Lords Sitting of 14 January 1991

Preamble
Reassembling after the Christmas Recess, the House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Worcester.

Sir John Sainty: Tributes
On consideration of the letter from Sir John Christopher Sainty, KCB, announcing his retirement from the office of Clerk of the Parliaments:
The Lord Privy Seal (Lord Waddington): My Lords, on 5th June last year my noble friend Lord Belstead read to the House Sir John Sainty's letter announcing his intention of retiring from the office of Clerk of the Parliaments with effect from 31st December. My noble friend said then that an opportunity would be afforded to the House to pay tribute to Sir John and to that end I now move to resolve:
"That this House has received with sincere regret the announcement of the retirement of Sir John Christopher Sainty, KCB, from the office of Clerk of the Parliaments and thinks it right to record the just sense which it entertains of the zeal, ability, diligence, and integrity with which the said Sir John Christopher Sainty executed the important duties of his office".
By an odd coincidence the last occasion a Motion on these lines was moved in your Lordships' House was within a few weeks of my noble friend Lord Whitelaw arriving here from another place. He spoke of his,
"inadequacy as a new boy to speak from experience",
of the outstanding qualities of the then retiring Clerk of the Parliaments, the noble Lord, Lord Henderson of Brompton. I too feel my inadequacies in speaking about Sir John, but I can truthfully say that, despite having arrived only recently, I have been here quite long enough to learn of the high esteem, respect and indeed affection with which he is regarded on all sides of your Lordships' House.
Sir John first entered the Parliament Office over 30 years ago in 1959. After a very few years, in 1963, he was seconded to be the private secretary to the Leader of the House and Chief Whip. In that capacity he served my noble and learned friend Lord Hailsham, my noble friends Lord Carrington and Lord St. Aldwyn, and after the change of government in 1964, the noble Earl, Lord Longford, and the noble Lord, Lord Shepherd. It must have been a crowded two years in his life; but more significantly, it was a period when he was called upon, while still a comparatively young man, to bear a very considerable amount of responsibility for the smooth running of your Lordships' House in a period of change.
Sir John then returned to the Parliament Office as Clerk of the Journals and held that post until 1970 when he left to work at the Institute of Historical Research. But in 1974, to the great good fortune of the House, he returned here as Reading Clerk and Clerk
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of the Journals. In 1983 he succeeded the noble Lord, Lord Henderson of Brompton, as Clerk of the Parliaments.
Sir John thus spent over half his career in the Parliament Office as Clerk of the Journals. This, as your Lordships know, is the post most intimately concerned with the precedents and procedures of the House. Rarely indeed has the House of Lords been served by a more distinguished proceduralist than Sir John. Throughout his career he not only undertook research into the precedents and history of your Lordships' House, but he ensured that the fruits of his research were fully written up and preserved. The result is that what was in the past largely an oral tradition of procedural expertise has now become a written one.
This work was not mere antiquarianism on Sir John's part. It has had a very practical benefit. The procedures of your Lordships' House have had to develop over the last 30 years, and particularly over the last 10 or 15 years, to meet the new pressures which have arisen over that time. In the process of evolution the advice of the Clerks has been and will of course continue to be crucial.
Thanks largely to the work of Sir John, that advice has for many years now been based on a most thorough understanding of the history of the House. It has always been for us to take the crucial decisions as to how we wish the House to evolve; but to Sir John goes the credit for our being able to do so in the full knowledge of what our predecessors chose to do in the past. We will continue to build on the sure foundation of his work. It will be a lasting monument.
Sir John's skills as a historical researcher straddle both his professional life in the House and his personal life, for he is a distinguished historian. His particular area of interest is that of office holding within the United Kingdom over the last two or three centuries. Indeed, he has been the memorialist both of his own post as Clerk of the Parliaments and of the whole Parliament Office.
Most of Your Lordships will always think of Sir John as a shy man. But as those of your Lordships who ever sought his advice over a procedural impropriety will testify, Sir John's mild manner concealed a strong sense of the House's traditional values. In defence of tolerance, courtesy and fair play he could display more than a hint of steel. He was not a retiring academic when it came to running his own department. He was a most active proponent of the welfare of his staff and ensured, by a series of reforms over the period of his Clerkship, that the staff of the Parliament Office were properly provided for within the changing conditions of the wider public service. Again, your Lordships will reap the benefits of his work in that area for years to come.
We rely upon our Clerks and we rely upon the Clerk of the Parliaments to ensure that the House can retain staff of as high a calibre as any in Whitehall. Only if that is the case shall we continue to be served as we have been served in the past.

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I believe that the first social event that I attended in the House as Leader was the party given by Sir John and Lady Sainty to mark his retirement. That, I feel, allows me to wish them, personally as well as on behalf of your Lordships, a very long and happy retirement.
Moved to resolve, That this House has received with sincere regret the announcement of the retirement of Sir John Christopher Sainty, KCB, from the office of Clerk of the Parliaments and thinks it right to record the just sense which it entertains of the zeal, ability, diligence, and integrity with which the said Sir John Christopher Sainty executed the important duties of his office.—(Lord Waddington.)
2.45 p.m.
Lord Cledwyn of Penrhos: My Lords, it gives me great pleasure on behalf of my noble friends to join the noble Lord the Leader of the House in the warm tribute that he has paid to Sir John Sainty. During the time that I have spent in the House, I have come to appreciate more and more the high quality of the service that we receive from the officials of the House. They are invariably helpful and courteous, and their advice is invaluable, especially when it is the advice that we want. There is a sense in which their responsibilities are greater than those of their colleagues in another place because we are not subject to the discipline of Rules of Order to the same extent as the other place, or to the discipline of a Speaker to enforce them. They are expert at guiding us, or most of us, in the right direction.
It is the Clerk of the Parliaments who bears the heaviest burden. I know that the House will agree with me that Sir John Sainty conformed to the highest traditions of his predecessors and brought dignity and honour to his office. His great knowledge of Parliament and government gave him the necessary authority, but he also had humour and an understanding of our needs and our idiosyncrasies. We shall miss Sir John very much, and we wish him and Lady Sainty a long and happy retirement.
Lord Jenkins of Hillhead: My Lords, I add my support and that of my noble friends to the Motion which has been moved by the Leader of the House the noble Lord, Lord Waddington. Although I have been lucky enough to have a little more experience than he has of sitting, as it were, in the House under Sir John Sainty, I nonetheless feel a tyro compared with, say, the noble Earl, Lord Longford, or the noble Lord, Lord Carrington, who, as Leaders of the House, had the benefit of Sir John's services nearly 30 years ago.
We have greatly appreciated Sir John's exceptional quality. He has been one of the most scholarly and wisest of the Clerks of the Parliament. It is appropriate that he retires not through infirmity or old age, having indeed surmounted an illness which caused us all great concern a few years ago, but to devote himself the more completely to the scholarship that he has already advanced to such an extent.
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We wish Sir John very well in what is not his retirement but his new vocation, which I believe he will discharge with all the distinction he brought to his duties in the House.
Baroness Hylton-Foster: My Lords, the Cross-Bench Peers too would like to support all the splendid tributes that have been paid to Sir John Sainty. We should like to add our thanks for all the help he has given over the problems peculiar to the Cross Benches, which he always dealt with in his usual courteous and patient way. We wish him a very happy retirement with his family.
The Lord Bishop of Worcester: My Lords, perhaps from these Benches I may add our thanks to Sir John Sainty. In my profession, the sincerity of an utterance is sometimes judged by whether it has been written down in full manuscript. When it has not, it is said to be more sincere. In that case, I am making a very sincere speech at the moment. We who come to the House as Bishops are not wise in the ways of Westminster. We have always received the utmost kindness and courtesy in preparing us for our part in the proceedings of your Lordships' House. With that, I should like to add the Bishops' good wishes to Sir John and Lady Sainty in their retirement.
2.49 p.m.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, as your Lordships are aware, it fell to Sir John Sainty towards the end of his period of office to do what he could to guide me in the discharge of my Woolsack responsibilities. The extent to which he succeeded in doing so is a striking tribute to his talents. It gives me the greatest pleasure to endorse the remarks that have been made and to join in wishing Sir John and Lady Sainty all the very best for the years that lie ahead.
On Question, Resolution agreed to nemine dissentiente; it was ordered that the Lord Chancellor do communicate this Resolution to the said Sir John Christopher Sainty, KCB.

Clerk of the Parliaments
Then, the then Leader of the House having informed the House on 5th June last that Her Majesty had, by Letters Patent, appointed Michael Addison John Wheeler-Booth, Esquire, to the Office of Clerk of the Parliaments, in the place of Sir John Christopher Sainty, KCB, the Letters Patent were read. The said Michael Addison John Wheeler-Booth, Esquire, made the prescribed declaration (which declaration is set down in the Roll among the oaths of the great officers) in terms as follows:
"I, Michael Addison John Wheeler-Booth, do declare that I will be true and faithful and troth I will bear to our Sovereign Lady the Queen and to Her Heirs and Successors. I will nothing know that shall be prejudicial to Her Highness Her Crown Estate and Dignity Royal, but that I will resist it to my power and with all speed I will advertise Her Grace thereof, or at the least some of Her Counsel in such wise as the same may come to Her knowledge. I will also well and truly serve Her Highness in the Office of Clerk of Her Parliaments making true Entries and Records of the things done and passed in the same. I will keep secret all such matters as shall be treated in Her said Parliaments and not disclose the same

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before they shall be published, but to such as it ought to be disclosed unto, and generally I will well and truly do and execute all things belonging to me to be done appertaining to the Office of Clerk of the Parliaments."
After which he took his seat at the Table.

Clerk Assistant of the Parliaments
The Lord Chancellor: My Lords, I beg to move the Motion standing in my name on the Order Paper. In accordance with the Statement made by me on 5th June last, I have appointed Mr. John Michael Davies to be Clerk Assistant in place of Mr. Michael Addison John Wheeler-Booth, appointed Clerk of the Parliaments. I therefore beg to move.
Moved, That this House do approve the appointment by the Lord Chancellor, pursuant to the Clerk of the Parliaments Act 1824, of John Michael Davies, Esquire, to be Clerk Assistant of the House in place of Michael Addison John Wheeler-Booth, Esquire, appointed Clerk of the Parliaments. —(The Lord Chancellor.)
On Question, Motion agreed to nemine dissentiente.

Reading Clerk and Clerk of Outdoor Committees
The Lord Chancellor: My Lords, I beg to move the Motion standing in my name on the Order Paper. In accordance with the Statement made by me on 5th June last, I have appointed Mr. Paul David Grenville Hayter to be Reading Clerk and Clerk of Outdoor Committees in place of Mr. John Michael Davies, appointed Clerk Assistant. I therefore beg to move.
Moved, That this House do approve the appointment by the Lord Chancellor, pursuant to the Clerk of the Parliaments Act 1824, of Paul David Grenville Hayter, Esquire, as Reading Clerk and Clerk of Outdoor Committees of the House in place of John Michael Davies, Esquire, appointed Clerk Assistant.—(The Lord Chancellor.)
On Question, Motion agreed to nemine dissentiente.

British Steel and Scotland
2.57 p.m.
The Earl of Selkirk The Earl of Selkirk asked Her Majesty's Government:
Whether they are satisfied that British Steel has good grounds for deciding neither to sell nor to develop any of its steel mills in Scotland.
The Parliamentary Under-Secretary of State, Scottish Office (Lord Strathclyde): My Lords, the future of British Steel's assets is a commercial matter for the company, which must be able to take the operational decisions it considers necessary to ensure its continuing competitiveness. We have, however, encouraged British Steel to give full and careful consideration to any case for investment in its Scottish plants and to any offers it may receive for any assets
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which might become surplus to the company's requirements.
The Earl of Selkirk: My Lords, is my noble friend aware that Scotland has one of the most successful blast furnaces in Europe and that its record of production in terms of man-hours for every tonne of steel produced is unique? What is behind the company's decision? Is there any reason to believe that that monopoly has taken no account of social considerations in the area of its works or that it is moving entirely out of that part of these islands?
Lord Strathclyde: My Lords, I fully understand my noble friend's concerns. However, they are commercial decisions best left to the company itself.
The Earl of Selkirk: My Lords, surely for a monopoly in such a position money is not the only consideration. There are also fundamental social considerations, and trade unions and others who are engaged in such work should not be kept in the dark.
Lord Strathclyde: My Lords, the Government have continually encouraged British Steel to be open with the facts and to bring forward its figures. The Government have not been slow in bringing forward their own initiatives, having commissioned a report from the Scottish Development Agency and set up the Lanarkshire Working Group, which will be chaired by the Scottish Office. The Government do not take their responsibilities in this matter lightly.
The Earl of Selkirk: My Lords, can the Minister assure the House that no other mill in that part of Scotland will be closed? If the mill is closed, how will the company provide the steel required by the oil industry which is fundamental to Scotland and which will not be provided from elsewhere?
Lord Strathclyde: My Lords, whether or not other steel mills or companies owned by British Steel are closed will be for British Steel to decide in the light of economic considerations. It will also depend on the guarantees that British Steel has given in the past concerning the future of those companies. As for the point made by my noble friend about seamless tubes for the North Sea oil industry, I understand that there is considerable over-capacity in that particular product throughout Europe.
Lord Carmichael of Kelvingrove: My Lords, is the Minister aware that his right honourable friend the Secretary of State for Scotland is asking almost exactly the same questions as the noble Earl, Lord Selkirk; namely, will British Steel be frank and tell us whether it intends to destroy the plant so that a competitor from abroad cannot use it? Is he further aware that just the other day British Steel announced that it would be closing one of the blast furnaces for six months? Neither we nor the unions have any information but the belief is that there is a strong possibility that the Clydesdale tube plant will go out fairly soon and, as the noble Earl, Lord Selkirk, said, that would result in no British-produced seamless tubing for the North Sea industry. When it is an expansionist base, does he agree that that appears to be quite crazy economics?
Lord Strathclyde: My Lords, I fully concur with the noble Lord regarding the words of my right honourable friend the Secretary of State. I do not believe that anybody in this House would disagree with the decision to ask British Steel to be as open as possible with its figures so that we can make a proper assessment of whether the plant should close. British Steel has said that it will co-operate fully with the SDA report. We will welcome that. I have already answered my noble friend Lord Selkirk on the question of seamless tubing to the effect that there is already considerable over-capacity of that particular product throughout Europe.
The Earl of Halsbury: My Lords, can the Minister confirm that Ravenscraig—which I understand is what we are talking about—was originally built because of a misunderstanding that a large automobile factory would be built alongside it? That never materialised. Does he agree that Ravenscraig has therefore been a non-starter owing to the transport costs involved in sending steel from Scotland to the South of England?
Lord Strathclyde: My Lords, I cannot confirm the original reasons for building the Ravenscraig steelworks. However, I can confirm that at the moment we are talking about the closure of the hot strip mill at Ravenscraig and not the steelworks itself, which will continue and is guaranteed to continue working for some years.
Lord Marsh: My Lords, given that British Steel is now a publicly quoted company responsible to its shareholders, what is the basis upon which ministers feel that they have to defend or oppose its commercial policies in this House?
Lord Strathclyde: My Lords, I have maintained that commercial decisions are for the company itself. That does not mean that I disagree with my noble friend Lord Selkirk when he says that quite clearly we have a responsibility to the people of Motherwell. That is why ministers set up the Lanarkshire working group and asked the SDA to come forward with its report on the future of the steel industry in Scotland, which is a legitimate function of responsible government.
Lord Jay: My Lords, will the Minister answer the other question asked by my noble friend? Is it true that British Steel is not merely closing down the plant but is refusing the sell it to any other enterprise which might be willing to operate it? Would that not be restrictive practice?
Lord Strathclyde: My Lords, as I understand it, if that is a restrictive practice it is a matter for the Director General of Fair Trading. Furthermore I understand that no buyer has come forward to purchase the hot strip mill at Ravenscraig.
Lord Williams of Elvel: My Lords, does the noble Lord accept that the reasons why ministers have a responsibility are, first, that a number of assurances were given by ministers and the company on privatisation—assurances which still hold and are underwritten by the Government—and, secondly, that there would be social problems of an enormous
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magnitude were Ravenscraig to be sucked up? That is a matter for government. Will he tell us what has happened to the assurances about the future of Ravenscraig that were given at privatisation and debated at great length in this House?
Lord Strathclyde: My Lords, for once I think I can agree with the noble Lord. Yes, the Government have a responsibility, given the enormous importance for employment prospects in the Lanarkshire area and the statements made by past Secretaries of State for Trade and Industry and by British Steel itself prior to privatisation—various commitments given shortly before privatisation—that steelmaking facilities at Ravenscraig and the rolling mill at Dalzell will continue in operation at least until the end of 1994. I understand that the commitments made in the past have been fulfilled by the company.
The Earl of Selkirk: My Lords, does the Minister deny the statement by British Steel that on no account would it sell Ravenscraig or any hot strip mill?
Lord Strathclyde: My Lords, I am not aware of any definite statement by British Steel to the effect that it would not sell anything on any account. As a government we have taken the position in the Scottish Office that we will encourage British Steel to give full and careful consideration to any case for investment made by anybody who wishes to invest in those particular plants.

Olympic Games: Venue in the Year 2000
3.5 p.m.
Lord Wade of Chorlton Lord Wade of Chorlton asked Her Majesty's Government:
What is their view of the possibility of holding the Olympic Games in Great Britain in 2000.
The Parliamentary Under-Secretary of State, Department of the Environment (Baroness Blatch): My Lords, as with other major sports events, we stand ready to offer whatever promotional support we can. However, it is for the British Olympic Association to decide whether there should be a British bid.
Lord Wade of Chorlton: My Lords, I thank my noble friend for that reply. Is she aware that the British Olympic Committee decided to go for a British bid again for the year 2000 and that the City of Manchester put in an extremely effective and professional bid for 1996? I believe that it would be in the best interests of all those who wish to see the Olympic Games held here that we should support the Manchester bid again. Does she agree with me that it would be in the best interests of the United Kingdom as a whole to have the games in such a place? There is great support for the idea in the whole area. Will she confirm that the whole of the United Kingdom would benefit from the Olympic Games being held in Manchester in the year 2000?
Baroness Blatch: My Lords, it would be inappropriate for me to do so, given that the responsibility for choosing which bid should go forward lies with the Olympic Committee itself. I agree with my noble friend that the bid put up by

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Manchester was indeed very impressive. My right honourable friend the Secretary of State for the Environment at the time was present in Tokyo when the bid was made. It is quite clear that a great impression was created by Manchester. As for the other factors mentioned by my noble friend, they will feature in any application to be considered as a bid to go forward.
Lord Mellish: My Lords, does the Minister agree that e correct impression should go out from this House? Is it not a fact that London has also made a very impressive bid which is not only as good as Manchester's but better? Would it not be a good idea for the noble Baroness to rise and say nice things about London for a change?
Baroness Blatch: My Lords, it is for that very reason that I said that it would not be appropriate for this House to have a view about which was the best bid. All bids will go forward and it is for the British Olympic Association to ensure which bid goes forward for the main games.
Lori Barnett: My Lords, I do not wish to see the Minister give any support to either side; nevertheless does she recognise that London is already sufficiently cluttered up and that the Greater Manchester area would be a very suitable area in which to hold the Olympics?
Baroness Blatch: My Lords, I shall have to continue my even-handedness in this affair.
Baroness Blackstone: My Lords, given the enormous prestige and economic potential of staging the Olympic Games, will the Minister assure the House that any bid will have the full support of the Government? Will she also say what kind of resources and technical support the Government will give to the British Olympic Association in presenting the bid?
Baroness Blatch: My Lords, it is entirely appropriate for the Government to give diplomatic promotional support and other practical support. It is worth noting in the case of Manchester that the infrastructure expenditure, which would have been a constituent part of supporting the bid at that time, will by 1996 have reached £500 million.
Lord Tordoff: My Lords, in addition to the obvious fact that Manchester is a highly superior city to London, does the Minister agree that to have such investment in an area of high unemployment and considerable deprivation, and away from the chaos of London, would be beneficial to the country as a whole?
Baroness Blatch: My Lords, I cannot agree because it is inappropriate for me to say which part of the country should be successful in its bid for the next Olympic Games. Bids will be eligible for the urban aid programme provided that they meet the criteria. The infrastructure will be a contingent part of any bid made for the games.
Baroness Phillips: My Lords, does the Minister agree that it is important that we should not argue about the relative value of the different cities but that we should work towards holding the games in Britain? That is something which many of us involved in sport
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and recreation wish to see. We have everything to sell—great athletes and a great country—and the Government should be seen to be supporting the effort.
Baroness Blatch: My Lords, I have no difficulty in responding to the noble Baroness. I concur with my right honourable friend the Prime Minister who looks forward to attending the games in the year 2000 and hopes that they will be placed in this country.
Lord Birkett: My Lords, does the Minister agree that staging the Olympic Games implies the building of a wide range of facilities which are badly needed in this country? Does she further agree that Manchester could use those facilities as well as any city in the land?
Baroness Blatch: My Lords, the facilities that will be provided will certainly be welcome in Manchester.

Private Hospitals: Gulf Emergency
3.12 p.m.
Lord Dean of Beswick Lord Dean of Beswick asked Her Majesty's Government:
Why private hospitals are not contributing to the emergency arrangements following the Gulf crisis, and whether private hospitals or beds could be requisitioned in the event of an emergency.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper): My Lords, contingency plans for the reception and treatment of casualties in the event of hostilities in the Gulf rely on a combination of military and National Health Service facilities. The national plans do not include the use of private facilities but, where appropriate, it is for health authorities to decide whether to contract out some of their routine work to private hospitals.
Lord Dean of Beswick: My Lords, I am grateful to the Minister for that Answer. Does she agree that in order to obtain a uniform approach a more central direction to regional health authorities may be necessary if, God forbid, war breaks out and we reach saturation point as regards casualties? Does the Minister further agree that it could be a mistake to leave the matter to the various regional health authorities because there could be two standards of treatment to the detriment of war casualties and the indigenous population on the waiting list?
Baroness Hooper: My Lords, the Government have already issued guidance and require regions to produce plans to show that they have prepared contingency arrangements. While the private sector makes a valuable contribution to overall health care it cannot provide the full range or match the scale of services available under the National Health Service. In particular, it cannot provide accident and emergency cover or send out medical teams to major incidents; nor can it offer the full range of specialties available in all health regions. We have taken care to ensure that plans are in place to meet any eventualities, although we hope that they will not occur.
Lord Hailsham of Saint Marylebone: My Lords, whatever the merits of the Question, is it not a source

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of considerable satisfaction that after years of deprecatory and critical remarks about the private sector in medicine made by members of the Labour Benches it should at last be recognised that the sector has something useful to offer?
Baroness Hooper: My Lords, yes, and I am grateful to my noble and learned friend for reminding us of that. I emphasise that the private sector has indicated that it is ready to help in any way.
Lord Molloy: My Lords, is the Minister aware that although the private sector has rightly said that it shares responsibility with the NHS hospitals, fundamentally it will lie with the NHS hospitals? Has there been any liaison between all hospitals, particularly with regard to their specialties, in order that they can provide the best service in the best manner if required?
Baroness Hooper: My Lords, yes. The regional planning that has taken place has taken that matter into account. Emergency arrangements have been set up. An operations room has been set up in the Department of Health and we believe that the various regions are adequately co-ordinated.
Lord Ennals: My Lords, clearly the whole House hopes that the eventuality will not occur. However, as the Minister has said, we must be prepared. Will she give an assurance that the 3,500 beds temporarily closed because of financial constraints will be opened if necessary to deal with the casualties in each of the regions? Secondly, is the Minister satisfied that doctors and nurses have been effectively briefed about the nature and effects of chemical weapons because anxiety has been expressed within the professions?
Baroness Hooper: My Lords, we are confident that the National Health Service has the resources and expertise to treat any casualties who are likely to be evacuated to this country. The Ministry of Defence has made arrangements to ensure that the casualties of chemical warfare will be decontaminated in the battle theatre. The reception of casualties will have an effect on National Health Service arrangements as regards waiting lists and so forth. We shall keep a close eye on those effects and consider whether any action is necessary.
Lord Ennals: My Lords, will the Minister respond to my question about the beds that have been closed? If they were opened there may be a less serious effect on patients awaiting treatment within the National Health Service.
Baroness Hooper: My Lords, on the basis of estimates we have made contingency plans for coping with casualties. They may include the opening of wards and beds which have been closed. We are keeping an eye on the situation and shall adapt as necessary.
Lord Shepherd: My Lords, has the Ministry of Defence passed to surgeons and consultants within the National Health Service the knowledge and expertise that has been acquired at Porton Down about
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chemical warfare and wounds? Has that knowledge been passed to the doctors who must deal with the patients admitted to hospitals?
Baroness Hooper: My Lords, there is full co-operation between medical personnel employed in both the Ministry of Defence and the Department of Health. A revised National Health Service medical guide—the so-called blue guide—which relates to Gulf contingency planning and makes available information to all specialist fields is about to be issued.
Lord Shepherd: My Lords, did the Minister say that the guide is about to be issued? Has it not yet been issued?
Baroness Hooper: My Lords, it is issued as of now.
Lord Smith: My Lords, I must ask a version of the Question that I asked on 18th December. Have Her Majesty's Government any plans effectively to link independent and NHS medicine? That might solve in part the awkward problem of the in-patient treatment of NHS patients displaced by the admission of casualties in the Gulf.
Baroness Hooper: My Lords, I have already said that it is for health authorities to decide whether it is necessary to contract out some of their routine work to private health facilities.

Unemployment
3.19 p.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
How they intend to reverse the increase in unemployment.
The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater): My Lords, the key contribution of government is to create a climate in which enterprise can flourish. We expect to see this year a reduction in inflation, which is our first priority, and a resumption of economic growth. The wide-ranging services offered by my department are, of course, available to help unemployed people to re-enter the labour market.
Lord Molloy: My Lords, I thank the noble Viscount for that reply. Is he aware however that what he has just said is completely the opposite of the view of the CBI, the TUC and prominent bankers and economists in the City? They take the view that by the end of the year there will be 2 million unemployed and that the root cause is the lack of application of the Government's policy, which they feel needs to be changed.
Viscount Ullswater: My Lords, my right honourable friend the Secretary of State said in another place that he is prepared to listen to any representations made to him. However, any serious attempt to reduce inflation must mean using a tight monetary and fiscal policy, which the Government are doing. That will involve costs in terms of a period of slower growth of output and employment and possibly rising unemployment. We should be deluding ourselves if we

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believed there to be a costless way of controlling inflation. We can minimise the pain if everybody acts sensibly in pay negotiations.
Lord Boyd-Carpenter: My Lords, notwithstanding my noble friend's admirable reply, is it not quite ridiculous to deal with this immense subject by way of a Starred Question?
Viscount Ullswater: My Lords, it is my duty to do my best to answer the Question on the Order Paper.
Lord Stoddart of Swindon: My Lords, is not the right way to reduce unemployment and get the economy going once again to reduce interest rates and to do so immediately? Is it not also a fact that the Government are now constrained from doing just that by their entry into the ERM?
Viscount Ullswater: My Lords, membership of the ERM will reinforce the anti-inflationary policy, which will in turn have a favourable effect on the economy, including employment in the long run. However, it makes it even more important that labour costs are kept under control. If firms allow themselves to become uncompetitive by agreeing to large pay rises, they will not be accommodated, as they have been heretofore, in depreciating currency.
Baroness Turner of Camden: My Lords, does the Minister not agree that rising unemployment is a product of the general economic situation for which the Government are responsible and that protective regulations in the employment field have very little to do with that unemployment?
Viscount Ullswater: My Lords, my right honourable friend the Chancellor admitted that there will be a slowdown in the economy. As I said, one of the effects may be an increase in unemployment in the short term. I do not believe that what has been done in the employment Acts has the same effect.
Lord Dormand of Essington: My Lords, if it is the function of government, as the Minister said, to provide the right climate in which enterprise can flourish, why have the Government failed to achieve that after 12 years in power?
Viscount Ullswater: My Lords, I cannot agree with the noble Lord. The Government have done extremely well in providing such a climate. I admit that at present inflation is damaging the economy and must be squeezed out.
Lord Dean of Beswick: My Lords, bearing in mind that the latest figures show a substantial increase in unemployment in Huntingdon, does the Minister believe that the new Prime Minister's policies are successful?
Viscount Ullswater: My Lords, I am not aware of the unemployment figures in Huntingdon in particular, All I can say is that we are looking forward to an increase in economic activity during the current year end therefore an increase in the level of employment.
Lord Williams of Elvel: My Lords, is the noble Viscount really looking for increased economic activity in the current year or does he expect growth to be resumed next year?
Viscount Ullswater: My Lords, the Autumn Statement forecasts suggested that the latter half of 1990 would be tough. However, output is expected to begin to grow again throughout 1991 and the prospects for the labour market will improve.
Lord Rochester: My Lords, if the recession deepens and unemployment increases, will the Government be prepared to give further consideration to the effect that their decision, announced in the Autumn Statement, to reduce expenditure on training may have on the economy in both the short and long term?
Viscount Ullswater: My Lords, employment training is not always the necessary requirement to help the long-term unemployed. Many unemployed have skills, some of them basic and some greater than that. But they have lost their motivation to return to the employment market. For that we need a balanced programme. That is why over 100,000 places at job clubs have been provided for the future.
Lord Hailsham of Saint Marylebone: My Lords, does not the round of supplementary questions arising from the original Question of the noble Lord, Lord Molloy, admirably illustrate the wisdom of the observation of my noble friend Lord Boyd-Carpenter that these matters are of such importance that they are more suitable for general debate than Starred Questions?
Viscount Ullswater: My Lords, yes, I must agree with my noble and learned friend. However, it is my task to answer as best I can the questions put to me.
Lord Williams of Elvel: My Lords, will the noble Viscount accept that if the Government tabled a Motion for debate on this matter, we should be only too pleased to debate it?
Lord Molloy: My Lords, is the noble Viscount aware that we should welcome a debate? However, are the Government and the party opposite saying that they begrudge the unemployed a Starred Question in this Chamber? Are they not aware also that the CBI, the TUC and prominent bankers and economists in the City would welcome the opportunity to be brought together under the auspices of the Government to see what contribution they could make towards avoidance of the recession for which we are heading?
Viscount Ullswater: My Lords, I am rather disappointed by the attitude taken by the noble Lord. On this occasion and on previous occasions I have tried to demonstrate that the Government take very seriously the plight of the unemployed and that they are actively working to try to reduce their number.

Business of the House: Debates, 23rd January
3.27 p.m.
Lord Waddington: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debates on the Motions in the names of the Lord Williams of Elvel and the Baroness Turner of Camden set down for 23rd January shall each be limited to 2½ hours and that Standing Order

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35 and paragraphs 10 to 13 of the Rules for the Conduct of Short Debates shall apply to each debate. —(Lord Waddington)
On Question, Motion agreed to.

Examiner of Petitions for Private Bills
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That, pursuant to Private Business Standing Order 69, Mr. Brendan Patrick Keith be appointed an Examiner of Petitions for Private Bills in place of Mr. Michael Graham Pownall.—(The Chairman of Committees.)
On Question, Motion agreed to.

Development Board for Rural Wales Bill
The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington): My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(Baroness Trumpington.)
On Question, Motion agreed to.

Statutory Sick Pay Bill
3.28 p.m.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Henley.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 1 [Reductions in the amounts recoverable by employers who have paid statutory sick pay]:
Lord Jenkin of Roding Lord Jenkin of Roding moved Amendment No. 1:
Page 1, line 5, at beginning insert:
("(1) In its application to any employer other than an employer during a tax year in which that employer employed on average in the (determined on a weekly basis) not more than five persons, section 9 of the Social Security and Housing Benefits Act 1982 (recovery by employer of amount paid by way of statutory sick pay) shall have effect as modified by the following provisions of their Act.").
The noble Lord said: I begin with an apology. I was not able to take part in the Second Reading debate on the Bill. A commitment outside the House precluded my attendance on that occasion; I therefore join the debate for the first time.
It would be for the convenience of the Committee if, in discussing Amendment No. 1, we were to discuss also Amendments Nos. 3, 4 and 6. I believe that it has been agreed through the usual channels that those amendments should be discussed with Amendment No. 1 standing in my name and that of my noble friend Lord Brougham and Vaux. My justification, if justification is needed, for moving the amendment is that I was the Secretary of State for Social Services, as the office holder was then known, who first announced proposals for statutory sick pay in a Green Paper which I published in April 1980 entitled Income During Initial Sickness—A New Strategy. That strategy contained two elements. One was the transfer to employers of the administration of statutory sick pay for short spells of sickness by employees; the other was the process which became known as self-certification; that is to say, to get rid of the immensely bureaucratic hassle of requiring GPs to certify short spells of sickness in order that people could present the certificates to the local social security office to obtain their sick pay. My recollection is that on the latter point I had substantial arguments, as did other Secretaries of State, with the British Medical Association. However, in the end the change was accepted.
I believe that both strands of the strategy worked extremely well. Both self-certification and the statutory sick pay scheme threw up remarkably few problems and produced significant savings in central bureaucracy. At that time the main argument on statutory sick pay surrounded the method of compensating employers. It is hardly surprising that when the Act comes to be amended by the Bill before us the same arguments have arisen.
Perhaps I could remind the Committee of my original proposal —that employers should pay the statutory sick pay and be compensated by a 0.5 percentage point reduction in the national insurance contribution. I still maintain that that was a remarkably sensible and simple proposal. However, I fear that it did not find favour with the generality of employers, and especially with the organisations representing smaller firms. There was considerable argument, to which I must say the Government listened.
We therefore published a second consultative document in June 1981 in which we set out two options. One was that the employers should recover half their statutory sick pay payments by deducting the amounts due under the NIC; they would also receive one third of a percentage point reduction in their NIC. The second option was that there should be a 0.5 per cent. reduction for all employers, with a further 0.4 per cent. reduction for smaller employers and employers in industries with high levels of sickness. At the time there were many arguments with the National Coal Board, as it then was, and one or two other industries which tended to experience high levels of sickness.
Employers were still unhappy. I can say to the Committee that by the time I left that department my mind was moving towards the proposition that, if we

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were to obtain the bureaucratic saving which we assuredly needed if we were to meet our manpower targets, we would have to offer employers more. It fell to my successor, now Sir Norman Fowler, to announce the 100 per cent. reimbursement for statutory sick pay. That was announced at the Conservative Party Conference in October 1981, about two weeks after I moved to the Department of Industry.
I hope the Committee will forgive me for rehearsing this matter at modest length. I do so for two very distinct reasons. First, I have always had a keen appreciation of the impact of changes of this kind upon the very smallest firms—those with up to five employees. Secondly, I am by no means opposed to compensation for statutory sick pay at less than 100 per cent. provided it is matched by appropriate reductions in the levels of national insurance contribution.
I notice that my noble friend Lord Boyd-Carpenter was quick to enlist me in his army. But I wish to make clear at this stage that I am not prepared to serve in that army. I believe that the Government have almost got it right. It is right. Given the substantial increase in the number of employers who now operate statutory sick pay schemes, when savings must be found to finance improvements in the welfare state for which there is no other source than central government funds, it is not unreasonable that a modest share of the cost of paying the statutory sick pay should be transferred to employers, provided that that is matched by appropriate reductions in national insurance contributions.
I shall listen carefully to the amendments to be moved by, among others, my noble friend Lord Mottistone. However, as he may be aware, I am not convinced that his amendment is justified. I feel and have always felt that there must be some way of avoiding potential serious hardship for the smallest employers. I know that these are sympathies which engage the attention of the Chamber from time to time. I refer to the small family business, the corner shop, the rural grocer who may be struggling to survive and may employ only one or two people or the tiny start-up operation which has only two or three employees. I am persuaded that as they stand the proposals may cause considerable hardship in those cases if their employees had anything significantly more than the average sickness record.
I suggested a cut-off point of employers with five or fewer employees. I am fully prepared to concede that that may not necessarily be the right test. I do not agree with the noble Earl, Lord Russell, who is suggesting 20 employees. That takes one into a totally different field where averages may have some relevance. For the very small employer the answer and the effect of my amendment would be to take them out of the Bill altogether. That would mean that they would continue to obtain the 100 per cent. reimbursement provided by existing legislation. Although it is not for this Bill but for other legislation, I envisage that they would not then obtain the reduction in national insurance contributions—
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0·5 per cent. for the standard rate and the 0·4 per cent. for the lower rates of NIC—which would go to all other employers.
I fully concede that my amendment may not be appropriately drafted and may not even contain the correct tests. However, I maintain that for those small firms the law should remain as it is. They should not be subject to the 80 per cent. reimbursement and would not therefore obtain the reduced NIC.
I advance that argument for two main reasons. It has always seemed to be perfectly reasonable to deploy arguments based on average sickness experience when one is dealing with an employer who may have employees numbered in tens, hundreds or even thousands. Then "average" experience of sickness is relevant. It would be extremely exceptional if there were significant departures from the average experience. However, when one is dealing with employers with up to five employees, averages cease to be relevant and could be misleading.
I read the speech of my noble friend and the whole of the Second Reading debate with a great deal of care. In that debate my noble friend gave examples to establish that the higher rate of deduction which he is proposing for the lower rate of national insurance contribution would in some circumstances benefit smaller employers if they had no more than the average, or even if they went above the average, sickness experience.
I hope that the Committee will forgive me because I propose to base an argument on several lines from what my noble friend said on 11th December. They are these:
"If we take an employer with five employees all earning £170 per week, and one employee had three weeks' sickness during the year—which matches the average incidence of sickness —the extra cost in SSP would be £82.41 assuming the employer makes good the difference between the higher and lower rate of SSP with occupational sick pay".
Pausing there for a moment, I must point out that that is a separate argument, and particularly that of the CBI, which is based on the proposition that it would follow that policy. For the purpose of his argument my noble friend has suggested that course although it is not inevitable. He continues:
"But the annual saving to the employer on his national insurance contribution liability as a whole would be £176.80, putting him £94.39 in profit. Even if the same employer had a further employee, also sick for three weeks, he would still make a saving of £11.98".—[Official Report, 11/12/90; col. 392.]
My noble friend went on to discuss the employer with 20 employees. I am sure that he is right that if you have the average or a little above it in the incidence of sickness, under the Government's proposals an employer may end up significantly better off. Conversely, if the employees have a sickness record significantly worse than the average, the opposite may be the case. That is the purpose of my amendment. I single out the words which my noble friend used which were:
"which matches the average incidence of sickness".
But what if it does not? People go sick as individuals and not as percentages or fractions.
When one is dealing with tiny firms which employ two or three people, it needs only one person in addition to go sick in, say, a 'flu epidemic or something like that for my noble friend's figures to become largely meaningless. Let us suppose that instead of two employees each being off for three weeks, the employer has two off for six weeks—and a bad dose of 'flu is likely to keep one away for six weeks—it may be said in relation to the average statistics that that would be highly exceptional. In those circumstances the employer would be substantially out-of-pocket. He would then have four times £82.41, which according to my calculator is £329.64. The annual saving on his reduction in national insurance contribution remains at £176.80. In those circumstances he is out-of-pocket by over £150. A very large or even a medium-sized employer is exceedingly unlikely to have a 200 per cent. increase in the incidence of sickness. However, that does not apply to the very small employer. In those circumstances a very tiny employer could be put at a substantial disadvantage.
Logically, the right answer would be to say that he should be compensated for the excess. Let us assume that the reduction in the national insurance contribution is matched by the average sickness incidence. If it can be proved that the employer has had substantially over that, then he can be reimbursed the balance. With my advisers I have tried to devise such an amendment but it was impossible to do so. It was impossible in terms of drafting to make reasonable sense of it. It would also be a totally impossible administrative task for the very smallest employers. I think that my amendment provides the right answer; namely, that we should exclude them altogether.
That brings me to my second argument, to which I attach some importance. For the hundreds of thousands of the very smallest firms my amendment would avoid any administrative change at all. I wish to draw a parallel from another change that was made a year or two back in the same field of statutory sick pay and compensation. The argument had been advanced by the employers, and no doubt also by the larger ones, that the payment of national insurance contribution on the statutory sick pay was something which should be reimbursed to employers. By transferring the payment to the employers they became liable for the NIC on that payment. Three or four years ago the Government agreed to that and an additional 7 per cent. was added to the sum which the employer might deduct from his NIC on that account.
It has been widely argued among the organisations for the very small businesses that valuable though that concession may have been, large numbers of them never actually came to grips with the matter. They never claimed the deduction to which they were entitled. I discussed this matter with my noble friend and his right honourable friend. I am immensely grateful to both of them for the time which they gave to the discussion of this whole issue. I said that if they were seeking to help small businesses additional administrative complications cannot be added. I
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asked what was the extent of the failure to claim this additional 7 per cent. contribution. My noble friend wrote me a letter in which he set out in great detail the admirable measures which the Government have taken to bring the provision to the attention of every employer. They are very substantial. He went on to say:
"Despite these efforts, employers' returns suggest that 20–25 per cent. of this additional compensation may be going unclaimed".
I am prepared to bet that if the employees are below the lower limit and do not pay a national insurance contribution, some part of the reason may be due to that. A very substantial part of the reason is due to the fact that it is too much hassle for the corner shopkeeper or the little village shop or the start-up business to collect this money.
My second reason is that there is advantage in not having additional hassle and administration at this stage. I am told that any change of this kind is likely to take up to three to four years before it is absorbed by the tens of thousands of the very smallest firms. I have been in government and in my experience the small employers do not actually read the carefully drafted documents which they are sent and they do not read the advertisements in the newspapers. They are much too busy running their businesses. Can we not simply leave them out of this Bill and let them stay as they are? That would avoid any administrative change. One could define who they are and they could be taken out. For the rest, the argument which I adverted to at an earlier stage of my speech will stand. No doubt we shall be debating these matters in connection with other amendments in due course.
There is a third reason which may appeal to my noble friend. It is more speculative. On the Government's figures the balance of additional cost—
3.45 p.m.
Baroness Fisher of Rednal: It is very difficult for us to hear what the noble Lord is saying.
Lord Graham of Edmonton: My noble friend is lucky.
Baroness Fisher of Rednal: We are concentrating but it is difficult. I do not know whether the noble Lord is not speaking into one of the microphones, but we can hardly hear what he is saying. But please do not start again.
Lord Jenkin of Roding: This is the first time that that has ever been said about me. Perhaps the noble Baroness might have words with those who are responsible for the amplification. I normally speak a little further back, but when I started those seats were full. I am coming to an end and no doubt the noble Baroness will be relieved to know that.
On the Government's figures the balance of the saving to public expenditure, less the offset of national insurance contributions, is minus £6 million. I recognise that in the total figures that is probably within a margin of error. The real figures show that the Government lose £6 million more in national insurance contribution than they gain in the switch

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from 100 per cent. to 80 per cent. reimbursement. However, as my noble friend made clear, some employers lose but some undoubtedly gain. He quoted examples of some who gain.
If this amendment is accepted it will save the smallest employers any administrative hassle and give them the full cost of any statutory sick pay. I have been advised that it will save the Government something of the order of £60 million. I put that figure forward with a very large question mark next to it. Some employers will benefit more from a reduction in NIC than they would pay out in SSP. More employers will benefit than will lose from what is in the Bill but employers who lose might lose very substantially indeed.
The amendment not only provides 100 per cent. reimbursement and thereby avoids hassle, but it may also save the Government some money. Few amendments moved in this Chamber or in another place have that effect. I hope that such considerations may help my noble friend to make some favourable noises about exempting on some test or other the smallest employers from the change announced by my right honourable friend in the statement last year on social security uprating. I beg to move.
Lord Stanley of Alderley: I understand that the amendment in my name and in the name of my noble kinsman Lord Russell is to be discussed with this amendment. My noble kinsman has asked me to open the discussion on our amendment. It is similar in principle to the amendment of my noble friend Lord Jenkin. However, our amendment puts the number at 20 while my noble friend's amendment puts it at five.
Why do we suggest to the Committee and in particular to my noble kinsman Lord Henley—I sympathise greatly with him in his task of having to defend the Bill—that our amendment should be supported? First, small businesses are under enormous financial pressure. The present ruinous interest rates affect privately funded businesses far more than those which have shareholders. Farming in particular is virtually bankrupt. If Members of the Committee do not believe me, I can tell them that in 1989 total farm income was less than that received by the five major Food supermarkets. We cannot therefore afford a single extra penny.
Secondly, as was stated at Second Reading, the Bill is a breach of faith in regard to what was agreed in 1982. In addition, the cost is actually 27 per cent. and not 20 per cent. because 7 per cent. is already being carried by the employer as an administrative cost. Thirdly, for most small businesses, particularly farmers, the extra cost cannot be passed on. That point always missed by the Government and indeed by the Ministry of Agriculture. We cannot pass on our costs.
Fourthly, it will encourage small employers, who employ two out of five handicapped people, to think twice about employing handicapped people. Fifthly, despite the figures given by my honourable friend Mr. Scott in another place (at col. 898 of the Official Report on 28th November), figures reinforced in this
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Chamber by my noble kinsman on the Front Bench (at col. 415 of the Official Report of 11th December), the small employer who usually employs those on lower salaries will not be better off than the larger one. My noble friend Lord Jenkin put it differently from the way I shall put it. I shall cut some corners. I shall no doubt be carved apart but it will save time.
For instance, I accept that, for an employee earning £50 a week, the employer's contribution will be reduced by a massive 0.4 per cent. as opposed to 0.05 per cent. if the employee is earning £200 a week. However, this generous rebate will reduce the employer's contribution in the first case by 60p a week as opposed to 10p a week in the second case. The actual cost to the employer could be £26.50 a week. Only a stupid bankrupt farmer would accept a deal such as that.
Sixthly, although I accept that a firm which employs three persons but has one sick—this point was made by my noble friend Lord Jenkin in a slightly different way—is in theory no worse off than the firm which employs 90 persons but has 30 sick, the latter situation seldom if ever occurs. The first situation—where one man in three is off sick—does. Moreover, due to the loyalty of employees to the small firm, they seldom take odd days off; and when they are away they are often seriously ill. It is there that these proposals will hit both the employee and the employer. The employer may have to find an extra £26.50 a week and may have to employ contract labour to make up for the loss of a third of his staff.
Finally, we have chosen the exemption number as 20 because there is a precedent for it. It is an exemption in the Employment Act 1989. I hope that my noble kinsman Lord Henley will be able to respond helpfully. I know that he is more than aware of the enormous concern on this point. He has been most helpful to me since the Bill made its unfortunate appearance in this Chamber just before Christmas. I am grateful on this occasion to the Government for giving us enough time to consider its effects. It is certainly no fault of my noble kinsman that it was rushed through another place during a period of considerable political activity. I hope that he will be able to give us some joy on these amendments.
Earl Russell: I am grateful to my noble kinsman Lord Stanley of Alderley for introducing the amendment for us. I asked him to do so because, as I have been teaching, I was not certain that I would be able to be here in time. I am grateful to the noble Lord, Lord Jenkin of Roding, for helping to ensure that I had plenty of time to be in my place.
I hope we can agree on the vital importance of small businesses to the national economy. Seventy-five per cent. of firms have a turnover of less than £100,000. Firms with fewer than 20 employees provide 25 per cent. of the United Kingdom's turnover and employ 33 per cent. of the workforce. Those are not negligible figures. There is perhaps force in the case that small businesses are sometimes more capable of innovation and are therefore more capable than larger ones of responding to changes in the market. A big firm, like a big boat, tends to have a rather large turning circle.

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I hope that that can be taken as common ground on both sides of the Committee. I hope it can also be agreed that small businesses are risky. Thirty-three per cent. of new businesses fail in their first three years. It is our complaint that the effect of the Bill must tend to be to increase the risk.
I know that the Government believe on ideological grounds in the great virtue of risk taking. I have been tempted, I admit only very late at night, to wonder whether they thought that because risk is such a good thing it therefore needed to be increased. That would be a policy worthy of Ian Fleming's Dr. No. I have no doubt that my noble kinsman will deny that that is the Government's outlook, and I shall be quite ready to accept such a denial; but I should be grateful if he would state his agreement with the Liberal Democrats that the risk of running small businesses is great enough already and does not need to be increased any further. The effect of the Bill must be to increase risk. Instead of having a system of insurance cover which spreads the risk, it moves towards a lottery system in which the costs on each firm are in proportion to the amount of sickness in that firm.
When this amendment was first moved by my honourable friend Mr. Kirkwood in another place, the Minister's right honourable friend Mr. Scott made three objections to it, of which I believe two to be false and one to be superable. As regards the first of these which I believe to be false, he said:
"Assuming the normal incidence of sickness in many small firms, any extra SSP costs will be offset by reductions in the employer's national insurance contributions".—[Official Report, Commons, 28/11/90; col. 898.]
I am aware that they will be partially offset, but the words I shall put forward against those of the right honourable gentleman are the words of the Secretary of State contained in the up-rating statement of 24th October. He claimed that the national insurance reductions would go a long way towards helping employers to meet the extra costs. The Secretary of State admitted that the offsetting is not complete. Moreover, my noble kinsman admitted that in his reply to the Second Reading of the Bill. That claim is in line with costings which employers have been carrying out, and I accept it. Therefore, it will not meet all the costs.
The second objection, naturally enough, referred to an administrative difficulty; namely, that many small businesses have a fluctuating workforce. Clearly that is a difficulty, but it is a superable one. The National Federation of the Self-Employed and Small Businesses argues that it is perfectly possible to take a monthly average at the end of each month which would be arrived at from the national insurance records. That is the same exercise as all our banks undertake when, for good or ill, they calculate our average daily balance over a period of a month. It is by no means impossible. However, if my noble kinsman the Minister seeks to argue that there is more practicality in considering an amendment restricting the effect on small businesses by turnover rather than
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by the number of employees, I would be prepared to discuss the matter with him provided that the limits on turnover were fixed sufficiently generously.
The third objection made by the Minister was that if this amendment were accepted it would cost £45 million. That is simply not the case. I say that because the Minister has made an assumption of the average incidence of sickness and five, or indeed 20, people are not a statistically significant sample. Where one has a sample which is not statistically significant the incidents will not be average; in fact, the figure may sometimes vary quite widely. Many firms may gain very little from this, but others may lose a great deal.
The amendment put forward by the noble Lord, Lord Jenkin of Roding, deals with five people. A firm which employs five people may genuinely have all its employees hurt in one car crash. They may all be off work for the maximum period of 28 weeks. That could mean bankruptcy. For such a firm, one employee is 20 per cent. of the workforce while in a firm employing 20 employees, two of them represent 10 per cent. of the workforce. As some illnesses are contagious, it means that the random variation will carry with it its own built-in multiplier effect. In a firm employing 20 people, it is possible to have 25 per cent. of the workforce off work suffering from 'flu at any one time. Such an occurrence would make a very severe difference to the firm's chances of survival.
On Second Reading on 11th December at col. 416 my noble kinsman the Minister said that the amount involved is small and that it would not influence employment decisions. I trust that he will forgive me for saying that he has made the classic mistake of looking at turnover when he should have been looking at margins. Turnover may be very big when margins are in fact very narrow. I need only invoke the name of Mr. Micawber to make my point.
If such incidents of sickness push firms over the edge and into bankruptcy it will create unemployment. That is why I believe that the Minister was wrong to claim that the Bill will save £45 million on small businesses. He has altogether failed to calculate the cost of unemployment generated by the Bill to the Treasury. Of course, it is difficult to calculate the cost of unemployment to the Treasury. It is clearly more than simply the amount of benefit paid. One should take into account the cost of administration, the cost to the redundancy fund, the loss of tax revenue, the loss of national insurance revenue and the loss of VAT.
The unemployment unit has carried out costings on such a basis and has arrived at a figure which indicates that the cost of unemployment to the Treasury in a year is £8,296 for each person. However, I shall not insist upon that figure. If my noble kinsman would care to supply a better one, I should be very happy to consider it. I have brought with me my calculator and am willing to review the figure.
However, if the figure quoted is relevant, it is only necessary for 5,245 people to become unemployed as a result of the Bill's provisions for the whole of the alleged saving claimed by the Government to be wiped

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out. If that should happen, then the one and only benefit that the Government can see arising from the Bill would also be wiped out. In fact, we would have to go through all the anxieties and all the hardships generated by the Bill for nothing.
The arguments for five or 20 people are the same in principle. In my view the noble Lord, Lord Jenkin of Roding, is offering me a quarter of a loaf. Of course, that is better than having no bread. However, I believe that he could have stretched the point and gone so far as the proverbial half a loaf. I imagine that the Government intend to accept his amendment. Indeed, I cannot imagine any government led by politicians doing otherwise. But if by chance the noble Lord finds it necessary to press his amendment, the Liberal Democrats will support it. We shall do so without prejudice to, and reserving our position on, Amendments Nos. 4 and 6. We shall consider further what action to take on those amendments when we have heard the Minister's reply.
4 p.m.
Lord Carter: We have agreed to group Amendments Nos. 1, 2, 3, 4 and 6 together in order to make the debate on the subject more effective. I must say that when I saw the amendment which had been put down by the noble Lord, Lord Jenkin of Roding, I greeted it with modified rapture. In our view it does not go far enough. Indeed, there is much more support outside of this Chamber for Amendment No. 6. So far as we know, his amendment would affect about half of the firms in the country. Nevertheless, it is a start in the right direction.
The noble Lord said that he accepted the principle of matching; that is, compensation for the payment of statutory sick pay being matched by reductions in national insurance contributions. We shall certainly look for his support later today, or at a later stage of the Bill's proceedings, when we try to amend the legislation to ensure that such matching takes place.
As regards Amendment No. 6, this would exempt all employers with fewer than 20 employees and would affect about 80 per cent. of firms. We do not believe that it is impossible to calculate the average number of people employed. The detailed implementation would obviously be a matter for regulation. It is estimated that the cost to the Exchequer would be in the order of £45 million. That means that if the amendment is rejected the cost to small businesses employing fewer than 20 people would be about £45 million. As we have heard, it is especially important to protect small businesses which are now struggling hard to deal with recession.
The point has already been made that 40 per cent. of disabled people are employed in firms with fewer than 20 employees. Those people are less likely to be able to retain their jobs if they are off sick because of their disability. Larger firms can deal with the problems of the disabled person who is off sick. But it is very hard indeed for a small firm. We should be doing nothing to make it harder for the disabled to hold down jobs.
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The Minister may raise the issue of complexity. There are a number of factors such as the number of employees, the size of the business and the level of turnover. The proposal in Amendment No. 6 is no more complex than others already in force. Decisions could be taken on the amount of turnover, payroll, or whatever. If the Government have a will we can certainly help to find a way.
The point made by the noble Lord, Lord Jenkin, and dealt with by the Minister at Second Reading, that somehow the legislation must be put into force so that money saved can be used for other benefits, cannot be correct. The Bill is broadly neutral in its effect on public expenditure. The cost of rebates is in the order of £250 million. The cost of reductions in national health contributions will also be in the order of £250 million. Therefore the Bill will have no effect at all in that respect. Money for other benefits this year has come from the £100 million saved by the changes in rates of statutory sick pay, and the thresholds, which are completely outside the Bill. We shall be debating those when we come to the regulations. However, it is a mistake to argue that the Bill is needed this year to provide money for other benefits. If the Government intend to rely on the argument that the Bill is needed to provide such funds, it can only be for the future. That must mean that the Government have it firmly in mind to reduce the rebate percentage in future without a corresponding reduction in employers' national insurance contribution. Therefore I hope the Minister will not attempt to make that point when he comes to argue against the amendments.
Some concession by the Government on the lines of Amendment No. 1 and also of Amendment No. 6 would be a start. We certainly wish to see the effect of any such concession. As I have said, we strongly believe that the exemption limit should be made at the level of 20 employees rather than five but we are prepared to give the Government the opportunity to come back at Report stage, having reviewed the position, and take up an approach which is based not on numbers but upon other factors as well. If any concession which is made does not go far enough then we shall either wish to divide the Committee on Amendment No. 6 or put down an amendment at Report stage which would help to reduce the worst effects of the Bill.
Lord Boyd-Carpenter: I do not know what attitude the Government propose to adopt towards Amendment No. 1, which your Lordships are actually discussing at the moment, but I suspect, if only out of gratitude to my noble friend Lord Jenkin of Roding, they will be recommending your Lordships to accept it. Apart from my noble friend the Minister, during the discussions that have taken place so far, including Second Reading, my noble friend Lord Jenkin of Roding is the only speaker to have had a kind word to say about the Bill. I should be surprised if the Government are not so overcome with gratitude to him that they will not accept his comparatively small amendment.
A very important principle is involved here. The Bill will obviously hurt the small employer: there is no

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dispute whatever about that. But to say that you must exempt the really small employer from what otherwise you are proposing for everybody else does involve an admission that the measure will do some harm to employers generally. If ever there was a moment when it was singularly unwise to impose any additional handicap on employers, it is surely now. Whether we are in a state of recession is a matter of debate among economists. I would not enter into that. However, we are in a period when industry is facing difficulties and when the Government are rightly telling industry that it must keep its costs down. To come forward at this time with a measure which will increase the costs of industry overall by exacting £100 million from it is surely singularly unwise. An increase of that order may have been all right a few years ago in a time of boom. It may well be all right some years hence if the Government's measures are successful, as I believe they will be, in restoring the economy. At this moment it is a singularly unwise thing to do for the sake of what, in the general run of government expenditure, is a trifling amount but not so trifling to many of the industries concerned.
That is no doubt why, as the Committee will be aware, all those who speak for industry, with a surprising degree of unanimity, are critical. The CBI which normally, as Members opposite will agree, tends to favour the Government, is bitterly critical and so generally are the other organisations of employers and industrialists. They feel it is wrong at this moment to be making an increase in the costs of employers. The fact that the one defender of the Bill, my noble friend Lord Jenkin of Roding, sees it necessary to save the very small employers from what is proposed indicates a general acceptance of that view.
I am very disappointed that after the discussion on Second Reading the Government did not give further thought, as many noble Lords suggested, to whether it was wise in these circumstances to go through with the measure as a whole. Ill feeling has been aggravated by the lack of consultation. In winding up on Second Reading, my noble friend, at col. 415 of the Official Report of 11th December, admitted that the measure had been introduced without consultation. I read his words:
"By the very nature of the way in which the process of public expenditure rounds operate—my noble friend Lord Boyd-Carpenter will know this better than I—it was not possible to engage in prior consultations. However, we ensured that employers and their organisations were kept fully in the picture after the first announcement was made."
It is perfectly clear that had the Government consulted industry or the CBI they would have dropped the measure. They come forward with it simply as a result of a deal done on the expenditure round. I make no criticism of their making deals on the expenditure round. But if you are imposing a burden on people without—because you do it through the expenditure round—consulting them in advance, the matter is infinitely more serious. Therefore I beg my noble friend, even at this stage, to hesitate before going forward with the Bill. It cannot be helpful to our economy in its present state. It cannot do other than
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create ill will towards the Government in circles where the closest co-operation with the Government is needed.
I hope that the comparatively small amendment of my noble friend Lord Jenkin will be accepted; indeed, I have no doubt that it will be. But apart from giving way on the principle and acceptance of the fact that an extra burden is falling upon industry, the amendment is not really going to cure the mischief of the Bill. That is why I suggest to the Committee that we accept this amendment and other amendments too.
My noble friend Lord Jenkin of Roding appeared to accept that view because in a general passage in his speech he said that it was all right to increase the obligation of employers by way of sick pay provided that a reduction in national insurance contribution matched the increased obligation; but it does not match it, by £100 million.
Baroness Phillips: I support my noble friend on Amendment No. 6 but also join the noble Lord who has just spoken in saying that we are happy with any of the amendments. He also touched on a rather important point of principle which perhaps has been overlooked. I recall a famous debate a long time ago about whether there should be payment for items such as prescriptions that were taken out of the National Health Service; that is, a prescription charge. It was said that the charge would be only a shilling, but once a charge or a reduction has been made a principle has been established. This time the Government are talking about a reduction from 100 per cent. to 80 per cent. Next time they will probably change it again. In other words, they will have introduced a principle.
I am particularly concerned about small retailers. They are a very important factor in this country. In common with many other noble Lords I am astonished at how the Government keep annoying their friends. One gets the feeling that they do not want to remain in government. Perhaps they want another party to come in and put right some of the mess they have made and to return later; but now they are certainly intent on offending their friends. Small retail employers are almost invariably Conservative voters.
Incidentally, listening to the noble kinsmen following one another, I thought we were in the small business industry. I take it they are all related, rather like owners of corner shops. Seriously, if retail employers have to pay more, which they will have to do however small they are unless we can change matters, they will not bear that cost because they cannot. They will pass it on to you and me in the form of higher prices. In the end it is never governments who actually bear the cost of anything; it is the customer, the passenger, we the people who bear the cost. That is totally unfair and impractical and it will not work.
I am quite sure that the Minister, who is not a kinsman I am sorry to say, will see the sheer common sense of the amendments put before him.
Lord Walston: I cannot resist the temptation—it comes so rarely—of expressing my wholehearted

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agreement with what the noble Lord, Lord Boyd-Carpenter, said and his method of expressing it. I agree also with the noble Baroness and other noble Lords who have spoken. There is extraordinary unanimity in this matter.
Nothing of significance can be added by me to the arguments, which seemed to be incontrovertible, put forward particularly by the noble Earl, Lord Russell. However, I remind the Committee of the devastating or harmful effect that these proposals will have, if passed as they stand, on all small businesses. We know that they are suffering even greater hardship than many other businesses, especially in rural areas where small businesses are of particular significance. It is a matter which will affect not merely the farmer—and I do not like special pleading on my part for that very important industry—but all other industries which operate in rural areas, whether they be garages, workshops, small manufacturing shops, factories, or anything of that kind. This extra small drop, but one which tips the balance, is liable to have a devastating effect not only on small industries in general but on rural activities and the life of the countryside in particular.
I therefore express my complete support for all the amendments that we have embraced in this rather wide-ranging discussion. I urge the Government, as the noble Lord, Lord Boyd-Carpenter, has already done far more eloquently, to withdraw all the proposals and to think again very seriously about their implications.
Lord Birkett: It is clear from speeches in every part of this Chamber that it is small businesses with which we are concerned. We always get into trouble when trying to draw up definitions, and in this case that means the numbers, whether five persons or 20.
One argument which does not yet appear to have been raised is the number of firms which have what might be called private insurance schemes to protect them from the effect of sickness. Certainly the number of firms that have such private schemes was an argument advanced by the Government in proposing the Bill in the first place. If that is one of the arguments I should have thought it would be clear that very few firms employing five persons or under will have such a scheme. Indeed, I should be very surprised if many firms employing 20 or under have such a scheme. In deciding between the two, I wonder whether the number of five is intended to define small businesses as very small businesses. I should have thought that 20 was a more rational figure for the definition of small businesses. In fact, I should be very surprised if it were not a better figure than five.
I am sure noble Lords will be happy to start at five, but in spite of the precision with which the noble Lord, Lord Jenkin of Roding, marshalled his arguments I consider 20 to be a better figure. I hope that your Lordships, in starting at five, will have the courage to go on to 20, and preferably beyond.
Lord Henley: I have listened most carefully to all noble Lords who have spoken in the debate and I intend to concentrate very much on the amendments
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in hand which, as has been said, relate to the problems that might face small businesses. I do not intend to repeat the arguments put forward at Second Reading on the general merits of the Bill. As the Committee will accept, the Bill has been given a Second Reading.
I touch first on the point made by my noble friend Lord Boyd-Carpenter that this is the wrong time to make these changes despite the reduction proposed in national insurance contributions. That criticism has been made particularly in relation to provisions contained in the Bill. It is argued that the present economic climate is such—a point which my noble friend made very forcefully—that it is wrong to introduce a measure which adds to employers' costs, however little those costs may be. However, that is to forget the very real growth there has been over the years in occupational sick pay coverage. I am now talking about the generality and it is a factor which is much welcomed by all. There is never a perfect time to make any changes but I can assure the Committee that the provisions in this Bill, in the light of the proposed reduced national insurance contributions, are not as significant as feared.
I have listened most carefully to my noble friend Lord Jenkin, who speaks with a wealth of experience in this area. He was the Secretary of State at the Department of Health and Social Security, as it then was, at the time when the statutory sick pay scheme was being developed and was personally involved in the discussions which took place with employers and their organisations at that time. Naturally, the Government take very seriously what my noble friend said and we are most grateful that he came to see my right honourable friend and myself before Christmas to outline his anxieties about the Bill.
However, as I am sure my noble friend accepts, the Government are not unsympathetic to the fears that have been expressed by and on behalf of small employers about the provisions in the Bill. As I told the House during Second Reading, my right honourable friend the Secretary of State and I have met representatives of the National Federation of Self Employed and Small Businesses. I had a further meeting with them only a few days ago which was most useful. We have also received letters from numerous organisations representing the small business interest as well as from some individual employers.
The Government appreciate that now is not an easy time for business, especially for small firms in the size range which my noble friend has identified in his amendment. I fully accept the comments made by Members of the Committee on this point. I shall come back in a few moments to the precise terms of my noble friend's amendment and I hope I shall have something to say then which will be helpful to my noble friend and to the Committee. However, I wish first to spend a little time on the effects of the reductions in national insurance contributions.
Before I touch on that, perhaps I may make a few comments on the financial effect of the Bill. The noble Lord, Lord Carter, said that the financial effect was neutral. The Bill gives savings in public expenditure

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which enable the Government to devote resources to areas of greater priority in the social security system. My right honourable friend Lord Jenkin made that point.
The National Insurance Fund is independent of the Consolidated Fund. I am sure that the noble Lord knows perfectly well that statutory sick pay is not a drain on the National Insurance Fund; it comes indirectly from the Consolidated Fund. Quite separately, the current state of the National Insurance Fund has allowed us to propose reductions in employers' contributions which we hope will go some way towards meeting the complaints that have been made. I hope that the Committee will be prepared to welcome all these factors.
4.30 p.m.
Lord Carter: Will the noble Lord give way? I am extremely grateful to him for doing so. I referred to the total public expenditure, which is broadly neutral. It is £250 million on each side. The Committee would be extremely grateful to the Minister if he could confirm that the Government see the rebate in the National Insurance Fund as completely separate. The reduction in the compensation is not always to be matched by the reduction in the national insurance contributions.
Lord Henley: I can give no assurance as to what my right honourable friend or any future Secretary of State might wish or be able to do. It all depends on the state of the National Insurance Fund. On this occasion, my right honourable friend has found it possible to make some reductions in the level of national insurance contributions. He proposes to make those when we lay the order for them. He also proposes to make changes to the banding. Those are broadly neutral in cost, but the financial effects of the Bill produce savings. As I explained during Second Reading—
Lord Boyd-Carpenter: Would my noble friend be good enough to confirm what I said? It was that the effect of the Bill is a saving in public expenditure. Can he quantify that, please?
Lord Henley: The effect of the Bill will be to produce a saving of the order of approximately £250 million, though I cannot remember the exact figure. At the same time we propose reductions in national insurance contributions payable by employers which will broadly match that. We are also changing the bands of statutory sick pay, which will produce further savings of £100 million. I think it would be easier to explain that when we reach the amendment in the name of my noble friend Lord Mottistone, which I understand relates directly to those savings.
Lord Harmar-Nicholls: I believe that the noble Lord, Lord Carter, deserves a fuller answer to his question. It is true that we would not expect my noble friend to speak either for the present Secretary of State or for future governments. However perhaps he can indicate whether the general intention behind the amendment is to set a precedent that could be
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followed and that may well be followed. I think my noble friend ought to make clear whether decisions on both those legs will be taken separately.
Lord Henley: As I said, I cannot bind my right honourable friend. He must look at the current state of the National Insurance Fund before he makes any reductions. The two are quite distinct. I cannot promise any matching reductions, should there be any future changes.
As I explained during Second Reading, in putting together the combined package of SSP changes and national insurance contribution reductions, the Government have paid particular attention to the special problems of the small employer. I explained to the House how the reductions would work and gave some examples of the practical effects for employers of different size and sickness experience. It is clear from the representations which continue to be made that the extent of these has not been fully grasped and I hope that the Committee will bear with me if I go into a little more detail about this. It is a very important point and should go on the record.
Although the proposed reductions go across the whole spectrum of employers' contributions, they are proportionately much greater in respect of employees in the lower earnings bands—that is, those earning £185 a week or less. Thus, from April 1991 it is proposed that the lower rates of 5, 7 and 9 per cent. should be reduced by 0·4 per cent. to 4·6, 6·6 and 8·6 per cent. respectively. This compares with the much smaller reduction of 0·05 per cent. on the employer's contribution in respect of employees earning over £185 a week.
Concentrating the reductions on the lower paid will particularly help those employers who would benefit from my noble friend's amendment. This is because such employers are generally more likely than the larger employer to have employees in these earnings ranges working for them. The contribution reductions in total are worth £250 million to employers and £150 million of this sum is made up from the changes in the lower rates.
Baroness Seear: I am sorry to interrupt the noble Lord but this point is important and it is not too easy to get clear what is meant. He seems to assume that small firms automatically employ people at lower wage levels. I accept that this is often true but there is an increasing number of small firms which employ only a few people who are, however, at a relatively high-tech level. Therefore those firms may pay relatively high salaries to that small number of people. I challenge the assumption that because the number of employees is small they are necessarily low paid. If I have got the argument right, I believe that is what the noble Lord suggests, but I do not believe that it is correct.
Lord Henley: I totally accept what the noble Baroness suggests. It is only a trend, but the smaller employer tends to pay lower wages. Perhaps I may give one example: many farmers tend to be small employers. No one would argue that the agricultural wage is one of the highest; it tends to be on the low

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side. Immediately all farmers will enter the discussion. This is only a trend, it is not automatically the case. If the noble Baroness will bear with me, I hope that what I have to say will to some extent open a possibility that might solve the problem rather than dealing with the matter purely in terms of the small employer, automatically assuming that he is the one with the low-paid employees.
I wish to expand on some of the examples I gave to the House at Second Reading. Statistics show that on average an employer can expect about 20 per cent. of his workforce—that is, one in five of the workers—to be absent from work because of sickness during the year and that the average amount of sickness is about three weeks. I do not believe that there is any dispute about these figures of average levels of sickness. They have certainly been accepted by a number of the organisations that have been in touch with us.
On this basis, if we take the employer with five employees all earning £150 a week, if one of those employees is away for a total of three weeks in the year, there will be a net gain to the employer of £173·59. That assumes not just the 80 per cent. reimbursement of SSP but that the employer tops up the difference between the lower rate and higher rate of SSP by occupational sick pay. Even if two employees are both away for three weeks in the year; that is, double the average level of sickness, there is still a gain of £91·18. If in the same size of employer, the employees were earning £184·50 a week; that is, just below the earnings level at which the standard rate of contributions would become payable, the savings of an employer experiencing the same degree of sickness as I have just described would be even greater: £825·79 and £764·98 respectively. If we look at an employer with 20 employees in those earnings ranges, the saving would be even more marked. Many Members of the Committee will have seen the calculations produced by the National Federation of the Self Employed and Small Businesses. The federation was kind enough to give me a copy of those calculations when it saw me last week, for which I thank it. Those show the effect on a single employee at four different earnings ranges. I do not dispute those figures, but it would be more realistic to look at the position in the context of the total number of employees in the workforce and the likely sickness that they would experience, as I have done in the examples I have just given.
I believe that I have said enough to emphasise the extent of the advantage which smaller employers (if their employees tend to be low-paid) have providing—I accept this is an important proviso—that they do not experience abnormal sickness.
I dc not for a moment pretend that all employers will gain, or break even, from the combined effect of the SSP/NI contribution package. That would be an absurd claim. The package as a whole cannot be neutral. The same considerations do not apply in respect of employees earning more than £185 a week, where the reduction in the employer's national insurance contribution is not so high. Of course, the very small employer, described by my noble friend, who has the misfortune to experience significant
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sickness in his workforce will not have the opportunity to recoup the extra SSP costs from the reduced national insurance contributions.
It is this last situation—the small employer experiencing above average sickness in his workforce—to which the Government have been giving particular consideration since Second Reading. We have been especially impressed by the representations made about the difficulties of applying averages to employers that have very few employees. Although most spells of sickness are short, if, for example, an employer with two employees should have one of those away for a protracted time (in the extreme case for the full 28 weeks for which SSP is payable) he would not only have insufficient other employees to gain from the reductions in national insurance contributions, he would probably also have to employ someone else whilst the employee was away. In larger firms neither of those situations will necessarily apply.
In the light of those considerations, we have been giving thought as to how the situation might be alleviated for such an employer. We have given serious consideration to my noble friend's amendment, and that of my two noble kinsmen. We feel that my noble friend has pitched his amendment at about the right level (five employees), whereas we feel that my noble kinsmen Lord Russell and Lord Stanley, who have pitched it at 20, have probably gone too high because at that size averages will begin to bite, if I may use that expression. But following what I said earlier, the particular problem we are seeking to redress is that of the small employer with abnormal sickness loads, who will not get the full benefit of the proposed reductions in National Insurance contributions. What we have in mind is a procedure which would enable a small employer—I stress we are only talking about small employers—to revert to claiming 100 per cent. SSP after an employee has been sick for a specified number of weeks.
As the Committee will appreciate, the crunch is how we define a small employer. My noble friend's amendment suggests five employees or fewer; a subsequent amendment from my noble kinsman Lord Russell proposes fewer than 20 employees. As I have said, we think my noble friend has it about right. As he will know, however, the use of a specific number of employees as the determining factor as to what is or is not a small employer is not without its difficulties. There could, for example, be problems where the employer's workforce fluctuated. We also need to look at how we deal with associated employers. There could also be problems with an employer with a large number of employees all earning below the lower earnings limit and only two or three above that limit.
We are, therefore, urgently exploring at the present time, possible other parameters which might be used to define a small employer to see whether those would be more sensible than relating any new rule specifically to the number of employees in the workforce at a particular time. I want to stress we are not ruling out the use of numbers. We are, for example, looking at how a small employer is defined in other legislation to see whether that can help. Another promising

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possibility is to relate the definition to the amount of national insurance contributions paid in the previous year. That would have the advantage for the employer of excluding from the reckoning any employees earning below the lower earnings limit who did not quality for SSP.
4.45 p.m.
Lord Stanley of Alderley: Will my noble kinsman give way? When he says that he is not ruling out a numbers definition, is he open to the suggestion that the figure might be more than five?
Lord Henley: I cannot go that far. We feel that five is about right. As I have said, once we go above five averages begin to bite. The compensation we propose through the reduction in national insurance contributions will begin to take effect. It is only with the small employer that we see problems. I am afraid that I cannot offer my noble kinsman any hope that we might consider more than five employees.
As the Committee will understand, we need also to look carefully at the administrative consequences of such an arrangement to try to provide the most practical and viable method for employers—a point rightly stressed by my noble friend Lord Jenkin, because employers, especially small ones, sometimes have problems in administering statutory sick pay and other matters relating to my department and the Inland Revenue in operating what might be a dual system of reimbursement.
I cannot usefully take this matter any further now. Although I accept the spirit of my noble friend's amendment, the Government cannot accept it as drafted. I give a specific undertaking that the Government will come forward on Report with their own amendment along the broad lines I have indicated. In the light of that I hope my noble friend will feel able to withdraw his amendment, and that my noble kinsman Lord Russell will not press his amendment.
Lord Jenkin of Roding: I am grateful to all Members of the Committee who have supported this group of amendments. In particular, I express my warm appreciation for what my noble friend the Minister has just said. When I moved the amendment I said that the test of referring to the number of employees might not necessarily be right. I am attracted by his suggestion of quantifying the exemption, if such it be, by reference to the amount of national insurance contributions paid. It seemed to me that that might have considerable advantages.
I hope that my noble friend will be open to argument on the question of what the effect of the exemption would be. Although he dealt with the point very briefly, he indicated that the effect would be 100 per cent. reimbursement over and above a certain level of statutory sick pay.
Lord Henley: The intention would be to reimburse those who suffered abnormal levels of sickness when their statutory sick pay extended beyond a certain time. I am afraid that I cannot go further than that.
Lord Jenkin of Roding: That is what I was afraid of. With the greatest respect to my noble friend, I am not sure that the small businesses we are talking about would find it possible to administer such a system. My suggestion would take them out of the Bill altogether and leave them in exactly the same position as they are now. I hope that my noble friend and my right honourable friend in another place may still feel able to consider that option.
I fear that, if there is to be additional relief for firms whose employees suffer exceptional sickness, in the end the position will be the same as with the 7 per cent. compensation for the national insurance contribution, up to 25 per cent. of which is never claimed, as my noble friend told me in the letter that I quoted. If that is the case we may have spent nearly an hour and a half to no avail because those eligible will not be able to benefit from the amendment. I make no apology for spending the time of this committee on considering the problems of small businesses. I hope that my noble friend will look very carefully at a suggestion which will not involve those small firms in any additional administration. That is what we want to see.
Lord Henley: I do not want my noble friend to be under any misapprehension. I do not believe that we can follow a line under which there would be two separate rates depending on the size of the firm. It is a question of finding a suitably simple form of reimbursement which would allow small businesses, when they experience exceptional levels of sickness, to receive 100 per cent. reimbursement.
Lord Jenkin of Roding: It would be churlish of me if I did not acknowledge that my noble friend has gone a very long way towards meeting the spirit of the amendment. It is clear from the way in which he has addressed your Lordships that the Government are open to further representations and discussion as to precisely how the relief may be defined and administered. We should all be grateful to my noble friend for the fact that there is to be relief for the very smallest firms. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 2 and 3 not moved.]
The Deputy Chairman of Committees (Lord Aylestone): If Amendment No. 4 is agreed to, I cannot call Amendment No. 5.
Earl Russell Earl Russell moved Amendment No. 4:
Page 1, line 11, leave out from ("payments)") to ("and") in line 15 and insert ("after the words "prescribed circumstances," there shall be inserted the words "and in the circumstances in paragraph (aa) below";").
The noble Earl said: One has to be grateful for small mercies. This one is very small. I should like to ask my noble kinsman whether he can explain further one point which caused me some considerable surprise. He said that when one reaches 20, statistics begin to bite. I have never known anyone to publish an opinion poll based on 20 respondents. If such a poll were published I should be very surprised if anyone gave it very great weight. Before the matter is disposed

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of, can my noble kinsman tell us whether he has any statistical evidence for the proposition that at the level of 20, statistics begin to bite? I beg to move.
Lord Henley: I am not sure that the expression I used was a happy one. However, my noble kinsman will understand that the greater the number of employees a firm has the more relevant average levels of sickness will be. There are particular problems which affect firms with a very small number of employees so that those statistics become irrelevant. However, I believe that one can say that at the level of 20 employees they are relevant and over the year will average out at more or less the same level for all, depending on the different degree of sickness in different industries.
Earl Russell: If my noble kinsman will write to me before Report stage justifying that statement I shall read what he says with a great deal of interest. I wait to see what the Government bring forward on Report and in the meantime I shall reserve my position.
Baroness Seear: The Minister made the even more surprising statement that above five statistical figures start to have some meaning. I cannot imagine how he arrived at that conclusion. Will he also explain that in his letter to my noble friend? It seems a most extraordinary figure to have arrived at.
Lord Henley: I shall write to the noble Baroness. The fewer involved the less relevant a statistic might be to an individual employer.
Earl Russell: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mottistone Lord Mottistone moved Amendment No. 5:
Page 1, line 14, leave out ("80") and insert ("91").
The noble Lord said: I noted what my noble friend Lord Jenkin of Roding had to say and the many points that have been taken care of in the discussion of earlier amendments. My noble friend had a hand in putting together the scheme in the early 1980s, and he was succeeded by my right honourable friend Sir Norman Fowler. The key point is that at that time there was full consultation with industry. In relation to this particular Bill there has been no consultation at all.
Notwithstanding the fact that my noble friend Lord Henley said at Second Reading (at col. 414 of Hansard for 11th December 1990) that he could assure the House that:
"There will be ample time for consultation… My door will remain open to any person",
in fact, he and his right honourable friend the Secretary of State have not discussed the matter with the CBI. On 10th January my right honourable friend the Secretary of State wrote to the CBI—
Lord Henley: My right honourable friend and I have had a meeting with the CBI.
Lord Mottistone: There was a meeting before Christmas but not after Christmas. In the final sentence of his letter, my right honourable friend the Secretary of State said:
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"I think we are both fully aware of each other's position. I am doubtful, therefore, that any further meeting would serve any useful purpose at this time".
That seems to me to be a blunt way of not discussing the matter.
One point that may be relevant to the earlier amendments is that it might be helpful if my noble friend Lord Henley were to have discussions with the CBI when considering what he might put in place of Amendment No. 1. That might redress some of the balance.
I turn now to my amendment. It would have the effect of making the Government's package of proposals for changing the statutory sick pay scheme cost neutral. That is the key feature of what we seek to achieve by changing the figure of 80 per cent. to 91 per cent. In this area there is no connection with the 91 per cent. that was mentioned earlier in another connection. It happens to be the best arithmetical result in order to make the cost completely neutral.
Under present proposals the reduction of employers' National Insurance contributions would broadly compensate employers for the 27 per cent. reduction in the amount of SSP reimbursed. However, the Government have offered no compensation for the increased costs which employers will bear as a result of the changes in SSP rates announced in the Secretary of State's annual benefit uprating statement. Because of the rise in earnings threshold which determines entitlement to the higher rate of SSP, fewer employees will be eligible for the higher rate of SSP, losing £9 per week. In many cases employers would have to make up the shortfall and their costs would therefore rise by as much as £100 million, according to the Government's own figures.
My amendment would increase the employers' reimbursement rate to 91 per cent. This would increase the amount reimbursed to employers by £99 million, and as long as the reduction in employers' national insurance contributions remains as proposed, the total package would therefore be cost-neutral on the Government's calculations. With the economy now in recession such a change is surely necessary. That is the basic reasoning for this amendment.
We had occasion to ask employers how much they reckoned the proposals in the Bill would cost them without the amendment. I shall leave it to my noble friend Lord Boyd-Carpenter to tell your Lordships exactly how much these companies think the cost will be, because it was his initiative that led to these figures being produced. The fact of the matter is that in this affair it will be very much a matter of rough justice, however it ends up. There will be some winners but very many more losers, and some losers may lose a great deal.
It is all very well to worry about the small firms. Of course we do not want small firms to go bust. In my part of the country, the Isle of Wight, we probably have more small firms per head of population than most other parts of the country, so I do not decry what has been said on the earlier amendments. But the success of this country in producing enough wealth in

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order to survive and pay for things like social security depends on the bigger companies, and they must be considered too.
As very much a half-way house solution I strongly recommend to your Lordships and to my noble friend on the Front Bench that the figure of 91 per cent. goes some way, but not all the way, to making a fairer balance of charge as between industry and government. I hope very much that my noble friend will feel that he can accept it. I beg to move.
5 p.m.
Baroness Turner of Camden: From these Benches I rise to support the amendment. The noble Lord, Lord Mottistone, in introducing the amendment has spoken, as he frequently does, on behalf of employers and has expressed the views of the CBI. I should like to express concern about the propositions in the Bill from the standpoint of employees.
Everyone in this Chamber, and I think the Government, wants to see a growth of occupational schemes. The reason why the Government say the Bill is now a possibility is that it is claimed that occupational schemes have grown enormously, and the figure of 91 per cent. of all employments has been advanced. We know that not all occupational schemes are good ones; some of them have exclusion clauses and others provide only a limited amount of cover, but in my view employers are unlikely to agree to improvements in existing occupational schemes or to their introduction if they do not think they are going to get reimbursement of SSP. In particular, those employers who hitherto have been making up the difference between SSP and full pay will have to pay more money in make-up, as the noble Lord, Lord Mottistone, has said, because of the changes in the lower and higher rates of SSP. Therefore, any pressure that might be exerted to improve existing schemes is not likely to meet with a very realistic or helpful response from employers.
I share the views which have already been expressed that at a time of recession it is in nobody's interests, either employees of small firms or employees in much larger organisations, if further costs are imposed upon employers in the circumstances outlined in the Government's propositions both in relation to the Bill itself and in further proposals outlined by the Minister.
I very much hope that the Minister will be able to say that he sees some point in the amendment and that the Government will view it with some favour. I support the amendment.
Earl Russell: The noble Lord, Lord Mottistone, has made the key point about the amendment; it is the break-even amendment. Even the Secretary of State did not claim that employers actually break even as things are. The National Federation for the Self-Employed has calculated the effects of having one employee sick. At £100 a week the employer would lose £6.77 a week; at a wage of £184.50 a week the employer would lose £17.97 a week.
1012
I understand that the noble Lord, Lord Boyd-Carpenter, is going to quote the figures collected by the CBI for individual firms. They are telling figures, and I look forward to hearing him quote them. I should like to add just one more figure which was made available to me at 12 o'clock today. It comes from the Committee of Vice-Chancellors and Principals, which calculates that the Bill will cost the universities £1 million a year. I think that that is in line with the other figures that the noble Lord intends to quote.
That aspect also draws attention to something that has not yet been mentioned, which is the effect of the Bill on the big public sector employers. Here we have a further problem which may tend to diminish any putative saving that the Government think they will derive from the Bill. I dread to think what the figure may be for the amount that the Bill is going to cost the National Health Service. If it goes ahead, the Government will have to decide whether they are prepared to allow beds to close to provide the necessary savings or whether because of the political consequences it will be necessary to stump up the necessary cash. I think it very likely that they may find they have to stump up the necessary cash, in which case the putative saving is diminished even further than we thought it would be.
The Bill is also going to have quite a serious effect on local authorities. I thought that this Government had got into enough difficulties with local authority finance and did not need to go looking for more. Evidently they are gluttons for punishment, but I do not think that this Chamber should necessarily help them to get it.
I want to mention two further points, one of which is the GATT. Your Lordships may ask what the GATT has to do with statutory sick pay. My answer is nothing. That is precisely why it is relevant—an answer which is perhaps superficially, on a Gilbertian level of paradox. It is true that we are seeing a more activist GATT. It is true that farmers who are concerned by this Bill are at the moment in the firing line. The Prime Minister said just before Christmas that it would be a tragedy if the GATT ended with no agreement being reached. I think that is a view from which there would be very few dissentients in this Chamber. That means that we may be placing upon farmers today, and perhaps on other producers tomorrow, burdens which many of us would place only with very great regret.
With a more activist GATT in the field it will be vital to any country to hang on to those ways of softening life for employers and making it cheaper for them to stay in business which do not contradict any GATT rules. As far as I know, reimbursing employers for statutory sick pay is not contrary to GATT rules, and in the near future ways of helping our employers which are not contrary to GATT rules will be like gold. Where we have anything like that we should keep it.
I shall make one final point. My noble kinsman the Minister dwelt on occupational sick pay schemes. I agree with what he said, but there seems to me to be

1013
a risk that as business does not like uncertainty and as this Bill will increase uncertainty dramatically for some businesses and significantly for others, firms may be slightly less eager to develop occupational sick pay schemes than they are at present. Therefore this Bill may do damage to a development in which the Minister and I believe, as do most of the rest of the Committee. I for one would regret it.
Baroness Seear: Perhaps I may ask the Minister to comment on a point arising from the speech of the noble Lord, Lord Mottistone. If I understood the noble Lord aright, he said that a lower paid worker under conditions of sickness is likely to be worse off because of the proposed changes.
So far in this debate it has not been mentioned that a high proportion of low paid workers are members of ethnic minorities who are apt to be employed to a considerable extent although not exclusively by other members of ethnic minorities. If it can be shown that this Bill will have an unduly unfavourable effect on ethnic minorities, it could be seen as a case of indirect discrimination. As I fully realise, like most cases of indirect discrimination it would not be intended, but that would be the consequence. That might lead to a case before the European Court.
That is a point which has been put forward by the Institute of Personnel Management. It is an important point to take into account.
Lord Boyd-Carpenter: In discussing this amendment the Committee has been considering the financial effects of the Bill. Perhaps my noble friend the Minister will allow me to say that so far he has been rather coy in his response to questions about those effects. I therefore invite his attention to the Statement on the financial effects of this measure as given on the front of the Bill. It states perfectly clearly that:
"Clause 1 will produce savings in public expenditure of £181m in 1991–92, rising to £190m in 1992–93 and £197m in 1993–94. In addition subsection (3) of the Clause will result in an increase of national insurance income of £71m, £75m and £78m in the three respective years".
That seems clearly to indicate—indeed it is the purpose of the Bill—that there will be a saving in excess of £100 million of public expenditure. That is how the whole matter started; namely, as part of the expenditure round and as the deal struck between the Secretary of State for Social Security and the Treasury. We know that; and we also know that it was done without consultation. I believe that it is useful that the Committee has a clear view of the financial effects centrally.
As my noble friend Lord Mottistone said, the CBI has been researching among its members as to what will be the additional costs to them. Understandably a number of companies are not happy about disclosing their names—although one of them has—but the CBI at least is satisfied that for a large chemical company the additional cost will be £460,000 a year and that for a large manufacturing company it will be as high as £2 million a year. To Marks & Spencer, which is a very
1014
well known and efficient firm and to its credit the company let its name be disclosed, it will be £600,000 a year.
We are not therefore dealing in small change, even with such big companies. It is also a time when they are desperately trying to keep down their costs and when appeals rightly are being made by the Government to trade unions not to inflate industrial costs by excessive wage demands. Yet the Government now come forward with a proposal which will increase the costs of those firms by figures of that kind. Consequently the purpose of my noble friend's amendment, which is designed to deal with that situation and which he assured the Committee would do so (I have not myself followed his calculations but I know that he is extremely well informed on these matters), is to prevent that increase in costs.
I wonder whether any students of our economy at the moment would not feel that it is the duty of Parliament to do everything possible to restrain the increase in industrial costs in the present situation and that it would be wholly irresponsible of Her Majesty's Government to insist on putting them up artificially.
5.15 p.m.
Lord Carter: Before the noble Lord sits down perhaps I may mention that he referred to a figure of £100 million. Did he deduct in that second figure the £71 million from the £181 million? The effect of this Bill is that one would have to add together those figures. On its own the effect of this Bill is to give an increase in the public exchequer of £258 million.
Lord Boyd-Carpenter: That is true because we are concerned with the difference between the national insurance fund and the national funds, as we are all well aware. I thought it only fair—I do not mind that the noble Lord does not—to add that the increase in exchequer costs was only in part offset by an increase in national insurance fund income. That is a matter of opinion but it seems to me that that is the fairest way to put the matter.
Lord Jenkin of Roding: I owe it to my noble friend Lord Mottistone to spell out in perhaps two or three more sentences than I did in my remarks on the earlier amendment why I feel some hesitation in supporting his amendment. I said that I thought the Government were justified in the general thrust of this Bill subject to the problem of small businesses that we dealt with in the last group of amendments, where the Government indicated that they were prepared to make concessions.
My noble friend Lord Boyd-Carpenter, as one of the first Chief Secretaries to the Treasury, has already adverted to the problem; namely, that when a spending Minister seeks to agree his programmes with the Treasury, specifically with the Chief Secretary (I have sat on both sides of that table as did my noble friend in an earlier decade), the fact is that he is engaged in a trade-off because there is an upper limit to what the Chancellor and indeed almost certainly the Cabinet have already indicated have to be the bounds of public spending.

1015
If one goes back and reads the Statement made in another place and repeated in this Chamber about the social security uprating, one can see that the Minister, my right honourable friend the Secretary of State, specifically referred to the linkage between the savings that could be achieved by this change to statutory sick pay and a number of other highly desirable improvements in the social security system which, by no stretch of the imagination, could ever be visited on anybody else such as an employer. There is here the position of an increasing number of employers operating employment sick pay and paying their employees amounts on different scales but paying them of their own free will because they feel it is part of their responsibility as employers. We have to consider that 91 per cent. of employees are employed by firms which operate some kind of sick pay scheme for their employees. That does not mean to say that the 91 per cent. of employees are covered. Some more research is needed on that point.
One should consider what the Government are able to afford for next year. As the Secretary of State said, they have made these changes open the way to a number of other important improvements both small and large and I think that the Committee will recognise that they are all improvements for which in one way or another every single one of us has been pressing over the years. They are improvements which will now take effect. The independent living fund has multiplied twelvefold in the course of three years and in this year it will have its resources doubled to £62 million. The independent living fund helps the most seriously disabled people who find themselves faced with difficult situations which are often far beyond the ability of the ordinary statutory payments to cover. There are sometimes hundreds and occasionally thousands of pounds necessary to meet the needs of their disabilities. It is done in a most imaginative way.
I have the honour to be a vice-president of Motability and will be handing over to it yet another car. An extra £1 million has been spent on expensive adaptations. There have been changes in the mobility allowance and there have also been changes in income support. Members of this Committee sat through long debates on the Social Security Bill and discussed the problems of income support. The real increase to the basic pension for those aged between 60 and 74 in income support, housing benefit and community charge benefit has been more than the retail price index can justify.
There has also been a major upward adjustment in a field which brings together the interests of elderly and disabled people; that is, the limits relating to residential care and nursing homes. There cannot be any Member who has not been faced with a problem similar to that which I faced in my former constituency. People said that they could not look after their clients on the limits which the Department of Social Security was prepared to allow. The Government have now met that problem and in London where costs are high the increases are
1016
substantial. I also remind the Committee that there has been an increase in child benefit for the eldest child.
In the light of my experience as social services Secretary of State and as a Chief Secretary, I regard it as being inconceivable that the Government, in view of the pressures that they face, could make any of those highly desirable changes—for which there can be no other source than the Exchequer—unless they were prepared to offer savings in an area in which employers are becoming increasingly responsible; that is, regarding it as being within the normal scope of employment to cover employees during short-term sickness—
Lord Mottistone: Does my noble friend believe that anything that he has said has any bearing on my amendment?
Lord Jenkin of Roding: My noble friend is asking for a larger reimbursement in order to remain neutral. The Government have had to find savings and I am reminding the Committee upon what they have spent those savings. For that reason I find the amendment impossible. How can one have one's cake and eat it? How can one go from 80 per cent. to 91 per cent. while at the same time applauding all the splendid things which my right honourable friend announced in another place before Christmas? Those matters do not add up. If we are to have the benefit of additional expenditure we must give the Government the facility to find the savings. The Government are doing that by cutting the reimbursement from 100 per cent. to 80 per cent. and changing the banding on social security—
Lord Harmar-Nicholls: Will my noble friend carry that argument to its logical conclusion? He has been rather selective in calling a halt at where he believes the overriding interest of the nation justifies that. If as a result there is an increase in unemployment and the cost of servicing the unemployed continues to eat up some of the margins that he believes the Government will have available, should that not be taken into account?
Lord Jenkin of Roding: We then come to the other side of the equation. The national insurance contributions, and so forth, do not enter into the public expenditure totals. In dealing with the public the Government must balance the extra spending with the reduction in compensation as regards the extra contribution. Broadly speaking, they have done that. When my right honourable friend the Secretary of State for Social Services deals with the Chancellor he is dealing with public expenditure. If he wishes to make improvements in his area of public expenditure he must be prepared to find savings.
I have listened to my noble friend and read the Second Reading debate in this Chamber and the debates in another place. I fear that I cannot accept the main burden of the argument; namely, that the Government should not be acting in such a way because that puts additional expenditure on the generality of employers. I believe that the other

1017
improvements are worth that cost and, therefore, cannot find it in my heart to support my noble friend's amendment.
Lord Boyd-Carpenter: Perhaps I may reply to my noble friend Lord Jenkin because he has challenged my proposition. We all accept that the Government's handling of social security improvements has been marvellous and is a fine achievement. However, there appeared to be a complete gap in my noble friend's argument in that he suggested that it must be financed in this way. He will be aware that the capacity to finance the present social security system and improvements to it depends on the efficient working of our economy. If we cannot create sufficient wealth by the efficient working of the economy we cannot support even the present level of social security benefits, never mind higher levels.
The point made by the critics of this Bill is not that one should not in some way or another finance such improvements appropriately through taxation. On the contrary, the point is that by using this method—incidentally, without prior consultation with industry —one is hampering the efficient working of the economy and therefore the capacity to produce the wealth necessary to maintain our social security system. My noble friend and I have sat on both sides of the table but, with great respect, he now appears to ignore the point.
Lord Jenkin of Roding: Perhaps I may respond and then I shall sit down. One is talking about 0.05 per cent. of the total employment bill which currently runs at more than £300 billion. I should have more sympathy for the employers if I believed that they were seeking to keep down and hold at a more reasonable level the pay increases that they are prepared to give to their employees. I am chairman of various companies and know how difficult that is, but it can be achieved. I have corresponded with the CBI on the subject but now I find that at its conference it wrings its hands about inflationary pay demands which its members are conceding and complains in this Chamber about the 0.05 per cent. which must be set against all the other desirable aspects in the area of social security.
Lord! Peyton of Yeovil: I understood that the point behind my noble friend's amendment is that the Government should not add wantonly to industry's costs. It has been my impression that industry has received a great deal of advice from the Government. It has also been the experience of industry to find that advice somewhat negatived by the process of constantly adding gratuitously to the costs of industry. One is left wondering whether this is a particularly good moment for the Government to choose to add even a small proportion. When my noble friend Lord Jenkin rose to make his point I listened, as always, with profound respect. However, it did not appear to be relevant to the amendment. I believe that the point is simple—that this is not the time to add to industry's costs in any way. I shall not presume to repeat the cogent arguments put forward by my noble friend Lord Boyd-Carpenter. I express only the fervent hope and devout prayer that the
1018
Government's ears may be opened and that they will agree to think again. I am minded to support my noble friend's amendment.
Lord Carr of Hadley: Without going into the detailed arguments, I should like to reinforce what has been said. This is not the time at which deliberate additions should be made to the cost of industry. There may be moments when to do that is tolerable but in my view at present it is not tolerable.
5.30 p.m.
Lord Harmar-Nicholls: I am never quite certain about the role of this Chamber as compared with that of the other place when dealing with these matters of detail. In the other place, if one had personal examples from constituents which could help to make the point under discussion on any Bill, one could use such examples to make one's contribution. In this Chamber we seem to feel it our duty to deal only with the global effect, which can run into millions of pounds, or 0.5 per cent. of something, which can amount to a great deal of money.
I should like to revert to the practice which I felt it was my duty to follow in another place. One listens with great care to the overall results which emerge from investigations made by the CBI as presented by my noble friend. However, I am connected with a few companies for which I have responsibility. When these percentages first appeared, I went to some trouble to examine what would be the result. Some of my companies employ perhaps no more than 10 or 12 people while others employ up to 150 or 200 people. Therefore, they cover a broad range.
I should like to tell my noble friend who will answer the debate that the effect of this measure is considerable. At present we are entering into a recession. We hope that it will be short and that we shall quickly return to happier times. However, at present the recession is causing us to think very hard about every penny which must be expended. In this area I can speak with complete authority and over the past two months we have had to dispense with something like 20 people. The financial situation of the companies involved has necessitated that action. I have no reason to believe that my experience, from which I can speak with full confidence, is any different from that of other companies where I am not in such a position.
My noble friend said that this was not the time to add, however marginally, to the problems which industry in general has at present. That is a very cogent point. While this Committee should look at matters globally and should not necessarily be swayed by the good or ill which one small action can bring, I believe that the evidence here shows sufficiently that this is not only the wrong action to take but the wrong time at which to try it.
In a completely different sphere, I should like to take up the very real point made by the noble Earl, Lord Russell, on GATT. During the five years in which I was a Member of the European Parliament (where we went into matters in detail rather differently from the way in which that is done in this Chamber)

1019
I discovered that many of the problems in international trade came under the heading of what were known as "non-tariff barriers". Under GATT, nations could not put on a tariff to protect their various industries. However, they tried to find methods of imposing what effectively amounted to a tariff; for example, by setting standards as to the quality of certain sections of a commodity. We discovered that the Japanese in particular were very adept at being able to produce a non-tariff barrier point which had the effect of putting up a barrier and giving protection very much to the disadvantage of industries in this country.
In this instance, this provision would not be infringing the spirit or the general approach set out by GATT. I agree with the noble Earl that to remove that help, however small it may be, is rather stupid. We could keep within the rules and yet could make a tiny contribution towards helping the general competitiveness of our industry. I came here today particularly to vote for my noble friend's amendment. By keeping this matter as level as possible at this time, we are doing our duty in helping the Government to meet the very grave financial problems which they must face. One is not and should not be oblivious to those problems. By accepting this amendment we should be doing just that. At the same time, we should not be injuring the grave necessity of helping our industries and business generally to play a part in producing the wealth which we need if we are to have the way of life that we believe should be ours today.
Lord Henley: I start by dealing with two points. My noble friend Lord Boyd-Carpenter accused me of being coy on the figures relating to the savings. Quite rightly he corrected me and for the sake of the record I should like to put that right. I said that the Bill will lead to public expenditure savings of some £250 million. It would be correct to say that there will be public expenditure savings from the Bill of around £180 million. In addition, the Bill will mean an increase in national insurance income. My noble friend is always very keen to maintain a distinction between the two and he is quite right to do so. Such an increase will amount to some £70 million arising from the ending of the 7 per cent. compensation. However, that is not a public expenditure saving.
The second point on which I should like briefly to touch is the point made by the Baroness, Lady Seear. She suggested that provisions in the Bill might produce unfavourable consequences for employers of ethnic minorities. If that were so, the Government would be very disturbed. However, I should emphasise that we believe that the provisions in this Bill will have no effect on employees and I do not believe that employers—whether or not of ethnic minorities—will react in the way which the noble Baroness and others fear. However, I undertake that the Government will look at any evidence produced to the contrary by the noble Baroness or anybody else.
When I first saw the amendment of my noble friend Lord Mottistone I was somewhat nonplussed as to why he had chosen the figure of 91 per cent. At first I
1020
thought it might be in honour of the new year or that it might indicate some recognition of the figure, which we all quoted, of 91 per cent. of employees working for employers who provided some form of occupational sick pay. However, my noble friend explained his point and I now understand that the level has been very carefully chosen. Nevertheless, I regret that I shall be unable to accept the amendment.
As my noble friend has explained, were the reduction in the reimbursement rate to be restricted to 91 per cent. instead of 80 per cent., this would reduce the public expenditure savings by some £100 million. This would in turn broadly match the savings which will be made through not increasing the higher rate of SSP in April and through raising the dividing line between the two SSP rates to £185 a week.
As the Committee will be aware, the changes affecting the higher rate of SSP and those entitled to it are not part of this Bill. There will be an opportunity to discuss these provisions within the next few weeks when the SSP (Rate of Payment) Order comes before the House along with the other uprating orders. Now is not the time, therefore, to have a detailed debate about these proposals.
It may be helpful in the context of the discussion on this amendment, however, if I briefly set out the provisions which will be in the uprating order and which were announced by my right honourable friend the Secretary of State on 24th October. As the Committee will know, there are two rates of SSP. The lower rate currently goes to those employees whose average weekly earnings are between £46 and £125 —£46 being the lower earnings level at which national insurance contributions first become payable. It is intended that that lower rate be increased by the full RPI increase of 10·9 per cent. from £39·25 to £43·50, which is an increase of £4·25 a week. The increase recognises the fact that low paid and part-time workers are less likely to receive occupational sick pay from their employer when they fall sick. At the same time the dividing line between the two rates which, as I said, is presently £125, should be increased to cover the whole range of earnings bands within which employers pay the lower rates of contributions. This will be £185 from April 1991. Finally, it is proposed that the higher rate of SSP will stay unchanged at £52·50 a week.
Those changes will reduce public expenditure by around £100 million in 1991–92. The Government maintain that, despite those changes, the vast majority of employees will receive no reduction in the total payment they receive when sick. This is because of the way occupational sick pay under the employer's own scheme interacts with SSP. And here, of course, lies the reasoning behind my noble friend's amendment.
My noble friend argued that although the reductions in national insurance contributions will broadly compensate employers for the costs of the proposals in the Bill, they will not cover the additional £100 million which arises under the uprating proposals. I accept that that is the case. But I cannot

1021
accept that it would be right to cover that by pitching the SSP reimbursement rate for all employers at 91 per cent. instead of 80 per cent.
In the first place not all employers will experience extra SSP costs as a result of the changes in the uprating proposals. While we expect most employees affected to have SSP topped up by occupational sick pay, some, of course, will not. Employers without occupational sick pay schemes would therefore obtain the ad vantage of the higher reimbursement rate proposed by my noble friend even though there was no extra cost to them. Similarly, the higher reimbursement rate would apply equally to SSP paid in respect of employees earning £125 a week or less as to those with higher earnings. Such employees will have had the benefit of a full RPI increase, so again the employer has no extra costs. In the Government's view, therefore, there is not a strong case in logic to make the change proposed in the amendment. But even given the fact that for many employers their occupational sick pay schemes will have to bear the cost of the changes in the SSP uprating proposals, the Government do not consider that that should impose a significant burden on individual employers.
I feel that my noble kinsman Lord Russell was scaremongering when he spoke of closing beds in NHS hospitals. The effect of £100 million spread throughout all employers will be very small. It represents only a tiny proportion of the total labour costs over the economy as a whole, which are running at well over £300 billion. It is less than 0.03 per cent., which is even lower than the figure of 0.05 per cent. given by my noble friend Lord Jenkin. The figure of 0.03 per cent. represents £100 million spread over the total labour costs which are running at well over £300 billion.
I acknowledge, as my noble friend said, that now is not a good time for business. But the Government do not consider that that modest shift in the balance of provision between state and business should pose specific burdens on employers. In that context I should perhaps stress the Government's record on employers' contribution rates. I remind the Committee that significant reductions in national insurance contributions have been introduced by the Government for employers as well as for employees.
In 1979 employers were paying 13.5 per cent., including the 3.5 per cent. national insurance surcharge. The Government gradually reduced that amount to 10.45 per cent. In 1985 they introduced the three reduced rates of 5 per cent., 7 per cent. and 9 per cent. for lower-paid workers. Those reduced rates are generally of the greatest help to smaller employers whose workforce is more likely to be among the less highly paid. As the Committee is aware, the Government propose to reduce those rates still further to 4.6 per cent., 6.6 per cent. and 8.6 per cent. from next April. Thus in the case of a lower-paid worker the employer's contribution will have been reduced over the 11 years from 13.5 per cent. to 4.6 per cent. As that amounts to little more than 0.03 per cent. of labour costs as a whole, the SSP changes form a very modest
1022
shift in funding to employers, especially when viewed in the context of the Government's past record on national insurance contributions.
Perhaps I can take an example given by my noble friend Lord Boyd-Carpenter which related to Marks & Spencer. I cannot confirm or deny its estimate of an additional annual cost of £600,000. I am not sure whether account was taken of the reductions in national insurance contributions. However, to put that in perspective one should note that according to the profit and loss account for the year ending 31st March 1990 its staff costs as a whole were £671 million. That comparison must put the increased costs it claims it will have into some perspective.
The Government decided on the figure of 80 per cent. reimbursement after careful consideration of all the implications. For the reasons I stated we do not believe that it would be appropriate to further change the level of reimbursement to take account of the £100 million which will be saved from the separate SSP changes to be included in the uprating proposals. In those circumstances I hope my noble friend will withdraw his amendment.
Lord Mottistone: That response is most disappointing. The figures quoted by my noble friend attempt to show that if one generalises very little money is involved—forgetting what happens to the individual firm and the firm that will go to the wall because it is in difficulty. If that is so, a gesture could be made to industry indicating that the Government recognise and appreciate its problems. My amendment does not go the whole hog and do away with the Bill, which is what I should really like to happen. To accept the amendment would be a practical and sensible gesture by the Government at this time to show that they recognise that industry is in trouble and that they are trying to do something about it. At some later stage, when industry is running better, a new Bill could be produced to change the rules.
To say that this is where we must stop and that the Government will not accept the carefully worked out figures which produce a reasonable neutral balance, strikes me as being most unreasonable. I was delighted by the support I received from these Benches from those of my noble friends experienced in industry who know the effect the Bill will have on companies. I was sorry to hear what was said by my noble friend Lord Jenkin. I will not pursue that point because other noble friends shot him down even more effectively than I could do. Those of us who are concerned for industry believe that the amendment goes some way towards recognising the problem. The noble Baroness, Lady Turner, put the point on behalf of the employee. Apart from what the noble Baroness said, I am afraid that we had not studied the impact on the employee as much as perhaps we should. However, it is not only companies wanting to remain solvent and to produce the wealth of the country which are concerned; it is also companies which want to remain solvent and continue to produce jobs for people.
The noble Earl, Lord Russell, said that the vice-chancellor told him that the cost would be £100 million. Not only will we hit employees and

1023
companies, but we shall also hit education. Therefore it is surely a matter on which the Government should concede. With that in mind I beg to move.
5.50 p.m.
On Question, Whether the said amendment (No. 5) shall be agreed to?
Their Lordships divided: Contents, 132; Not-Contents, 80.

Division No. 1

CONTENTS

Abinger, L.

Hughes, L.

Addington, L.

Hylton-Foster, B.

Airedale, L.

Irvine of Lairg, L.

Aldington, L.

Jeger, B.

Ampthill, L.

Jenkins of Hillhead, L.

Ardwick, L.

Kearton, L.

Attlee, E.

Kilbracken, L.

Auckland, L.

Kilmarnock, L.

Aylestone, L.

Kinloss, Ly.

Banks, L.

Kirkhill, L.

Barnett, L.

Lauderdale, E.

Birk, B.

Lawrence, L.

Blackstone, B.

Listowel, E.

Bonham-Carter, L.

Lockwood, B.

Boston of Faversham, L.

Longford, E.

Bottomley, L.

Lovell-Davis, L.

Boyd-Carpenter, L.

McIntosh of Haringey, L.

Brightman, L.

McNair, L.

Brooks of Tremorfa, L.

Malmesbury, E.

Bruce of Donington, L.

Marsh, L.

Carmichael of Kelvingrove, L.

Mason of Barnsley, L.

Carnarvon, E.

Mayhew, L.

Carr of Hadley, L.

Mersey, V.

Carter, L.

Milner of Leeds, L.

Cledwyn of Penrhos, L.

Monson, L.

Clinton-Davis, L.

Morris of Castle Morris, L

Cocks of Hartcliffe, L.

Mottistone, L. [Teller.]

Craigavon, V.

Nicol, B.

Darcy (de Knayth), B.

Ogmore, L.

David, B.

Oram, L.

Davies, L.

Peston, L.

Dean of Beswick, L.

Peyton of Yeovil, L.

Denington, B.

Phillips, B.

Donaldson of Kingsbridge, L.

Pitt of Hampstead, L.

Dormand of Easington, L.

Prys-Davies, L.

Elliot of Harwood, B.

Rea, L.

Ennals, L.

Richard, L.

Ewart-Biggs, B.

Ripon, Bp.

Falkland, V.

Rippon of Hexham, L.

Fisher of Rednal, B.

Ritchie of Dundee, L.

Gainford, L.

Rochester, L.

Gainsborough, E.

Russell, E.

Gallacher, L.

Saltoun of Abernethy, Ly.

Galpern, L.

Scanlon, L.

Gisborough, L.

Seear, B.

Gladwyn, L.

Shackleton, L.

Graham of Edmonton, L. [Teller.]

Shaughnessy, L.

Shepherd, L.

Grantchester, L.

Sidmouth, V.

Greenway, L.

Stanley of Alderley, L.

Gregson, L.

Stedman, B.

Grey, E.

Stoddart of Swindon, L.

Halsbury, E.

Strabolgi, L.

Hampton, L.

Taylor of Blackburn, L.

Hanworth, V.

Taylor of Gryfe, L.

Harmar-Nicholls, L.

Terrington, L.

Harris of Greenwich, L.

Thomson of Monifieth, L.

Hatch of Lusby, L.

Thorneycroft, L.

Hertford, M.

Thurlow, L.

Hollis of Heigham, B.

Tordoff, L.

Hooson, L.

Turner of Camden, B.

Houghton of Sowerby, L.

Underhill, L.

Howie of Troon, L.

Wallace of Coslany, L.

1024

Walston, L.

Wilberforce, L.

Wedderburn of Charlton, L.

Williams of Elvel, L.

White, B.

Winstanley, L.

Wigoder, L.

NOT-CONTENTS

Allerton, L.

Lurgan, L.

Arran, E.

Lyell, L.

Astor, V.

McColl of Dulwich, L.

Beloff, L.

Mackay of Clashfern, L.

Belstead, L.

Mancroft, L.

Bessborough, E.

Margadale, L.

Blake, L.

Merrivale, L.

Borthwick, L.

Milverton, L.

Brabazon of Tara, L.

Mountevans, L.

Brougham and Vaux, L.

Mountgarret, V.

Butterworth, L.

Munster, E.

Caithness, E.

Napier and Ettrick, L.

Campbell of Croy, L.

Nelson, E.

Carnock, L.

Nugent of Guildford, L.

Cavendish of Furness, L.

Orkney, E.

Chesham, L.

Orr-Ewing, L.

Cochrane of Cults, L.

Park of Monmouth, B.

Colwyn, L.

Pearson of Rannoch, L.

Cox, B.

Perth, E.

Davidson, V. [Teller.]

Quinton, L.

Denham, L. [Teller.]

Reay, L.

Elibank, L.

Rees, L.

Elton, L.

St. John of Fawsley, L.

Fanshawe of Richmond, L.

Selborne, E.

Flather, B.

Skelmersdale, L.

Fraser of Kilmorack, L.

Stockton, E.

Gibson-Watt, L.

Strathclyde, L.

Glenarthur, L.

Strathmore and Kinghorne, E.

Gormanston, V.

Suffield, L.

Haig, E.

Swinfen, L.

Hailsham of Saint Marylebone, L.

Teviot, L.

Thomas of Gwydir, L.

Henley, L.

Trefgarne, L.

Hives, L.

Trumpington, B.

Holderness, L.

Vaux of Harrowden, L.

Hood, V.

Waddington, L.

Hooper, B.

Wade of Chorlton, L.

Jenkin of Roding, L.

Whitelaw, V.

Johnston of Rockport, L.

Windlesham, L.

Killearn, L.

Wynford, L.

Long, V.

Resolved in the affirmative, and amendment agreed to accordingly.
5.57 p.m.
[Amendment No. 6 not moved.]
Earl Russell Earl Russell: moved Amendment No. 7:
Page 1, line 24, leave out subsection (2).
Lord Simon of Glaisdale: Am I right in thinking that we shall be discussing Amendments Nos. 7 and 8 together?
Lord Henley: The noble and learned Lord is quite correct.
Earl Russell: There seems to be a general sense that the Government are attempting to do something which is rather unwise. The subsection which I am trying to delete authorises the Government, whenever they see fit, to do it again, and as many times as they like, without recourse to further parliamentary legislation. Clause 1(2) has become known in industrial circles as the clause of Damocles. It is known in this House as a Henry VIII clause. If one looked at the view from Tower Hill one might think that those two names had something in common. I have noticed that when one uses the phrase "Henry VIII clause" it sometimes produces a somewhat glazed expression among noble Lords. Most of us know that

1025
there is only one memorable thing about Henry VIII and we cannot quite see how a clause can manage to have six wives.
The procedure was first used in the reign of King Henry VIII. It involves the passing of an Act which authorises a Minister by order to vary the primary legislation. It authorises the Minister to make new law by regulation. I shall not say that that is something which is always improper but it is something which Parliaments in all centuries ought to view with suspicion. It ought not to be done lightly; and when it is done it ought to be for a clearly acceptable objective and with a very clear justification.
In anything that has been said for this clause I do not think that those criteria have in the least been satisfied. I shall not develop the arguments arising from the Donoughmore Scott Report. I hope that the noble and learned Lord, Lord Simon of Glaisdale, will develop those points. I shall say only that I have read the report. I agree with everything that the noble and learned Lord has said in the past about it and I expect to do so again.
When we consider a clause of this kind we have to ensure that there is an adequate check on the Executive. Parliaments are not always the most powerful check on the Executive but they are the check which our system is designed to use. We should use them as best we can. We have to concern ourselves with the object of the clause and we have to concern ourselves with its justification. I am not sure that it does very well on either of those criteria. There is less resistance for some objectives than there is for others. If something on the whole beneficial and not particularly damaging is being done by one of these clauses, we may perhaps be more indulgent to the form of it than we should be in other cases.
We have had a rush of them recently, each for a rather worse objective than the previous one. The Henry VIII clause in the Education (Student Loans) Bill was simply designed to authorise the Minister to vary the list of educational institutions at which students were eligible to receive loans. The House on the whole took the view that that was not a particularly harmful objective. The clause in the Courts and Legal Services Bill was perhaps a little more unusual. It sought to allow the Minister to transfer business from the High Court to the county court. That, thanks to the noble and learned Lord the Lord Chancellor, was modified in the course of its passage. But here we have a very much more dubious objective. The clause is being used to authorise the Minister, by regulation, to lay financial burdens on the subject.
I am sure that my noble kinsman the Minister will wish to object to that form of words. He will wish to say that what we are dealing with is not the laying of a financial burden on the subject but the paying of a reimbursement. In strict form that is true but we are dealing with what is correctly described as statutory sick pay. The employer is under a legal obligation to pay it. If my noble kinsman were to deny that, I would put down a good many amendments at Report stage to ensure an adequate protection for employers. It is
1026
something which the employer has to pay and for which he is no longer being reimbursed so in effect it imposes a financial burden on the subject.
I ask the Committee to consider what its reaction would have been if we had not gone through the initial stage of liability with reimbursement but had gone straight to the imposing of a liability without reimbursement with such a Henry VIII clause involved. I think we should have taken a very dim view of it. There are only two objectives which I should regard as more questionable than this. One is the direct laying of new taxes by a Henry VIII clause and regulation and the other is the creation of new criminal offences. We have no sign yet of the Government doing either of those things but such clauses are becoming more frequent. Sooner or later we shall have to send one back and say that it really will not do.
The justification offered for the clause by my noble kinsman the Minister at Second Reading was equally thin. We were given reassurances both by my noble kinsman and by his right honourable friends Mr. Scott and the Secretary of State that the Government had no present plans further to reduce the rate of reimbursement on employers. I entirely accept those reassurances, but they leave the Government with a very thin justification for this clause. In fact when my noble kinsman justified the clause he did so solely in terms of Executive convenience. He said:
"it is sensible to have a provision that is capable of being changed".
He gave the game away by saying:
"Governments of all complexions acknowledge that as the sensible way to proceed".—[Official Report, 11/12/90; col. 417.]
That is simply the voice of the Executive, the voice of administrative convenience as it has been heard for centuries. The trouble is that it does too much. It has never been in accord with administrative convenience to have Parliaments at all. That is why it is rather important that we have them. It has always been a nuisance to busy ministers to have to justify themselves in Parliament. In fact I do not think I am being fanciful in hearing behind those arguments the irritation in Whitehall that it has to go through legislation to get a Bill on the statute book in the first place. That irritation is a mark of quite how necessary it is that we should go through the parliamentary process.
I fully accept that my noble kinsman will move an amendment to introduce the procedure by affirmative resolution. I welcome that. But, with respect, for this House it is not enough. It ensures the ability to debate whatever the Government may do in future but some of us in this Chamber do not always feel that our debates are listened to with quite the attention that we should like to think they deserve. If we speak in this Chamber with the tongues of men and angels and cannot vote, we have no power. What matters is the ability to vote against the Government and occasionally to win.
A great deal of argument is going on about under what circumstances this Chamber may vote on

1027
something to do with a statutory instrument. I shall not go into that matter any further—it is sub judice with the Procedure Committee at the moment—but it is at present a convention that this Chamber does not directly vote against a statutory instrument. Therefore, if a further reduction in the reimbursement is introduced by a statutory instrument it will in effect be capable of becoming law without the consent of this Chamber. Another place can and may vote against it, but if we in this Chamber let that go through we abandon our right to say no.
For that reason the increasing use of Henry VIII clauses constitutes a contempt of this House. They are being used to do something which I think is thoroughly questionable in itself. Sooner or later we shall have to vote one of these clauses down and get it taken away. We have argued against them before and yet they become more frequent. When will we have a better opportunity to vote one down? I beg to move.
Lord Stanley of Alderley: I have been reading the reasons given by my noble kinsman Lord Henley at Second Reading for not accepting such an amendment. They are quite unconvincing for three main reasons. He stated first at col. 416 of Hansard that the Government had no plans at present to alter the rates. Then, at col. 417, he said that it would be unwise for him to predict the future. It sounds as if he took those statements straight from Sir Humphrey. I really do not know what they mean. Moreover, he repeated that assurance—if you can call it an assurance—during the debate on the first amendment.
Secondly, my noble kinsman went on to say that the level of national insurance contributions is a separate question and could therefore be adjusted if statutory sick pay was altered. That was a nice use of the word "could". Thirdly, he stated that the principle of the Bill was covered in Clause 1 but that the percentage rate charged to employers was not a principle and therefore was appropriate for secondary legislation. If ever there was a chicken and egg case that is a perfect example.
Finally, unless Members of the Committee support Amendment No. 7, the amendment which has just been accepted will be ineffective, in that the Government could put forward an order to alter the rate back to 80 per cent. or, indeed, back to any rate they wished.
Lord Mottistone: My noble friend has stolen my horse: I had intended to make the same point. The effect of winning acceptance of the last amendment will be completely nullified if Amendment No. 7 is not accepted by the Committee. It will mean that any percentage would be vulnerable.
I turn now to Amendment No. 8. It is my experience in this Chamber that both affirmative and negative orders are just as unattackable—if that is the right word—in this place as if we had no powers over them. We can put forward a good argument, but if the relevant order has been passed in another place—and it is up to the Government to organise that—then there is an unwritten rule that we must more or less let
1028
it pass through this Chamber. Moreover, if we do not do so, all sorts of hell could be let loose. Therefore, such opposition has seldom occurred.
In my view orders are not good enough to cover such matters. Of course, administratively, they are splendid but as regards keeping parliamentary control, as mentioned by the noble Earl, we must retain primary legislation to cover such crucial areas. Therefore, I hope that Members of the Committee will support Amendment No. 7 and reject Amendment No. 8.
Lord Carter: It is clear that those of us who have put our names to the amendments, and others, feel that the process of affirmative resolution is not enough. There is a point which is puzzling me and perhaps the Minister will clarify it in his reply. The Bill refers to an order amending the subsection by,
"any greater or lesser percentage".
However, in Amendment No. 8 reference is made only to "a lesser percentage". Therefore, in the most unlikely event of the Government wishing to increase the percentage, would they be able to do so?
I turn now to deal with the effect of this subsection. We on this side of the Committee believe fundamentally in the concept that statutory sick pay is the responsibility of the national community through the national insurance system. We have already debated the fact that this Bill in its totality is not about a saving in costs for this year. If the Government wish to save money they can do so—as they have done this year—by way of the rates and the thresholds of statutory sick pay. They do not need a Bill in order to do so.
Having produced the Bill, the Government say that this year they will roughly balance in global terms the cost to the employer of reduced rebates by reducing the national insurance contributions. The Minister confirmed that these are in fact quite separate issues. Indeed, he did so in his reply to me on a previous amendment. The answer he gave is the reason why the Committee should accept Amendment No. 7. He said that the rebates and the changes in the national insurance programme are entirely separate.
Why therefore do we need a Bill? It is clear that we do not need one in order for the Government to save money. They intend to save money in future years by increasingly shifting the burden of statutory sick pay to employers. Their original intention was to slip through the future changes by way of the negative resolution procedure. They have at least given way on that issue by changing to an affirmative resolution. However, we are quite convinced that this is not the way to do it. As I said, it is not enough. If Members of the Committee will excuse the pun, we hope to help the Government to stiffen their resolution still further by removing the subsection from the Bill.
The Government must return to Parliament through primary legislation if they wish to make changes of principle such as those in respect of the percentage rate of rebate. Such changes must not be brought about by administrative fiat. I urge Members of the Committee to support the amendment so that

1029
we may at least in one case stop this increasing practice of government by regulation and replace it with government by Act of Parliament.
6.15 p.m.
Lord Simon of Glaisdale: This subsection is a highly objectionable provision. It is all the more objectionable because it is unnecessary for the purpose of the Bill as it has been explained to the Committee. It is by far the most objectionable of all the Henry VIII provisions which noble Lords have had to consider in recent years. It impinges upon fiscal matters (on charges of the subject) and moreover, as I said, it is unnecessary for the purpose of the Bill.
Our liberties depend upon the balance of the constitution. We do not carry a division of powers to a logic Al extreme and conclusion as does the American constitution. However, by and large we keep separate the judicial, the legislative and the executive functions. Unless that is done, liberty has gone. One saw that when the Reichstag surrendered its legislative powers to Hitler to enable him to govern by decree; in other words, it gave him a Henry VIII clause to cover all that he wanted to do.
I entirely agree with the remarks made by the noble Lord, Lord Carter. Amendment No. 8 is quite insufficient. However, it enables us to examine what has been happening by way of the preparation of legislation and by way of the supervision of the work of parliamentary counsel. On the face of the Bill, this subsection is subject to no parliamentary control. How is it that that fact did not alert anyone? It is only by going back to a section of the 1982 Act which is amended—namely, Section 9—and then chasing through the legislation over many pages to Section 45 that we find that the negative procedure applies. However, that appears only after considerable scrutiny. How was the provision ever introduced with only the negative procedure applying to it?
The Joint Committee on Delegated Legislation produced a unaminous report in the 1972/73 Session. It set out three criteria which would govern when there should be an affirmative resolution. This subsection offends against no less than two of them. In paragraph 46 of the report the committee refers to,
"Powers substantially affecting the provisions of Acts of Parliament".
Those are explained as meaning something other than "trivial or tidying-up" procedures. I do not suppose that it can be pretended for a moment that this is merely a matter of trivial tidying up.
Secondly, reference is made to,
"Powers to impose financial charges".
The noble Earl dealt with that, but the sentence continues:
"or to make other forms of financial provision."
So I am bound to ask: how was the provision ever introduced with the negative procedure alone? Have the Government reneged on the acceptance of the report of the Joint Committee? If not, how did it escape notice? Of course I ask that question
1030
rhetorically because your Lordships all know the answer. It is because parliamentary counsel are not responsible to any legal department.
Sir Robert Andrew was recently asked to report on the government legal services. He recommended that parliamentary counsel should be responsible to the law officers. Personally I should have preferred the Lord Chancellor, but Sir Robert's recommendation was certainly better than nothing. However, that was not accepted by the Government and one can only speculate as to the reasons why. The parliamentary counsel still remain responsible only—and only nominally of course—to the Prime Minister, who has other things to do than supervise the drafting of Acts of Parliament.
The other reason why there is no control is that the Legislation Committee of the Cabinet, on which the noble Lord, Lord Boyd-Carpenter, served with such distinction for so long, has abnegated its former function of supervising and scrutinising legislation before it is introduced. I am quite certain that in his day the fact that this was, on the face of it, not subject to any parliamentary control and, on scrutiny, was subject only to negative resolution would have set all the wires humming and the Bill would have been referred back to the department.
So much for Amendment No. 8; hut, as the noble Lord has just said, it does not meet the case at all. The Donoughmore Committee recommended not that it should simply be convenient to legislate in this way but that it should be essential, necessary and proven to the hilt. Those were its words. Of course it is highly convenient for the Executive not to have to bother with Parliament as regards its legislation. The "gentleman in Whitehall" does generally know best, but there is one thing he cannot know. However skillfully he cobbles it up, he cannot tell where the shoe is going to pinch the citizen: only the citizen can tell that.
One need not look beyond this Bill for an example. During the discussions on Second Reading and again today, countless objections of a total and economic nature have been produced to cause the Government to be prepared at least to rethink some matters; and recently your Lordships have carried an amendment against the Government. As was pointed out by the noble Lords, Lord Stanley and Lord Mottistone, this procedure is available to overturn the considered opinion of your Lordships. When Sir William Harcourt went to the Home Office, he called together the officials and said, "My business is to prevent your governing the country so well that an infuriated population will hang you from the lamp posts of Whitehall." That is the purpose of Parliament: to prevent our being governed with excessive efficiency which does not really take account of where a measure bites.
So one comes back to asking again what I ventured to ask last time: do the Government accept the Donoughmore Report? My noble and learned friend the Lord Chancellor indicated that they did, by and large, but certainly nothing appears in this Bill to bear that out. The Memorandum bears no resemblance at

1031
all to the Henry VIII clause and neither did the Minister's introduction. It was only when he was reminded to do so that he dealt with it in his reply and then, as has been pointed out by the noble Earl, all he said in effect was that it might be very convenient and it might come in handy some time. That is simply not good enough.
As I have said, this is the worst example we have had, principally because it involves a charge on the citizen. We had a number of Henry VIII provisions, as the noble Baroness, Lady Seear, will remember, on the courts Bill. The most egregious—not as objectionable as this but highly objectionable—was a provision allowing the Lord Chancellor to alter the penalty for an assent. He rapidly withdrew it and all the other Henry VIII clauses except one were made subject to affirmative resolution. The one that was not was a minor one affecting rules of court.
Therefore I ask the noble Lord on the Front Bench: does he really justify this as necessary and does he even say it is proper for the purposes of the Bill? I hope that the noble Earl will carry this matter of high constitutional importance into the Division Lobby, unless the noble Lord, Lord Henley, accepts the amendment. If he does, I shall follow him without hesitation.
Lord Rippon of Hexham: I have high hopes of the new Conservative Administration under the premiership of Mr. Major. We have been promised a change in the style of government. At the very least, I hope this means that we shall pursue our objectives by different means. One of the worst features of recent legislation has been the proliferation of these Henry VIII clauses, to which reference has been made. We are now facing, as the noble and learned Lord, Lord Simon of Glaisdale, said, the worst example that I have known. The folly of the position is shown by the references to the effect of the previous amendment, which will be perfectly useless if this further amendment is not made.
I, too, welcome this amendment providing that there should be affirmative resolution, but I think that the noble and learned Lord, Lord Simon of Glaisdale, was absolutely right when he said that this amendment should not have been necessary. We have had a number of discussions in this Chamber about these clauses. We had a long discussion on the Courts and Legal Services Bill, when we virtually had an assurance, although it was slightly modified to me in a subsequent debate, that the Government would not normally try to introduce measures of this kind by negative resolution. I hope that the noble and learned Lord the Lord Chancellor will look at this Bill and consider how such a thing could happen.
I have been a sinner myself. Indeed in a debate on the 14th February at col. 1408, I gave a striking example of what happened to legislation for which I was responsible, under which an order was subsequently made which had, to my mind, the most devastating consequences. But there was nothing at all that the courts could do about it. So it is fair to say
1032
that even the affirmative resolution is no really effective safeguard, not only in this Chamber but in the other place as well.
I can say from my experience that a clause of this kind would never have got through the Legislation Committee when the noble and learned Lord, Lord Simon of Glaisdale, was Solicitor General. There is no doubt about that. The position has become worse and worse and the courts are powerless if Parliament has in effect given delegated powers to the Minister which in practice are often exercised on the say-so of a relatively junior official, even though a Minister's name may be attached to the order.
Only last July the Court of Appeal turned down a challenge to the use by the Secretary of State for Social Security of delegated powers because it had to. There was no doubt that the Minister had power to make the order, so effect had to be given to it although the Court of Appeal expressed stringent criticisms of what it described as "unprecedented and unsupervised power". This power goes further than that.
When I had the opportunity of initiating a short debate on 14th February last year, I suggested as moderately and as modestly as I could the establishment of a Select Committee to scrutinise all Bills and to report whether they contained insufficiently defined administrative powers or proposed any inappropriate delegation of legislative powers. I had in mind what happened in Australia. In 1981 a Senate standing committee was established for the scrutiny of Bills, and it has worked very well. Of course we have plenty of committees to study the past and to peer into the future, but I do not think that we pay enough attention to what is happening at the present time.
I shall not pursue that point but I would ask my noble friends on the Front Bench to have a look at the debate we had on 14th February and also to study the debate which was initiated by the noble and learned Lord, Lord Simon of Glaisdale, on 31st January last year, which went into greater detail about the high constitutional issues that he has raised. It was a debate on both the quantity, which is too large, and the quality of legislation.
I believe that the Government should comply with the recommendations of the Donoughmore Committee that the use of the Henry VIII clause should be severely restricted, and it should always be explained and justified in the Memorandum to the Bill. It should also be remembered that the Donoughmore Committee was considering a very different situation from that which we face today. Heaven knows what it would have thought about a provision of this kind. It was considering a situation in which such a clause had been used only nine times since it was first introduced in a local government Act of 1888, which was limited to such matters as giving the Minister power by order to state the date of the coming into operation of the Act, and was normally limited to a period of 12 months from the coming into force of the Act. In the event, after the publication of the Donoughmore Report no such Henry VIII clause was introduced until after the Second World War. In other words, the Government found it perfectly

1033
possible between 1932 and 1939 to introduce complicated public health and local government legislation without feeling the necessity for provisions of this kind.
I do not want to go over all the arguments that have been advanced, not only today but on many previous occasions, but I should like to emphasise that I entirely agree with everything that has been said by the noble and learned Lord, Lord Simon of Glaisdale, both on this and other occasions. We need to emphasise that we are debating or discussing not some obscure or trivial legal point but a matter which has considerable constitutional implications, with dangers that are very real.
6.30 p.m.
Lord Peyton of Yeovil: Many years ago I was called upon to take my place on the Standing Committee which was considering the licensed premises (new towns) legislation. Ever since then I have been able to keep under very strict control, without undue effort, my admiration for our legislative procedures. I recognise that such procedures are a nuisance for the Government and I would have great admiration and respect for any administration that felt called upon to face the problem as a whole. I have rather less respect when a somewhat underhand method is resorted to of merely by-passing the inconveniences of procedures for which successive governments are responsible and of which they are the beneficiaries.
The constant use of the Henry VIII clause is unacceptable. I cannot think that any of your Lordships who voted for the previous amendment could possibly do other than support this one. I conclude my remarks by saying to my noble friend on the Front Bench, who enjoys—"enjoys" may be the wrong word—my entire sympathy in having to carry this particular burden, that I think he is allowing his cheerful good nature and optimism to get a little out of control if he thinks that the crumb of the affirmative resolution which he is offering to your Lordships will play a decisive role in the outcome of this discussion.
Lord Boyd-Carpenter: Now that the Leader of the House is here I hope I may appeal to the Government to think again. I share the sympathies of my noble friend Lord Peyton with my noble friend Lord Henley, who has had to stand up most gallantly not only to numbers but to reason for most of the afternoon. I fully realise the limitations imposed upon a junior Minister, and his inability to go back on what he has said in his brief, but now that the Leader of the House is here it would be helpful if we could be given some encouragement and in particular if we could be given an explanation as to why this subsection was inserted in the Bill. It is not good enough just to say, "Oh well, it might come in handy one day". One can hardly expect Parliament to take that as a serious argument for serious legislation. There must have been some thought in some circles of government that, having got this Bill through and having produced a modest reduction in public expenditure, they could take another gulp and reduce the 80 per cent. to 60 per cent. or something similar. I am sure that the noble Lord, Lord Henley, is far too discreet to tell us that, but it
1034
is only fair to tell him the suspicion which arises in the minds of even the most guileless and naive of those such as myself—and of course I couple the noble Lord with myself in that.
Seriously, surely we could be told that the Government are going to have another look not only at this particular subsection, which I hope will be taken out of the Bill in a few moments, but at the whole structure of the Bill; surely they will realise that some of us at least who have been critical are not critical because we enjoy being critical of a government whom we fully support and for whom we have the greatest respect. The fact that we have therefore been driven to oppose the measure might perhaps be thought to suggest there is something wrong with it.
I do not expect the noble Lord, Lord Henley, to get up and say that—if he did he would probably be the ex-Minister tomorrow morning—but I hope that either he or my noble friend the Leader of the House will be able to say that the Government are going to give serious and extra thought to the matter. As the noble Lord the Leader of the House knows, because I wrote to him over the Recess, I begged him and his colleagues in the Government to have another look at the whole of the Bill, the consequences of which seemed and still seem to be most unfortunate and particularly damaging to the Government at an important time. I therefore hope that we may be given some encouragement not merely on this subsection but on the Bill.
Lord Henley: I regret that I shall not be able to satisfy my noble friend Lord Boyd-Carpenter. I thank him for his fairly soothing words after the violence from the noble and learned Lord, Lord Simon, who accused me of violence in my conduct of the Bill through the House. I thought that my responses had been positively honeyed all the way through the Committee stage. In bringing forward concessions or making offers of concessions on some amendments I believed that I had been the opposite of violent. I shall not be able to help very much Members of the Committee who have spoken on this and on my own amendment to which I shall come in a moment.
As I told the House during Second Reading, and as my right honourable friends have said on more than one occasion in another place, the Government have at this time no plans to make further changes in the SSP reimbursement rate. Once again I wish to assure the House that the Government have no private commitment to make progressive reductions in the percentage rate in the future. That being the case, Members have asked: why have the provision at all? I can do no better—
Lord Rippon of Hexham: Will my noble friend give way? Does that mean that there are no present or future plans to change the 91 per cent.?
Lord Henley: I can give no commitment on the amendment. It will obviously be a matter that we shall have to consider and another place will have to consider when the Bill goes back to it.

1035
I was trying to reassure the Committee that we have no secret plans or commitment to make progressive reductions in the percentage rate in the future. I repeat what my right honourable friend said in another place on two occasions, because he quoted himself at Committee stage. The Secretary of State said:
"We have no plans to make further changes, but given the way that matters have been developing and the continuing need to examine priorities across the whole spectrum of social security, it seems sensible to have a provision that is capable of being changed… A large part of the social security system, including nearly all the rates of benefit —quite apart from the whole range of other rules—is in a form that does not lock it into primary legislation, so that changes can be made by secondary legislation. Governments of all complexions have acknowledged that that is a sensible way of dealing with social security matters". —[Official Report, Commons, 28/11/90; col. 915.]
It would be foolish to rule out for ever further consideration of this aspect. The inclusion of the power in Clause 1(2) of the Bill is a sensible arrangement which, as my right honourable friend said, does not lock future changes into primary legislation but enables them to be made by secondary legislation. It follows similar provisions in much of the social security system—for example, changes in the rates of benefits themselves are dealt with in this way.
My noble kinsman Lord Russell and the noble and learned Lord, Lord Simon, suggested that it would be quite extraordinary to use secondary legislation to lay financial burdens on United Kingdom subjects. The truth is that there are very long-standing precedents. Perhaps I may give one example that is particularly relevant: the rates of contributions can and will be varied by secondary legislation and could be increased by the same means. I can say in passing that I am proud to be a member of a Government that has been able to reduce rates of contribution of both employees and employers over the years.
The noble Lord, Lord Carter, also asked why my amendment only offered the affirmative procedure if the rate should be reduced. He is quite correct; if we decided to increase above 80 or the 91 per cent. as it is now, that would not have to be done by affirmative resolution.
During Second Reading and this afternoon, the noble and learned Lord, Lord Simon of Glaisdale, suggested that the inclusion of this provision in the Bill was contrary to the recommendations of the Donoughmore Committee. Modern statutes confer power on the Executive to make delegated legislation which amends the statutes themselves. This is used, for example, to alter financial limits or to make alteration of details within a narrowly defined field. Or, as I have mentioned, to make alterations to national insurance rates.
However, as the Committee knows, the Government have noted the concern that has been expressed by noble Lords on this matter, particularly by the noble and learned Lord, Lord Simon, both on Second Reading and this afternoon. In passing, perhaps I may say that I regret the lack of trust that has been expressed by many of the Government's supporters—my own noble friends—in the assurances
1036
that we have given. We have undertaken that should any order under this provision be introduced in the future which seeks to reduce the percentage rate currently applied, it should be subject to the affirmative resolution procedure. That undertaking is fulfilled by my Amendment No. 8. My noble kinsman Lord Russell said that this was of no use whatever because, he alleged, we take no notice in this House of what is said.
Earl Russell: I beg my noble kinsman's pardon, I did not say it was of no use whatever. I said that I welcomed it, but that it was not enough.
6.45 p.m.
Lord Henley: The noble Earl went on to say that the Government take no notice of what he and other noble Lords say when we debate affirmative resolution procedures in the House. I can assure him that we take full note of everything he says, as we shall of the points made by other noble Lords. The affirmative resolution procedure is a great concession.
However, the Government cannot agree to the complete removal of the subsection. It has been the practice of governments of all complexions—and I am sorry that the noble Earl, Lord Russell, does not like that remark for which I make no apology—to proceed by secondary legislation once the main principle has been established. That makes for sensible and efficient government, particularly in the highly complex field of social security legislation.
In the light of what I have said and of the amendment in my own name which follows, which would prevent any further order being enacted without the approval of both Houses of Parliament, I hope that my noble kinsman will feel able to withdraw his amendment.
Lord Simon of Glaisdale: I am sorry to interrupt the noble Lord when he is in the act of sitting down, but would he care to answer the question that I ventured to ask? How did it happen that the Bill was introduced subject only to the negative procedure?
Lord Henley: I think I can only apologise for that omission. As I stated, the Government have now brought forward an affirmative resolution procedure. I hope that the noble and learned Lord will accept it as being good enough and also accept my apology that it was not brought forward subject to the affirmative resolution in the first place.
Lord Rippon of Hexham: Before my noble friend sits down, perhaps I may say that of course we have absolute trust in the present Government, but what about a future government?
Lord Henley: I am grateful for my noble friend's trust in the present Government. I am sure that the noble Lord knows that they will remain in power for a considerable number of years.
Lord Carter: Perhaps I may point out to the noble Lord that at col. 917 of the Official Report in another place on 28th November 1990 his right honourable friend the Secretary of State, Mr. Newton, said:
"I always seek to be open with the House about such matters and it is not inconceivable that this Government, or any future one, might make a judgment in particular

1037
circumstances that it was reasonable to propose a further change in the percentage without compensation, or whatever, through the national insurance system".
He referred to "this Government".
Lord Henley: We have never given any assurance that this Government would make no changes. We have just given the assurance that we have no plans at the moment. Circumstances can change. While this Government is in power—which it will be for many years—in changed circumstances obviously different decisions may have to be made.
Earl Russell: I am deeply grateful for the support I have received from every quarter of the Committee. It is a good day when I can agree with everything said by the noble Lord, Lord Boyd-Carpenter. One matter with which I agree was when he expressed sympathy for my noble kinsman the Minister who has had a difficult day. He stood at the burning Dispatch Box, whence all but he had fled. I admire the courage with which he did so. I shall take up two points.
My noble kinsman denied the fact that people take no notice of our debates. I deduce that from, among other things, the presence of the clause in the Bill. Had they taken notice of our debates, it would not have been there. I agree with my noble kinsman that we cannot for ever rule out the possibility of changing the rates of reimbursement for statutory sick pay. There is a procedure for doing that. It is called a Bill. I commend the amendment to the Committee.
6.50 p m.
On Question, Whether the said amendment (No. 7) shall be agreed to?
Their Lordships divided: Contents, 106; Not-Contents, 71.

Division No. 2

CONTENTS

Abinger, L.

Galpern, L.

Addingion, L.

Gisborough, L.

Airedale, L.

Gladwyn, L.

Ardwick, L.

Graham of Edmonton, L. [Teller.]

Attlee, E.

Auckland, L.

Grantchester, L.

Banks, L.

Grey, E.

Beloff, L.

Haig, E.

Birk, B.

Hampton, L.

Blackstone, B.

Hatch of Lusby, L.

Bonham-Carter, L.

Hertford, M.

Bottomley, L.

Hollis of Heigham, B.

Boyd-Carpenter, L.

Hooson, L.

Brooks of Tremorfa, L.

Houghton of Sowerby, L.

Bruce of Donington, L.

Howie of Troon, L.

Carmichael of Kelvingrove, L.

Hughes, L.

Carter, L.

Hylton-Foster, B.

Cledwyn of Penrhos, L.

Jeger, B.

Clinton-Davis, L.

Jenkins of Hillhead, L.

Cobbold, L.

Kilbracken, L.

Craigavon, V.

Kinloss, Ly.

Darcy (de Knayth), B.

Kirkhill, L.

David, B.

Lawrence, L.

Dean of Beswick, L.

Lindsey and Abingdon, E.

Donoughue, L.

Listowel, E.

Dormand of Easington, L.

Lockwood, B.

Elliot of Harwood, B.

Longford, E.

Ennals. L.

McIntosh of Haringey, L.

Ewart-Biggs, B.

McNair, L.

Ezra, L.

Marsh, L.

Falkland, V.

Masham of Ilton, B.

Gainford, L.

Mason of Barnsley, L.

Gainsborough, E.

Mayhew, L.

1038

Meston, L.

Saltoun of Abernethy, Ly.

Milner of Leeds, L.

Seear, B.

Milverton, L.

Shackleton, L.

Monson, L.

Shaughnessy, L.

Morris of Castle Morris, L.

Sidmouth, V.

Mottistone, L.

Simon of Glaisdale, L.

Mountgarret, V.

Stanley of Alderley, L.

Nicol, B.

Stoddart of Swindon, L.

Ogmore, L.

Taylor of Blackburn, L.

O'Hagan, L.

Taylor of Gryfe, L.

Oram, L.

Tordoff, L.

Peston, L.

Turner of Camden, B.

Peyton of Yeovil, L.

Underhill, L.

Pitt of Hampstead, L.

Walston, L.

Prys-Davies, L.

Wedderburn of Charlton, L.

Rea, L.

Whaddon, L.

Richard, L.

White, B.

Ripon, Bp.

Wilberforce, L.

Rippon of Hexham, L.

Williams of Elvel, L.

Rochester, L.

Winterbottom, L.

Russell, E. [Teller.]

NOT-CONTENTS

Arran, E.

McColl of Dulwich, L.

Astor, V.

Mackay of Clashfern, L.

Bauer, L.

Mancroft, L.

Belstead, L.

Margadale, L.

Blake, L.

Merrivale, L.

Blatch, B.

Mersey, V.

Borthwick, L.

Mountevans, L.

Brabazon of Tara, L.

Munster, E.

Brougham and Vaux, L.

Napier and Ettrick, L.

Butterworth, L.

Nelson, E.

Caithness, E.

Nugent of Guildford, L.

Carnegy of Lour, B.

Onslow, E.

Carnock, L.

Orkney, E.

Cavendish of Furness, L.

Orr-Ewing, L.

Chesham, L.

Park of Monmouth, B.

Cochrane of Cults, L.

Pearson of Rannoch, L.

Colwyn, L.

Pender, L.

Davidson, V. [Teller.]

Reay, L.

Denham, L. [Teller.]

Renwick, L.

Eccles of Moulton, B.

Selborne, E.

Elton, L.

Skelmersdale, L.

Flather, B.

Stockton, E.

Glenarthur, L.

Strathclyde, L.

Gormanston, V.

Strathmore and Kinghorne, E

Hailsham of Saint Marylebone, L.

Suffield, L.

Swinfen, L.

Henley, L.

Thomas of Gwydir, L.

Hives, L.

Trefgarne, L.

Holderness, L.

Trumpington, B.

Hood, V.

Ullswater, V.

Hooper, B.

Vaux of Harrowden, L.

Jenkin of Roding, L.

Waddington, L.

Johnston of Rockport, L.

Whitelaw, V.

Killearn, L.

Windlesham, L.

Long, V.

Wyatt of Weeford, L.

Lyell, L.

Wynford, L.

Resolved in the affirmative, and amendment agreed to accordingly.
6.58 p.m.
[Amendment No. 8 not moved.]
Lord Mottistone Lord Mottistone moved Amendment No. 9:
Page 2, line 1, leave out subsection (3).
The noble Lord said: We change the subject slightly. I shall speak also to Amendments Nos. 14 and 15 which are consequential upon Amendment No. 9. The amendment removes that part of the Bill which takes away from employers the additional amount that they receive to compensate them for paying national insurance contributions on SSP. At present

1039
employers are reimbursed an additional 7 per cent. on any SSP that they pay. That reflects the average additional cost borne by employers.
SSP is a state welfare benefit, not pay, and employers should not therefore have to pay national insurance contributions on it. However, one of the unintentional side effects of employers administering SSP was that employers had to pay national insurance on the higher rate of SSP and their employment costs were thus increased. That situation was recognised and alleviated when, in 1985, the Government introduced the additional compensation.
I should also like to remind my noble friends on the Front Bench that the arrangement was introduced at the same time as Ministers extended employers' responsibility for administering the scheme from eight to 28 weeks. It was intended partly—as set out in the DHSS discussion paper published in December 1984 —as a
"recognition of the extra work for employers as a result of the SSP changes".
The Government are now proposing to withdraw that provision arguing, first, that employers receive compensation for national insurance payments when national insurance may not have been paid and, secondly, that around 25 per cent. of the additional compensation is unclaimed. That is a fact to which my noble friend Lord Jenkin of Roding referred repeatedly in the course of earlier amendments. Neither of those arguments holds water. Compensation is based on the average additional payment paid by employers as a whole. That was the option favoured by Ministers in 1985 and then, as now, it was clear that under that system certain employers would receive more in compensation than they had paid, but that some companies would not receive full compensation.
That method was accepted by the CBI in the interests of administrative simplicity, but employers' acceptance was conditional on the percentage remaining at an acceptable level and on the understanding that the system would not be arbitrarily changed. I emphasise the word "arbitrarily" in view of the way in which this Bill has been handled.
The Government's second argument, that because 25 per cent. of the available compensation is unclaimed all compensation should be withdrawn, seems at best illogical. It is surely not one which the Government would wish to see applied to other areas. The fact that so much compensation remains unclaimed clearly indicates that, despite the Government's assurances, and indeed considerable efforts, the SSP scheme is not as simple to understand and administer as Ministers claim. I expect that the majority of unclaimed compensation belongs to the smaller companies which find it hardest to get to grips with the scheme.
Those are the reasons for my amendments. I hope that my noble friend the Minister will give them serious consideration. If he cannot undertake to accept my amendment as it stands perhaps he will say
1040
that he will take it away and think about it so that we might come back to the matter at Report. In view of the general unpopularity of the Bill, as shown by the last two Divisions, and the need for the Government to be seen by industry to be listening to what it has to say and recognising that it has real problems, and in particular financial problems, perhaps the Government may be able to accept the amendment more readily now than they could when they first introduced the Bill. I beg to move.
Baroness Turner of Camden: I rise to support the amendment moved by the noble Lord, Lord Mottistone. Again, I do so with employees in mind. It is not just a question of employers having difficulty with a scheme which, as the noble Lord said, is not as simple as the Government maintain. The evidence indicates that a number of small employers in particular find the provisions extremely complicated. That is no doubt why the take-up of the rebate is so low.
When there are administratively complex issues to be handled employees are automatically affected. That is particularly so if those issues are perceived by employers to add to their administrative costs. As I said in relation to a previous amendment, that makes it much more difficult for unions and employees who are represented to negotiate reasonable occupational sick pay schemes where there are none. It also makes it more difficult to negotiate improved schemes because employers simply do not wish to add to their costs.
For those reasons, and in the light of the fact that the Bill is clearly most unpopular on all sides of the House, I ask the Government to give careful consideration to what has been said by the noble Lord, Lord Mottistone, who has covered the issues very comprehensively. I have pleasure in supporting the amendment.
Earl Russell: I rise only to say very briefly that the Liberal Democrats warmly support the amendment. I agree both with what the noble Lord, Lord Mottistone, said and with what the noble Baroness, Lady Turner of Camden, said. The Bill will have an adverse effect on employment. An almost bankrupt employer is often a bad employer. There are already difficulties in relation to the payment of statutory sick pay. The Bill will not make the situation any better.
Like the noble Lord, Lord Mottistone, I hope very much that the Government will think hard about the amendment. They have had considerable food for thought today and if they do not think hard about it I hope that the noble Lord, Lord Mottistone, will go for the hat trick.
Lord Henley: As my noble kinsman said, the Government have had considerable food for thought today. I cannot offer to take the amendment away and think about the matter with any real hope that the Government will change their mind on the matter. However, I hope that in the light of the defeat that my noble friend inflicted on the Government earlier he

1041
will not feel it necessary to press this amendment, bearing in mind that the Government will obviously have to consider their position to some extent.
I should like to explain briefly why we feel that we cannot accept the amendment. As my noble friend explained, the amendment and the associated amendments to the schedule would remove from the Bill the provision which abolishes the additional amount which employers can recover as compensation for the national insurance contributions payable on SSP. The level of compensation is calculated actuar ly each year and represents the estimated total of the employers' contributions payable on both SSP and SMP as a percentage of total SSP/SMP payments. For 1990–91 the rate was fixed at 7 per cent. As my noble friend will know, that means that employers are currently able to recover from their national insurance contributions payable to the Inland Revenue a sum equivalent to 107 per cent. of the SSP they have paid out.
As I have said, that additional amount was intended to compensate employers for the cost of national insurance contributions they pay on SSP. As my noble friend Lord Jenkin said earlier, it has been of only limited success despite widespread publicity. As much as a quarter of the compensation available is never claimed by employers. Even when it is claimed it does; not always fulfil its original purpose. In the interests of simplicity of operation by employers it is available on all SSP paid by employers even where the total amount of SSP payable is below the lower earnings limit and thus does not attract national insurance contribution liability. That is obviously highly unsatisfactory. Moreover, it makes little sense to retain the 7 per cent. compensation rate for SSP once we move from 100 per cent. reimbursement.
My noble friend's amendment would also have financial implications. As the Explanatory and Financial Memorandum sets out, the ending of the compensation rate will increase income to the National Insurance Fund by £71 million in 1991–92, rising to £75 million and £78 million in the succeeding two years.
For those reasons I cannot accept my noble friend's amendment.
Lord Mottistone: I am disappointed that my noble friend did not feel that he could be a little more accommodating. However, I do not believe that this is an appropriate occasion to return to the charge because we could well argue the matter more fully having had the opportunity to read my noble friend's arguments, which I do not think tell us very much more than we already know. We may be able to return to the charge at Report. I shall reserve the right to come back if necessary with exactly the same amendment.
It is sad that the Government are not thinking as they were in the early 1980s when they introduced the scheme. I was involved in a personnel capacity at the time. Nor did they give the same thought to the matter as they obviously did in 1985 when they made the adjustments to which I referred. They seem to have
1042
gone hard on and become unhelpful to industry in the course of the last year. I do not think that is wise of the Government, partly because of the economic situation but also because they really ought to he friends with industry for all kinds of reasons, which I would have thought would be obvious to them.
Having said all that, I reserve the right to come back and take leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord Henley Lord Henley moved Amendment No. 10:
Page 2, line 18, at end insert:
(6) In section 22 of the Social Security Act 1989 (recovery of sums equivalent to benefit from compensation payments) in the definition of "benefit" in subsection (3), the words "subject to regulations under subsection (3A) below" shall be inserted after the word "and", and after that subsection there shall be inserted—
"(3A) If statutory sick pay is prescribed as a relevant benefit, the amount of that benefit for the purposes of this section shall be a reduced amount determined in accordance with regulations by reference to the percentage from time to time specified in section 9(1) (a) of the 1982 Act (percentage of statutory sick pay recoverable by employers by deduction from contributions)."").
The noble Lord said: In moving Government Amendment No. 10 I will also be speaking to Amendment No. 11 in the name of the noble Baroness, Lady Turner of Camden, and the noble Earl, Lord Russell, which deals with much the same point.
Amendment No. 10 is straightforward and arises from the interaction of the provisions in this Bill with the recoupment provisions embodied in Section 22 of the 1989 Act. Many noble Lords will remember that Act and the discussion on it during the progress of the 1990 Act. Section 22 of the 1989 Act provides for the whole of certain prescribed benefits, including statutory sick pay, to be deducted from compensation for personal injury. The sum deducted is paid over to the Department of Social Security. This is not the occasion to rehearse the arguments which led the Government to enact the recoupment provisions, but an underlying notion is that the DSS should get back from compensation what it has paid out. Having made that point, the reasons for this amendment become apparent. A reduction of SSP funding from 100 to 80 per cent., or 91 per cent., needs to be reflected in the recoupment arrangements. That was brought out during the debate in another place and the point was acknowledged by my right honourable friend the Minister of State who undertook to consider the precise implications of the changes for recoupment. At the time, the department's legal advice was that any necessary change could be incorporated by way of an amendment to regulations using the powers in this Bill. However, that earlier opinion is now subject to some doubt and we consider it to be prudent to remove that doubt by ensuring that there is a specific power in Section 22 of the 1989 Act to amend regulations. That is the nub of the amendment.
The list of benefits covered by the recoupment scheme is contained in the Social Security (Recoupment) Regulations 1990 and we consider that that is the place in which to set out any change in the

1043
amount of SSP being recouped. We shall be amending those regulations to provide that recoupment of SSP is on a par with the proportion of government funding.
From what I have said it will be abundantly clear that the Government fully accept the spirit of Amendment No. 11. However, as I explained, we propose to amend regulations to spell out the precise changes for recoupment associated with this Bill. I hope that with that assurance, not only of our intention but of the provision contained in our amendment, the noble Baroness, or whoever is dealing with it, and my noble kinsman will feel able not to move their amendment.
The reasons for Amendment No. 10 are clear and I commend it to the Committee. I beg to move.
Lord Carter: I am grateful to the Minister for that explanation. He has given the assurance we are seeking—that there is no need for Amendment No. 11 because it is covered by Government Amendment No. 10.
Earl Russell: I welcome the amendment. I thank my noble kinsman warmly for the letter he sent to me explaining the amendment in detail. I am glad we have it, and I thank him.
On Question, amendment agreed to.
[Amendment No. 11 not moved.]
7.15 p.m.
On Question, Whether Clause 1, as amended, should stand part of the Bill.
Lord Jenkin of Roding: I should like to make one comment. I very much regret that two amendments have been carried by the House against the Government, particularly after the Government treated my own amendment—the first amendment on the Marshalled List—with such an open mind and with an undertaking to come back.
There is a lesson to be learnt. I base that opinion on previous experience to which I referred earlier. If one is going to change the arrangements which affect employers paying their employees and to make alterations which will be to the disadvantage of some and to the advantage of others, there is enormous benefit in consulting them beforehand. I understand the reasons why it is said that that was not possible in this case; namely, that this was a deal negotiated with the Chief Secretary as part of an overall rearrangement of priorities in the social security budget.
What seems to be happening is that the public expenditure Statement is beginning to acquire some of the characteristics of the Budget. These things are all done quietly behind locked doors. I hope that the amount of leaking to the press of the discussions which go on will never be repeated for the Budget. It is said that somehow it is impossible for Ministers to consult on a proposal on which they are engaged in discussions with the Treasury until they have actually done the deal. I am not sure that that is necessarily right. I understand that the particular proposal was not made by the Treasury but by the Department of
1044
Social Security and by my right honourable friend the Secretary of State. I do not see why he could not have said: "Here is something I am prepared to consider, but I must have time to discuss it". It could be done fairly quickly. After all, the public expenditure rounds start with the position papers and previous programmes in May. The serious negotiations do not actually get under way until later; some in July but most in September and then intensively in October. It is quite a long period. If there is to be a change in social security arrangements involving some hundreds of millions of pounds and affecting many millions of employers, and if there is a lesson to be learnt from today's proceedings, it seems to me that it would have been much better to have had full consultation even if that did to some extent interrupt the normal process whereby the public expenditure round was conducted.
I feel a bit churlish in making this point because my own amendment was accepted in essence, but what we have seen is the product of not doing that and of leaving very little time for discussion. The Government should have gone to the employers' organisations and said, "We have got to find £250 million of public expenditure and we want to do it in the easiest and best way of dealing with statutory sick pay, national insurance contributions, or whatever it might be. How can we do this with the minimum of hassle, recognising that there will be some pain and grief to be borne?" If they had done that, I believe there would have been a better response from the CBI, and others, than we have had simply because this was been bounced onto them with very little warning and time for serious negotiation before the Bill came before Parliament. I think that aspect needs to be looked at.
I apologise if I sound unduly censorious but clearly my noble friend, as parliamentary Under-Secretary, does not have these matters firmly within his control; although I hope he will allow me to say that he has batted remarkably effectively today. If I may change the metaphor, I think he has been dealt a difficult hand and in part it has been of the Government's own making.
Lord Henley: I thank my noble friend for those comments. Naturally he would not expect me to comment on them or reply in any detail. My right honourable friend will be aware of what he says and I am sure will take note of it as my noble friend speaks with great experience of these matters.
Clause 1, as amended, agreed to.
Lord Carter Lord Carter had given notice of his intention to move Amendment No. 12:
After Clause 1, insert the following new clause:
("Extent: payments condition
.The provisions of this Act, insofar as they amend section 9 of the Social Security and Housing Benefits Act 1982 (recovery by employers of amounts paid by way of statutory sick pay), shall only have effect to the extent of the amount paid by an employer in respect of statutory sick pay paid to an employee during the first three weeks.").
The noble Lord said: I do not propose to move this amendment or to move Amendment No. 13. I need to work out the effects that the amendments that we carried earlier today would have on these proposed

1045
amendments. I should like the chance to consider them and take advice. I reserve the right to bring back the amendments at Report stage.
[Amendment No. 12 not moved.]
[Amendment No. 13 not moved.]
Clause 2 agreed to.
Clause 3 [Citation, commencement, financial provision and extent]:
On Question, Whether Clause 3 shall stand part of the Bill?
Lord Henley: I do not know whether it is quite correct to delay proceedings in this manner for a moment or two to allow those who are to conduct the next business time to reach the Chamber. No doubt Members of the Committee would like to have the details of Clause 3 explained to them to a somewhat greater extent.
Like its predecessor clause, which was Clause 2 and which I did not have time to discuss, this clause contains only consequential changes which a quick perusal of almost any social security Bill will show are a regular it feature of social security legislation.
Subsection (1) deals with the citation of the Bill. Subsection (2) provides for different parts of the Bill to come in at different times and for different purposes. I beg to move that Clause 3 stand part of the Bill.
Clause 3 agreed to.
In the Schedule:
[Amendments Nos. 14 and 15 not moved.]
Schedule agreed to.
House resumed: Bill reported with amendments.

Maintenance Enforcement Bill [H.L.]
7.24 p.m.
Report received.
Clause 1 [Maintenance orders in the High Court and county courts: means of payment, attachment of earnings and revocation, variation, etc.]:
Lord Morris of Castle Morris Lord Morris of Castle Morris moved Amendment No. 1:
Page 2, line 30, leave out subsection (6) and insert:
("(6) In any case where the court proposes to exercise its power under paragraph (a) of subsection (4) above it shall, when making an order to that effect, specify the period of time during which the debtor shall be deemed to have an opportunity of opening an account in accordance with the provisions of subsection (6A) below.
(6A) In any case where—

(a) the court proposes to exercise its power under paragraph (a) of subsection (4) above, and

(b) having given the debtor an opportunity of opening an account from which payments under the order may be made in accordance with the method of payment proposed to be ordered under that paragraph, the court is satisfied that the debtor has failed without reasonable excuse to open such an account during the period of time provided for so doing in accordance with the provisions of subsection (6) above,

the court in exercising its power under that paragraph may order that the debtor opens such an account.").
The noble Lord said: My Lords, first of all I should like to say how sorry I am that I am not facing across this Dispatch Box the noble Earl, Lord Ferrers. I gather that his absence is owing to the fact that he has been in hospital and is recovering from an operation. On behalf of all of us on these Benches perhaps I may say how much we hope that he will soon make a complete and happy recovery. I look forward to welcoming him back in his place. I notice that meanwhile he has been replaced at short notice and in quick time by a noble Lord who is of equal height and equal stature though perhaps not of equal build.
In moving this amendment I should like to link with it Amendment No. 6 which is its mirror image and concerned also with the question of defining opportunity within the Bill. The effect of the present amendment would be that the court would be able to specify the period of time during which the debtor will have an opportunity to open an account from which payments may be made. If the debtor fails to open an account during the time specified by the court, then the court will be able to order him to do so.
Your Lordships may remember that at Committee stage I tabled an amendment which sought to provide that if a debtor had not opened an account within 14 days of the hearing he would have been deemed not to have taken up his opportunity to do so. The court would then have been able to order him to open an account. That amendment was designed to ensure that the court could proceed to make an order forcing the debtor to open an account with the minimum of delay. Delay lies at the centre of this amendment. Delay all too frequently can be the debtor's device to avoid responsibility and delay is always the creditor's enemy.
The earlier amendment also sought to prevent potential litigation over the meaning of the word "opportunity". Your Lordships may recall that although they expressed sympathy for the proposed amendment, the Government rejected it on the basis that it failed to take account of the circumstances of each case and would amount to a fetter on the court's discretion. On 13th December last the noble Earl, Lord Ferrers, said:
"I believe the provisions of Amendment No. 5 would impose an unnecessary and possibly undesirable timetable on the exercise of the court's discretion".
He went on to say:
"While we sympathise with the aim of the amendment, we believe that the better course would be not to attempt to fetter the discretion of the court to decide for itself how long to adjourn proceedings in order to allow a debtor to take steps to open an account".—[Official Report, 13/12/90; col. 590.]
The current amendment again seeks to provide a period of time during which the debtor shall be deemed to have an opportunity to open an account. However it differs from the amendment which I originally tabled as it leaves to the court the decision over the period of time during which the debtor shall have an opportunity to open an account. That will mean that, as before, the court will if necessary be able to proceed to make an order that the debtor open an account with the minimum of delay. But there will be the added advantage that the system will be more

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flexible and the court will be able to come to a decision on the time to be allowed for a debtor to open an account, having taken account of all the circumstances of each case and of the representations made to the court by the parties. The court will not be bound to give the debtor the opportunity of opening a bank account within the period of 14 days following the hearing but will be able to decide for itself for how long it considers that a debtor should have the opportunity to open an account. I beg to move.
Baroness Macleod of Borve: My Lords, I must apologise to the House first of all for not being in my place at Committee stage and secondly for arriving rather late this evening. I feel strongly about subsection (6A) (a). It is absolutely wrong for it to be possible for a court of any jurisdiction to be able by law to force a person to open a bank account. It is wrong in principle. It is wrong also in that it takes away the individual's freedom, which all of us hold dear.
Whether or not the reasoning behind the proposal is right is immaterial to me. I do not believe that anybody should be forced to do something that does not in any way make sense. For instance, it is possible, and it was done by my grandson at the age of 10, to open a bank account with £1. A bank manager will accept that amount of money when a client opens an account. When a debtor is told by a court that he must pay maintenance to his ex-wife through a bank account he will deposit only £1. In my view there is no method of forcing him to deposit any more money.
Had I been present in Committee I should have tried to persuade your Lordships to throw out Clause 1(6) (a). I feel so strongly that this is not the way to get a debtor to pay maintenance to his wife that I had to come to the House this evening to say so. I have had 30 years' experience of dealing with people in such difficulties. As was said by my noble friend Lord Ferrers in Committee, the Bill allows the debtor to pay maintenance to the creditor in four different ways, but surely this is not one of them. I know that it is now too late to ask your Lordships to delete the subsection but I hope that when the Bill comes before the other place that will be done.
7.30 p.m.
Lord Reay: My Lords, I thank the noble Lord, Lord Morris of Castle Morris, for his kind words of welcome and for his good wishes to my noble friend Lord Ferrers for a speedy recovery from the effect of his operation. My noble friend will be grateful for those comments. I can assure the House that he is making good progress after a successful operation. These amendments are similar to two amendments which the noble Lord moved during Committee and with which the Government expressed some sympathy. The Government could not accept them because it was feared that to do so would impose an unnecessary and potentially undesirable timetable on the exercise of the court's discretion.
These amendments do not impose any particular time period. However I assure the House that they are
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unnecessary. If a maintenance debtor has an account out of which standing orders can be made the court may order payments to be made by that method to begin on a certain date. If the maintenance debtor does not have such an account the court which is considering ordering that payments be made by standing order will adjourn the case until another date which will be fixed by the court at the time of the adjournment. The adjournment period in this instance is to give the debtor an opportunity to open an account. The matter must return to the court at the end of the adjournment in order for the method of payment to be decided. The court, therefore, under its usual adjournment procedures automatically specifies a period during which the maintenance debtor must open an account.
I hope that in the light of that explanation the noble Lord will feel able to withdraw his amendment.
Lord Morris of Castle Morris: My Lords, I am grateful to the noble Lord for that clarification. I have great sympathy with what was said by the noble Baroness, Lady Macleod, after 30 years' experience in these matters. I have the greatest respect for her because no one has been more concerned with such issues than she.
I agree that no one should be forced to do anything which does not make sense. In Committee I stressed the problem of someone opening a bank account and refusing to deposit funds into it. However, the Government set their face against that point. I hope that they will now pay heed to the noble Baroness as well as to me and will listen to the wisdom of her words.
I remain of the belief that it would be better if the requirement were specified and spelt out. The date of an adjournment is frequently decided as being a matter for the court's convenience rather than anyone else's. My proposed amendment would helpfully direct the court's consideration to the special interests of the debtor and, even more, of the creditor. Typically, it is the creditor who must buy the groceries and pay the bills week by week. The creditor does not have the luxury of being able to adjourn during pleasure payment to the girl at the supermarket checkout. However, I perceive that the Government present a flinty bosom to my best arguments and that even though I too speak with the tongues of men and of angels I shall not convince the noble Lord. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Reay Lord Reay moved Amendment No. 2:
Page 3, line 2, after ("question") insert ("having (if practicable) given every interested party an opportunity to make representations").
The noble Lord said: My Lords, the noble Lord, Lord Morris, tabled two amendments during the Committee stage to ensure that all interested parties were aware of the proceedings. The requirement that a court must have regard to any representations made by the debtor, the creditor and the applicant, if different from the creditor, as to the method of payment is worthless is one or more of those parties is unaware of the proceedings.
The Government had considerable sympathy with the noble Lord's amendments, as my noble friend Lord Ferrers said. Accordingly, we asked to consider the matter further and we have now come forward with these amendments. They are drafted along the lines suggested by the noble Lord, Lord Morris. Their effect is to impose an obligation on a court to give notice to all the parties in order that they may make representations on the method of payment.
The noble Lord has also tabled similar amendments which have the same purpose. The Government prefer the version drafted by parliamentary counsel for two reasons. First, the noble Lord's amendment to Clause 1 refers to an "application". The higher courts may, of course, act on their own motion and may not have an application before them. Therefore, the amendment proposed by the noble Lord to Clause 1 is inaccurate. Secondly, the word "application" does not actually appear in the paragraphs which are to be amended and, therefore, the reader must search to find the word "application" earlier in the clauses. Parliamentary counsel in his draft has agreed with the principle expressed in the noble Lord's amendments but has drafted amendments which we consider are more appropriate in the context in which they are situated. The Government have also thought it best to include in the amendments the proviso "if practicable"; otherwise we may be requiring a court to do the impossible.
I hope that in the light of that explanation the noble Lord will agree that the amendment fulfils the need that he recognised.
Baroness Macleod of Borve: My Lords, I support my noble friend's amendment. The provision is vitally important for past and future family relationships. Anyone connected with a case under consideration should have an opportunity to speak. I prefer the Government's amendment because it includes the words 'if applicable". It may be that some of the parties concerned are abroad or in hospital and, therefore, unable to attend. It is vitally important that everyone concerned in a case should be heard and, therefore, I support the Government's amendment.
Lord Simon of Glaisdale: My Lords, I have no objection to the purport of these amendments. Indeed, I venture to applaud them. My only cavil is that I do not believe that they are necessary. Before taking any action which might adversely affect a party or anyone who might be before it, every court should, so far as practicable, give notice to that party and hear any representations.
I expect that my legal pronunciation of Latin will offend your Lordships but there is a very fundamental principle of law, indeed it is a principle of natural justice—audi alteram partem (hear the other party). I expect 1 hat the noble Lord will say that that may be so but there is no harm in writing it down and that it is better to be safe than sorry. If he says that—and I suspect that that will be echoed by the noble Lord, Lord Morris of Castle Morris—I have nothing more to say. As I say, it seems to me that every court should do that and I hope that it would do so of its own motion.
Lord Morris of Castle Morris: My Lords, I am obliged to the noble and learned Lord and I am encouraged by the Government's attitude towards this necessary and important concept of notification. On this side of the House we welcome these amendments which honour fully the assurance given in Committee that the Government would look carefully at the points which we raised.
I shall say what the noble and learned Lord, Lord Simon of Glaisdale, said I would say; namely, that it is better that those matters should be written into the Bill. There remains only one tiny reservation which concerns the words "(if practicable)". Perhaps the noble Lord could expand on that phrase. I hope that he can assure me that that phrase should not be interpreted as an invitation to any of the parties concerned to cause any further delay. If that assurance can be given, I do not wish to move Amendments Nos. 3 or 8.
Lord Reay: My Lords, the noble and learned Lord, Lord Simon of Glaisdale, made a point with which have some sympathy; namely, that these amendments are not necessary. However, he correctly anticipated the reason that we should like to see them written into the Bill. We agree with the noble Lord, Lord Morris, that it is better to be safe than sorry.
As regards the anxiety of the noble Lord, Lord Morris of Castle Morris, that the words "(if practicable)" should not constitute an invitation to the parties to cause any unnecessary delay, it is not our intention that that should be the consequence.
On Question, amendment agreed to.
[Amendment No. 3 not moved.]
Lord Reay Lord Reay moved Amendment No. 4:
Page 3, line 3, leave out ("interested") and insert ("such").
The noble Lord said: The noble and learned Lord, Lord Simon of Glaisdale, objected in Committee to amendments similar to these amendments because he said that they were unnecessary. In the light of the noble and learned Lord's objection, my noble friend Lord Ferrers withdrew those amendments in order to have another look at them.
Parliamentary counsel has been able to improve the drafting of the amendments but we still believe that they are necessary to rectify a problem with the Bill. As it presently stands, the wording of the Bill is adequate for the first application for maintenance but does not work so well for subsequent applications. As your Lordships are aware, the Bill's provisions must apply also to applications for variation or enforcement. For that reason we believe it is more accurate to use the words "person who applied" than the word "applicant" in Clauses 1 and 2. The remaining four amendments are consequential.
7.45 p.m.
Lord Simon of Glaisdale: My Lords, I am very grateful to the noble Lord, the noble Earl and the draftsman for reconsidering this matter. As the noble Lord knows, I still believe that the original draft was adequate. Indeed, I am borne out in that by the fact

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that one of the amendments alters the same wording as in the draft in the Domestic Proceedings and Magistrates' Courts Act of a few years ago.
In two periods of my life I have worked very closely with parliamentary counsel and I knew them all. I no longer have that privilege but it is perfectly obvious from scrutiny of this Bill that counsel in charge of it has an extremely acute mind, high intelligence and, indeed, an ear for language. However, I believe that he has gone too far in this case.
The word "applicant" refers not only, as its etymology might suggest, to someone who is at present applying. Many years ago I was an applicant for admission to the Bar. I am now an applicant to your Lordships' indulgence. In a very short time I hope to be an applicant for a taxi to take me home. Therefore, I do not quarrel with this. I asked that the matter should be considered and I am most grateful that that has been done. Having made my point, I must defer to the draftsman, if he prefers this wording. I merely thank the noble Lord.
On Question, amendment agreed to.
Lord Reay Lord Reay moved Amendment No. 5:
Page 3, line 17, leave out ("applicant") and insert ("person who applied").
The noble Lord said: My Lords, I have spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Clause 2 [Orders for periodical payment in magistrates' courts: means of payment]:
[Amendment No. 6 not moved.]
Lord Reay Lord Reay moved Amendment No. 7:
Page 4, line 33, after ("court") insert ("having (if practicable) given them an opportunity to make representations").
On Question, amendment agreed to.
[Amendment No. 8 not moved.]
Lord Reay Lord Reay moved Amendment No. 9:
Page 4, line 37, leave out ("applicant") and insert ("person who applied").
The noble Lord said: My Lords, this amendment was spoken to with Amendment No. 4. I beg to move.
On Question, amendment agreed to.
Lord Reay Lord Reay moved Amendment No. 10:
Page 5, line 11, leave out ("applicant for the") and insert ("person who applied for the maintenance").
The noble Lord said: My Lords, this was spoken to with Amendment No. 4. I beg to move.
On Question, amendment agreed to.
Lord Morris of Castle Morris Lord Morris of Castle Morris moved Amendment No. 11:
After Clause 3, insert the following new clause:
("Enforcement of sums adjudged to be paid
. Where default is made in paying a sum adjudged to be paid by a conviction or order of a magistrates' court and the court decides to issue a warrant of distress under section 76 of the Magistrates' Courts Act 1980 for the purpose of levying the sum there shall not be taken under the warrant any of that person's goods which are—
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(a) such tools, books, vehicles and other items of equipment as are necessary to that person for use personally by him in his employment, business or vocation; and

(b) such clothing, bedding, furniture, household equipment and provisions as are necessary for satisfying the basic domestic needs of that person and his family.").

The noble Lord said: My Lords, this amendment deals with the baleful subject of bailiffs. Just as park-keepers are disliked by small boys and traffic wardens are seldom popular with motorists, so bailiffs are not the flavour of the month with many of those to whom this Bill will apply. They are necessary, but there are few that love them. It is all the more important therefore that their powers should be clearly understood and their activities disciplined and controlled.
The effect of the amendment will be to bring private bailiffs into line with the county court bailiffs. In redrafting it after the Committee stage I took into account what was said by the noble Earl at Committee stage regarding the National Consumer Council report and the work of the Home Office group set up specifically to consider such matters. That is why the amendment I am presenting today is a much narrower amendment. It seeks to implement the provisions introduced into the Courts and Legal Services Act 1990, which stipulates the specific goods which may not be seized under a warrant of execution by bailiffs working for the county courts. A similar provision operates for sheriffs in Scotland under the Debtors (Scotland) Act 1987. As the provision was introduced by the Government for county court bailiffs in England and Wales, and sheriffs in Scotland, there seems to be no justification for private bailiffs in England and Wales not also operating under those restrictions.
The matter is important because offences do occur. I refer noble Lords to a case reported in The Times as recently as Friday, 4th January 1991, in the following terms:
"A community charge defaulter who had goods removed from his home by bailiffs last September after he failed to pay the tax won a court appeal yesterday against the London borough of Wandsworth for wrongful seizure of goods".
On that occasion the stipendiary magistrate said,
"that he was not satisfied that the bailiffs had done enough to find out who owned the goods".
He added,
"that it was vital that bailiffs found out whose property they were taking when seizing goods to enforce payment of the community charge".
It must needs be that offences occur, and the same will unquestionably apply to maintenance orders. That is why the amendment is not only required, but urgently required. I beg to move.
Lord Reay: My Lords, the amendment is a general provision which does not relate specifically to maintenance collection and enforcement, which is the subject of the Bill. I understand the concern behind the amendment, as did my noble friend Lord Ferrers when the noble Lord, Lord Morris, moved a more comprehensive amendment at Committee stage. We understand the problems and distress that occur when

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bailiffs are involved. As the noble Lord said, it is indeed a baleful subject. We are giving the report of the National Consumer Council on private bailiffs careful consideration. However, we feel that we must resist the amendment.
The amendment sets out very detailed procedural rules. As mentioned during the Committee stage, the Home Office is presently consulting the magistrates' courts service with a view to bringing the magistrates' courts rules, specifying which goods may be distrained, into line with the rules governing distress orders by the higher courts. I would not wish to pre-empt that consultation by agreeing to this amendment.
It is correct that the wording of this amendment appears in Section 15 of the Courts and Legal Services Act 1990, which is primary legislation. But that is only because the procedures in the higher courts were already governed by primary legislation—the Supreme Court Act 1981 and the County Courts Act 1984—and it was necessary to amend those statutes. The equivalent provisions for magistrates' courts are contained in Rule 54 of the Magistrates' Courts Rules 1981, and it is this secondary legislation which will need to be amended. The Government consider that it is best that these procedural matters relating to distraint in the magistrates' court are dealt with in secondary rather than primary legislation so that we can adjust them as circumstances require. In the light of that explanation I ask the noble Lord to withdraw his amendment.
Lord Morris of Castle Morris: My Lords, I see that I have yet again failed to convince the noble Lord of the merits of my argument and bring him round to my point of view. Perhaps I may ask him to reassure me on two points. The first concerns the timetable of the Home Office group. Is there any reason to believe that that group is treating the question as a matter of considerable urgency? I should be grateful if the noble Lord could say something a little more precise than that the group will report as soon as possible or in due course. It is a matter on which we have considerably strong feelings, and I would welcome an assurance that the Home Office group is proceeding with its task as briskly as may be.
Secondly, can the noble Lord assure me that that group will consult widely? Has it consulted, or does it plan to consult, the National Association of Citizens' Advice Bureaux? That has without question unrivalled experience of the problems which arise almost daily in the matter of bailiffs and the way they work. I shall be grateful if the Minister will reassure me on those two points.
Lord Reay: My Lords, I can tell the noble Lord and the House that the Home Office is at present consulting interested bodies, including the magistrates' courts' representative bodies. We are consulting widely on the harmonisation of magistrates' courts' rules with the seizure regime applying to the orders of the civil courts. Ministers will aim to take decisions in the light of responses they receive by the summer. It is not an entirely straightforward matter. I hope that that will satisfy the noble Lord.
Lord Morris of Castle Morris: My Lords, I could not ask for more. I am grateful for that assurance and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 [Revocation, variation, etc. of orders for periodical payment in magistrates' courts: general]:
Lord Reay Lord Reay moved Amendment No. 12:
Page 8, line 44, leave out ("applicant") and insert ("person who applied").
The noble Lord said: My Lords, this amendment was spoken to with Amendment No. 5. I beg to move.
On Question, amendment agreed to.
Schedule 1 [Amendment of certain enactments relating to maintenance orders registered in or confirmed by magistrates' courts or registered in the High Court]:
Lord Reay Lord Reay moved Amendment No. 13:
Page 27, line 3, leave out ("in court which made it") and insert ("by registering court").
The noble Lord said: My Lords, this is purely a tidying-up amendment to Schedule 1. It is necessary because the words in brackets in that paragraph are intended to be a summary of what is said in Section 34 of the Maintenance Orders (Reciprocal Enforcement) Act 1972. The present drafting does not achieve that. This amendment will ensure that the paragraph gives an accurate summary of that section. I beg to move.
On Question, amendment agreed to.
Schedule 2 [Minor and consequential amendments]:
Lord Reay Lord Reay moved Amendment No. 14:
Page 30, line 12, after ("Act)") insert ("(a)").
The noble Lord said: My Lords, this amendment was spoken to with Amendment No. 5. I beg to move.
On Question, amendment agreed to.
Lord Reay Lord Reay moved Amendment No. 15:
Page 30, line 13, at end insert ("and
(b) for the words " "the applicant for the order" " there shall be substituted " "the person who applied for the maintenance order" " ").
The noble Lord said: My Lords, this amendment was spoken to with Amendment No. 5. I beg to move.
On Question, amendment agreed to.
8 p.m.
In the title:
Lord Simon of Glaisdale Lord Simon of Glaisdale moved Amendment No. 16:
Line 14, leave out ("to amend section 10 of the Courts and Legal Services Act 1990").
The noble and learned Lord said: My Lords, this was a matter which I raised in Committee in relation to the title. It struck me in passing that it was extremely odd, when the schedule of minor and consequential amendments contained 10 paragraphs, to have taken only the last paragraph, paragraph 10, and reflected that in the title. It also struck me as odd that it should be thought proper in the title to refer at all to matters of minor and consequential amendment. There was then the general background that if words are unnecessary we do not want them in a statute.
I tabled the amendment because of the timetable. I wrote to the noble Earl to say that if the Government wanted to introduce their own amendment I should withdraw mine. I then received a message from the Public Bill Office that it thought the amendment was necessary. That gave me the opportunity of looking further into the matter.
I shall not press the amendment to a Division. But I ask that it be considered both by the noble Lord's department and by parliamentary counsel. The point is that the Long Title in this form serves no purpose at all; it is useless juridically and parliamentarily. A Long Title can be useful, but not one of this kind. I know what is in the mind of the draftsman. The present practice is that everything of major importance in the Bill must be reflected in the Title. In so far as he has followed that, he is following existing and current practice, which is approved in the Public Bill Office as well.
It strikes me as very odd if that is carried as far as a minor and consequential amendment. I believe that the draftsman is right in saying that this is not consequential, but it is minor or else it should not appear in that schedule.
What I wish to submit to your Lordships for consideration is what is the real purpose of the Long Title. The textbooks, including Erskine May, are unanimous on this in the modern practice in law. The Long Title is part of the statute and available for interpretation. It does not operate to contradict the enacting words of the main clauses. That of course includes the schedules, which are just as much part of the statute as the main clauses.
One used to be told by teachers of constitutional law the undoubtedly apocryphal story of a private Act of Parliament in which the town clerk had interpolated into an obscure schedule a clause divorcing his wife. I do not think that anyone ever believed that. However, it points to this conclusion. Parliament very much leaves the schedule of minor and consequential amendments to the draftsman, and I think that he should consider—perhaps I can write to him about it—one or two of the provisions in the schedule which seem neither minor nor consequential. Also, as I read it, the Long Title does not reflect the provision in the main clause, Clause 5, amending the Children Act.
However, that is not my point. My point is this. Although the Long Title cannot contradict the words of the main clauses and schedules—the enacting words —it is available in case of any doubt as to their meaning. Craies on Statute Law cites a number of cases where the Long Title was made a resource for resolving a contradiction.
A Long Title in this form can be of no service at all. It is not needed as a label because it does not purport to be such. The Short Title is the label. Nor is it a table of contents, which appear immediately before the Bill under "Arrangement of Clauses". That appears in each print of the Bill and in front of the Act of Parliament when it is printed as a separate Act. It also
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appears as an index in the statute book when the Act is printed there. Therefore, one does not need the Long Title as a recital of what is in the Act or the Bill.
What one needs it for is to tell one what is the object of the measure so that, if there is some ambiguity or conflict as to interpretation, the court can look at the Long Title to resolve it. I do not hold this out in any way as a model of drafting, but a Long Title in this form for this Bill would be far more useful: "An Act to secure more effectively the payment of maintenance and certain periodical payments and the enforcement of orders for maintenance of certain periodical payments and for connected purposes". That would be of some use to the court in an emergency. As I say, the present Long Title is no use at all.
Having said that, I go back to what I said originally. What the draftsman has done is entirely in accordance with contemporary practice. I ask though that it should be re-examined if any weight is given to what I have just said. Perhaps the noble Lord can have it considered by officials and perhaps the draftsman could take it to the Chief Parliamentary Counsel, who could take it to the Legislation Committee. I beg to move.
Lord Reay: My Lords, the noble and learned Lord raised this point during Committee stage. He is an advocate of concise drafting which excludes all unnecessary words. In this I fully support him. The current practice is for the Long Title of a Bill to reflect everything contained in the Bill. I should like also to have recourse to Erskine May's Parliamentary Practice (21st Edition), where it states at page 441:
"The long title sets out in general terms the purposes of the bill, and should cover everything in the bill".
Lord Simon of Glaisdale: My Lords, the noble Lord has quite rightly added those last words, which reflect the current practice. But the words immediately before reflect the purposes of the Bill. It was that that I tried to emphasise.
Lord Reay: My Lords, I take the noble and learned Lord's point. Perhaps he will allow me to proceed a little further. The specific words referring to Section 10 of the Courts and Legal Services Act 1990 are required in the Long Title as the amendment to that section in the Bill, I am given to understand, is not directly covered by the phrase "and for connected purposes" which ends the Bill's Long Title.
The amendment to Section 10 made in the Bill will enable rules of court to be made to ensure consistency between procedures under the Domestic Proceedings and Magistrates' Courts Act 1978 and procedures which will be introduced with the implementation of the Children Act 1989. Although this amendment to the Courts and Legal Services Act 1990 embraces maintenance proceedings, it goes slightly wider than the manner in which maintenance should be paid, which is the subject of our Bill, and therefore requires specific mention in the Long Title even though the amendment to the 1990 Act being made by this Bill is only a minor amendment. That is our explanation.

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I am grateful to the noble and learned Lord for his assurance that he will not press his amendment even though he may not be convinced by what I have said, although of course I hope he is.
Lord Simon of Glaisdale: My Lords, it remains for me to thank the Minister and the draftsman for having given this matter consideration. The opposing arguments are now quite clear. All I can ask is that the matter should be considered on general principles. That being so, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

Indoor/Outdoor Wheelchair Provision
8.10 p.m.
Lord Allen of Abbeydale Lord Allen of Abbeydale asked Her Majesty's Government:
Whether they will provide an indoor/outdoor wheelchair for the most severely disabled in the light of the findings of the Disablement Services Authority.
The noble Lord said: My Lords, it is some relief that on this third attempt we are at last able to debate an issue which is so important to some of the less fortunate members of the community. I have to confess that since the last attempt to ask this Unstarred Question I have succeeded in completely mislaying my notes and now have some slight understanding of how Carlyle must have felt. I should like to thank those noble Lords who have put down their names to speak. Perhaps I may be forgiven for expressing my particular pleasure that the list includes the name of the noble Lord, Lord Banks.
The Disablement Services Authority—the DSA—was set up in July 1987 to take over the artificial limb and appliances service run by the DHSS and to integrate the service into the NHS this year. A major responsibility of the DSA is to meet, in the jargon, the short-range mobility needs of people of all ages who have serious and permanent difficulties in walking. In that role it provides a wide variety of wheelchair. The great majority are non-powered, but last year there were nearly 8,500 powered chairs in issue, most for use indoors but some for use outdoors, alas of a rather clumsy and unattractive construction and capable of being used only by an attendant. It is not always the case that a suitable attendant is available. It was the committee chaired by the noble Lord, Lord McColl, which highlighted the fact that there was a serious gap in the provision of wheelchairs by the DSA in that there was no powered wheelchair usable both indoors and outdoors, and that as a result a number of people were s suffering an avoidable lack of mobility or were having to resort to the private sector to buy a chair which they could ill afford.
By some juggling of finances, the DSA succeeded in mounting a pilot scheme in 1989, based on Newcastle and Manchester, involving the issue of some 400 chairs, made by three manufacturers, to people who met certain fairly strict requirements. For example, the individuals had to satisfy the conditions for
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mobility allowance; they had to be under 65; they had to be unable to walk or self-propel effectively within their home; and they had to meet the eyesight standard required for a car driving licence. I have before me a careful study of the outcome of that pilot scheme, including the answers to a questionnaire sent in by most of those who took part. It is not surprising that the results fully confirmed that the independence allowed by the use of these chairs, the ability to go to the shops or the cinema or to visit friends, made a very great difference to the quality of life. Indeed, it does not require much imagination to see what a difference to one's existence is made by an ability to get around by one's own independent efforts.
Some questions arose which called for further thought. Is it right, for example, to have an age limit of 65? Is it really essential to retain the sight test required of car drivers? There is also the point that if it were possible to adapt chairs to meet individual needs, even greater benefits would flow. In the longer term, there could be problems of repairs and maintenance. There is also the practical question of producing a chair which is small enough to be usable inside the rather modest dwellings of some of those concerned but which at the same time is strong enough to mount the kerbs which are met with outside, perhaps when a carelessly parked car prevents the use of a graded entry to a pavement. But obviously the overriding problem is that of cost. A basic non-powered chair costs about £130. A new electric indoor chair costs about £750. But the cost of the chairs used in the pilot scheme came out at £1,500 to £2,000.
The DSA put in an interim bid for £10 million, for the present financial year, for an expansion of the scheme. That bid was not successful. But Mr. Kenneth Clarke, when Secretary of State for Health, managed to find £1 million from somewhere for additional indoor/outdoor powered chairs in the northern and north-western health regions. It is worth quoting what he said when he announced this grant at the Manchester disablement services centre last May. After expressing his delight at being able to make the announcement, he said:
"During my visit today I have met severely disabled people who have been using these chairs during the pilot study. I have seen for myself the way in which they can improve the quality of life of many disabled people. Most of us take for granted the freedom to collect our children from school, go to the shops or visit friends but for the severely disabled that freedom does not usually exist. This additional money will help around 450 disabled people to enjoy some of that freedom".
The problem is the difference between on the one hand, this extra 450 in two regions and the 200 under the pilot scheme and, on the other hand, the possible total, including the over-65s, for the country as a whole. We may be thinking in terms of numbers well in excess of 20,000.
When the functions of the DSA are transferred to the regional health authorities in April, there is to be a ring-fenced budget for the first two years. To judge from Mr. Clarke's statement, the Government were well aware of the merits of these chairs, and the DSA sought the inclusion of the sum of £53.25 million in the

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ring-fenced budget to allow for the general issue of these chairs from 1991–92 onwards. This was a good deal more than the previous total budget for wheelchairs.
In the event, I now understand that this bid has not been accepted. Although the ring-fenced budget which is to be handed over is to receive a welcome and substantial increase of rather more than 18 per cent. for 1991–92, the additional sums not only fall well short of what the DSA was asking for but carry with them, as I understand it, no requirement that they are to be used for indoor/outdoor powered chairs. The DSA tells me it hopes that some of the extra money will be devoted to this purpose, but there is evidently no obligation; and it is not to be forgotten that there are other pressing needs—notably the need for more provision for special seating in the ordinary types of wheelchair—which will cost a great deal of money.
Therefore, this evening there are many questions to be put to the Government. I should like to ask some of them and I am sure that other speakers will add to the list. The first is the obvious question of whether they think that the indoor/outdoor powered chair is a good idea and whether the provision of such chairs should be encouraged. Do they share the hope of the DSA that some of the extra money will be spent on those chairs? On what scale do they think that such chairs will in practice be issued on the financial allocations which are now to be made? How is it hoped to achieve a reasonable consistency between different parts of the country? Is any guidance being given about conditions, such as age limits and eyesight tests? Could there be different practices in those respects in different areas? Is there to be any continued research into devising the most satisfactory type of chair?
Further, on a practical point, can those who have been issued with chairs under the pilot scheme funded with Mr. Clarke's £1 million count on being able to keep them and on being able to have them properly serviced and maintained? Anything that the Minister can say of comfort on those issues will be most welcome and will reach a much wider audience than that present in the Chamber this evening.
I shall leave aside for the moment the problem of indoor/outdoor powered chairs. There is a great deal of anxiety about what will happen when the budget for the whole of the wheelchair and artificial limb services ceases to be ring fenced after 1993. There is a fear that there may be a serious risk that some of the money intended for those services will find itself diverted to competing needs. I have asked about prospects in the immediate future for indoor/outdoor powered chairs. I end my speech by going a little wide of my Question by asking what are the Government's plans from 1993 onwards for monitoring this valuable service? Further, how will they guarantee that those in need of limbs and chairs after 1993 will have those needs satisfactorily met?
8.23 p.m.
Lord Holderness: My Lords, I suspect that all noble Lords and noble Baronesses taking part in this debate will wish to join me in congratulating the noble Lord, Lord Allen, not only upon his persistence in the matter but also upon his success at the third attempt in getting a debate on his Question which the Government will be answering this evening.
Although tonight's debate takes place in the shadow of grave and difficult decisions that Her Majesty's Government must take, in a sense I am glad that it did not take place earlier. First, I believe that my noble friend Lord McColl would have been unable to take part on earlier occasions. We greatly look forward to hearing his contribution. Secondly, I believe that the noble Baronesses, Lady Masham of Ilton and Lady Darcy (de Knayth), who are sitting in front of me, would have had similar difficulties. We look forward to their contributions bearing in mind the special insight which they bring to the problem. Indeed, I look forward to hearing all the speeches which will be made during the course of the debate.
As the noble Lord, Lord Allen, has just said, we now know more about the Government's intentions. We also claim that the Disablement Services Authority, which was unanimous and most enthusiastic about these indoor/outdoor chairs, is now further advanced in its whole plan for the future organisation of the wheelchair service. I must declare an interest, in that I am chairman of the authority, which, as the noble Lord said, was a special health authority appointed in 1987 by no less a figure than the present Prime Minister (then serving the Government in a rather humbler capacity) with the remit to manage, to improve and eventually to hand over the service to the National Health Service.
In the report of his working party, which led to the appointment of this authority, my noble friend Lord McColl emphasised the need to provide an indoor/outdoor chair which at that early stage he clearly and wisely saw would transform the lives of men and women with most serious disabilities as well as helping many of them towards useful employment which they could not otherwise take. At the same time, he realised that this would reduce their need for care by providing them with greater mobility. I am sure that the House will be grateful to my noble friend, who is sitting behind me, for being willing to postpone an important journey abroad in order to take part in the debate.
As the noble Lord, Lord Allen, said, the two pilot studies carried out in the north of England convinced the Disablement Services Authority that the provision of such a chair is an objective which must be achieved as soon as possible. Certainly few reports which I have read have reached so unanimous and wholehearted a conclusion. Perhaps I may quote from paragraph 34 of the report. It reads:
"All the clients reported that the wheelchairs improved their lifestyles, giving them the independence and self-esteem to undertake a variety of activities that would not have been possible without an indoor/outdoor wheelchair".

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I sometimes think that it may be difficult for able-bodied people fully to appreciate the glorious access to freedom which this new provision will bring to a few thousand of our most needy fellow citizens. It is very easy to take mobility for granted, yet it is one of the most precious gifts enjoyed by human beings. Therefore, as the noble Lord, Lord Allen, said, the authority asked Her Majesty's Government for the resources necessary to provide the chairs. The bid was for a large sum of money—£53 million. The Government have not produced that amount, but they have replied in a rather different way. They have increased considerably in all the regions the allocation for the services which the authority is about to hand over, of which the wheelchair service is an important part.
From the beginning of next April, when the DSA comes to an end, it will be the duty of each regional health authority to try to distribute this increased sum among the districts in its region. By that time, each of those districts will be responsible for the wheelchair service. That has been the aim behind the policy of the Disablement Services Authority for nearly the whole of its short life. Soon after our appointment, members of the authority recognised the fact that the wheelchair service must be brought as close as possible to those who will use it.
I have been encouraged, from a number of visits I have paid to district health authorities now running the service, in the belief that we took the right decision. One hundred and eighty-three of the districts in England are now responsible and the remaining handful will be added before the end of March. So this devolution of responsibility is all but complete, and it is in the districts that the decision to provide indoor/outdoor chairs will be implemented.
Ever if district health authorities do not at first believe that they have enough resources to make this addition to the wheelchairs they are providing at present, I hope that sufficient will be put at the disposal of each district health authority to enable it to bring such a benefit to those in greatest need. Although it is obviously not for the Disablement Services Authority for much longer to provide any guidance at all, I hope that local health authorities will take into account what I might call the social benefit in any priorities they have to decide.
In conclusion, I need hardly add that it will be of great satisfaction to all members of my authority, as we finish the work we were appointed to do, if a large number of health authorities decide in the coming year to lay a firm foundation by means of this addition to the service, for which its most disabled users understandably feel they have already waited very patiently and for too long.
8.32 p.m.
Lord Banks: My Lords, I should like also to join in supporting the noble Lord, Lord Allen of Abbeydale, in raising this important subject this evening. It has been a great privilege also to hear the noble Lord, Lord Holderness, describe the arrangements which have been made for when the Disablement Services
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Authority, which currently has responsibility for the wheelchair and artificial limb services, transfers this responsibility to the regional health authorities, who will in turn devolve services no doubt to the district health authorities with, as the noble Lord, Lord Allen of Abbeydale, pointed out, a ring-fenced budget for the first two years.
Many health authorities have expressed concern that the level of funding for this service will be inadequate, particularly if the service is to be improved. There is concern also—the noble Lord, Lord Allen of Abbeydale, referred to this—that once the budget ceases to be ring-fenced in 1993 some of the money intended for the wheelchair and artificial limb services will be channelled into other health services which may, in the light of the National Health Service reforms, be given higher priority.
RADAR, the Royal Association for Disability and Rehabilitation, is concerned that this will mean that the wheelchair service will become another Cinderella service and that after 1993 limb and wheelchair users will have to fight high-profile, life-saving clinical services for cash-limited funds. It would appear that a continued ring-fenced budget for the wheelchair and artificial limb services is vital. With the wheelchair and limb budget not ring-fenced after 1993, how will the Government guarantee clients the best quality limbs and chairs which are needed after that?
An extremely important, but often ignored, aspect of the needs of people in wheelchairs is special seating. Again, the noble Lord, Lord Allen of Abbeydale, made some reference to this. Correct seating is of vital importance to people who use wheelchairs, affecting their independence, their health and their state of mind. Someone who is incorrectly seated may, for example, be unable to feed himself. In addition, extra pressure is put upon carers, who will frequently need to adjust the position of the person in the wheelchair. Such dependence upon others inevitably increases frustration and results in a loss of confidence. More worrying still, if incorrectly seated, people with deteriorating neurological conditions, such as multiple sclerosis, can become deformed and suffer an increase in spasticity, a predisposition to pressure sores and joint contractures. The treatment of an average pressure sore costs the National Health Service at least £30,000.
RADAR is extremely concerned about the lack of provision of special wheelchair seating. The Department of Health, in its February 1990 report to Parliament under Section 22 of the Chronically Sick and Disabled Persons Act 1970 recognises the importance of special seating. It says:
"There are significant increases in the number of projects concerning wheelchairs and seating, underlining the importance of optimising posture and mobility in order to achieve maximum independence and function for physically disabled people".
Some of the language in that may seem a little out-dated, but we get the meaning very clearly. They are saying there is more to be done in optimising posture than has been done up to now. A report by the Leonard Cheshire Foundation, based on its residents,

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shows that over a third of them were badly seated or could be seated better. Information from sources such as the Leonard Cheshire Foundation and the Multiple Sclerosis Society suggests that some 70,000 to 100,000 people are in need of special seating. With wheelchair cushions alone costing from £35 to £350 each and with more sophisticated matrix seating costing around £800, the indications are that some £50 million would be required to provide an adequate service. This is a small sum in comparison with the potential cost to the health service of £3,000 million in the treatment of pressure sores because the correct seating had not been made available.
I understand that the Department of Health has recently allocated £1 million to the funding of special seating. I should like to ask the Minister whether that is correct. If so, this provides only between £10 to £14 per person, and is far from adequate. Will the Government recognise the savings to the National Health Service which would be made possible by the provision of an adequate budget for special seating? The Government are surely committed to improving the independence and mobility of disabled people. Will they back this commitment by making resources available for the provision of powered indoor/outdoor wheelchairs nationally for disabled people who need them and also for the provision of special seating for disabled people who need it? Will they also ensure that after 1993 the budget is used for the purpose for which it is intended?
8.39 p.m.
Baroness Darcy (de Knayth): My Lords, I am delighted that my noble friend Lord Allen of Abbeydale has struck it lucky the third time round and I should also like to congratulate him on his persistence. I also wish to congratulate him very much on his clear, sympathetic and very comprehensive summary of the indoor/outdoor powered wheelchair situation. May I also say what a particular pleasure it is to follow the noble Lord, Lord Banks, and to have an opportunity to say how pleasing it is to hear his wise and measured words once again.
I am grateful for the kind remarks of the noble Lord, Lord Holderness, but, not being a regular powered wheelchair user, I wondered whether there was anything useful I could add to what the very knowledgeable noble Lord had said and also to what the noble Lord, Lord McColl, could tell us. However, I was spurred into taking part by the informed comments of the Joint Committee on the Mobility for Disabled People, of which I am a member, and by the memory of a magic sense of freedom when a few years ago the noble Lord, Lord McColl, arrived with a prototype of the Squirrel powered wheelchair and I traversed my garden and went over parts where I had never been before. It really did open up new vistas for me. The Squirrel then ran into financial difficulties, but I am delighted to hear that it is now to be developed by Shanning International, because I think it is a chair with great potential.
The Joint Committee on Mobility for Disabled People was delighted at the Disablement Service
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Authority's initiative in issuing a limited number of powered indoor/outdoor wheelchairs, at the outcome of that initiative, and at the agreement by the Secretary of State for Health to spend an extra £2 million on wheelchair and special seating in the Northern and North-Western Region.
It is generally agreed that the powered outdoor wheelchair currently available, the DSA model 28B, is unsatisfactory. My noble friend Lord Allen has already described it as cumbersome. It weighs over 14 stone without its user and it makes a Dalek look quite neat. It is very difficult to manoeuvre and it cannot cope with steps, thresholds, steep slopes or full-sized kerbs. I am told by a mobility centre that some users return the chair within weeks of issue because they simply cannot manage it. This is hardly appropriate mobility for the 1990s.
The most unsatisfactory aspect of model 28B, which my noble friend has already touched on, is the fact that it is attendant-operated. Mobility should lead to freedom, which goes hand in hand with independence. It also means that the helpers have time on their own too. Physical independence has spin-off benefits: one becomes more independent in other ways. This was a very cheering aspect that emerged from the pilot study. The noble Lord has already quoted paragraph 34. I wish to quote from paragraph 27, which says much the same thing; namely, that the conclusion of the regional staff was that
"overall the clients were delighted with this type of wheelchair because it considerably improved their outdoor mobility, giving them an improved degree of independence and markedly increasing their self-esteem. The vast majority of clients who participated in the Study were reported to be keen to retain their indoor/outdoor wheelchair."
I very much hope—and the Joint Committee on Mobility for Disabled People stressed this too—that this limited issue will rapidly be expanded to cover the whole country. Very severely disabled people's quality of life should not depend so critically on where they live. I also feel strongly that people over 65 should be included, particularly those who are unable to apply for mobility allowance on account of their age.
As has already been mentioned, there is a great deal of concern about future funding when the responsibility for issuing wheelchairs is transferred to the regional health authorities. It will be ring-fenced for two years, but there are grave doubts about whether the funding is adequate to provide the range of wheelchairs and cushions urgently needed. I hope the Minister will be able to assure us that there will be no cutting back of existing services; rather, that the Government will improve the service and take account of modern wheelchair and cushion developments. The whole cushion service is at present under great pressure (there is no pun intended there), but it is crucial that the full range of satisfactory cushions remains available. This is an area in which I can speak with a little more experience and feeling.
It is a false economy, for example, to stop the issue of the more expensive cushions which are most effective in preventing pressure sores—they can cost about £250—because in the end, as the noble Lord, Lord Banks, has said, treating a pressure sore can cost

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£20,000 or more and mean the occupation of a hospital bed for perhaps 12 weeks, to say nothing of the disruption in the life of the patient and his or her family.
The noble Lord, Lord Banks, has already spoken at great length about special seating, but I should like to say a little about it because it is a very important subject The extra £1 million for special seating is very welcome, and the giving of that extra £1 million acknowledges the importance of special seating. As the noble Lord, Lord Banks, has said, incorrect postures can mean not only pressure sores but, for example, contractures leading to impaired mobility and loss of independence. RADAR and other organisations, including the Multiple Sclerosis Society and the Leonard Cheshire Foundation, are concerned about the under-provision of special seating. They say that funding is far from adequate.
Would the Minister agree to undertake a survey of the number of people in need of special seating so that future provision can meet their needs?
The Joint Committee on Mobility for Disabled People—who I think the Minister would agree is not given to over-reacting —says that it is very worried indeed about the prospects for the service throughout the country when ring-fenced funding ends in April 1993. It would like ring-fencing to continue. Without ring-fencing the wheelchair and cushion services will have to compete for funds with the glamour areas of transplant and heart surgery. The provision of independent mobility and correct seating and cushions may be unexciting, but it enables users to be healthier, more confident and more useful members of the community. It keeps them out of hospital. It makes very good sense practically and financially, as well as in terms of human happiness.
Therefore, I very much hope that the Minister will give some positive and encouraging assurances about the long-term future of the wheelchair service.
8.45 p.m.
Lord McColl of Dulwich: My Lords, along with many others I am grateful to the noble Lord, Lord Allen of Abbeydale, for initiating this timely debate on the subject of powered wheelchairs.
As your Lordships know, the Government became concerned with the services involved in the supply of artificial limbs, wheelchairs and other appliances, and asked me to chair a working party to examine their adequacy, quality and management. I was very fortunate to have the help of an exceptional group of people without whom I very much doubt whether we would have had any success at all. Among others, they included giants such as Mr. Duke Hussey, Sir Austen Bunch and Professor Brian Griffiths, soon to be Lord Griffiths.
It is no secret that there was a certain reluctance among, the disablement services, as they were then, to accept our diagnosis of what was wrong and to accept the treatment that we advised. The report was about to be put on that well-known dust-producing shelf when it was rescued by a junior Minister who really galvanised the machinery into instant action and, as a
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result, almost all the 49 recommendations were implemented. So impressive was his practical knowledge and concern for disabled people, and so outstanding was his ability to make decisions and actually implement them, that I confidently told many of my friends that he would be the next Prime Minister.
In response to our report, Mr. John Major announced in another place on 17th February 1987 some important improvements in wheelchair provision. Three new types of chair were to be developed, and the wheelchair service was to supply for the first time, as has already been mentioned, special seating systems for those who needed it. However, one of our concerns not covered by that announcement was the supply of indoor/outdoor powered chairs. As your Lordships know, those who need occupant-controlled powered chairs are supplied with them for indoor use only. The indoor/outdoor powered chair is more powerful, more robust and, of course, more expensive.
The question of cost has always prevented the services, while under direct government control, from supplying such chairs. When the Disablement Service Authority, of which I have the honour to be vice-chairman, took over the service it seized the nettle and conducted a pilot study in Newcastle and in Manchester. As we did not know how many of the chairs would be required, we drew up precise criteria for their issue which were simple to apply. From that study we concluded that to provide the chairs throughout England would cost £11 million. If the provision were extended to those above the age of 65, the total bill would be £53 million. As most of us are either moving towards 65 or have passed it, we are increasingly interested in the provisions for more elderly people.
As noble Lords know, by 1st April 1991 the disablement services will be devolved completely to the National Health Service. With its demise, the DSA is able to bequeath resources to its successor health authorities, showing an overall cash increase of more than 18 per cent. in 1991–92, compared with the 1990–91 regional budgets. Some regions will receive 20 per cent. more compared with this year. That gives local health authorities a real opportunity. We reckon that the cost to each district health authority of supplying indoor/outdoor wheelchairs on the criteria which we used in the pilot study would only be about £58,000. If the supply were extended to include those above the age of 65, the total cost to each district health authority would only be £278,000.
I know that some will say that against the background of demands from other parts of the health service now is not the time to proceed with this. To them I point out that the district health authorities have to consider all the needs of the population they serve. The Disablement Services Authority funding will be ring-fenced until 1993 and there is this large step-increase in resources between this year and next. When the district health authorities decide how to spend their wheelchair money next year, I trust that they will have near the top of their priorities these comparatively modest sums. After all, half the

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population will be disabled to a greater or lesser extent before they die. For most disabled people these chairs make all the difference.
In conclusion, I wish to pay special tribute to the civil servants and the National Health Service officials who have combined in this unique experiment of forming a special health authority with a life of less than four years, charged with taking over the disablement services from the DHSS, re-vamping them, greatly improving their quality and then transferring them to the National Health Service. They will be integrated with the service at district level for wheelchair provision and at supra-district level for artificial limb provision.
Great credit goes to the officials and members of the board, especially to our chairman, my noble friend Lord Holderness, who has been ably assisted by his chief executive, Mr. Melvyn Jeremiah, whose capacity for work seems endless. This has indeed been a success story with which I am proud to have been associated.
8.56 p.m.
Baroness Masham of Ilton: My Lords, I wish to thank my noble friend Lord Allen of Abbeydale for giving us the chance to say a few words on the subject of providing an indoor/outdoor electric wheelchair for severely disabled people ranging between the ages of five to 65 years. This is our third attempt to debate a subject which concerns giving a far greater quality of life to severely disabled people. The most precious quality for anyone is their independence. Until one has lost it, it is difficult to appreciate how important every added bit of independence is to the individual and those who may help him. Thanks should go to all those people who helped with the report. A special thanks should go to the noble Lord, Lord McColl, for the work he did on his report as well as on this one.
Debating this subject at the eleventh hour of the Gulf situation makes me think of the invasion of Normandy. It was because of the expected casualties at that time that the National Spinal Injuries Centre at Stoke Mandeville Hospital was set up for service personnel paralysed in the war. I hope and pray that there will not be a war because with every war come many long-term severely disabled people.
I am very concerned at this time with the closures or pending closures of centres which provide support and rehabilitation for physically disabled people. I have received several letters and a signed petition from the people living in and around Newcastle-upon-Tyne because their only day centre for severely physically disabled people, the Shield Field Day Centre, is threatened with closure as the social services department is short of funds. I have written to the Minister for Social Security and Disabled People and to the director of social services in Newcastle. I await replies. Closures have already happened. The noble Lord, Lord Banks, said that that was a fear. I wish that it were not, but I could give him examples of centres which have already closed.
It was Newcastle and Manchester which undertook this pilot study for indoor/outdoor wheelchairs. I wish
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to ask why these two cities were chosen. The most important point about the pilot study was that clients who reported said that the electric indoor/outdoor wheelchair enhanced the quality of their lives 100 per cent. One woman who knew that an electric wheelchair would give her the independence and quality of life she needed to remain in the community and stay independent wrote to me several years ago. I contacted her Member of Parliament, who happened to be Mr. Callaghan, now the noble Lord, Lord Callaghan. His secretary was most helpful, giving me the names of voluntary organisations in that part of Wales which I contacted. The lady received her wheelchair and she later wrote to me saying, "I feel I am a bird let out of a cage". She was free to visit the park and do her shopping in the local shops. Surely if there is such a thing as care in the community it must be about enabling people to do as much as they can for themselves. If they can do little, they should be enabled to survive without being incarcerated in their homes.
As founder and now president of the Spinal Injuries Association, I find that it would be totally impracticable for the high lesion tetra- or quadriplegics to use a chair which could not go inside and outside. The very severely disabled people are paralysed from the neck down. The Spinal Injuries Association states:
"The rules governing the issue of indoor/outdoor chairs mitigate very harshly against our more severely disabled members".
When SIA surveyed the tetraplegic members in 1981 it was found that not one of these people used the chair issued by the DHSS. Their comments were that the DHSS chair was not reliable, not comfortable and not suitable for their lifestyle. A person paralysed from the neck down does not want to transfer in and out of a chair more than is strictly necessary; nor will his helper want to lift him in or out more than is necessary. Think of the helper's back when lifting a heavy, totally paralysed person. Thus a chair which will cope with both inside and outdoor conditions is absolutely vital for severely disabled people.
In 1989–90, the Spinal Injuries Association was given a most helpful grant by the Wolfson Foundation to help with mobility problems. It received over 200 applications and was able to assess about 80 people. After she received her wheelchair, one woman said:
"The wheelchair has taken the strain off our marriage. It gives me the chance to go out on my own and to give my husband a break. It was sheer chance that we received assistance from the Wolfson Fund. If I had not been a member of the Spinal Injuries Association I would still be totally dependent on my husband for my mobility".
Organisations such as RADAR, the Multiple Sclerosis Society, the Leonard Cheshire Foundation and the SIA are worried about what will happen when the present service is integrated into the local health authorities' services, as has been mentioned by several of your Lordships. It is vital that there should be the expertise and funding for correct seating. An incorrect, cheap cushion can cause pressure sores, with disastrous and expensive results. The correct seating, as with the correct chair, for the individual is

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cost-effective in the long run, but its provision needs expert training and for interest to be shown by the professionals running the service.
In many health authority areas the needs of physically disabled people come a long way down the list of priorities. There are often district teams to deal with the problems of the mentally handicapped, but that is riot the case with the physically disabled. Expert advice should be available for all who need it. Disabled patients or clients are often shuttled from pillar to post as they have become a non-priority group. I hope that the Department of Health will not wash its hands of all responsibility, because clear guidelines on good practice and specialised needs should be circulated to all regions and districts.
The provision of an electric wheelchair for indoor/outdoor use is not the end of the matter. A good tack-up service is needed. These chairs need reliable and efficient servicing. There must be a breakdown procedure or people may be marooned in the middle of a supermarket or in an isolated lane. Each district should have a pool of chairs for that purpose. Will there be insurance and maintenance cover? There should be puncture-proof tyres, maintenance-free batteries and the correct seating for the individual, as I have said. The assessment staff should be trained. When assessment takes place, the individual user (the client) should be part of that assessment. The user's needs are the main point of the exercise. Training should be provided for the user and his or her helpers, if they have them. Safety straps should be provided so that users are not thrown out of the chairs when going up or down a kerb or bump. As stated in the report, there should be kerb climbers when needed.
To provide a good package there needs to be proper investment and training and an efficient service for all who need it. Many elderly people feel left out. I believe that many organisations for the elderly could do more for their disabled members. They often seem to forget their neediest members. I hope that Age Concern, the Distressed Gentlefolks Aid Association and other organisations will expand their help for disabled people.
I hope that the pilot study will be extended to all parts of the British Isles so that before too long the people who need these chairs and have no other means of obtaining them will be able to have a suitable chair of their choice.
9.4 p.m.
Earl Attlee: My Lords, it is, as always, a pleasure to follow the noble Baroness, Lady Masham. I must admit that had this Unstarred Question been tabled at the beginning of last year I should have been saying something different. I unfortunately broke my ankle in April and for several months I found out what it was like to be immobile. I was in a wheelchair twice. In one way that terrified me. I would be sitting looking at something when some well-meaning person would suddenly grab the chair. I would be swung around by someone I did not know. I did not know whether I could trust them. Normally I could not.
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I hope the noble Baroness will not mind if I tell a little story. It was "white cane" day. She drove up in her car and got out with her wheelchair. I was there by arrangement so that I could help her up the kerb. A well-meaning young man brushed me aside and said that he would help. He grabbed the chair. He headed towards the kerb. I thought, "Oh, my God". Sure enough, he hit the kerb. The noble Baroness mentioned seat belts. My goodness, she needed one! She was jerked forward, and stopped just in time. Looking round at that keen, healthy young man she said in a pained voice, "Please, let Lord Attlee do it, he's an expert". I was pleased by that, although not because she called me an expert. I now realise why she said that.
I was once swung around in a wheelchair. Admittedly I was on board a ship. My right foot, which was heavily plastered, crashed into a pillar. Had it not been for the thick plaster, untold damage would have been done. I had some experience before that because I was a volunteer ambulance driver. I could do that work only at weekends, but I became used to loading and unloading wheelchairs and locking them into position in an ambulance. Therefore, when I read the report I was interested to see that people could load wheelchairs into cars. An ordinary wheelchair with somebody in it is difficult enough to manoeuvre and load into a vehicle when there is a ramp. How anyone can load it into a car beats me. I am glad, therefore, that this debate is not only about powered wheelchairs.
Like the noble Lord, Lord Allen of Abbeydale, I question why there is an age limit of 65, which is the age I shall reach next year. Why on earth does someone in a powered wheelchair have to meet the same eyesight requirements as someone who drives a car? In view of the speed at which the chairs will travel it is clear that one does not need to be able to see 30 yards ahead.
With the greatest respect to the noble Lords, Lord Holderness and Lord McColl, I do not like the report. This may be a personal view, but I dislike any report printed in proportional spacing with the letters crammed together so that an "n" and an "i" look like an "m". I found the report very hard to read.
Regarding the specification of the three wheelchairs, if one has to manoeuvre a wheelchair in and out of houses and up stairs one wants to know how much the chair weighs. The report gives all sorts of information about the wheelchairs but not their weight. I shall not ask the Minister to answer that question tonight because I have a feeling that she does not know the answer.
The noble Baroness, Lady Masham, mentioned batteries. Some wheelchairs are supplied only with dangerous lead acid batteries. The far safer and more powerful gell battery can be obtained, but at additional cost.
Like other speakers I am at a loss to understand why both of the centres where the trials were carried out are in the North. We talk about the North-South

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divide; there are many differences between the two halves of the country and it is a pity that the report was based on trials carried out only in the North.
Another criticism of the report relates to the number of people involved. While about 58 per cent. of those questioned may have thought that a particular wheelchair was very good, which sounds wonderful, trials involved only about 53 people. Only 6 per cent. thought that the chairs were bad. That is fine, but it means only about six people. Far too few people were questioned to make the statistics anything but airy-fairy.
I should like to conclude with two further points. The first concerns the cushions. It is intolerable that an expensive piece of equipment costing over £1,000 should have a standard seat. As the noble Lord, Lord Banks, said, if one does not have the correct seat one gets sores and can hurt one's spine.
I should like to underline one point concerning special seating. Here I have an interest, admittedly an emotional one. My wife's eldest brother suffers from an advanced stage of multiple sclerosis. My wife and I see him when we can and his mother visits him three or four times a week. When I look at him I wonder how his bottom and thighs feel when he sits all day in his wheelchair.
The report shows that there is a requirement for powered wheelchairs. Any wheelchair gives a certain amount of independence, but to use a muscle-powered wheelchair one needs strong arms, shoulders and hands. Many people who are severely disabled do not have the necessary muscle power. I hope that not only will the Government find sufficient money to provide powered wheelchairs for those who need them but that they will also review some of the unwise restrictions as to age and the need to have eyes like a hawk.
9.13 p.m.
Lady Kinloss: My Lords, at the third attempt the noble Lord, Lord Allen of Abbeydale, has at last been able to ask a most important question of the Government this evening. It is particularly important in view of the nearness of the transfer of the wheelchair and artificial limb services from the Disablement Services Authority to regional health authorities.
RADAR and others are concerned that in 1993, when the budget ceases to be ring-fenced, some of the money intended for wheelchair services and artificial limbs may be channelled into other health services. When the wheelchair and artificial limb budget is no longer ring-fenced after 1993, can the Minister say how the Government can guarantee clients the best quality limbs and chairs, especially those severely disabled people who need indoor/outdoor powered chairs?
The Spinal Injuries Association tells me, as my noble friend, Lady Masham has already said, that a person paralysed from the neck down does not want to transfer in and out of a chair more than is strictly necessary, so that a chair which can cope with indoor and outdoor conditions is absolutely necessary.
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In paragraph 82 of the McColl Report it is estimated that there are about 400,000 users of wheelchairs. There are two distinct categories. About 85 per cent. may use chairs for a short time each day, or they may be temporary users of chairs. The second group consists of users who are so severely disabled that they spend many hours a week in their chairs and are totally reliant on their equipment. They make up about 15 per cent. of the total.
While the budget is still ring-fenced, the regional health authorities (or the district health authorities, if they are responsible) will have to decide where the money is to be spent. Will they hope to have perhaps six people in wheelchairs which are used by occasional users or one person who needs the much more expensive indoor/outdoor powered chair? After 1993, when the budget is no longer ring-fenced, how can we be reassured that the regional health authorities will still continue to provide the money for the most appropriate chair for the person's needs?
An extremely important but often ignored aspect of the needs of people in wheelchairs is the special seating which the noble Lord, Lord Banks, and my noble friend, Lady Darcy, have already mentioned. Correct seating is of vital importance to people who use wheelchairs, affecting their independence, health and state of mind. For example, somebody who is incorrectly seated may be unable to feed himself. This causes extreme pressure to be put on carers, who will frequently need to adjust the position of the person in the wheelchair. I am sure the Government would agree that such dependence upon others inevitably increases frustration and results in loss of confidence.
The Department of Health, in its recent report to Parliament (February 1990) under Section 22 of the Chronically Sick and Disabled Persons Act 1970, recognised the importance of special seating. The Government have recently allocated £1 million to special seating, for which they must be thanked, but can the Minister say how much it is costing the NHS to treat pressure sores which result from poor seating?
Perhaps I may ask the Minister one more question. Can she say what consultative mechanisms are planned so that disabled people may influence the wheelchair service in the future, particularly as regards the indoor/outdoor chairs? I hope the Minister can give us some hope when she replies tonight.
9.18 p.m.
Lord Ennals: My Lords, I believe that the whole House and probably all disabled people dependent on wheelchairs will be grateful to the noble Lord, Lord Allen of Abbeydale, for his persistence and for the way in which he presented his case.
I must declare an interest as one of the vice-presidents of RADAR and as President of the College of Occupational Therapists. I am very interested in this question. Not only do I want to add to the praise given to the noble Lord, Lord Allen, who has done so much for disabled people by raising issues in this House and by his other works: I want to express the thanks of all noble Lords for what the noble Lord, Lord Holderness, and the noble Lord, Lord McColl,

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have done during their period as Chairman and Vice-President of the Disablement Services Authority. I think the appointments, both of which were made by a young man who has since achieved prominence, were very imaginative. Perhaps it was intentional that this debate was delayed until Mr. Major had become Prime Minister and had the sort of authority which would enable some of the anxieties which have been expressed in all parts of the House to be laid to rest.
As the noble Lords, Lord Allen and Lord Holderness, have explained, in April 1991 the functions of the Disablement Services Authority in relation to wheelchairs and artificial limb services will be transferred to the regional health authorities. In turn they will pass on those responsibilities to district health authorities with, as the noble Lord, Lord Allen, said, a ring-fenced budget for the first two years.
With others, I warmly welcome the noble Lord, Lord Banks, back to his place. With his customary fervour he said how much many of the health authorities were concerned about what would happen in terms of the level of funding. We ought to look at the work that has been done by the Disablement Services Authority and at the decision that, after that work and that of the working party presided over by the noble Lord, Lord McColl, we ought to be looking with enthusiasm and hope for the consequences of its work being taken over by the National Health Service. It offers a great opportunity and means that services will be provided by health authorities at very near the level of the people who need those services.
However, it would be an absolute tragedy if, instead of that being a great opportunity to improve the services available for disabled people, it turned out to produce a reduction in the service or indeed not to provide the opportunity for the improvements which modern technology has made available. I know that many authorities are deeply concerned that the wheelchair service might become another Cinderella service and that noble Lords will constantly ask why the services are not being provided. It requires very great determination and will on the part of the Government to see that funds are made available to ensure that the service is properly provided.
As the noble Lord, Lord McColl, said, during 1989–90 the DSA carried out a pilot study in the north and north-west health authorities and 200 powered indoor/outdoor wheelchairs were issued to selected individuals. As was noted at the end of the study, those individuals were permitted to retain the wheelchairs and the Department of Health made available an additional £1 million for that purpose. As the noble Lord, Lord Allen, said, to provide that quality of service in wheelchairs for all those people who need them the DSA estimates that £53 million would be required.
I hope that in response to what several noble Lords have said the Minister will make a very clear statement about the funds that will be available. We ask these questions. With the wheelchair and limb budget not being ring-fenced after 1993 how will the Government guarantee that clients receive the best quality of limbs and chairs needed after that? What arrangements will
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be made to monitor the wheelchair service once it is integrated into the National Health Service? Is the Minister aware that the level of funding so far is inadequate to provide indoor/outdoor powered chairs and the special seating referred to by a number of noble Lords this evening?
Unless there is a massive increase in the budget, there is a danger that disabled people will be forced into self-propelled or inferior models which can themselves be disabling. We must ask the department what steps it will be taking to ensure regional parity of service so that the service received does not depend on the part of the country in which one lives. I must ask whether it is defensible that certain people in the north and north-west regions should now have possession of powered wheelchairs on the National Health Service and that such vehicles are not available for people with similar needs in other parts of the country. Are the Government prepared to make available the required resources in order to rectify that apparent injustice?
Currently, people who need powered wheelchairs have to buy them privately. Therefore, the precise number of people who own such wheelchairs is not available. However there are some half dozen or so manufacturers of those wheelchairs, each of whom regularly produces new models. It is highly unlikely that that would be the case if the demand were not substantial. At an average cost of £1,800 per chair, it is equally unlikely that people will buy them if they do not genuinely need them, particularly as disabled people tend to be in the lowest income bracket. It is part of the responsibility of the Government, and also of the National Health Service because it seeks to provide a service available to all at the point of need, to seek to provide the best quality mobility vehicles —that is, indoor/outdoor wheelchairs—for all disabled people regardless of their ability to pay. It would be sad if there were a degree of privilege, particularly as disabled people tend to be at the lowest end of the income bracket.
I shall not comment upon special seating because that was fully discussed by the noble Lord, Lord Banks. Under the new system assessment proposes to involve more occupational therapists and physiotherapists. I welcome that provided that the disabled people have a full say. However, we are faced with a grave shortage of occupational therapists and physiotherapists. The noble Baroness, Lady Masham, as a vice-president of the College of Occupational Therapists, is fully aware of that. Perhaps the Minister will recognise the acute shortage of occupational therapists and physiotherapists and say whether more can be done to meet the needs.
Reference was also made to the importance of consultation with disabled people. The Minister was asked about the consultation that she has had with disabled people and their organisations about the integration of the wheelchair service into the regional health authorities. If during the two years from April we discover a fear that after the end of ring-fencing the service might deteriorate will the Minister and the

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Secretary of State consider extending the period of ring-fencing in order to ensure that the service expands?
I am sure that we all welcome the new traffic lights that have been provided in Parliament Square opposite St. Margaret's Church. However, I have received many complaints from disabled people that the ramp there is so steep as to be dangerous. I hope that someone will hear this plea on behalf of wheelchair users. A sharp ramp can create great dangers, particularly in an area where there is a great deal of traffic. We look forward to hearing the Minister's reply to a short debate for which we are grateful to the noble Lord, Lord Allen of Abbeydale.
9.27 p.m.
Baroness Hooper: My Lords, I too congratulate the noble Lord, Lord Allen of Abbeydale, on his perseverance in raising this Question. I am glad that it has been a case of third time lucky. It is an important subject, as every speaker in the debate has recognised. Everyone can envisage the difference that powered wheelchairs must make to the life of disabled people who need them. We in this House are fortunate in having among us Members with first-hand experience who are sufficiently articulate to put the message across. I listened with interest and considerable sympathy to all the contributions this evening. I assure your Lordships that the Department of Health recognises that indoor/outdoor powered wheelchairs can considerably enhance the quality of life of some severely disabled people. We do what we can to encourage their use.
Perhaps I may first make some comments on the role of the Disablement Services Authority, although much has already been said. We have heard about its role and the excellent work it has carried out. I am very happy to join with the noble Lord, Lord Ennals, in taking this opportunity to acknowledge the work of my noble friend Lord Holderness and his team at the Disablement Services Authority.
As was envisaged at the outset, the authority will cease to exist from this April. However, arrangements have been made between the authority and local district health authorities to ensure a smooth takeover and a continued high level of commitment to those services in the National Health Service in the context of an integrated rehabilitation service. That includes the ring-fencing of services currently provided by the authority for the two years following its abolition. However, I feel sure that the services provided in that area will remain as a lasting tribute to the work of the Disablement Services Authority, which aims to meet quickly and cost-effectively the short-range mobility needs of people of all ages who have serious and permanent difficulties in walking.
To that end, the authority supplies over 250 types of wheelchair for users of all ages. These include two types of powered chair—a self-propelling indoor powered chair for people who cannot walk or propel an ordinary wheelchair and an attendant-controlled outdoor chair for those carers who cannot push a
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chair. The authority supplied over 8,400 of these powered chairs last year, which represents an increase of 9 per cent. on the previous year. Taking all kinds of wheelchair, almost 170,000 were issued last year—8 per cent. up on 1988–89.
As has been explained this evening, the committee chaired by the noble Lord, Lord McColl, took the view that occupant controlled indoor/outdoor powered wheelchairs would help to improve the independence and quality of life for severely disabled people and recommended that such chairs should be supplied by the NHS. Again, as the noble Lord said, following the authority's examination of that issue, a pilot study was carried out in northern and north-western regions during 1989–90. I understand that the DSA selected those two pilot sites as the disablement services centres in those areas already had the appropriate medical and technical expertise and the necessary administrative support to be able to run a successful pilot study. No North/South divide exaggeration was intended.
The final report of the study became available earlier this year. It found that such powered wheelchairs could significantly improve the quality of life of severely disabled people, which came as no surprise to a number of people. It also confirmed the validity of the prescription criteria as a basis for future supply, although the authority decided subsequently to remove the upper age limit of 65 which previously formed part of the criteria for eligibility. I should say to the noble Earl, Lord Attlee, that the conditions discussed were for use in the pilot schemes. Conditions for any future issues will be a matter for the National Health Service.
Mention has been made of the unsuccessful bid for additional funds to extend powered wheelchair provision in the 1990–91 spending round and the fact that the then Secretary of State was able to allocate an additional £1 million during the year. For 1991–92 we have made an increase in the funds earmarked for disabled services in general which exceeds not only the GDP forecast but also, admittedly by a small amount, the general growth allocations of regional health authorities. That has been done to help to ensure that money is there to meet the existing demand for special wheelchair seating.
It must be said that the difficulty, as always, in earmarking funds centrally is that we tend to look at our own special interests in feeling that earmarking would be helpful. However, in practice it means that the matters earmarked tend to build up, and the freedom of management in the regions is therefore constrained. As a result, a certain amount of local flexibility is lost. As noble Lords will be aware, local health authorities feel strongly about that.
The position of overall funding changes from year to year, as do the priorities within it. Therefore I must say at this point that we also remain free to consider the case again in subsequent years. I remind noble Lords that however good the case for funding, the cost of offering a powered chair immediately to everyone who could benefit would be very large. The typical cost of the limited range of wheelchairs used in the

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pilot study was mentioned as being between £1,500 and £2,000. Non-powered standard wheelchairs come out at a round £130. To move straight from the present pilot scheme to full provision for all those who need the wheelchairs would almost treble the cost of wheelchair services in the country from about £33 million to £86 million. Realistically, we are looking at a period of several years over which we hope that powered indoor/outdoor chairs may become progressively more widely available.
I should add that the Royal College of Physicians issued a timely report on their survey of health services for adults with physical disabilities. That report was published last November and will certainly be useful to all those concerned with planning and running services for disabled people.
In answer to the noble Lady, Lady Kinloss, I should also say on the point of consultation that all disablement services centres have been encouraged to set up user consultation arrangements to take account of the views of users. The DSA has also emphasised the importance of consultation. No one will have to give up a powered wheelchair that has already been issued. That was a point raised by the noble Lord, Lord Allen of Abbeydale. We continue to hope that those districts which have people with indoor/outdoor chairs from the DSA will find the resources necessary for maintenance.
Regarding the fears that ring-fenced budgets may be raided for other purposes after 1993, I must say that every group that comes to us fears that the National Health Service reforms will mean less funds for their group. With continuing growth in total spending, they cannot all be right. However, health authorities will be responsible for addressing all the health needs of their residents. There is no reason to fear that our reforms of the National Health Service will funnel a greater share of funds into the acute sector.
I appreciate that there is a cost to treating such things as pressure sores. However, in passing I must say that the estimate of £3,000 million given by the noble Lord, Lord Banks, for that cost is not a credible estimate. That represents almost one-eighth of all National Health Service expenditure. I may have misquoted the figure, but I shall look at Hansard to make sure.
Regarding the funding for special seating, part of the reason for the good increase in funding for these services is that we have specifically taken account of the growing demand for special seating. Whether or not we should have a survey of those needing special seating is a matter for individual health authorities. Again, they will have the responsibility of identifying the health needs of their residents and the obligation to act on them.
With regard to the assessment of wheelchair users, in the most difficult cases that will be carried out by multi-disciplinary teams which will include rehabilitation medicine consultants, OTs, physios and medical/technical officers. The noble Lord, Lord Ennals, and others referred to regional parity. The
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normal process of the National Health Service management executive reviews of regions and the collection of statistics identifies those regions whose performance is weakest. The number of occupational and physiotherapists has increased by a considerable amount in the past 10 years.
Perhaps the most predominant question that I have been asked this evening is what happens after ring-fencing ends in 1993. We believe that by 1993 the wheelchair and artificial limb services should be firmly entrenched in their local National Health Service within a developing consultant-led specialty of rehabilitation medicine. In any case the separation of purchasers and providers which our National Health Service reforms create will ensure that there is a serious examination by the purchaser of which health needs are greatest. There will be less scope for powerful hospital specialists to divert resources into what may be considered to be more glamorous areas. We will monitor their efforts by collecting statistics on activity and expenditure; by the National Health Service management executive's review of regions; by the appointment of persons of standing in every region in order to champion the causes of the disablement services and who will sound the alarm if problems arise anywhere.
There will also be one regional general manager and one regional director of public health specifically responsible for the services. The Department of Health will be in regular touch with these individuals. In any event any money earmarked centrally is by no means the whole picture. A health authority should not need to be told that a service such as these wheelchairs is worth special support. As I have said, we shall be monitoring the progress and, no doubt, if it becomes necessary, we may have to consider guidance which is another matter about which I was asked.
I hope that many will conclude that without these measures further funds should be allocated locally. During the period of ring-fencing the allocation which each district will get to purchase disablement services for its residents will be the minimum and not the maximum they can spend. Powered wheelchairs have been proved to represent an extremely good investment for some severely disabled persons. Clearly district health authorities will need to weigh the competing priorities they face very carefully. Given the obvious value of powered indoor and outdoor wheelchairs for those able to benefit from them, I hope and feel sure that districts will find ways of bringing the developments and advantages of ever-improving technology and making them more widely available and that this will not be a Cinderella service.
Lord Allen of Abbeydale: My Lords, there is one question which the noble Baroness has not answered in her very interesting speech. Is any general guidance being given about age limits and conditions of that kind or is there a risk that different practices will be followed in different areas?
Baroness Hooper: My Lords, I apologise to the noble Lord. I thought that I had touched on the fact that the criteria laid down in the pilot projects will not

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necessarily be followed throughout the national Health Service. We do not envisage issuing guidance, but if in the course of monitoring the progress of services we feel that guidance is necessary, we shall issue it.

Avon Light Rail Transist Bill [H.L.]
Bill withdrawn.
House adjourned at fifteen minutes before ten o'clock.