Lords Sitting of 12 November 1991

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

The Lord Bishop of Norwich
Peter John, Lord Bishop of Norwich—Was (in the usual manner) introduced between the Lord Bishop of Chelmsford and the Lord Bishop of Worcester.
The Lord Bishop of Coventry
Simon, Lord Bishop of Coventry—Was (in the usual manner) introduced between the Lord Bishop of Ripon and the Lord Bishop of Bradford.

Training and Enterprise Councils
2.48 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
Whether they have any proposals to change the structure and functions of the Training and Enterprise Councils.
Earl Howe: My Lords, TECs are private companies engaged in training, education and enterprise with a performance based contract with my right honourable friend the Secretary of State. There are no proposals to change these arrangements.
Lord Dormand of Easington: My Lords, that is an even more complacent Answer than we are used to on this side of the House. Are the Government giving urgent consideration to the most serious criticisms of TECs which have been made by the Auditor General and by the Commons Select Committee on Employment? Is the noble Earl aware that one of the criticisms made by the Auditor General is that a sum of £24.5 million has been paid to trainees who have not regularly or even at all attended courses organised by the TECs? There are equally devastating comments made in the report. What is the Government's response to the replies to the Select Committee from 60 of the 82 TECs which are now in existence, which say that the training guarantees—the core of the TECs—to youth employment and long-term employment are simply not being met because of the shortage of funds?
Earl Howe: My Lords, I hope I can reassure the noble Lord on both those points. The National Audit Office report is being taken very seriously by my department. The report says that in some cases a lack of comprehensive attendance records means that some payments might have been made to training providers without supporting evidence of trainees' attendance. We arc anxious that the Government should get full value for money, and that all payments are supported
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by proper evidence. Having said that, the report contains figures and comments which are some months old. The auditors have seen and noted a marked improvement in all areas of procedure and record keeping since TECs became operational last year.
Turning to the noble Lord's second point about the Select Committee report, again I stress—and I hope reassure the noble Lord—that the YT guarantee is being met. Furthermore, the Government are fully committed to that guarantee. It is the top priority for each individual TEC to ensure that its local arrangements are effective to meet the guarantee, but no TEC will be prevented by lack of resources from meeting the guarantee. Many TECs are saying that school staying-on rates seem to have turned out higher than expected. That is a welcome development and is taken into account when setting budgets.
Lord Mellish: My Lords, the noble Earl will know that the Government have taken some action which has held up the progress of, for example, the Construction Industry Training Board. The CITB has a wonderful reputation, so much so that the Government themselves have paid tribute to it. Yet by their action they have delayed matters. Do I understand from the noble Earl's reply that no further action is to be taken against the TECs and that they are to be allowed virtually carte blanche to do what they will?
Earl Howe: My Lords, TECs have considerable autonomy to manage their own affairs and their own budgets within certain strictly defined limits. For example, there is a 5 per cent. latitude on switching funds between budgets. Therefore, it is a matter for each individual TEC to decide how those funds are allocated within the limits that I have mentioned.
Lord Holderness: My Lords, has my noble friend been able to reach a decision on the proper relationship of the TECs with vocational training for disabled people? If not, can he say when he may be able to do so?
Earl Howe: My Lords, TECs are contractually bound to make appropriate provision for trainees with special training needs. The guarantee group in YT and the guarantee and aim group in employment training include substantial numbers of people with special needs who thereby receive priority help. It is for TECs to decide with whom to contract in order to meet the training and enterprise needs of their locality. They will make that decision on the basis of quality, the appropriateness of training for individuals and value for money. What matters is that those needs are being met effectively.
Baroness Seear: My Lords, is the noble Earl aware that many organisations, particularly those involved in the provision of training for those with special needs, are having great difficulty due to the late payment of money by TECs? Is he further aware that the Government have made available capital funds to deal with such cash flow problems but the TECs are refusing to use them for that purpose, thereby causing

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great disruption and serious hardship to the organisations concerned? Since that capital fund is public money, are not the Government responsible for seeing that it is used in the way intended? Does the noble Earl not agree that the answer to the question, which has been raised before, that it is for the TECs to do what they like with the money, is inadequate in view of the purpose for which the money was given to the TECs?
Earl Howe: My Lords, I am grateful to the noble Baroness for drawing my attention to those points. I was not aware of them. I shall make sure that they are brought to the attention of my right honourable friend the Secretary of State.
Lord Peston: My Lords, the noble Earl is quite right to say that the TECs are private enterprises. However, they were invented by the Government and are the Government's training flagship. Can the noble Earl say what is the nature of the contractual arrangement? Some TECs are doing quite well but many are doing very badly indeed. Can the Minister tell the House what is the mechanism for making those TECs which fail to meet their contractual obligations rectify matters? For example, can a TEC be made bankrupt? Can the board be fired? What is the mechanism for making the system work?
Earl Howe: My Lords, it has always been the Government's view that the relationship between the department and TECs would need to evolve and develop over time as the full network comes into place. The review which is now being undertaken is giving effect to that view. To speculate on TECs coming to an end or going bankrupt is premature. I do not believe that that will ever occur. However, in the event of schemes closing, other TECs would endeavour to take up the slack; and there would also be referrals to regional offices.
Lord Glenamara: My Lords, can the noble Earl give a more specific answer to the question which was asked by the noble Lord, Lord Holderness? Can he give any assurance to the four colleges which are engaged in training the disabled, one of which is in Durham? Those colleges are very apprehensive at present. If the noble Earl is not prepared for the question, would he write to me and the noble Lord, Lord Holderness, about the matter?
Earl Howe: My Lords, I shall be happy to write to the noble Lords on that subject.
Lord Williams of Elvel: My Lords, perhaps I may declare an interest as President of the Federation of Economic Development Authorities. Is the noble Earl aware that district authorities, which in many cases are the largest employers in an area, have no right of representation on these employer-led boards, and that the Government have consistently denied the local authorities the right to be so represented? Will the Minister undertake to look at the matter again in the light of the review? Furthermore, will there be a formal consultation process with the FEDA on the performance of the TECs?
Earl Howe: My Lords, I am very surprised by the noble Lord's comments. As he may know, guidelines are laid down as to the composition of the boards of TECs. Typically, one third of those boards is comprised of representatives of local authorities, local schools, voluntary organisations, and so forth. The suggestion of a policy of deliberate exclusion is new to me. However, I shall look into the matter and I thank the noble Lord for drawing it to my attention.
Lord Dormand of Easington: My Lords, am I right in assuming that in his reply to my supplementary question the Minister was saying that the Government accept the serious criticisms made by the Auditor General? If that is so, can the noble Earl say on behalf of the Government when those matters are likely to be corrected? After all, it is the second year running that the Auditor General has refused to confirm the accounts. Regarding the replies to the Select Committee to which I referred, I understand that in another place the Secretary of State said that those replies were out of date. How can those replies be out of date when most of them were made in September and October?
Earl Howe: My Lords, the Government take seriously the report of the National Audit Office. In defence of TECs it is fair to say that 1990–91 was a year of unprecedented upheaval when responsibility for delivering services shifted from my department to the TECs. However, the auditors noted a considerable improvement in the standards of record keeping and in general procedures.
As regards the noble Lord's second question, it is important to emphasise that the replies to which he referred, and to which his honourable friend Mr. Blair has also referred, are several weeks out of date. Events have moved on. The department has been in discussion with TECs about the YT guarantee with a view to agreeing any necessary actions. It has reached agreement with 18 of the 19 TECs referred to by the noble Lord. Discussions with the remaining TEC are in hand. The majority of TECs feel comfortable about being able to meet the demands placed on them. The essential point to note is that the Government are fully committed to the YT guarantee and will ensure that it continues to be met.

BT Profits and Prices
3.1 p.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
Whether they will establish a public inquiry to examine the relationship between British Telecom's profits and the prices charged to the consumer.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Reay): My Lords, the Government have established a strong independent regulator, the Director General of Telecommunications, who regulates these matters. Under the present price control formula changes in BT's main prices are limited to 6.25 per cent. less than the increase in the retail prices index. It means that at

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today's inflation rate they are falling in nominal as well as real terms. This price control ensures that cost increases cannot be passed on to customers.
Lord Molloy: My Lords, I thank the Minister for that Answer. Is it not the fact that British Telecom has made outrageous profits from excessive prices? Does the Minister agree that whoever was responsible for checking an upheaval which means that many poor people cannot afford a telephone should be replaced as quickly as possible? Will the Minister make a big effort to answer the question of whether a public inquiry will be set up?
Lord Reay: My Lords, as regards a public inquiry, Sir Bryan Carsberg has announced his intention to issue a consultative document in January next year inviting views from all interested parties before deciding on any new price controls. He took similar action in 1988 when the price gap was previously reviewed.
Lord Boyd-Carpenter: My Lords, in the light of my noble friend's comments about price movements, is it not d ear that the improvement in the profit performance of British Telecom derives from greater efficiency?
Lord Reay: My Lords, I agree with my noble friend. The profits of British Telecom must be seen in perspective. It is one of the United Kingdom's largest companies with an annual turnover of £13 billion and an investment programme of more than £2.5 billion per year.
Lord Mackie of Benshie: My Lords, is the Minister saying that the results of improved efficiency should not be passed on to the customer as well as to the shareh older?
Lord Reay: My Lords, they are being passed on to the customer. The effect of the price controls has been that since privatisation in 1984 BT's main prices have fallen in real terms by about 27 per cent.
Lord Bruce of Donington: My Lords, is the Minister aware that arguments put forward by Members on these Benches when British Telecom was privatised have proved to be right and that this private monopoly is nothing more than a rip off of the general public'' Does the Minister agree that there is a strong case not merely for a public inquiry but for the intervention of the Government to ensure that this public rip off by a private monopoly does not continue?
Lord Reay: My Lords, I do not agree with the noble Lord. In our view effective competition is the best way to defend consumers' interests. The Government have progressively introduced competition throughout the British telecommunications market. However, such competition takes time to develop and while it does the consumer needs the additional protection of a strong independent regulator. That is a protection that the consumer has with the results that I have quoted.
Lord Tordoff: My Lords, will the Minister invite his noble friend the Leader of the House to ask the noble Lord, Lord Bruce of Donington, not to bellow in our ears quite so much but perhaps to use the telephone?
Lord Reay: My Lords, I am sure that the noble Lord will do what he can to take advantage of that advice.
Lord Bruce of Donington: My Lords, will the Government agree that occasionally it is necessary to use a loud voice in order that the politically dumb on the Liberal Benches may hear?
Noble Lords: Oh!
Lord Reay: My Lords, I do not believe that any Members of this House have ever had difficulty in hearing the noble Lord.
Lord Williams of Elvel: My Lords, I shall endeavour to speak softly—
Lord Hailsham of Saint Marylebone: Speak up!
Lord Williams of Elvel: My Lords, does the Minister agree that the increased prices announced by British Telecom on 1st August 1991, averaging 4.5 per cent., hide back-door increases in rental and installation charges of 7.8 per cent., which is above the rate of inflation? Will the Minister further reflect that the decision by British Telecom to charge telephone users 44½p plus VAT to use directory inquiries has incensed many consumers, myself included?
Noble Lords: Hear, hear!
Lord Reay: My Lords, charging for the service of directory inquiries has meant that rather than BT recovering the cost from everyone indiscriminately only those who make use of the service now pay for it. The most intensive users are businesses. Therefore, introducing charges has removed a cross subsidy from domestic consumers to business. Domestic call charges were reduced by between 4.5 and 7.3 per cent. as a result of introducing those charges.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that Members on all sides of the House recognise the point behind the question asked by the noble Lord, Lord Williams. However, can he explain the reason for the criticism of profits by people who object to profits being made but who were silent when the nationalised steel industry was making great losses?
Lord Reay: My Lords, I believe that my noble friend was asking a rhetorical question of the noble Lord opposite. As I have indicated, BT's profits must be seen in perspective taking into account factors such as the need for massive investment.
Lord Greenway: My Lords, will the Minister find a way of pressurising British Telecom to utilise some of its enormous profits to produce a pay-phone box which provides change? What happens at present amounts to nothing less than daylight robbery.
Lord Reay: My Lords, I must consider that question. The quality levels throughout BT's services

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have never been higher. Ninety-six per cent. of all call boxes are now functioning whereas in 1987 the number was less than 75 per cent. Before that date the number was undoubtedly lower although no statistics were kept.
Lord Morris: My Lords, is it right that British Telecom controls more than 95 per cent. of the telephone services market? Can my noble friend say whether the sale of 49 per cent. of the shares of BT presently held by the Government will further encourage competition within that market?
Lord Reay: My Lords, our policy is to ensure that business and residential customers have the widest possible choice of high quality services at the most competitive price. In our view open and vigorous competition is the best way to achieve that aim. We have sought to introduce effective competition and customers now have many new choices. That pattern will be extended.
Lord Molloy: My Lords, does the Minister agree that such massive profits can have been made only as a result of excessive price increases? I hope that he will consider and send to British Telecom a poignant argument; that the poorer section of our community, which relies on the telephone to keep in touch with doctors, local authorities and so forth, are discovering that they cannot afford a BT telephone. Will the Minister take that into consideration when an examination is made?
Lord Reay: My Lords, we believe that competitive prices and quality matter to the consumer. The system which we have established will ensure that those are delivered.

NHS: Local Health Strategy
3.10 p.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
What help they will give to local health authorities to enable them to carry out a "safeguarding health role".
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper): My Lords, our reforms have provided the NHS with new opportunities to tackle broader aspects of the nation's health. Directors of public health are central to this task. The health strategy will seek not simply to safeguard but actively to improve health and bring real and substantial benefits to the health of the nation.
Lord Molloy: My Lords, I thank the noble Baroness for that reply, which I am pleased to hear. However, that policy must be carried out all over the country and that is not being done. At least one authority, the London Borough of Ealing, has dismissed its chief health education officer and his two assistants. The Government's worthwhile and remarkable endeavour has been frustrated by the London Borough of Ealing's ruling council.
Baroness Hooper: My Lords, I am sorry to hear the news that the noble Lord conveys. The purport of the Question was not immediately discernible from the Question on the Order Paper. However, I shall look into the local aspects of the matter and write to the noble Lord.
Lord Desai: My Lords, will the noble Baroness comment on reports in today's newspapers that at least two London health authorities are extremely dissatisfied because they do not believe that even minimum standards are being met in London?
Baroness Hooper: My Lords, the London question is being considered not only by the Tomlinson inquiry but also by the King's Fund inquiry. Members of your Lordships' House are represented on that inquiry. They will look into the special factors which affect the delivery of health care in London.
Lord Stoddart of Swindon: My Lords, did the noble Baroness see the article in yesterday's Evening Standard by Dr. Le Fanu, who alleges that old people are being discriminated against within the National Health Service? If she has not read that article, will she do so and comment upon it?
Baroness Hooper: My Lords, I am grateful to the noble Lord for raising that issue. Of course, I have seen that article. The Government have done a great deal to help older people with their health needs because we are aware of the increasing numbers and needs of that category of patient. The GP contract ensures that older people are offered a regular health check on a voluntary basis. Only today the Department of Health launched a guide to health and healthy living for older people with representation from certain Members of your Lordships' House.
Lord Carter: My Lords, the Minister referred to the central role of regional directors of public health. Is she aware that the role of safeguarding health would be easier to fulfil if the Government were to accept the policy of the European Commission and the Labour Party, which is supported by all 14 regional directors of public health in England, that there should be a ban on the advertising of tobacco?
Baroness Hooper: My Lords, the Government's Green Paper The Health of the Nation is looking into that area, among many others, in targeting health needs. We believe that the district and regional authorities have new important strategic tasks to carry out as a result of our reforms. Because of the encouraging settlement announced in last week's Autumn Statement, the funds will be available to put behind the words.
Lord Carter: My Lords, will the noble Baroness answer my question? Why in Brussels yesterday did the Government block the EC directive on the banning of tobacco advertising?
Baroness Hooper: My Lords, the noble Lord should be rather more sure of his facts. There was no question of blocking anything yesterday at the meeting of the

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Council of Health Ministers because no decision could be taken constitutionally until the opinion of the European Parliament had been taken.
Lord Mellish: My Lords, there is another side to the London story which should be put. Is the noble Baroness aware—she cannot be expected to be aware —that two very elderly people were both taken into Lewisham hospital where they had hip replacement operations? They were kept in for about 14 days and both were discharged together. I believe that a brilliant job was done.
Baroness Hooper: My Lords, all too rarely do we hear the good news stories. I am grateful to the noble Lord.
The Minister of State, Home Office (Earl Ferrers): My Lords, 24 minutes have elapsed and there is still another Question on the Order Paper. I believe that the convention is that we move on to the last Question at about this time.

Safer Cities Scheme
3.15 p. m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
Whether there have yet been any direct results from the safer cities scheme.
Earl Ferrers: My Lords, we have established 19 local projects which have undertaken and planned over 1,600 local crime prevention measures. Examples of their impact and success are shown in the latest safer cities progress report issued on 30th October, a copy of which I am placing in the House of Lords Library.
Lord Campbell of Croy: My Lords, I thank my noble friend for that encouraging reply. As the scheme seems to be producing worthwhile results, will it be extended to other areas with government support, in particular to areas in which there is ram raiding of shops 53, carefully organised criminal gangs in cars and vans?
Earl Ferrers: My Lords, the existing projects are reviewed after three years of operation. The indications are that this form of crime prevention is highly effective. We shall consider what should be the proposals for the future in due course. I agree with my noble friend that ram raiding is quite intolerable but decisions on priority for action in the safer cities areas are decided by local steering committees. So far ram raiding has not been selected as a crime problem to target.
Lord Richard: My Lords, is the Minister aware that in the press statement issued by his Ministry on 4th October four local authorities were singled out as being particularly worthy of praise in respect of this initiative: Birmingham, Lewisham, Nottingham and Wolverhampton? Is he aware also that those are all Labour authorities.
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What is the current level of funding for the programme and, in view of the increase in crime figures announced recently, are there any proposals to increase that?
Earl Ferrers: My Lords, with regard to the fact that the four authorities to which the noble Lord referred are all Labour authorities, I can only say thank goodness there is some sense somewhere.
With regard to the rest of the noble Lord's question, the funding was for 20 projects. Nineteen have been established and one more will be established. We must see what future course is taken when my right honourable friend has considered all the points at issue.
Lord Richard: My Lords, can the noble Earl say what is the current level of funding?
Earl Ferrers: My Lords, I knew that the noble Lord had thrown me by his first absurd supplementary question! As regards the level of funding, £2.9 million has been spent since April 1989. At present, about £7 million per year is spent because funding has increased. Of that £5 million is spent on grant and £2 million on salaries and running costs.

Business
Viscount Davidson: My Lords, at a convenient moment after 3.30 p.m., my noble friend the Leader of the House will, with the leave of the House, repeat a Statement that is to be made in another place on the NATO summit.

Business of the House Debate, 13th November
3.18 p.m.
Earl Ferrers: My Lords, on behalf of my noble friend the Lord Privy Seal, I beg to move the first Motion standing in his name on the Order Paper.
Moved, That the debate on the Motion in the name of the Baroness Turner of Camden set down for Wednesday the 13th of November shall be limited to 5 hours.—(Earl Ferrers.)
On Question, Motion agreed to.

Business of the House Debates, 20th November
Earl Ferrers: My Lords, on behalf of my noble friend the Lord Privy Seal, I beg to move the second Motion standing in his name on the Order Paper.
Moved, That the debates on the Motions in the names of the Lord Allen of Abbeydale and the Baroness Warnock set down for Wednesday the 20th of November shall each be limited to 2½ hours.—(Earl Ferrers.)
On Question, Motion agreed to.

European Communities Committee Select Committee
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the first Motion standing in my name on the Order Paper.
Moved, That a Select Committee be appointed to consider Community proposals, whether in draft or otherwise, to obtain all necessary information about them, and to make reports on those which, in the opinion of the committee, raise important questions of policy or principle and on other questions to which the committee considers that the special attention of the House should be drawn;
That as proposed by the Committee of Selection the following Lords be named of the committee —

Aldington, L.

Brain, L.

Bridges, L.

Bruce of Donington, L.

David, B.

Elles, B.

Ezra, L.

Greenhill of Harrow, L.

Hunter of Newington, L.

Lockwood, B.

Lucas of Chilworth, L.

Mackay of Ardbrecknish, L.

Nathan, L.

Oliver of Aylmerton, L.

Pearson of Rannoch, L.

Robson of Kiddington, B.

Selborne, E.

Serota, B. (Chairman)

Shepherd, L.

Somerset, D.

Stedman, B.

Thurlow, L.

Varley, L.

Young, B.

That the committee have power to appoint sub-committees and to refer to such sub-committees any of the matters within the terms of reference of the committee; that the committee have power to appoint the chairmen of sub-committees but that subcommittees have power to appoint their own chairman for the purpose of particular inquiries; that two be the quorum of sub-committees;
That the committee have power to co-opt any Lord for the purpose of serving on a sub-committee;
That the committee and any sub-committee have power to adjourn from place to place;
That the committee have power to appoint specialist advisers;
That the committee have leave to report from time to time;
That the reports of the committee from time to time be printed, notwithstanding any adjournment of the House;
That the minutes of evidence taken before the committee or any sub-committee from time to time be printed and delivered out if the committee thinks fit. —(The Chairman of Committees.)
On Question, Motion agreed to.

Science and Technology Select Committee
The Chairman of Committees: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That a Select Committee be appointed to consider science and technology; and that as proposed by the Committee of Selection the following Lords be named of the Committee—

Adrian, L.

Caldecote, V.

Dainton, L.

Denton of Wakefield, B.

Desai, L.

Flowers, L.(Chairman)

Gregson, L.

Howie of Troon, L.

Kirkwood, L.

Nicol, B.

Platt of Writtle, B

Porter of Luddenham, L.

Renwick, L.

Tombs, L.

Whaddon, L.

That the committee have power to appoint sub-committees and that such sub-committees have power to appoint their own chairmen;
That the committee have power to co-opt any Lord for the purpose of serving on the committee or any sub-committee;
That the committee have leave to report from time to time;
That the committee and any sub-committee have power to adjourn from place to place;
That the minutes of evidence taken before the committee or any sub-committee from time to time be printed and delivered out if the committee thinks fit;
That the committee and any sub-committee have power to appoint specialist advisers.—(The Chairman of Committees.)
On Question, Motion agreed to.

Nurses, Midwives and Health Visitors Bill [H.L.]
3.20 p.m.
Baroness Hooper: My Lords, I beg to move, that the Nurses, Midwives and Health Visitors Bill, which was introduced in this House on 5th November, be now read a second time. The main purpose of the Bill is to change the constitution of the United Kingdom Central Council for Nursing, Midwifery and Health Visiting (UKCC) and the four national boards for nursing, midwifery and health visiting.
I remind your Lordships that the UKCC is the statutory body for the nursing professions in the United Kingdom responsible for establishing and improving standards of training, maintaining a register of qualified practitioners, and determining whether a practitioner should be removed from the register.

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The national boards currently have responsibility for approving courses for nurses, midwives and health visitors, enabling them to qualify for registration; approving post registration courses for those already on the register; ensuring that such courses meet the requirements of the central council; and carrying out initial investigations in cases of alleged misconduct. The Bill will change the constitution of the central council from a body the majority of whose members are appointed by the Secretary of State to a body the majority of whose members—some two—thirds-are elected by the professions to whom they are responsible. At the same time it will change the constitution of the four national boards for nursing, midwifery and health visiting from elected to appointed bodies.
In line with the principles of the NHS reforms, the role of the national boards in managing and financing the provision of nursing, midwifery and health visiting education and training will be devolved to health authorities, except in Northern Ireland where existing arrangements will continue to apply. It will also centralise all professional conduct investigations at the council, avoiding duplication of effort and rationalising this important function.
The proposed changes are the result of recommendations arising from a review of the central council and the national boards commissioned by the four United Kingdom Health Departments and carried out between December 1987 and March 1988 by Peat Marwick McLintock, as part of the regular Treasury programme of reviews on non-departmental public bodies
In the event, the review team produced a radical set of recommendations, the general tenor of which I have already outlined. It is that change in the administrative and organisational arrangements of the statutory bodies for nursing, midwifery and health visiting which the Bill seeks to implement. The fundamental principle of professional self-regulation is not being called into question. Indeed, the proposed changes will, we believe, strengthen it. For that reason the amending legislation which is laid before your Lordships is generally agreed to be non-controversial.
The Peat Marwick McLintock report was issued for consultation to the nursing profession in August 1989 and the formal consultation period ended in February 1990. Subsequently, there was a wide range of informal discussions between the health departments, the statutory bodies and representatives of National Health Service management to try to establish the maximum consensus on the way forward.
Following the announcement which my right honourable friend the Secretary of State made in the other 'place on 4th February 1991, the Legislation Advisory Group was established and given the remit of considering what changes would be required to the Nurses, Midwives and Health Visitors Act 1979 in order to give effect to the government decisions on the Peat Marwick McLintock recommendations; that is, to alter the roles of the five state nursing bodies.
The Legislation Advisory Group comprised representatives of the four United Kingdom health departments, the UK Central Council and the
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national boards. It has had several very productive meetings since it was established in March 1991, and has achieved near unanimity on all details of the proposed legislation. The nursing, midwifery and health visiting professions have been involved at all stages of our deliberations and their contribution has been both constructive and valuable. I take this opportunity once again to thank all the participants for their hard work.
The details of the provisions in the Bill are clearly outlined in the explanatory memorandum. Therefore I will not elaborate on them all at this stage, although I shall be happy to expand on my opening remarks if so requested during the course of the debate. However, I shall make particular mention of Clause 1. It increases the maximum membership of the central council from 45 to 60 and specifies that two-thirds of the membership shall be elected (rather than appointed as at present) under an approved electoral scheme. The remaining members are to be appointed by the Secretary of State, bearing in mind the need to secure that the members of the council shall include representatives of the three professions of nursing, midwifery and health visiting, and also representatives from all parts of the United Kingdom. The council is to have a president and a vice-president appointed by the council from among its members.
The increase in the maximum membership takes into account the increased workload which will be placed on members by the future role and responsibilities of the council, in particular the centralising of all professional conduct investigations at the council. The fact that the majority of members will in future be elected by the professions to which the council is answerable reinforces the principle that the nursing, midwifery and health visiting professions should be fully self-regulating.
I move to another important aspect of the Bill contained in Clause 4. It provides for the non-executive members of a national board to be appointed by the Secretary of State rather than elected, as at present. In future the national boards will be smaller executive bodies with a more limited role and function, directly accountable to the Secretary of State. As regards executive members, the clause provides for certain officers appointed by the boards to be ex-officio members of the boards. It further allows for remuneration, pensions, allowances and gratuities to be paid by the Secretary of State (with the consent of Treasury) to members of the boards appointed by him. Finally, it gives the Secretary of State power to make any further provision with respect to the constitution and administration of the boards as he thinks fit.
Clause 5 amends the functions of the national boards by specifying that they shall approve institutions which provide courses of training for nurses, midwives, and health visitors rather than providing or arranging for others to provide courses at institutions which they have approved. The latter function will in future be discharged by health authorities, except in Northern Ireland where Clause 5(3) ensures that the role of the national board can continue as at present. The amendment reflects the

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intention to permit the transfer for funding for the education and training of nurses from the boards to health authorities and health boards, where it is considered more appropriately to lie. The clause also removes from the boards their disciplinary investigation function, so that professional conduct matters will in future be the sole responsibility of the council. Finally, it removes a now superfluous requirement on the boards, in the discharge of their functions, to have regard to the interests of all groups within the professions, including those with minority representation. That last amendment is consequent upon the fact that the boards are required to exercise their amended functions in accordance with the rules of the council, which is itself required to have a proper regard for all such interests.
Those are the clauses which contain the main changes the Bill is to bring about. I believe that the Nurses, Midwives and Health Visitors Bill is a non-controversial piece of legislation. It will not, overall, lead to an increase in public expenditure and is not expected to have any effect on public service manpower. I ask your Lordships to grant the Bill a Second Reading.
Moved, That the Bill be now read a second time. —(Baroness Hooper.)
3.30 p.m.
Lord Carter: My Lords, I thank the Minister for a clear exposition of the Bill, as is typical of her. I also congratulate the Government on producing a health Bill which is not contentious, which means that I can be brief when I respond.
As the noble Baroness said, the Bill has been generally welcomed by all the professional organisations involved and it is certainly not politically contentious. From the Opposition Benches we shall do our best to assist its passage. There is no need for me to analyse the nature and structure of the Bill as the Minister has done because, as she said, it is the result of full consultation with the organisations involved.
I wish to deal with one or two matters which we shall need to probe at later stages of the Bill. As regards Clause 1(4) (b), we understand that it is the intention of the Secretary of State to consult organisations in deciding on the one-third appointed members of the council. We may wish to consider whether the intention of a consultation should be written into the Bill to ensure a broader base of appointees, to the effect that the Secretary may or shall consult with the interested organisations. It will be interesting to have the Minister's response as to how she views that as a proposal when we come to the end of the debate.
We also understand that it is the intention of the Government to ring-fence the funding for nursing education at regional health authority level. We shall need some assurances as regards the nature and timescale of the ring-fencing. We shall need to be told what it means and how it will operate. In passing, we wish that the Government's enthusiasm for ring-fencing extended to other areas. The noble Baroness
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will remember our debates concerning community care. When the noble Baroness responds, or perhaps at a later stage of the Bill, we shall wish to probe a little as to how ring-fencing is supposed to work and how it will be protected.
There is another area of concern of which I know the Minister is aware. I refer to the disciplinary functions of the UKCC. I am sure that that organisation, the Royal College of Nursing and the Royal College of Midwives all feel that, in addition to suspension, there should be a power of reprimand or caution. I understand that an amendment has been drafted to write that provision into the Bill. Perhaps we could save time at a later stage of the Bill if we heard now the Government's reaction to the proposal. I know that all the organisations involved feel that this is an important extension which should be given to the UKCC. I understand that there may be legal problems and perhaps the Minister can advise the House on that.
I have mentioned the Royal College of Midwives. It is particularly concerned that the interests of minority groups such as midwives are properly protected. We shall need to examine that aspect as the Bill proceeds. I believe that in the 1979 Act, which this Bill replaces, the interests of minority groups are specified though they are not in this Bill. Perhaps the Minister can tell us why that change of approach was adopted.
As I said, I shall be extremely brief as the Bill is non-contentious. All the matters I have mentioned can be dealt with quite easily when the House goes into Committee. I know that a number of speakers who are to follow me have considerable knowledge of the nursing professions and that their views will command the attention and respect of the House. I look forward very much to hearing them. It will also give the House a chance to pay tribute to the remarkable job that is done by all three professions mentioned in the Title of the Bill.

NATO Summit
3.33 p.m.
The Lord Privy Seal (Lord Waddington): My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Prime Minister on the NATO Summit in Rome on 7th and 8th November. The Statement is as follows
"With permission, Mr. Speaker, I shall make a Statement on the NATO Summit in Rome on 7th and 8th November which I attended with my right honourable friend the Foreign Secretary.
"Last July in London NATO agreed to adapt its strategy to the changed situation in Europe and to build up a new partnership with the countries of central and eastern Europe. At the summit we agreed how to carry forward both those tasks.
"The strategic concept reflects the British Government's objectives. These were to ensure that NATO remains the linchpin of Western security, charged with dealing with whatever security problems might threaten. The strategy reaffirms the

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need for a collective defence based on NATO's integrated military structure and also on the need for both nuclear and conventional forces, kept up to date where necessary, but at significantly reduced levels. Alliance forces in every NATO country will be smaller, more mobile and more flexible. At the summit we endorsed the establish-men: of new rapid reaction forces, in which the United Kingdom will command the land element.
"The summit declaration establishes a North Atlantic Co-operation Council. This forum will enable NATO to discuss common security issues with the Soviet Union, the Baltic states and the countries of eastern Europe. At Britain's suggestion the first such meeting will be held at Foreign Minister level in Brussels in mid-December.
"We have agreed a wider role for NATO. Henceforth, NATO will not just be keeping the peace. It will be actively promoting peace. It will be prepared to help the countries of eastern Europe in planning defence forces in a democracy, with civilian-military relations, and in converting defence production to civilian purposes. The relationship may well develop still further.
"The NATO Summit also, for the first time, considered in depth the European defence identity and the alliance. We affirmed some important principles: first, the principle that NATO is the essential forum for consultation and agreement on policies bearing on the security and defence of alliance territory; secondly, endorsement of the British proposal to use the Western European Union as the means of strengthening the European pillar of the alliance; thirdly, the need to establish clear and open relations between NATO and the Western European Union and to involve other allies on issues discussed in the Western European Union which affect their security.
"Heads of Government received a report on Yugoslavia following a meeting of Community Foreign Ministers with Lord Carrington. In view of the grave situation in Yugoslavia and the repeated breaches of the ceasefire, Community Governments agreed in Rome on a series of restrictive measures. These include: suspension of the trade and co-operation agreement; suspension of benefits under the general scheme of preferences; and the suspension of the PHARE programme and restoration of quotas on textiles.
"Community Governments asked those member states which are members of the Security Council to promote measures in the Security Council to tighten the arms embargo and to take steps towards imposing an oil embargo. We are now consulting other members of the United Nations Security Council about the introduction of such measures.
"Community Governments also decided that positive action would be taken to benefit those parties who were being co-operative in the peace process. Taken together, these measures will increase the pressure on those responsible for appalling bloodshed and suffering in Yugoslavia. NATO Heads of Government issued a separate
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statement making clear the allies' strong support for the efforts of the European Community to promote peace in Yugoslavia.
"We discussed developments in the Soviet Union. We publicly supported economic reform and democratisation. We stressed the need for the authorities in the republics as well as at the centre to respect their obligations on human rights, arms control and economic policy. In particular, we urged them to do everything necessary to implement the CFE and START treaties and to prevent the proliferation of nuclear weapons.
"We are living through a dramatic revolution in eastern Europe and the Soviet Union. We have to use all the means at our disposal—the European Community, the CSCE and NATO—to help them build stable democracy in their countries.
"NATO remains the core of our defence. Were we again to face a military threat, NATO would be there to meet it. But NATO is now reaching out to the countries of eastern Europe to help provide stability and a sense of security. All of us at last week's meeting agreed that the continuing American and Canadian presence in Europe is vital both to defending and to promoting peace in Europe. Britain will have a central part in that task both in the alliance and in the European Community. The decisions of the NATO Summit provide important guidelines for the negotiations leading to the European Council in Maastricht.
"I hope the House will welcome the outcome of the summit as a significant contribution to a sound defence and to democratic stability in Europe."
My Lords, that concludes the Statement.
3.40 p.m.
Lord Cledwyn of Penrhos: My Lords, we are grateful to the noble Lord the Leader of the House for repeating the Statement. The Rome Summit was a very important occasion in view of the continuing argument within the Community about the place of defence in political union and the general view of Germany and France that the Community should operate independently of NATO.
Will the noble Lord tell the House whether the two principles listed on page 2 of the Statement mean that France and Germany now unequivocally accept the continued presence of the United States in Europe and the continuance of NATO? It certainly seems that the outcome of the summit has left the options open with regard to the development of European security, that the message to the Maastricht Summit is that NATO remains at the heart of our security policy. We welcome that assurance as well as the recognition of the need for a closer link between NATO and the former Warsaw Pact countries.
We further recognise that it will take time for the development from collective to co-operative security to take place, but that this may be achieved if a closer relationship between East and West Europe becomes meaningful and real and is not merely the product of wishful thinking. We further welcome the European commitment to NATO's rapid reaction force and we note that Britain is intended to play an important role

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in this. Is the noble Lord confident that Britain will be able to make a substantial contribution? Can he guarantee that the percentage of reservists in the British contribution to the RRC will be no more than 20 per cent., as previously understood? Further, can the noble Lord say when further discussions on nuclear and conventional disarmament will begin? In particular, can he say whether Britain, as the major European contributor to NATO's naval forces, requires NATO to respond to Soviet requests for talks on reductions in maritime forces? That is particularly relevant in view of the Norwegian worries about this matter.
We warmly welcome the remarks about Yugoslavia. Can the Minister tell the House when resolutions or proposals are likely to be put to the Security Council of the United Nations, as mentioned in the Statement?
Finally, can the noble Lord say whether the Government intend to support non-proliferation measures mentioned by NATO by actively pursuing negotiations for a comprehensive test ban treaty and fully implementing United Nations arms embargoes on countries such as Iraq?
The Statement gives us confidence that there is a more likely possibility that agreement can be reached in Maastricht on the defence issue within the argument about political union.
3.43 p.m.
Lord Jenkins of Hillhead: My Lords, my noble friends and I are also grateful to the noble Lord the Leader of the House for repeating the Statement. On the whole, Her Majesty's Government seem to have secured a satisfactory outcome to the NATO Summit. I congratulate the Prime Minister on the result.
The central issue, which is of some considerable delicacy of balance for the future seems to me to be this: for Europe to encourage a precipitate American withdrawal at the present time would seem to be both dangerous for the stability of Europe and to smack of considerable ingratitude for the contribution of the past 45 years. NATO, after all, has been an unusually manifest and triumphant success. There are very few international organisations in the history of the world which have achieved almost completely the objectives for which they were set up. NATO has done that for almost the past half century and it would seem appropriate to pay tribute to its primary architects who were Truman and Acheson, Attlee and Bevin. It has been a remarkable achievement and something for which we owe great gratitude.
Therefore, while I take this view about the great American contribution and the desire that it should continue, I think that at the same time it would be foolish to assume, with the end of the cold war, with other changes, with the weakening of the relative economic position of the United States, with the tilt in the balance of that continental country from east to west—although not likely to be over the turn of the century and beyond—some adjustment of America's degree of commitment across the Atlantic. Therefore, it would seem that the act of statesmanship which has
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to be performed is not to encourage any precipitate withdrawal but, at the same time, look to the future and realise that Europe will have to take more responsibility for its own defence. I hope that that is the approach of the Government. I should be very grateful if the noble Lord the Lord Privy Seal could assure me that that is so.
I have only one small question about Yugoslavia. In general I welcome the approach. The Statement outlines the desirability of taking up sanctions against the aggressive forces within Yugoslavia while taking positive action to benefit those parties who are co-operative in the peace process. It is an admirable objective but quite a difficult one to carry out in practice. I should be grateful if the noble Lord has any thoughts to share about how effective sanctions can be brought against those who are being aggressive while benefiting those who are more anxious to see a peaceful solution brought about.
Lord Waddington: My Lords, I am very grateful to the noble Lords, Lord Cledwyn of Penrhos and Lord Jenkins of Hillhead, for their remarks. This undoubtedly was a successful summit. It was accepted that there must be a continued presence of the United States in Europe and a continuing role for NATO. Clearly, the noble Lord, Lord Jenkins, is right to remind us that things could change by the end of the century but at the same time we are entitled to put considerable reliance on the statement by President Bush that he believes that there should be an unshakeable commitment to European security by America and that so long as American forces are wanted in Europe they will continue in Europe. It is indeed very important, as the noble Lord, Lord Cledwyn of Penrhos, said, that we should build up closer links between NATO and the former Warsaw Pact countries, and that was an important theme of the discussions.
As a result of the changes that are being made 23,000 members of the British Army will still remain in Germany. I cannot answer the specific points made by the noble Lord, Lord Cledwyn of Penrhos, about the opening of talks; neither can I tell him when any particular resolution will be put to the Security Council on Yugoslavia. The decision was made, however, that those members of NATO who are members of the Security Council should certainly promote the decision of the NATO Summit.
The point made by the noble Lord, Lord Jenkins of Hillhead, about Yugoslavia was that one does not know how hard the sanctions decided upon at the summit will bite. Somehow or other we have to put in place sanctions which mark the disapproval of the international community and do some good yet leave the way open to helping those parts of Yugoslavia which have actually helped the peace process.
3.49 p.m.
Lord Bridges: My Lords, will the Lord Privy Seal give the House any more details about the new institution of which he informed us—the North Atlantic Co-operation Council. This seems to be a most welcome and significant development. While it is

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helpful to know that the first meeting of this council will be held in December and attended by the Foreign Secretary, will the Lord Privy Seal say something more about the composition of this council, the likely plan of its activities and how Her Majesty's Government intend to use their influence on what it does?
Lord Waddington: My Lords, we certainly intend to exercise as strong an influence as we can on what it does. However, I regret that I cannot answer the noble Lord's specific question. I wish that I could. All I can say is that it was a conclusion of the council that such a co-operation mechanism should be set up. Perhaps the noble Lord will bear with me if I write to him on that specific matter.
Lord Callaghan of Cardiff: My Lords, perhaps when he does so the noble Lord will be good enough to write to me too. I was going to ask exactly the same question and add to it a small supplementary question. Why was it decided to set up a new institution, as distinct, for example, from using the CSCE or a sub-committee of the CSCE for this purpose? I am against the proliferation of new institutions. I should have thought that that is a good Conservative view as well. I am sure that there must have been a reason, and I should be interested to know what it is.
I have two further points. When will the rapid reaction force become operational? I know that one or two top appointments have been made. I was a little disturbed to hear that it will be some time before it is thought that a multinational division will be formed and the other divisions will be wholly operational. I should be glad to hear what the position is. Arising out of that, and just as important as the establishment of the force, is the point that its role has not yet been determined. I certainly do not wish to be critical here. What is it to do, where is it to go, in what circumstances and for what purpose? That is clearly as important as setting it up. I realise that some time must be spent in working that out. I hope that agreement can be reached that its role will not necessarily be wholly within the present boundaries of the NATO area. We should look at the possibility of extending it provided we do not alarm people too much and provided we can get agreement on that.
Having said that, I add my congratulations. It is not a question of finding a role for NATO; it has been a question of adapting NATO to the changed circumstances. I am delighted to hear from the noble Lord that it will remain the linchpin of our defence. We must do everything we can to ensure that the Americans understand that this is in their interests as well as in ours.
Lord Waddington: My Lords, I am grateful for the congratulations offered by the noble Lord, Lord Callaghan. I am not so grateful for the questions, so few of which I seem able to answer. I cannot answer the question as to why it was thought that the North Atlantic Co-operation Council was necessary as a new mechanism. I shall have to come back to the noble Lord 3n that. I do not think that he need worry about
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the timing of the coming into operation of the rapid reaction force. It is not as though there will be a vacuum before it comes into operation, and NATO deployments will continue until that change comes about. It is right to say that the new role need not necessarily be confined to the NATO area.
Lord Eden of Winton: My Lords, perhaps I may follow up the question posed by the noble Lord, Lord Callaghan. In the Statement my noble friend referred to the fact that NATO would be playing a more positive role in the future. Does that imply that NATO will be more interventionist? If that is the case, can we anticipate that it could in certain circumstances be attempting a pre-emptive role in order to guard against the outbreak of localised incidents, if they can euphemistically be referred to as such, with the example of Yugoslavia in mind? In that context, is NATO likely to look beyond the strict confines of the European territories? It would be most helpful if my noble friend could throw some light on how he sees NATO's more positive posture in the defence of peace and the promotion of security developing.
Lord Waddington: My Lords, I am grateful to my noble friend for the questions he has put and for giving me a breathing space. I can now answer the noble Lord, Lord Callaghan. The aim is to make the NATO rapid reaction force operational by the end of 1992. The most important decision of the summit was the acceptance that NATO should remain the linchpin of Western security and WEU should be the defence component of political union in Europe. That is the real significance of the talks.
Lord Mackie of Benshie: My Lords, I am a member of the Parliamentary Assembly of WEU. Can the noble Lord tell us whether progress has been made towards resolving the ludicrous position whereby France, because of past suspicions, will not take part in the command structure of NATO? We are talking of WEU as the defence component without France being wholly within NATO. To talk of setting up interchangeable staff units and so on is quite ludicrous. Was there any sign at the summit of the French modifying their attitude? That would make matters so much simpler in view of the likely reduction of American forces in Europe.
Lord Waddington: My Lords, I have no reason to believe that there was discussion at the summit about a change in the present position of France so far as concerns the command structure of NATO. Apart from the communiquéabout the Soviet Union, France agreed with the conclusions reached and the important conclusion about WEU to which I referred a short time ago.

Nurses, Midwives and Health Visitors Bill [H.L.]
3.57 p.m.
Debate on Second Reading resumed.
Baroness Robson of Kiddington: My Lords, I join the noble Lord, Lord Carter, in thanking the Minister

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for her introduction of the Bill. It is non-controversial and noble Lords on all sides of the House agree with its proposals.
It must be right to remedy a number of the defects in the Nurses, Midwives and Health Visitors Act 1979. Those were highlighted in the Peat Marwick McLintock report and have been pressed for in the past by the UKCC. The Bill will provide a better legislative basis for the council to fulfil its regulatory functions more efficiently. It is not often that all professional bodies and noble Lords in all parts of the House welcome a Bill and are in general agreement with it. Perhaps the consultation that took place prior to its introduction is something from which we can learn.
One or two points need to be clarified. The noble Lord, Lord Carter, has touched on some of them. There is concern about responsibility for financing nursing, midwifery and health visiting education being transferred to the health authorities and the health boards. We are all aware that when cash becomes tight education very often suffers. It has to because the service has to go on. We therefore welcome the Government's intention to ring-fence the sum of money necessary for education. However, can the Minister say for how long that ring-fencing will continue? I ask that question because ring-fencing is not a method which is very much liked by the Government or indeed by health authorities. Therefore, we wish to receive some reassurance about the length of time it will be in place. We should also like some guarantees that the fact that nurse education and training will be the responsibility of and funded by the RHAs in the future will not lead to a loss of momentum in the development of nurse education.
On Clause 7, as mentioned by the noble Lord, Lord Carter, all the bodies welcome the new power of suspension granted in the Bill, in addition to the power of removal from the register. However, I should like to join the noble Lord in asking that a further remedy should be made available to the UKCC; namely, that of cautioning persons, especially where the allegations of professional misconduct made against them have been proved or admitted and where removal from the register might be considered an excessive penalty. I understand that the idea of cautioning was included in the consultative document published on 30th September this year. I wonder why it is not embodied in the Bill.
I said that all three professional bodies are in agreement with the Bill. However, the Royal College of Midwives has a special concern which I should like to highlight and upon which I ask for the Minister's reassurance. The college feels that there is a weakness in the 1979 Act which has not been remedied in the present Bill. The central council has to consult the midwifery committee on all matters relating to midwifery. The college believes that that relationship should be strengthened and that it should go further to ensure that not only consultation takes place but also that the council should not unreasonably reject any recommendation of the midwifery committee. As the Royal College of Midwives considers itself to be a
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minority group, I wonder whether the Minister can reassure its members that they need not feel threatened by the new legislation.
I welcome the Bill. We shall do our best to ensure that it passes speedily through the House.
4.3 p.m.
Baroness McFarlane of Llandaff: My Lords, I too should like to thank the Minister for her presentation of the Bill and to speak in its support. I am a nurse, a midwife and a health visitor. Therefore, I have a personal interest in each of the professions named in the Bill. Further, prior to the 1979 legislation, I was chairman of the Joint Board of Clinical Nursing Studies, which was one of the nine bodies amalgamated under the 1979 Act. On the passage of the Act, I had the honour of being asked by the Secretary of State to be the first chairman of the English national board and, by virtue of that, a member of the United Kingdom Central Council for Nursing, Midwifery and Health Visiting. It is from that background and experience of what the situation was like prior to the 1979 Act, with the overlap of functions among nine statutory and governmental bodies, the problems of working through the provisions of the legislation and the division of work between the council and the boards, that I should like to support the Bill wholeheartedly.
The noble Lord, Lord Carter, paid tribute to the contribution of the professions named in the Bill. I think that it is right and proper, as we are here this afternoon, to say that the education and the regulation of those professions is of paramount importance to the health service and to quality assurance in the National Health Service. Unless nurses, midwives and health visitors are adequately prepared for their roles and unless the professional practice is regulated, the quality of the National Health Service will suffer accordingly.
I believe that there is probably no need to remind your Lordships of the increasing sophistication in medical care these days and of the commensurate need for sophistication in nursing care. We have the impact of high technology and the demographic trends, with increasing numbers of elderly people in the population and their needs and dependency. We then have all the matters stressed in the government publication The Health of the Nation and the need for health promotion and prevention of ill health. Because of all the sophistication, nurses and midwives are playing increasingly important roles.
I have only perhaps to mention a few of the specialties in those professions to indicate the need for their adequate preparation and control. For example, if one looks at the advances in oncology nursing and palliative care, the work of midwives in special care baby units and the work of health visitors in special stress counselling clinics, one sees that they are the backbone of the National Health Service.
Therefore, preparation for those roles is essential. I must pay tribute to the way in which the present UKCC has tackled the needs of the professions. The recommendations contained in the report on Project 2000 for the training and education of nurses to take

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their place from the year 2000 are now being implemented. I believe that exciting changes are taking place in nursing education which are preparing them for the future. More recently, the UKCC has produced its report on post-registration education and practice and on the future of community education. So the present bodies have been playing an important role it raising the standards of nursing education and in the regulation of the profession.
I believe that the provisions of the Bill outlined by the Minister have great strengths. That the UKCC should become the directly elected body means that the professions will be those to whom the UKCC will he accountable. That strengthens the whole question of self-regulation. The boards will be streamlined and I believe that, through that process, they will become far more effective and efficient. I also believe that, through the provisions of the Bill, the confusion in the division of work between the UKCC and board will be clarified and the whole of the professional conduct work will he taken over by the UKCC.
Not unnaturally, in a profession where Professor Judge called a report on nursing education fissiparous, reservations have been expressed about some of the provisions in the Bill. We have already heard some of them rehearsed in the House this afternoon. I have heard reservations as to the size and power of the boards and their ability to be innovative and responsive to national needs. I believe that the national boards took great pride in making provision for particular national needs. The Bill caters for that by making the UKCC accountable to the professions and therefore responsive to actual needs.
Secondly, I have heard reservations expressed about the loss of joint committees as provided for in Clause 3. In a profession such as health visiting, which before 1979 had its own statutory body, there is a feeling of loss at no longer having a joint committee. I feel that the Bill meets those needs because the council has power to set up committees and it must consult the professions when so doing. We have already heard about the apprehensions felt about the financing of nurse education and of the assurances sough" over ring-fencing.
This Bill gives me the opportunity to raise a matter that I mentioned on 13th February in our debate on the long-term objectives of the NHS. Whereas great progress is being made with Project 2000 and increased efficiency is being achieved with the consolidation of schools of nursing into colleges of nursing, the capital charges involved in bringing together colleges, for instance, in one building, have not been identified. I should be interested to hear an assurance on that point.
Our most important misgiving relates to the role of the UKCC in the regulation of professional conduct and its power not simply to suspend or remove from the register but to issue a formal caution. I regard the Bill as being uncontroversial. Given some clarification, I shall accord it my full support.
4.12 p.m.
Baroness Cumberlege: My Lords, I should also like to thank my noble friend the Minister for introducing the Bill. I wish to give it my strong support. I have been a member of the UKCC since 1988 and I have taken part in professional conduct committees. I know from first hand experience that the standards that nurses, midwives and health visitors set themselves are extremely high. I support them in their struggle to shake off the image of being angels or handmaidens. We know that they constitute a large. highly trained and scrupulously monitored professional body.
British nursing has laid the foundations for nursing education and practice in many countries. Nearer to home it has spearheaded attempts to improve professional practice within the EC, and as Europe continues to undergo change British nursing will have a key part to play in sharing its considerable achievement and skills.
The noble Baroness, Lady McFarlane, said that in this technological age nursing skills require a high degree of sophistication. I agree, but like the professions and indeed the council itself, I also strongly believe that good quality care embraces not only technical skills but compassion, gentleness and respect for one another. British nursing in my view succeeds in maintaining that very delicate balance. I am therefore mystified by the apparent reluctance to introduce limited prescribing for nurses. I think that everyone acknowledges that terminal care sisters and Macmillan nurses are the experts in caring for dying people, and yet they are not credited with the sense and skill to vary the rates of pain-relieving drugs.
Community nurses are not allowed to prescribe the simplest remedies, and they have to suffer the indignity of obtaining a doctor's signature, which also causes the patient prolonged and unnecessary suffering. Some doctors, I know, recognise the nonsense of the situation, and, perhaps one could say wrongly, leave a pile of signed prescriptions for the nurse to fill in. That is clearly not a desirable situation, but I think that it is an understandable practice, given the circumstances in which we find ourselves. I know that my noble friend the Minister will tell me that Touche Ross has been commissioned to report on nurse prescribing, but I wonder what is holding up that measure. Today we are dealing with a Bill of the most responsible nature, but we are absolutely failing to give nurses the responsibility and trust that they deserve.
We should appreciate that many people who need medical attention and advice neither want nor need to see a doctor. When we did a Marplan poll we found that 60 per cent. of people would prefer to see a nurse rather than a doctor for certain matters. I agree with the noble Baroness, Lady McFarlane, about the innumerable nursing problems faced by the increasing number of elderly and handicapped people for whom we have to cater at home and by their carers. There are few health centres and surgeries where people are offered direct access to a nurse; yet we know that seeing the doctor is not always the best solution.
Often people need and want time to talk and to be listened to. A busy GP cannot always give them that

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time. That has long been recognised in other parts of the world. Nurses here want to extend their brief to meet that demand. In this country we have a handful of nurse practitioners, and we urgently need many more to relieve GPs and to extend the choice of advice available.
I know that concern has been expressed today as to the problem with the funding provisions of the Bill; that they are perhaps not sufficiently robust. I also sense a healthy scepticism about the regions; that they are not to be trusted and that if money is not ring fenced, it will be spent elsewhere. I understand those pressures. When I was a district chairman, I experienced the temptation to raid the education and training budget to keep open a ward or a theatre or to progress new developments. But regions are now once removed from the intensity of operational pressures, and the new system, which is bureaucratically defined as Working Paper 10, is designed to ensure that education is protected from short-term expediency of that sort.
From my experience as chairman of the regional health authority for South West Thames, Project 2000, the new educational training scheme, has taken RHAs by storm. It has generated excitement and interest, and some of the best debates in my region have centred upon nurse education and training. In the past two years we have invested over £2 million in Project 2000. Some of that money has come from the centre, but some we have funded locally.
At present we have the ridiculous situation of regions being responsible for ensuring that sufficient skilled nurses are available to work in hospitals and in the community but part of the education budget for the training of the nurses to enable that to happen is being held by the educational boards. I welcome revision of a situation which means that in the North of England we are training too many nurses. That is extravagant not only in resource terms; it is a personal tragedy for young students who have completed years of training only to find that there is no job for them. There is real merit in bringing together the needs of the service and the resources available to ensure that the best quality of health care is given. There is also merit in allowing greater flexibility between pre-registration and post-registration education. On average, nurses used to spend only seven years working in the profession; today they spend 14; and so their needs for post-registration education are different. The NHS must be flexible enough to meet those changing needs. I believe that responsibility at the regional level is about the right level. It is not too far removed from the service and it is not too close to be pressurised.
I hope that we shall give the Bill a safe passage but I share the reservations expressed that there is no provision for a person whose registration has been neither removed nor suspended and who is not subject to a formal caution. I know that the backlog of cases coming before the UKCC is disturbingly long. Some people have to wait over two years to have their cases heard and that is unreasonable. Only 45 per cent. of those who come before the professional conduct
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committee are removed from the register. We require more flexibility, and I hope that the Minister will respond.
The Bill goes very far, but it does not recognise the demand for nurses to be able to prescribe, to become practitioners even more in their own right. I hope that in the future we shall have a measure before the House that will not only include such a provision but will also provide a nationwide nurse-practitioner service and thereby give a tangible expression to more patient choice as embodied in the Patient's Charter.
4.20 p.m.
Baroness Cox: My Lords, I am delighted to welcome the Bill and I offer it my strong support. I believe that its provisions represent significant milestones in the history of nursing, midwifery and health visiting. I wish to commend the Government for bringing forward the legislation, which I believe will be warmly welcomed by all the professions concerned.
As my noble friend the Minister has already indicated, the essence of the Bill is to provide for effective professional regulation based on the principles of professional responsibility and accountability. My noble friend has given such a clear exposition that I do not wish to add to it, but merely to highlight a few of the changes which I believe are particularly to be welcomed.
They include, first, the change in composition of the UKCC so that the majority of its members will be elected by the professions. This is a significant reflection of the principle of self-regulation. Secondly, there is the rationalisation of key regulatory functions relating to the maintenance of professional standards and conduct by bringing them together within the remit of the UKCC. Thirdly, there is the streamlining of vital educational functions by vesting important responsibilities in the four appointed national boards.
In my contribution I wish to pay tribute to my professional colleagues whose work has enabled the Government to recognise the profession's maturity in this way. First, I wish warmly to commend the UKCC under the leadership of Dame Audrey Emerton and Mr. Colin Ralph. The functions of the UKCC as laid down in the 1979 Act have been:
"to establish and improve standards of training and professional conduct for nurses, midwives and health visitors".
The council has responded magnificently to those challenges. It has brought into being the entirely new scheme of education for nursing known as Project 2000. This is designed to enable student nurses to have a professional education rather than a basic training; to enable them to understand the theory underpinning practice; and to have the opportunity to think about and to think through the assumptions and implications of their professional responsibilities.
If I may say so, this is a world away from the situation during my training a generation ago. I shall never forget my first ward report from a marvellous ward sister whom I remember with admiration and affection to this day. After giving me what I am pleased to say was a good report, she offered me a kindly word of advice. She said, "In your own

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interests, nurse, as you go through the hospital, please do not ask so many awkward questions". My noble friends on the Front Bench may think rather regretfully that I have not changed much.
I am pleased that in our professional education we are now providing both pre-registration and post-registration students with an opportunity to think independently and critically about their own professional practice. The UKCC is to be congratulated or the way in which not only Project 2000 has been introduced but also the work it has accomplished on post-registration education designed to improve the knowledge and clinical competence of qualified practitioners. This underlies the philosophy of both the Government and the profession that every nurse, midwife and health visitor should be properly and adequately qualified to fulfil their professional responsibilities.
On the issue of professional standards, the UKCC has issued a number of key documents on professional conduct, confidentiality and accountability. As the noble Baroness, Lady McFarlane, mentioned, as professional practice in health care becomes ever more complex in terms of clinical, ethical, legal and social aspects of care, there will be an indisputable need for better educated and more ethically aware practitioners, a need which the UKCC has been keen to meet along with colleagues on the national boards.
I therefore wish also to offer a brief tribute to the work of the national boards. In my capacity as chairman of the Health Studies Committee of the Council for National Academic Awards, I have had the privilege of undertaking many joint validations of new courses together with national board colleagues. If I may do so without sounding patronising, I wish to express my appreciation of the high standard of work undertaken by board colleagues during validation visits which are often arduous and challenging, given the complexity and the seriousness of the issues at stake. I am therefore pleased that the importance of the continuation of their work is recognised in the Bill.
Before I conclude, perhaps I may turn to three questions which I wish to ask my noble friend. All have been anticipated in the contributions from noble Lord; earlier in the debate. The first relates to the issue of professional conduct and discipline. I think that this was raised by every noble Lord who has spoken so far. I know that colleagues on the UKCC and from the Royal Colleges of Nursing and Midwifery share this concern. I hope that my noble friend will be able to help us.
I refer to the lack of provision on the face of the Bill for the UKCC to have the option of issuing a caution as part of a disciplinary procedure. I understand that this is not deemed to be technically necessary as it may be implied by the provision of more serious sanctions. I also understand, however, that the situation is not clear-cut and could be challenged. Therefore, my colleagues on the UKCC would greatly appreciate this unequivocal and essentially benign provision. They would particularly value it as it would provide them with an appropriate response to situations which do not represent grave misdemeanours and also because it would help to ease the backlog of cases currently
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awaiting consideration. If my noble friend could offer reassurance on the matter, which I do not believe is contentious, perhaps in the form of a government amendment, I know it would be greatly appreciated and give much relief.
The second query refers to anxiety expressed by the Royal College of Midwives. It was anticipated by the noble Baroness, Lady McFarlane, and also the noble Lord, Lord Carter. I refer to Clause 5(5), the subsection which removes a duty placed upon the national boards in Section 6(2) of the 1979 Act to,
"have proper regard for the interests of all groups within the professions, including minority representation".
As a group with minority representation on a non-elected body, midwives are concerned that nothing should be left to chance. The words were included in the 1979 Act to ensure proper recognition of smaller groups of health care staff outside mainstream nursing. Similar words remain in the 1979 Act relating to the UKCC. The Royal College of Midwives suggests that there is no logic for removing this responsibility from the national boards. I know that any clarification or reassurance my noble friend could give would be most welcome.
Finally, I have a query concerning funding for professional education. Again, this is a point that has already been anticipated by the noble Baroness, Lady Robson of Kiddington, and other speakers. Clause 5 of the Bill brings to an end the boards' responsibilities for financing nursing, midwifery and health visiting education, transferring it to health authorities or health boards. The Royal College of Nursing—here I must declare an interest as a vice-president of the college—has expressed concern over the proposal. It is concerned because in the past there has been a fear that education is vulnerable, particularly in times of financial cutbacks. The college therefore welcomes the Government's declared intention to ring-fence education funding in England at regional health authority level. However, as I understand it, this commitment is not prescribed in legislation. Can my noble friend therefore give some indication as to how and for how long such ring-fencing is to be ensured and protected?
I reiterate my overall delight in and unequivocal support for this important Bill. In its recognition of the professional maturity of nursing, midwifery and health visiting and in its principled provisions for the extension of their powers of regulation, I believe it will not only enhance the standing and practice of those professions but will also enable them to enhance the quality of care they provide for those for whom they are professionally responsible.
I end by congratulating the Government on bringing this initiative into Parliament, where I hope it will be received with enthusiasm. I also congratulate my professional colleagues on the UKCC and the national boards for their achievements, without which this Bill would not have been possible.
4.30 p.m.
Lord Meston: My Lords, I should declare an interest as a legal assessor to the UKCC. It is by serving as such an assessor that I have come to know

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something of the work of that body and also come greatly to admire its efficiency and high standards. Professional standards are constantly protected, defined and raised not just for the sake of it but for the sake of the patients and public being served by these professions. All that is not just a polite platitude but a real reason for saying that if this legislation is wanted by the UKCC we should respect its wishes and speed it on its way.
This Bill reflects the fact that the UKCC well knows its own business and is willing and able to control the affairs of these professions. It is worth raising a cheer for the work of the UKCC during the Gulf War when it enabled nurses to verify and update their registrations. With my limited perspective and with the authoritative speeches that have already been made, I shall not trespass into areas that I do not properly understand. However, I hope the Minister can enlighten us on the timescale of this measure. It seems that the changes proposed in Clause I have to be triggered by approval orders for both a proposal and a scheme under Clause 2. Presumably the existing regime continues unless and until approval orders are made. How long is all that expected to take? In that context, as regards Clause 16, will the Minister confirm that other changes will not be held up while the Clause 1 mechanism is being put into operation?
I now turn to the other proposed changes. As has already been mentioned, Clause 5 provides for a sensible transfer of functions relating to the investigation of misconduct. That has already been described as a streamlining measure. It is to be hoped that it will deal with some of the delay in getting cases before the appropriate committee. Previous speakers have referred to that matter.
Clauses 7 and 8 are also welcome. From my own experience and that of other legal assessors, I can inform the House that the conduct and health committees of the UKCC deal fairly and firmly, but also sympathetically, with a great variety of cases. These often involve detailed consideration of evidence and of almost every type of human weakness, both momentary and long-term. I stand second to none in admiring the way that task is carried out. In cases of misconduct it is never seen as just a punitive exercise; more often the committee tries hard to help the nurse concerned back on to the rails, if at all possible. At the same time the committee pays proper regard to the need to protect the public in general and vulnerable patients in particular.
Hearings are also often an opportunity for the committees publicly to explain and reassert professional standards. Clause 8 is useful in that context as it permits outside representation on the committees. That is a valuable if not an essential measure. I am glad to note that Clause 8 provides that the lay membership of such committees—I hope I may describe them in such terms—will not form a quorum. That reflects the fact that in certain cases technical matters are discussed which have to be left to the professionals to decide.
Clause 7 has already been mentioned. It provides for an additional power of suspension from the
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register. It adds a useful measure of flexibility to the Bill. However, I am not sure whether it is intended that suspension should be used as a sanction, or as a protective measure pending investigation where a strong prima facie case is raised, or possibly for both purposes. As almost every speaker has mentioned, what is still missing is an express power to caution or reprimand. As things stand, a conduct committee can remove a nurse from the register or make no order at all. There are cases where removal from the register, thereby depriving a nurse of her livelihood, is too severe. However, the alternative of making no order seems too feeble and sends out the wrong signal. We all know that for some years the UKCC has wanted the power to caution or reprimand. Other professional bodies have such a power.
It is frankly absurd that the UKCC should have to put up with conflicting advice. When it wanted the power to caution to be put in the rules it was told it could not have it because there was no basis for it in the primary legislation. Then when it wanted to put the power in the primary legislation in this Bill, the message came back that that was unnecessary as such a power was implicit in the greater power to remove. Lawyers can disagree about almost anything, I am glad to say. However, the lawyers who disagree in this case are not those who will have to pay for the test case to sort this matter out. The position is highly unsatisfactory. To remove all doubt and debate on the topic, there should be a power expressly stated in the Bill to caution or reprimand. When I speak of a power to caution or reprimand, I speak of a power with the formal status of a sanction to be recorded as such. I am not merely talking about an informal ticking off.
Subject to those observations, I join others in welcoming this Bill. I wish it a speedy passage.
4.37 p.m.
Lord Harmsworth: My Lords, in making this, my second speech in your Lordships' House, I expressed the view early this morning to one who must surely be the greatest authority in your Lordships' House, that one's second parachute jump is worse than the first. He gave me no encouragement. He said, "One's first speech is like jumping from a balloon, one's second is like jumping out of an aeroplane".
The Government have a proud record in the field of nursing. Since 1978–79 not only has the number of nurses and midwives in the UK risen by 69,000, but nurses' pay has increased by 48 per cent. in real terms. Nurses now have an independent pay review body, a modernised career structure and a modern graduate training system. Through Project 2000 there is a new system for training nurses which gives more weight to the process of learning and less to sharing the workload of hospital wards, valuable though that still is.
This Bill is much to be welcomed. It is welcomed by the Royal College of Nursing. That should come as little surprise. In the regular Treasury programme of reviews on non-departmental public bodies, Peat Marwick McLintock made recommendations which were the outcome of thorough research and consultation. That consultation continued formally

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on the issue of the report, to be followed by informal discussions thereafter between health departments, statutory bodies and NHS management. The result was a radical change in the structure and role of the UK Central Council on the one part and the four national boards on the other.
Two-thirds of the UKCC, its maximum size expanded, is now to be appointed by the Secretary of State on being elected under a new and self-determined electoral scheme proposed by the professions. Only one-third is to be appointed directly by the Secretary of State, and then only from among nurses, midwives, health visitors and medical practitioners, or from among people with qualifications that are considered of value to the council. That is in contrast to the position in the 1979 Act, under which all the 45 members are either appointed by the Secretary of State or nominated by the national boards. The United Kingdom Central Council for Nursing, Midwifery and Health Visiting has come of age. It has had its adulthood acknowledged.
I like this Bill. It is right that these professions should be self-regulating. It is right that the Secretary of State should play a lesser role in the affairs of these professions. It is right that he and Parliament should limit themselves to the safeguarding of the public interest and that there should be a limit amounting to a general reserve power of veto over detailed constitutional and procedural issues. That is efficient and cost-effective management.
Apart from the tidying up of the 1979 Act, the Bill acknowledges the high level of expertise and ability in the professions, and, through it, the Secretary of State professes his faith in their ability efficiently to regulate their own affairs. He has delegated important professional functions to those best able to perceive their needs. Again, in contrast with the 1979 Act, the four new slimline executive national boards will now be appointed by the Secretary of State in each of the four countries. In keeping with the philosophy behind the provisions of the 1990 health Act, they will continue to be accountable to them. Here again, in their clearly defined role of approving institutions, validating courses including further training for those already registered, the boards afford a new and more efficient method of ensuring that appropriate professional training is delivered; and who better than the profession itself to judge what is proper training for itself?
Throughout the NHS there is a new spirit of enthusiasm and self-confidence. My belief is that it is born out of the trust that the Government have placed in the. marked and widespread ability to be found throughout the NHS: ability to stand on one's own feet, to run one's own affairs without unnecessary control from the centre, and to make decisions uncluttered by bureaucracy. The Bill mirrors those concepts so powerfully established in the new National Health Service and Community Care Act. I commend it to the House.
4.43 p.m.
Lord Auckland: My Lords, at a time when the National Health Service is the victim of some untidy and almost uncouth political wrangling, it is good to welcome a Bill that is virtually non-controversial. It is a highly technical Bill. I speak with some trepidation because, although my family has been involved in the administrative side of medical care for seven generations as I have mentioned to your Lordships before, only our younger daughter has had experience of the nursing profession. I have not consulted her regarding the Second Reading of the Bill, but I shall no doubt receive some information from her as we progress towards the remaining stages.
Our daughter is currently a practice nurse for a general practitioner in south-west London. I echo the views of my noble friend Lady Cumberlege who said that practice nurses should be given more responsibility. It is good for them to be able to put into practice the comprehensive training at their disposal to help out hard-pressed and harassed general practitioners, of whom there are certainly many in the London area and in the large conurbations, by performing duties that they have learnt during their training.
Clause 4 goes a long way towards establishing a realistic programme for nurses, midwives and health visitors. I have always been against large committees. The Bill gets the matter about right. It is essential to have on a committee of this kind people who have had experience of, and currently have experience of, the nursing profession.
Perhaps I may say a few words about Clause 7, the part of the Bill that has been most discussed during our Second Reading debate. Nurses, midwives and health visitors perform extremely responsible duties. They become tired; they may at times become irritable. Mistakes are bound to occur. As one who has spent all his working life in the insurance industry, I know of some of the appalling cases of malpractice that have occurred, particularly in America. However, such cases are rare in this country and, although at present we have an adequate supply of nurses, particularly in the conurbations, we cannot afford to lose good nurses and midwives who have made a mistake which was not serious and not intentional. I therefore believe that the Government's intention to introduce a cautionary procedure will be implemented so that cases which do not involve a serious act of misconduct are treated with reasonable leniency. Obviously, there may be a few cases in which harsher penalties are needed.
We have here a Bill which will help the nursing and midwifery profession as a whole. We come back to the question of nurses' pay and accommodation and nursing shortages. The problems are not confined to this country. I recently spoke at a conference in Copenhagen when the question of nursing shortages, particularly with regard to elderly people, and midwifery shortages, was raised. We have all been here before, but the Bill will go a long way towards establishing a proper organisation for those hard working and dedicated people.
4.47 p.m.
Baroness Hooper: My Lords, this has been a most interesting debate on a Bill of great importance to the nursing professions. We have had contributions from people who know what they are talking about, perhaps best exemplified by the noble Baroness, Lady McFarlane of Llandaff. I had not realised that she represents all three branches of the profession to which the Bill applies. I am also glad that my noble friend Lord Harmsworth decided to try jumping out of an aeroplane, having so successfully landed from his original balloon jump.
I am also grateful for the general welcome given to the Bill and for the many valuable points made, all of which have demonstrated your Lordships' interest and concern in the future of nursing and your understanding of the valuable role that the professions play and will continue to play in the challenging times ahead. I join wholeheartedly with all your Lordships in saying once again that we all acknowledge and appreciate the work of nurses, midwives and health visitors.
Turning to specific issues and questions, perhaps I may start with the point made by the noble Lord, Lord Carter, who suggested that we might write into the Bill a requirement for consultation with regard to Clause 1(4)(b). Such appointments are already subject to the provisions of Clause 1(5). Given the extensive consultations, which worked so well in the preparation of the Bill, my right honourable friend the Secretary of State would hardly wish to make appointments of such importance without proper consultation with those who have an interest. I can and do undertake that he will do so. That undertaking therefore is clearly on the record. However, in our view, it is undesirable to prescribe in legislation whom he should consult on particular appointments. We feel that there is a need for maximum flexibility. That is a basic principle underlying all the provisions of the Bill.
The noble Lord, Lord Carter, and all noble Lords who contributed to the debate referred to the power to caution in relation to Clause 7 of the Bill. Our legal advice is that the council, as the body charged with hearing and determining proceedings for a person's removal from the register, already has the power to caution. We are therefore advised that it is not necessary to write anything into the Bill. I understood that the council also received further legal advice which corresponded to that of parliamentary counsel. As a fellow lawyer, I bow and do not wish to disagree with the views expressed on this subject by the noble Lord, Lord Meston, except perhaps to quote again the dictum of an ancestor of one of his noble friends, the noble Viscount, Lord Falkland, who in a slightly different context said: "When it is not necessary to change, it is necessary not to change". Presumably, if it is not necessary to write something in, it is necessary not to write it in. Bearing in mind the force of the arguments that have been expressed in the course of today's debate, I undertake to look again into the question.
Still on the subject of Clause 7 and the reference made by the noble Lord, Lord Meston, to the power of suspension, in addition to the present power to
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remove from the register, it is intended that this power should be used where a nurse, midwife or health visitor is deemed by the health committee of the UKCC for medical reasons to be unfit to practice.
A number of noble Lords raised the point about midwifery representation on the boards in connection with the provisions of Clause 4(4), which specifies that the Secretary of State shall secure that the majority of members of a national board are registered nurses, midwives or health visitors. We have made every effort to make clear throughout the negotiations with the statutory bodies that the Government will wish to ensure that the interests and expertise of each of the three professions are adequately represented. However, it is also necessary to provide for boards of wider expertise, not only clinical but teaching and management expertise. It may not therefore be appropriate to guarantee that a practising midwife or a health visitor must be a member of each board. I recognise the preoccupations voiced by my noble friends and other noble Lords about minority representation on the boards and the references to the amendment which is made by Clause 5 to Section 6(2) of the 1979 Act.
We know that the statutory bodies are concerned about the impact that that could have on minority groups. They may, and clearly some of them do, feel vulnerable and disadvantaged without the protection previously provided. Nevertheless, the amendment was made because, in the view of the health departments, the phrase no longer has any relevance when boards cease to be bodies elected by the membership. National boards are required to exercise their functions in accordance with the rules of the council, which itself is required to have a proper regard for all minority interests. In our view that provides sufficient protection for all groups within the professions.
With regard to ring-fencing or funding of education and training, which we all acknowledge is of great importance, my noble friend Lady Cumberlege was very reassuring as to the role of the regional health authorities, particularly as considerable change is taking place in the whole area. The Secretary of State's announcement of government decisions on the two consultation exercises—one on the Peat Marwick McLintock review of UKCC and the four national boards, and the other on Working Paper 10—made it clear that it was for employers to determine their needs for qualified nursing, midwifery and health visiting staff. That is why regional health authorities, in consultation with employers, identified the education and training costs required to produce key, qualified staff in those areas and have protected them at regional level.
The ring-fencing aspect enables those costs to be removed from the contracting arrangements between purchasers and providers under the National Health Service reforms. In reply to the specific question asked by the noble Baroness, Lady Robson, and by my noble friend Lady Cox, the length of time that the ring-fencing will be in place will be as long as it proves necessary. We are satisfied currently that regional health authorities are taking very seriously their

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responsibilities under Working Paper 10 but I can assure your Lordships that we shall continue carefully to monitor the position.
Perhaps while I am on the subject of education and training, I may refer to the other question asked by the noble Baroness, Lady McFarlane, about the capital costs for merging colleges of nursing. She suggested that they should be met by the department. We have limited centrally top slice funds to transitional costs of moving to Project 2000, not the costs of merging colleges as such, which health authorities themselves must meet. But a special one-off grant was made this year to the regions to help with the miscellaneous costs of moving to Project 2000. Again, that did not include capital as such but it included a contribution, for example, to additional library costs.
My noble friend Lady Cumberlege also asked about the need for many more practice nurses. We agree that the role of nurse practitioners is vital and should increase, if not perhaps within the scope of this Bill. But we are aware of the need, and their numbers will undoubtedly increase. The current work being carried out in the UKCC on the subject of post-registration training, mentioned in its consultative document on community nursing, will, we believe, contribute to that increase.
The noble Baroness, Lady Robson, suggested strengthening the power of the UKCC midwifery committee. At present there is no evidence that the current situation, whereby the UKCC is required to consult the midwifery committee on midwifery matters, which does not restrict its powers any further, has not worked. Since the Bill is not intended to change the UKCC's role vis-à-vis any of the three professions there is no need to make any additional arrangement in that respect.
My noble friend Lady Cumberlege raised another matter which is outside the scope of the Bill, namely, limited prescribing by nurses. We understand the anxieties about delay, but consultations with relevant agencies are continuing. We hope and expect that an announcement will be made in the not too distant future. Although it is not a matter for this Bill I shall pass on my noble friend's remarks to my colleagues in the Department of Health.
Finally, the noble Lord, Lord Meston, mentioned implementation. We hope that if the Bill is enacted as speedily as possible—and I understand that all of your Lord hips hope that it will be—the reconstituted bodies will take office in April 1993. That is a tight timetable. I can confirm that Clause 14 provides that the existing council and board can continue in office until the new arrangements take effect.
In its reconstitution of the statutory bodies for nursing, midwifery and health visiting, the implementation of which will provide increased efficiency and effectiveness in the administration of those bodies and more direct accountability to the nursing professions which they represent, I believe that the Bill marks a milestone in the history of nursing. It can truly be said that it also represents the coming of age of the professions, and in that I echo the remarks made by some of my noble friends. I commend the Bill to the House.
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On Question, Bill read a second time, and committed to a Committee of the Whole House.

Tobacco Products Labelling (Safety) Regulations 1991 (SI 1991/1530)
5.2 p.m.
Lord Stoddart of Swindon Lord Stoddart of Swindon rose to move to resolve, That this House calls on Her Majesty's Government to amend the regulations to require United Kingdom tobacco manufacturers to print health warnings on packets of cigarettes which would not exceed in their import the health warnings currently required under European Community law.
The noble Lord said: My Lords, it is necessary to have a debate on this matter, not only because of the importance of the issue itself but also because there was no debate in the House of Commons. It is true that there was a cross-party Early Day Motion critical of the regulations and asking that they be withdrawn, but unfortunately there was no discussion of the matter in another place and therefore there was no vote upon the issue. Therefore, in my view it is incumbent on this House to make good that deficiency of debate. That is one of the reasons why I have raised the question today and I hope that we shall have a good, open and informative debate on the matter.
In my view, too many orders which affect the public and the best interests of British business slip through without proper debate. It is often only when it is too late that their baleful effects are understood by Members of Parliament and the country generally. At least on this occasion some of the arguments against the regulations can be deployed and placed on the parliamentary record.
The major argument against the regulations is not on the grounds of health but on the basis that they discriminate against British tobacco manufacturers and put jobs at risk. That is because the regulations impose upon British manufacturers the duty to print on tobacco packaging health warnings which are larger and more stark than those which our competitors are required to print. For example, the United Kingdom is the only EC member to propose the mandatory use of the words "smoking kills" on cigarette packets. Under the regulations the size of the health warning is 50 per cent. larger than required by the EC directive.
Before I deal with the likely adverse effects on the United Kingdom tobacco industry I should like to say a few words about one of the new messages, to which I have already referred. That message will state boldly and starkly, "smoking kills". The implication of that message is that everyone who smokes will be killed by smoking. That is patently untrue. Some smokers may die prematurely of what is commonly known as a smoking-related disease, but other smokers will not. Some smokers will die from other causes, not from smoking-related diseases. Furthermore, non-smokers who have never been near a cigarette in their lives will die of so-called smoking-related diseases.
As an example, perhaps I may quote a snippet which appeared in the Daily Telegraph on 1st November 1991. It is headed "Smoker is 106". The item goes on to say:
"Mr. William Cornish smoked his pipe as he celebrated his 106th birthday yesterday. Mr. Cornish, of Budleigh Salterton, Devon, has been smoking for 80 years. He said, 'It's never done me any harm"'.
It looks as though it will not do him any harm. He has done very well and has lived much longer than his three score years and ten. Clearly smoking has not killed him.
How far down the road will we go with this type of labelling? Excess alcohol causes death in many people. It is a major factor in murder and violence. Are all beer cans and spirit and wine bottles to be labelled, "drinking kills"? A couple of weeks ago I looked at the road accident statistics for 1990. I was surprised by the figures. Some 5,000 people were killed and no fewer than 337,000 were injured on our roads in one year. Indeed, 60,000 of the injuries were very serious and in many cases will result in paralysis for life. In the light of that carnage is it suggested that 6 per cent. of a car's surface should be covered with a label stating, "cars kill"? Of course not. Yet it would follow logically from the regulations which we are discussing today that cars should be so labelled.
Lord Gray of Contin: My Lords, I am grateful to the noble Lord for giving way. He will have heard the report on the radio this morning that in the city of Edinburgh pollution levels were monitored at 14 different points within the city and it was found that at 13 points the pollution levels were in excess of the level recommended by the EC in regulations. That is in the open air and, therefore, is one example of pollution for which smokers cannot be blamed.
Lord Stoddart of Swindon: My Lords, I am obliged to the noble Lord for that intervention. I heard that news this morning and that roadside tests showed a high excess of nitrogen oxide in the air in Edinburgh. That does not occur only in Edinburgh. People cannot see exhaust fumes, which are invisible, and therefore the effects are largely ignored. Nevertheless, they exist and the baleful effects are felt by people living along the roads and using the roads. Many bus companies are banning smoking on buses but I venture to suggest that some passengers may suffer more harm as a result of inhaling diesel fumes while waiting for a bus than while sitting on the top deck where smoking is allowed.
Animal fats are said to be the major cause of coronary heart disease yet no one suggests that every pack of butter, cheese, fatty bacon, and so forth, should carry a label declaring "animal fat kills". They would be laughed out of court if they did so. Nevertheless, according to the medical profession animal fats are the major cause of coronary heart disease. The fact is that the message "smoking kills" is incorrect and misleading. It is reprehensible that the Government should force tobacco manufacturers to adopt labelling standards which in the case of other products would be unacceptable, if not illegal.
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I turn to the main arguments against the regulations. First, the regulations discriminate against the United Kingdom's tobacco industry and in favour of our overseas competitors. In the face of that it is remarkable that the Department of Trade and Industry has not uttered a word about them. What is it doing to protect our manufacturing industry? It is a manufacturing industry, whether people like it or not. Indeed, was the Department of Trade even consulted before the regulations were made? The Secretary of State—God bless him—waxed eloquently at the Conservative Party conference and at the CBI conference last week about exports and the way in which the Government wanted to help exporters to increase their exports. In this case they are doing the reverse; they are not helping our exporters but they are helping the importers.
I must be fair and even-handed. This is not a party political matter. The official Opposition has been silent about these regulations and presumably its silence indicates assent. I can only express my surprise that the Labour Party, concerned as it is and as it should be about unemployment, especially in depressed areas, has not raised questions about the effect of these regulations on employment.
The regulations go much further than the EC directive requires in respect of United Kingdom manufacturers. The EC directive does not allow any member state to prevent the import of any tobacco product which conforms with its directive. Therefore, we cannot ban the import of cigarettes because they do not carry the health warning required under these regulations. Imported cigarettes and tobacco products will carry less stringent health warnings, as regards their size and wording, than UK-manufactured products. If the warning means anything it is bound to encourage people to smoke foreign-made cigarettes and tobacco products rather than British-made products because the labelling will give the impression that foreign cigarettes are safer than British cigarettes. Nothing could be dafter than that. Even the Minister is smiling—I believe she agrees that the situation is daft, but we must wait and see.
The irony is that should United Kingdom companies transfer cigarette manufacture to outside the United Kingdom they will not be subject to these regulations. Therefore, the regulations provide an incentive for manufacturers to move their businesses abroad with the resultant loss of British jobs and adverse consequences to the British balance of payments. The positive surplus on the British balance of trade in tobacco is no less than £513 million per year; that is, half a billion pounds a year. I sincerely hope that manufacturers will not move their production abroad. I implore them not to do so but nevertheless the risk will exist. If Rothmans decided to move its production abroad 1,300 jobs could be lost in the North East, which is already a depressed area. Surely we do not want that; surely that is not what we are after.
I have tried to show why I believe that the regulations are misconceived and more draconian than is necessary or desirable. I hope only that those who wish to see the British manufacturing industry

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treated fairly and not worse than its overseas competitors and who are concerned with preserving jobs will deplore the regulations and make clear to the Government that they should think again and withdraw them. I beg to move.
Moved, That this House calls on Her Majesty's Government to amend the regulations to require United Kingdom tobacco manufacturers to print health warnings on packets of cigarettes which would not exceed in their import the health warnings currently required under European Community law. —(Lord Stoddart of Swindon.)
5.16 p.m.
Lard Orr-Ewing: My Lords, I speak as a non-smoker but one who does not like to see an industry that serves this country well being picked on and clobbered. Under the departmental leadership of William Waldegrave and the noble Baroness, Lady Hooper, the Government believe that it is necessary to introduce these new regulations to harmonise labelling in the EC. They wish to produce a minimum standard for the size of the warning label, doubling the area from 2 per cent. to 4 per cent. of the packet. I cannot think of a better description than that used by the Foreign Secretary; he said that the EC is tinkering. Why in logic is it necessary to have the same size this, that and the other? If the Government would get on with some of the major problems besetting the EC, such as the CAP, and concentrate on them we should all be much better off.
I can see the situation of someone in the Ministry saying, "While we are doing this, and goodness knows why we should hurry, wouldn't it be a good idea to make it even bigger? Why don't we do even better than all the pathological people who are mad against smoking and make the label 50 per cent. bigger than anyone le else's? We shall have even more people saying that smoking kills". I ask my noble friend to consider whether it is really necessary to introduce this regulation.
We have managed very well under the voluntary agreement. One of the good aspects of the industry is that a voluntary agreement has existed for 20 years. It was last renewed two months ago. On occasions I have believed that the industry has gone too far in agreeing to emotional labelling such as "smoking kills". That is not the case in 99.9 per cent. of deaths. One might put the warning on every car because cars kill far more often than tobacco. The regulations will override the satisfactory voluntary agreements that have existed for so long.
The UK tobacco industry has done pretty well. It employs a total of 13,000 people in areas of high unemployment. It has a balance of payments of £500 million. It collects for the Treasury £7.5 billion in tax each year. That is a high yield of tax. Incidentally, we pay higher taxes on cigarettes than any of the main 10 countries. Of the 12, Denmark is the only country which imposes higher taxes on its cigarettes than we do.
During the recession British industry is struggling to keep its head above the problems. One would hope that Ministers, and every civil servant who gallantly
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and conscientiously serves his Ministry, are doing everything possible at this time to help British industry wherever it is creating wealth, but not a bit of it. This trivial measure is brought forward to add to the problems of the industry.
We have been changing curricula in our schools. It would be rather nice to change curricula in the training of our civil servants. They should spend a month in France to see how the French look after their national industries. They could then come back and indoctrinate others. British industry, even if it is part of the EC, must give itself an extremely high priority. Each civil servant should be dedicated to ensuring the best for British interests over and above EC interests.
I understand that my noble friend has been in Brussels. The tobacco industry in the EC seems to be in a tremendous mess. It would make a very good Marx Brothers film if anyone were available to write it. The CAP receives £1,000 million per year to help tobacco growers in the EC, which are mainly in Greece but there are some in France and Germany. Much of the tobacco produced with the aid of that incentive is not very good to smoke and is not popular to European taste. Having subsidised its growth, we then subsidise it again and sell it to third world countries where there is no health warning and it is acceptable to less sophisticated tastes. It is astonishing. We spend £1,000 million per year in encouraging people to grow tobacco. We cannot sell a lot of that so it is sold to third world countries. That is a strange, hypocritical approach.
When my noble friend was in Brussels she looked at the matter of labelling and also at the suggestion that all advertising of tobacco should be banned. That is one example of tinkering or subsidiarity. That is a strange word which means that as much as possible should be done at the circumference of the circle and as little as possible should be done at the centre. I gain the impression that the centre grows in strength and numbers and that tinkering takes place all the time.
I asked the Minister to look at what happened when advertising was banned altogether. For example, the Italian industry has gone to the European Court of Justice on the size of labels. It is proposed to increase the area of the labels not from 4 per cent. to 6 per cent., which my noble friend is doing, but from 4 per cent. to 8 per cent. The proposal is for two labels on each pack. The appeal has been put forward to see whether that is legal.
When considering banning the advertising of tobacco one should look at the example of Norway. Norway stopped all advertising of tobacco 16 years ago; Finland banned it 13 years ago and Portugal banned it 10 years ago. It is strange but those are the only three countries in the EC where tobacco smoking has increased. Therefore, it does not seem to me that this is a worthwhile operation for the EC to undertake. This country has had voluntary agreements which were carried out fairly sensibly, although I found them to be rather extreme. In this country tobacco smoking has decreased by 25 per cent. That is a marked contrast. Why look in the crystal ball when one can read the record?
Lord Rea: My Lords, the noble Lord is mistaken in one sense. Indeed, smoking has decreased by 25 per cent. but in the past six years it has remained almost stationary at 31 per cent.
Lord Orr-Ewing: My Lords, I was quoting the figure over the past 10 years, but I note what the noble Lord says. If the Government discriminate against tobacco companies the companies will not remain competitive. As the noble Lord said, imports from the EC will be encouraged and increased. None of those imports will carry health warnings to the higher standards that we are now setting. They will carry their own local health warnings, which are much less severe. Several companies have production units overseas. If we continue to turn the screw they will transfer production overseas. I therefore ask why this should be done.
Many people have been led to believe through warnings and newspaper reports that people die from so-called passive smoking. In the United States in particular, where they love legislation and lawyers love business, people have tried hard to prove that someone has died from passive smoking, but have never yet succeeded. If it is proved I may revise my thoughts. However people are frightened into believing that by breathing in someone else's smoke they are liable to suffer from an oncoming cancer. That is untrue and not proven. It is just an emotional reaction.
Many housewives have tedious chores. They have to do the cooking, which is sometimes boring. I know that when my wife is bored or is cooking she smokes a cigarette. I believe that she smokes 10 per week. As a result of that she is more relaxed and at peace. It calms and comforts her. That must apply to millions of people who have boring tasks to undertake.
I am reminded of a tale where a man aged 70 or so went to see his doctor. He asked the doctor for an overhaul. At the end the doctor said, "I strongly recommend that at your age you give up all smoking and drinking". The man said, "Oh doctor, will I live longer?" The doctor replied, "No, but it will seem a hell of a lot longer". I cannot help but believe that if we continue to take this line, life will become very boring indeed.
The Earl of Longford: My Lords, like the noble Lord I am a non-smoker and in that sense, I am neutral. However, is he telling us that all the medical conclusions about the dangers of smoking are nonsense?
Lord Orr-Ewing: My Lords, of course I am not. I would not be so ridiculous. I am trained as a physicist. I look at results and deduce what is causing them. All my life I have looked at the facts, which is why I quoted the facts about advertising. Of course, I am not saying that all the medical conclusions are nonsense. However, people—and there are one or two in this House who are not here today—become pathological about smoking. They nearly spit. I have met people who have said, "Oh, you are smoking. How dare you come into this room?" That is the result of a campaign which we have all seen over the years.
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It was said that sugar is bad for us and then it was said that sweeteners are bad for us. I had a constituent who had 6,000 tonnes of sweeteners on the ocean waiting to dock here when suddenly the government of the day decided that they were bad for health although I am glad to say that, in the end, they relented and allowed the consignment to dock. One hears that butter is bad or Flora is bad. We are always being told such things. I take them with a grain of salt, if not a grain of aspirin.
I ask the Government to reconsider this matter even at this late stage. Is it really necessary to make the life of this industry more difficult by carrying out these unnecessary measures.
Lord Rea: My Lords, before the noble Lord sits down, he referred to passive smoking and the lack of proof that anyone had died as a result of a person having smoked nearby. Has the noble Lord read the report about the research recently completed in California which was reported in the newspapers today? That shows that those who live in the same household as a smoker are 30 per cent. to 40 per cent. more likely to die of cancer than those who live in homes where there is no smoker. In one form of cancer death was 50 per cent. more likely. Yes, with statistics it is difficult to prove in any one case. Nevertheless, the statistics are sound.
Lord Orr-Ewing: My Lords, I note what the noble Lord says. I have not yet read the report but I shall read it. However, one case in the world does not prove that passive smoking is a serious danger. It is not.
5.30 p.m.
Lord Cocks of Hartcliffe: My Lords, it is possible that I shall find it necessary to leave before the end of the debate in order to address the annual banquet of the Bristol licensed victuallers. Noble Lords interested in racing will agree that to speak on tobacco at tea-time and on the drink industry in the evening is a notable double. Therefore I hope I shall be forgiven should I have to leave.
My interest in the subject is known but I shall rehearse it again. For 17 years I had the honour of representing the constituency of Bristol, South. At that time it contained a large concentration of people who worked in the tobacco industry and an even larger concentration of people who were pensioners of the tobacco industry. I am happy to tell the House that when the matter of my suitability was put to the test, the electorate returned me with substantial minorities —sorry, majorities. I fear I am speaking of my next point. I was only removed by a combination of hard Left militants who decided that I was not a fit and proper person to be a public representative.
I have never cavilled about the medical evidence on smoking. Shortly after I entered the other place I served on the Committee on the late Sir Gerald Nabarro's smoking Bill and moved an amendment which led to the display of the tar and nicotine tables, which should now be seen in all tobacconists. Needless to say, the tobacco industry claimed the credit for that after I had done the donkey work; that is life as we know it.

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I have followed the industry carefully. I have always said that people who do not give up smoking should be guided to forms of smoking which are less hazardous. My noble friend Lord Stoddart very ably outlined the disadvantages of the British tobacco industry under the regulations. While people continue to smoke it is invidious that our indigenous tobacco industry should be penalised at the expense of foreign imports. I should have thought that that was so self-evident that my noble friend's remarks stand on that point.
I return to a theme I have raised in your Lordships' House before today. In our society there are a number of middle-class zealots who lead an extremely comfortable life. When they see others in society who are perhaps not so well placed as themselves, they ease possible feelings of guilt by engaging in campaigns against what they regard as social evils. In that way they feel that they expiate any pangs of conscience that they may suffer for enjoying an extremely comfortable life. Once again the regulations are the result of campaigning by zealots who are trying to ease their middle-class consciences.
In his introductory remarks my noble friend said that there had been no debate on the matter in the House of Commons. However, these matters tend to slip through. The tobacco industry is not everybody's cup of tea these days and not everyone feels able to stand up and say something about it. I sometimes feel that questions in regard to the tobacco industry are put forward as trail blazers for possible other measures.
In the last Session of Parliament we had the Bill, now an Act, regarding the protection of young people under age from the sale of tobacco. That Bill went through all its stages in the Commons and in your Lordships' House until the Third Reading, when for the first time I raised the point that the only way in which the Bill could be enforced was by inspectors taking round armies of young children and sending them into tobacconists' shops to see whether they could persuade the shopkeeper to break the law. I shall not weary the House with more details. But it seems to me that if it is necessary to resort to that kind of measure in order to ensure that the legislation is enforced, we are going down a very slippery road.
I do not believe that tightening up on tobacco legislation will be the end of the story. Next it will be the drink industry; those involved will become a persecuted group. As my noble friend said in his introductory remarks, it will be alcohol next, then certain foods and certain practices. We shall become not only a nanny state but will employ an army of people: to go round to ensure that the various laws are being enforced. The whole thing is becoming nonsense. We need to keep a sense of proportion. We are in danger of widening the legislation too far.
We are now informed that snuff must be labelled. Are we really being told that in the House of Commons, after all these years, the box of snuff which is kept in the Doorkeeper's Chair so that Members may have a pinch if they wish, must be labelled so that Members will pause for a moment to think, "Is it all right? Should I have another sniff?". What is society
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coming to? Things can be carried too far and I hope your Lordships will keep a careful eye on where we are going.
5.36 p.m.
Baroness Brigstocke: My Lords, I hope that I am not a pathological zealot. It is about time we heard from the alternate sponsor, health versus industry. As a member of the Health Education Authority I offer my warmest congratulations to the Government on choosing the strongest warnings from the European Community list. Perhaps I should also congratulate the Department of Trade and Industry. The Government consulted fully on the draft regulations and health organisations agreed that the warnings should be larger than the EC minimum.
Smoking kills. Are noble Lords aware that it kills 110,000 people in the United Kingdom each year? That is around one in four smokers. I am not giving your Lordships anecdotes; I am repeating the results of serious medical research. Moreover, tobacco is the only major consumer product which is unsafe when used as the manufacturers intended. It must be right that cigarette packets should carry clear warnings of the dangers in the strongest possible terms.
When I was a teacher I became increasingly worried at the number of teenage girls and young women who smoked. The Health Education Authority recently produced a powerful campaign of short films to highlight what an unattractive and anti-social habit smoking is. Yet—I hesitate to use the word in this Chamber and am sorry if I give offence—do noble Lords realise that among young people aged 17, 22 per cent. of boys are regular smokers and 24 per cent. of girls? The figures at the age of 15 are more shocking. Among boys aged 15, 17 per cent. are regular smokers—that is, those who smoke one cigarette a week—and for 15 year-old girls the rate is still 24 per cent. We should do everything we possibly can to help them not take up the habit.
Unfortunately, recent research shows that it is not only smokers who suffer but also those who inhale the smoke, even though they may not smoke themselves. I ask my noble friend Lord Orr-Ewing to look at the front page of today's Guardian which states:
"Non-smoking women who live with a smoker have a 50 per cent. higher chance of developing one form of lung cancer than if their partners did not smoke".
These are the latest findings from the American Association for Cancer Research. I fully support the Government's decision to make tobacco warnings more prominent. I consider it wrong of the noble Lord to try to reverse a decision made to protect the nation's health.
5.40 p.m.
Lord Mason of Barnsley: My Lords, the tobacco industry and Her Majesty's Government appeared to me to have a sensible and most respectable system of dealing with tobacco advertising through the well-established voluntary agreement system. There has been 20 years of co-operation between the tobacco industry and the Government, each bearing in mind the seriousness of the subject and the health risks involved. These talks on the agreement have covered

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health risks, the future of the tobacco industry and jobs, freedom of choice versus state moralising and consideration of the various pressures from the British Medical Association, ASH (Action on Smoking and Health) and the tobacco companies. There are a whole host of factors involved in determining how to warn smokers of any health risks inherent in smoking tobacco.
Somehow all this may fall apart. I believe that the Government are embarking on a course which will not only jeopardise the voluntary agreement system but also cause unnecessary friction between the tobacco industry and the Department of Health. I gather that the recent voluntary agreement, which can run until June 1994, contains provisions to cut advertising on shop fronts by 50 per cent. over that period. That is on top of the recent spend of £3.5 million on a campaign by the tobacco industry against illegal sales by retailers to children under 16.
Incidentally, as has already been mentioned, the banning of tobacco advertising by law does not necessarily stop people smoking. There have been tobacco advertising bans in many countries over the past 10 years. The result has been that in France smoking or tobacco consumption has risen by 5 per cent.; in Portugal by 7 per cent. and in Italy by 8 per cent. In Norway consumption has risen by 50 per cent. In the United Kingdom, under the voluntary agreement, smoking has declined over that period by 29 per cent. In Holland—another country operating the voluntary agreement—tobacco consumption has declined by 41 per cent.
What is unfathomable is the Government's determination to prove tougher on tobacco advertising than their European counterparts. These government regulations mean that the health warnings on British cigarette packets will be in stronger language, including "smoking kills", with the size of the warnings 50 per cent. larger than that decreed by the EC directive. I believe that this will result in some dire consequences of which the Government should be aware.
Lord Rea: My Lords, I am grateful to the noble Lord for giving way. I am sorry to keep intervening in this way, but my noble friend said something that is inaccurate. He said that the EC decrees that the warning should be only 4 per cent. of the space on the cigarette packet. The EC states that it should be at least 4 per cent. thus allowing member countries to have a larger health warning if they wish. Italy and the United Kingdom have decided to require that.
Lord Mason of Barnsley: My Lords, I am sorry to disturb my noble friend, but I never mentioned 4 per cent. in connection with the Common Market directive. I said, and I repeat, that the Government's recommendations are to increase the size of the warnings on packets to 50 per cent. above what the Common Market recommends and to use stronger language as well. I said that I believe that this will result in some dire consequences of which the Government should be aware. These regulations discriminate against United Kingdom-produced
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tobacco products, especially cigarettes, and will greatly assist cheaper cigarette imports from Europe, especially Portugal, Spain and Greece.
The wording and the size of the warnings go much further than is required or is necessary to implement the EC directive. They will be stark warnings, increased in size and much more prominent, but cigarettes imported in packets from Europe will not have such stark and large warnings. I believe that this stance will harm the British tobacco industry, threaten more tobacco workers' jobs and disturb what has been a most responsible and co-operative voluntary agreement.
But the real danger, as I see it, is to place in jeopardy the health of many young smokers, most of them school children and the young unemployed who are not really able to afford the higher priced quality, low tar, British cigarettes. They will be looking for the cheaper brands. That means the imported cigarettes of high tar content without the same serious warnings on packs compared with the United Kingdom cigarette packets. Those imports may well flood the country with a distinctly increased danger to the health of young smokers especially the 300,000 children under 16 years of age. It will all be brought about by Her Majesty's Government intent on introducing much tougher regulations than any other EC country.
In that regard I ought to warn that when the single European market is established, British smokers will be able to buy unlimited cigarettes, cigars and tobacco at less than half British prices. For example, Portugal produces cigarettes at 30 pence per packet compared with £2 per packet in the United Kingdom. The imports will be cheap, high tar and consequently much more dangerous, unhealthy and high risk than the British products.
I know and emphasise that these youngsters and others should not be smoking cigarettes. Adults can please themselves: they have the freedom and the right to enjoy smoking tobacco. It is not for us to tell them how to live their lives. Indeed there is already too much dictatorship on the issue. But the fact is that youngsters are smoking in large numbers. It is right that they should be aware of the consequences. However, these regulations, insisting on the more frightening slogans and the increased size of the warnings—greater than the EC directive demands—are destined not only to harm our own tobacco industry and cut jobs, but also, through the encouragement of imports of high tar cigarettes, cheaply produced and of poor quality, a badly researched tobacco product compared with the less damaging British product, to place thousands of our youngsters at greater risk. I do not know why the Government are pursuing this policy and how it can be seriously defended.
5.49 p.m.
Lord Cullen of Ashbourne: My Lords, I shall be very brief because most of the things I had to say have already been said. I must declare an interest as a smoker, having been smoking steadily and regularly

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for at least 60 years. I have not reached 106 like the friend of the noble Lord, Lord Stoddart, but I hope that I shall.
Noble Lords: Hear, hear!
Lord Cullen of Ashbourne: Like myself, people employed in the United Kingdom tobacco and related industries will be strongly opposed to these regulations. They have seen a progressive decline in their numbers since 1979 caused by a combination of excessive taxation of tobacco products and company rationalisations, the latter in large part caused by the former. In 1979 there were 40,000 people directly employed in the tobacco industry. Today there are 12,000—less than one third of that number. Now, at a time of very high unemployment, Her Majesty's Government would impose much stronger health warnings than those necessary to implement the directive. This can only put our industry into an even worse position vis-à-vis foreign competition.
At the beginning of this year import penetration by cheaper, lower quality, foreign cigarettes amounted to 8.5 per cent. It was expected to grow to 9.5 per cent. by the year end. One wonders how much higher it will be if these regulations are enforced.
I ask your Lordships to consider this matter from the point of view of employees in the industry. They know that cigarettes are the most highly taxed consumer product in this country and that they are taxed more highly than in any other EC country—except Denmark, as other noble Lords have said. They know that their industry was responsible for net exports of £640 million in 1990 and contributed £7.5 billion in tobacco tax to the Exchequer. Now, having seen their numbers decimated in the past 12 years they can only regard these regulations with dismay. I realise that Her Majesty's Government justify these regulations on health grounds. However, I have believed until now that the philosophy of my party was in favour of choice—the freedom to choose.
We all get pretty fed up with being told not to eat this, that and the other, with having well tried medicinal products removed from the market place and with pettifogging directives from the bureaucrats in Brussels. But for the Government to go even further than those bureaucrats—about whom the Government have been known to complain from time to time—is really too much to bear.
5.54 p.m.
Lord Rea: My Lords, I am very grateful to my noble friend for initiating this debate because it gives your Lordships a further opportunity to debate the issue of smoking versus health. Last Wednesday I spent a little time discussing how promotion of tobacco perpetuates the habit and I tried to persuade the noble Baroness not to oppose the draft European Community directive restricting tobacco advertising which was discussed yesterday in Brussels. I do not think that I was successful, but at least the issue will now go forward to be discussed and debated by the European Parliament. Members of the European
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Parliament will doubtless be subject to much subtle, skilful lobbying by the tobacco industry in the intervening months.
My noble friend always argues his case vehemently and well. Often he is alone in his viewpoint, but in moving his amendments to weaken my Bill to protect children and young persons from tobacco in the last Session he was joined—as he was this afternoon—by my noble friend Lord Cocks. During that previous debate I began to feel that I was faced with a pair of terrible twins. Now I see that they have been joined by another of my noble friends, Lord Mason of Barnsley —the twins have become triplets. To continue with the analogy, perhaps I should also note noble Lords opposite who have also supported his position, so that now I have in my demonology a group of quaint, querulous quintuplets. Quaint, because like dinosaurs they are out of date and living in a hostile environment (certainly a hostile environment outside this House) which recognises the ghastly impact of smoking on health.
I believe that it is my role as a doctor to point out that cigarette smoke is a slow poison which, as the noble Baroness said, eventually kills one in four people who smoke habitually over a period of years. I think with 100,000 people killed by a habit it is reasonable to say that it "kills", not just that it "can kill", because people who do not want to read the message will say, "Ah well, it can kill but it won't kill me, so it's all right". "Kills" is the message which has an impact. Cigarette smoke contains a unique mixture of a large number of noxious substances including carbon monoxide, formaldehyde, arsenic, cyanide, ammonia, acetone and many carcinogenic tarry substances. Smokers who inhale have to endure the assault of these substances in order to obtain the nicotine which gives them the pleasure and relief from tension which they seek. Too often, of course, the tension itself is caused by the craving for nicotine which occurs a few hours—and often for much longer than that—after the last cigarette.
To put the record straight I should say that I do smoke a cigar occasionally, but I am very careful not to inhale it. That is when the most serious damage occurs. I have a great deal of sympathy with smokers. I understand the suffering which many smokers go through when they attempt to give up. Luckily, I never became addicted to nicotine, perhaps partly because when I first inhaled a cigarette at the age of 14 I turned a nasty shade of grey green and was violently sick. I think my body was reacting rather sensibly to that cocktail of nasty substances which were temporarily in my lungs.
I wonder whether the reasons put forward by my noble friend and his friends for their objections to the slightly larger health warnings required by the UK regulations have anything to do with the real reason? I think the real reason is that the tobacco industry is afraid—and possibly through market research it already knows—that slightly larger and starker health messages will encourage more people to stop smoking.
Lord Stoddart of Swindon: My Lords, I am most obliged to my noble friend. May I assure him and emphasise that, when I spoke, I spoke for myself and not for the tobacco industry?
Lord Rea: My Lords, I accept that absolutely from my noble friend. These messages might stop more teenagers, for instance, from taking up smoking. That would be very serious for the tobacco industry. It is worth tracing the stages of the evolution of these regulations. Noble Lords may remember the position of the United Kingdom Government when the EC directive which gave rise to these regulations was debated in Brussels during 1989 by the Council of Ministers. The stronger messages suggested were opposed by our then Secretary of State for Health, Mr. Kenneth Clarke, who, incidentally, as most of us know is a cigar smoker who has previously been a cigarette smoker. We lost the argument and hence the present regulations are the embodiment of that EC directive.
The regulations only prescribe a minimum size of warning of 4 per cent. of the surface on the back of the packet. There is nothing in the regulations to prevent a member state, on public health grounds, from requiring a larger warning. Italy, as has already been mentioned does so already.
There was, as the noble Baroness, Lady Brigstocke, said, a period of public consultation in the UK after the EC directive was passed, before our regulations were finally drawn up and the requirement of a minimum of 6 per cent. of the packet face was included as a result, as she said, of these consultations with all the health professions, particularly the Health Education Authority. No one has so far mentioned the fact that the industry has been granted a judicial review of the legality of the regulations. The case will probably go to the European Court.
I ask noble Lords to consider whether it is likely that someone buying his usual packet of Benson & Hedges and seeing a slightly more prominent health warning on the packet will switch to another brand, possibly imported from another EC country, with a smaller health warning. It is surely more likely, if there is any effect at all on his habit, that he will be encouraged to smoke less or even to give up altogether. That is exactly what smokers should do, and that is why the regulations are framed as they are.
6.1 p.m.
Lord Sefton of Garston: My Lords, perhaps I may say a few words before we hear from the Front Bench speakers. I have never before spoken about smoking and tobacco addiction. Many young people are taking to smoking and are not realising the dangers. They are doing so because we are making the appeal on the wrong lines. In all the debates on the subject I have never heard anyone suggest that the wickedness of the smoking habit is not so much the danger to the individual but the demeaning of the human being. It makes the smoker a slave. We should point out to young people that once they are addicted they will no longer be masters of their fate or defenders of their
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soul. The smoker surrenders his will to the habit. If society itself becomes addicted to a habit in that way, society becomes demeaned.
I wish to make two more points. We should all look carefully at our own habits. I smoked and I drank but I gave up smoking and drinking. I did so because I was not prepared to allow myself to become addicted. I wanted to decide my fate for myself. I stopped drinking and I stopped smoking. I was not much better in health, but, my goodness, I was better in my contentment of mind.
Perhaps I may say this to the medical profession. It shouts all the time about the dangers caused to the individual by smoking. The profession should have a look at itself. I have had bitter experience of the addiction caused by members of the medical profession who so easily prescribed drugs which they must have known were addictive. They must have known of the great dangers, but they continued to prescribe.
We do not require more regulations which warn people about the dangers to their health. Young people are not inclined to regard such warnings as important. They say, as one noble Lord has already said, "It will never happen to me". We should put the issue on a much higher level. We should try to persuade young people that if they do not become addicted to smoking or to that other terrible habit, drinking, the better for all of us. That would move the issue on to a new plane.
6.4 p.m.
Lord Carter: My Lords, it is one of the pleasant courtesies of the House that we thank noble Lords for putting down Motions and for drawing the attention of the House to important subjects. I am not sure that I can extend the usual pleasantries to my noble friend Lord Stoddart. I prefer to reserve my position until the end of the debate. I should like to see what my noble friend decides to do with his Motion, although I can make some helpful suggestions.
I feel that my noble friend shows an unusual enthusiasm for European Community measures. I have listened with great care to the arguments of those who support the Motion and I have found them rather confusing. Are we talking about harmonisation, price, employment in the tobacco industry and health, with perhaps just a touch of residual anti-European Community feeling? I found it hard to tease out a theme from those who support the Motion.
As has been well said, the dangers of smoking are well known and documented. Anyone who has watched a heavy smoker die of lung cancer will not need statistics to convince him or her of the dangers of smoking and such a person will not be impressed by nitpicking arguments about the size of health warnings. If we accept that smoking is dangerous, then anything which reduces the flow of information concerning those dangers must have some very powerful arguments in its favour. We have not heard those arguments today.
Perhaps I may refer to the employment point which was touched on today during Starred Questions. My noble friends will know that it is Labour Party policy

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to ban tobacco advertising. That is also likely to be European Community policy. What will happen to the employment argument when, after the general election, the next Labour Government introduce a complete ban on tobacco advertising? Do my noble friends support Labour Party policy in this matter? If they do, what will happen to the employment argument then?
We have heard a good deal about the size of the health warning, as if the argument broadly turns on that. We are talking about a difference between 6 per cent. of the surface area and the 4 per cent. EC minimum. I have looked at the diagrams at the back of the regulations. I do not have a ruler with me but, so far as I can see, a 50 per cent. increase in the size of the health warning is between a quarter of an inch and half an inch. I find it impossible to believe that such a difference will have the effect that has been argued.
We learnt in the Observer on Sunday that children of 12 are now targeted in the cigarette marketing strategy of a major tobacco company. Those who support the Motion might argue that the result of the changes they propose will be that somehow fewer children will be encouraged to take up smoking. That will be achieved by reducing the size and weakening the effectiveness of the health warning on the packet. Frankly, that belief is plain daft.
My noble friend Lord Stoddart introduced the Motion by saying that we had to debate it because there had not been any debate in the other place. We would certainly sit a good deal longer than we do if we felt that we had to debate everything that had not been debated along the corridor.
The noble Lord also produced what I thought was an extraordinary and pedantic point about the words "smoking kills". As he said, not all smokers die. Almost anything that stops children taking up smoking is worth saying. There are many examples of phrases that have been extremely effective but not absolutely accurate. The two that spring to mind are "Careless talk costs lives" and "Guinness is good for you".
We have also heard about employment in the tobacco industry. I say in passing that the Labour Party supports the regulations. If unemployment results there is the possibility of alternative employment. There is not much alternative if one is dying from lung cancer. Every change imposed on industry to improve public health has of necessity led to a change in employment. Perhaps I may point out in passing that agriculture has lost 100,000 jobs in the past 10 years. Many of the farmers and farm workers who lost their jobs are not now unemployed. They have found other jobs.
My noble friend Lord Mason referred to the health of young smokers, children and the unemployed. His argument seemed to be that he would prefer them to become addicted to better quality tobacco. If those who support the Motion are concerned about the phrase "smoking kills", surely they are not arguing that leaving the phrase on the packet will steer children and young people to poorer quality products. If the warning is effective it will stop them smoking altogether.
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I am amazed that those who support the Motion are prepared to consider, if it is put to a vote and is successful, the possibility of headlines such as, "House of Lords votes to reduce size of health warnings on cigarette packets and to reduce the effectiveness of health warnings". It is no good my noble friend saying, as he may well do when he concludes, that he is not trying to amend the regulations but merely asking the Government to do so. If he thinks, as I am sure he does, that the Government have no intention of amending the regulations—I must say that I support them in that respect—then his Motion is tantamount to voting against the regulations, which, as we know, is quite contrary to the conventions of this House.
Lord Stoddart of Swindon: My Lords, perhaps I may draw my noble friend's attention to the Procedure Committee's first report of the 1991 Session. I shall not read it to your Lordships, but if my noble friend reads paragraphs 9, 10, 11 and 12 on page 2, that will put him right on the matter. It is not against the conventions of the House to vote on regulations of this kind.
Lord Carter: My Lords, I am perfectly well aware of that fact. The Procedure Committee has dealt with non-fatal amendments, and this of course is just such an amendment. I say that because, even if it is carried, the Government do not have to take any notice of it. As we all know that the Government will not take any notice of it—at least, I hope that they will not—I still believe that, if my noble friend were to be successful, it would be a way of voting against the regulations. If he decides to press the Motion to a vote, I shall certainly advise my noble friends on these Benches to vote against it.
6.11 p.m.
Baroness Hooper: My Lords, the subject of tobacco labelling has been well and truly aired during the course of the debate as indeed has the sister subject of tobacco advertising, although it was not, strictly speaking, part of the Motion of the noble Lord, Lord Stoddart of Swindon.
It bears repetition to say that the dangers of smoking are very grave. Smoking is responsible for more than a hundred thousand deaths a year. I believe that the figure of 110,000 was quoted by my noble friend Lady Brigstocke. Such figures show that one-third of deaths in middle age are due to smoking. Smoking is implicated in lung cancer, in heart disease and in respiratory disease. There is no doubt that smoking kills; indeed, it is estimated to kill 25 per cent. of smokers. It kills over 20 times more people than is the case with road accidents. However, I should point out to the noble Lord, Lord Stoddart of Swindon, that we also take very seriously the need to curb the number of road accidents and the need to control air pollution caused by our use of motor vehicles.
Smoking is a serious issue and the Government are taking it seriously. An important part of our Green Paper The Health of the Nation is the section which says that smoking is the,
"largest single preventable cause of mortality".

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Therefore, the Government's aim is to reduce death and ill health caused by smoking.
In summary, I believe that I can fairly say that the noble Lord, Lord Stoddart of Swindon, simply does not want tobacco manufacturers in this country to print health warnings on cigarette packets which exceed in their import those required under European Community law. Perhaps I should clarify the choice that we made on the subject of the warnings which are being used as well as on their size. In doing so, I should like to take the opportunity to clarify for the record the suggestion that my right honourable friend, who is now Secretary of State for Education and Science, did not oppose stronger health warnings on labels. That was because he wished to retain what we considered to be a very successful system of voluntary agreements relating to labelling, just as we would wish to do on the subject of advertising. However, that is not now possible as the European Community directive is in force and we must comply with it. That means that we must make the best of the present situation.
In the regulations before Parliament we have said that all cigarette packets should carry the message,
"Tobacco seriously damages health"
on the front of the package and, on the back, additional warnings which, complying with the directive, will have to be rotated on an equal basis once every 12 months. The warnings which my right honourable friend the Secretary of State chose are:
"Smoking causes fatal diseases;
Smoking kills;
Smoking when pregnant harms your baby";
and,
"Protect children: don't make them breathe your smoke".
Those warnings were selected from the list of 14 possibilities agreed at European Community level. They were selected because we believed them to be the most effective in making an impact. That view was supported by health experts during consultation on the regulations. We firmly believe that it should be impossible for smokers to ignore the terrible damage which their habit may do to their health and also to the health of those around them.
On the subject of passive smoking, the Government accept the advice of the Independent Scientific Committee on Smoking and Health that passive smoking causes several hundred deaths in the United Kingdom each year. I understand that the Australian courts have heard a case on the matter and have concluded that passive smoking does cause fatal diseases. I should add that tobacco is the only major consumer product which is highly dangerous when used as the manufacturer intended. Alcohol can be dangerous if taken in excess. Moreover, animal fats can, as the noble Lord, Lord Stoddart of Swindon, said, cause heart disease; but, similarly, that applies when they are consumed in excess.
Reverting to the choice of warnings, I have already referred to the four warnings selected by my right honourable friend for appearance in rotation on the back of the packages. In addition, there are two warnings which must be added to the rotating system and which apply to all European Community member states. These are:
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"Smoking causes cancer"
and,
"Smoking causes heart disease".
I believe that those two messages show how seriously the European Community takes the dangers of smoking. The clear intention is to maximise the impact of the health warning. The additional four UK warnings which we have selected do not exceed the import of these clear and unequivocal mandatory messages.
It has been suggested that the UK warning label will be made more striking than the EC's minimum requirements in size. That is because our warning will cover 6 per cent. of the surface of the cigarette packet, while the wording of the directive contained in Article 4 requires that such warnings should cover at least 4 per cent. of each large surface of the unit packet. However, as the noble Lord, Lord Rea, said, the matter is currently sub judice. We do not yet know all the choices which have been made by other EC countries, although some of them have chosen 4 per cent. as the surface size. However, we do know that Italy has chosen a much larger size and that that has been contested. I should like to emphasise the fact that these regulations are not the result of the Department of Health thinking up the idea of having the strictest and most impactful health warnings, as I think my noble friend Lord Orr-Ewing tried to suggest.
During the three-month period of consultation about the EC labelling directive, we received representations from the tobacco industry, retailers, health interest groups (both statutory and non-statutory bodies) and from a wide variety of consumer interests. There was a great deal of support for the directive's intention to use the most effective warnings, and health interest groups were keen to see the size of the warnings enlarged to make them as effective as possible. It was on that basis that my right honourable friend the Secretary of State decided to make the warning larger.
It has been suggested during the debate that that decision will mean unfair competition from other European Community manufacturers for UK manufacturers. I have been asked whether smokers in the UK will switch to foreign brands; I do not believe that they will. Home producers currently have more than a 90 per cent. share of the market. Smokers are notoriously loyal to their brands, hence the efforts to achieve brand identification in the industry's advertising campaigns which currently mystify some of us. It is difficult to believe that the size and nature of UK warnings will lead to an increased take-up of foreign brands, especially in view of the restrictions on advertising. That is also true in relation to the suggestion by the noble Lord, Lord Mason, that high tar cigarettes will now flood the market. That will not happen because this country is currently implementing the European Community tar yields directive which limits tar yields to 15 mg by 1992. There will be no high tar cigarettes anywhere in the European Community and therefore our imports will not be affected.
As regards exports to the European Community, the United Kingdom industry is again in the same

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position as the industries of other European countries. We can export goods produced for the home market to all member states without any alteration other than translating the warnings into the language of the importing state, or we can comply with the regulations of each importing state. Either way, the competition is equal and fair. I must emphasise that all member states agreed the directive on tobacco labelling and are now implementing it.
Perhaps I may digress slightly. My noble friend Lord Orr-Ewing referred to the tobacco subsidies under the common agricultural policy. That is a subject dear to my heart. I should like to reassure him that UK health and agriculture Ministers consistently argue for the removal of those subsidies. I did so again yesterday in Brussels. We shall continue to do so, and the good news is that the amount of the subsidies is decreasing.
If we wish to discourage smoking and, in particular, the start of the smoking habit by young people, we must use all means at our disposal. If the new warning labels make smokers give up, or help people not to start to smoke, we should be delighted. All government tobacco measures aim to reduce smoking. We have had considerable success in recent years. Some figures have been quoted, but I should like to give nine. In 1974, 45 per cent. of the adult population smoked but in 1988 (the latest figures available) that was dawn to 32 per cent.
As to the impact on industry, I am grateful to the noble Lord, Lord Carter, for clarifying his party's position. It is hard to believe that consumers will switch brands merely because the warnings in other countries are somewhat smaller. It must be said that our health policy will inevitably adversely affect the tobacco industry. Following the figures relating to the decline in consumption that I have quoted, that has clearly already started; but it is our clear aim to reduce the incidence of smoking.
I acknowledge that it is impossible completely to reconcile the aims of the tobacco industry and the nation's health interests. The Government's strategy aims to reduce the prevalence of smoking, and tough warnings are a part of that strategy. This is a small but significant step in the Government's action to discourage tobacco use. In that context, our action is fully justified. I urge the House to reject the Motion.
6.25 p.m.
Lord Stoddart of Swindon: My Lords, first I thank all noble Lords who have taken part in the debate. It has been a useful, good debate. Opinions have been put on record which had not previously been put on record. That is altogether good in a democratic society in a democratic body. At least I think that we are a democratic body!
Baroness White: My Lords, quasi-democratic!
Lord Stoddart of Swindon: My Lords, that is a good point. The noble Lord, Lord Orr-Ewing, emphasised the need to assist manufacturing industry during a recession, and of course these regulations will not do that, as I hope I and other members of your Lordships House have shown. He made many other points and
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raised the issue of passive smoking. He advised us—correctly, I believe—to take the claims of injury through passive smoking with a pinch of salt. I remind him that salt is also supposed to be bad for us; and so he had better not take too much of that or the doctors will be advising him that he is injuring his health.
My noble friend Lord Cocks said that the anti-smoking campaign was conducted by well-heeled middle class zealots who were easing their consciences. That was a good description, and it needs no further comment from me. He also referred to the nanny state and the host of inspectors who will be required to enforce the increasing number of regulations. I had believed that the Conservative Government were against more regulations, but apparently they are not because they impose more and more all the time.
The noble Baroness, Lady Brigstocke, has an interest because she is a prominent member of the Health Education Authority. She referred to the 110,000 people a year who die from lung cancer. I remind her that 710,000 people a year die in this country, and that means that 600,000 people do not die from lung cancer. Furthermore, the statistics refer to premature deaths from lung cancer. That means that any man under the age of 73 or woman under the age of 79 who dies is included in the statistics as having died of a smoking-related disease.
I ask my noble friend Lord Rea to explain why the Japanese, who smoke two and a half times as many cigarettes than the English, have an incidence of lung cancer less than half that of the United Kingdom. That is something that needs explaining. I hope that the medical profession will concentrate upon that discrepancy as well as on why smoking causes lung cancer.
Lord Rea: My Lords, my noble friend invites me to explain. The low Japanese figures are due to their diet and nutrition, which gives them the lowest heart disease rate in the world. It also helps them to have a lower cancer rate for a number of cancers compared with the rest of the world. However, they have a higher rate of some other cancers because of something they eat which is bad for their stomachs. On the whole, diet is the reason.
Lord Stoddart of Swindon: My Lords, I am most obliged to the noble Lord for that reply. It is the most revealing reply I have yet heard. He is now confirming that it is not only smoking that causes cancer but bad diet. We should take note of that and reflect upon it. I certainly shall do so.
The noble Baroness, Lady Brigstocke, also declared that smoking was an anti-social habit. There is the rub. Do we make regulations and are we making these regulations because smoking is an anti-social habit or because it is a health risk? I believe that she was mistaken to bring up the fact that she and other people —but not everyone—believe that smoking is an anti-social habit. Before long, if we bring in regulations to satisfy everyone's view of what is anti-social, we shall end up doing nothing at all. That would be most unfortunate for people.
My noble friend Lord Mason rightly drew attention to the additional danger, especially to young

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people, of the high tar risk from imported cigarettes. I hope that the Government will take notice of that because it is relevant. The noble Lord, Lord Cullen, has been smoking for 60 years. He still looks extremely well, he is going strong and I sincerely hope that he reaches his target of 106 years.
The noble Lord, Lord Sefton, referred to addiction. Of course, he was right to do so, but on the other hand he said that he was not so addicted that he could not give up smoking, because he did. He also mentioned other addictions. Frankly, as my noble friend said, the medical profession has been responsible for persuading people to become addicted to various drugs. Let us not forget the great valium scandal where the medical profession quite wrongly prescribed tens of millions of tablets of valium, to the detriment of some patients.
My noble friend Lord Carter said that a Labour government would bring in a ban on tobacco advertising. He asked what I would do under those circumstances: would I support Labour Party policy? I support Labour Party policy when I believe it is sensible. I am not a hack who will support anything that my leaders like to hand down from time to time. After all, parties change their minds. I shall reserve my position on that, if he does not mind, and will answer him when the time arrives.
Finally, the noble Baroness, Lady Hooper, made a good job of explaining the Government's position. I thank her for going into so much detail. The House deserved the explanation and I congratulate her on giving it. For that reason alone, it was worth having this debate. The noble Baroness knows that I do not agree with much of what she said, but at least she did us the courtesy of treating our arguments seriously as arguments which had to be answered. I do not agree with her on the main point she made in the debate that the regulations will not hurt British manufacturers. I believe that they will hurt them and that is why I brought forward this amendment tonight. I thank the noble Baroness and all those who have taken part in the debate.
Now comes decision time. I have to decide whether it is right that I should ask the House to vote on my amendment to the regulations. I have considered this very seriously indeed and have taken into account the conventions of the House. It is not against the conventions of the House for a vote to be taken on the regulations. That is clear and I am sure that the House accepts it.
On the other hand, while I do not wish to rock anyone's boat, I also have to take into consideration what my noble friend Lord Rea mentioned. The tobacco industry has been granted a judicial review. It may very well take a case to the European Court and in one sense that makes the issue sub judice. Therefore I do not believe that it would be helpful for me to press the amendment to a vote this evening. I hope that the House will forgive me for detaining it and for not pressing the matter to a Division but I feel that that is the right decision.
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I thank the House for allowing the debate to take place in a reasonable, friendly and in some ways entertaining atmosphere. With those few words, I beg leave to withdraw the Motion.
Motion, by leave, withdrawn.

The Motor Car Industry
6.37 p.m.
Lord Dean of Beswick Lord Dean of Beswick rose to ask Her Majesty's Government whether they have any proposals to alleviate the present difficulties of the motor car industry.
The noble Lord said: My Lords, some Members of your Lordships' House have asked me what reason I had for wishing to debate the motor car industry. It is a convention of your Lordships' House that if one has a pecuniary interest one should declare it. I now declare that I have no pecuniary interest. I have no consultancies for any part of the motor industry, nor am I a parliamentary adviser to it, nor am I sponsored by my trade union, the AEU, a major union in the industry.
My main reason for wishing to debate the issue is that before we rose for the Summer Recess at the end of July the signs were there that the industry was in serious difficulty. I took the view that if it was possible to obtain a debate, in spite of all the calls on the time in your Lordships' House and in another place, it would do no harm to have one in an objective sense.
I was concerned that a few weeks ago, on 16th October, there was a Question on the Order Paper which was answered by the Minister, the noble Viscount, Lord Ullswater. The noble Earl, Lord Onslow, who sat behind him, spoke of the success of the motor industry as though everything was all right. Everything is not all right. The noble Earl was referring to the export situation, which looks quite good, but developments in the domestic market are dangerous. Everyone knows that in any manufacturing industry, if the domestic base goes, as sure as eggs are eggs the export performance will be affected later and the whole industry may collapse.
I chose to debate this matter because the motor car industry plays a vital role in our economy. In fact it is a cornerstone of the British economy. The Society of Motor Manufacturers and Traders Limited has provided me with some figures. That body states that the export success of the industry in 1990 was shown by the £9.7 billion of exports. That sum took £2 billion off Britain's automotive trade deficit, outpacing oil as well as aerospace. The deficit for the first six months fell to £617 million compared with almost £3 billion in the same period of 1990.
The society further stated that the motor industry and its customers contributed £20 billion in taxes in 1990. That figure represents more than 13 per cent. of all government tax revenue and is twice the sum raised from taxes on drink and tobacco combined. It is therefore vital that this industry is encouraged to prosper.
I can recall a time during my days in another place and in my early days in your Lordships' House when

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the motor industry was in serious trouble; it might well have gone out of business. Nevertheless, it rallied. The industry has transformed its operating practices over the past decade and output per head has increased by 90 per cent. since 1980. Some people may think that that figure could be improved upon, but nevertheless it reveals a tremendous increase in output.
Investment in skills and training has been as important for improved quality and efficiency as investment in machinery. The industry is performing strongly on both counts, constantly setting more ambitious targets. Massive international investment is making, Britain an important centre for motor manufacturing.
Let us consider some of the factors that are affecting the industry at present. Those in the industry are of the opinion that the Government's fiscal policy is not helping at all and is damaging the industry at present. At home the 1991 vehicle market is suffering its worse decline for a decade. After 10 months car sales were 22 per cent. down. The recession was aggravated by the Chancellor's punitive Budget last March Some of us are still trying to understand why it was so punitive.
As regards employment, at the end of the 1980s almost 800,000 people depended on a thriving motor industry and trade for their jobs. Over the past year 28,500 jobs have gone from the industry and from franchised dealers. Worse still, another 40,000 jobs are expected to be lost by the spring of 1992. The number of jobs, in the industry is 13 per cent. down on the figure in 1989. The 10 per cent. special car tax and the recently increased VAT combine to add more than 27 per cent. to the price of a new car. Those two charges have added about £1,000 to £1,500 to the price of a family saloon car. Among vehicle producing countries, this tax burden on new cars is at the top end of the European scale. That shows the size of our present predicament.
One of my main reasons for initiating this debate was to try to ensure that Britain's car industry competes on equal terms with the car industries of other countries. When the single market arrives, I want to see the British car industry competing on equal terms with the rest of Europe. I do not want to see our car industry being handicapped by a measure that our Government could easily remove without damaging our economy. Like other industries, the motor industry is affected by inflation, interest rates and the value of the pound abroad. What is unusual is the extent to which the industry is hampered by a combination of taxes which have a pernicious effect on this bedrock of our industrial base.
It is worth considering the position of the truck industry. In 1991 the number of trucks sold is expected to be the lowest since 1954. That is a dangerous position to be in. In two years Britain has gone from being number one in Europe for truck sales to number four. I n 1989 the British and German markets were about the same size. However, in 1991 the German market will be three times bigger than the British market. Although this is a cyclical business, the current downturn is the deepest on record and
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represents a 53 per cent. drop in total sales of trucks and a 49 per cent. drop in van sales. That is a severe reduction. The severe market downturn undermines competitive ability and risks future investment in terms of people, product and machinery.
Cars and motor cycles are the only consumer durables subject to a sales tax of 10 per cent. in addition to VAT. Most noble Lords will be aware that the Monopolies and Mergers Commission has produced a report on this matter. I understand that a report has also been prepared for Sir Leon Brittan for him to study in his capacity as a European Commissioner for industry. I do not wish to discuss those reports in detail as one has to look at the whole picture to grasp the position in the industry. However, I believe that one of the matters that has been studied is whether British people are paying more for the same car than their European counterparts. Vauxhall has carried out some research on this matter. It has concluded that, when one looks at the whole package, a British person buying a car obtains as fair a deal in this country as is the case anywhere on the Continent. However, we can make a balanced judgment on that matter only when we obtain the full reports. Your Lordships' House may debate the reports in due course.
I believe that a factor that helped the motor industry to reach a peak of success was its company trade agreements with some trade unions. The union I belong to has been successful in conducting negotiations with some car producers. Those negotiations have meant that some factories have been able to cut across the problems of demarcation disputes. That has all been done without the help of Mr. Howard in another place, who seems to have something against voluntary agreements and does not appear to believe they can be successful.
I could go into far greater detail. However, I am grateful that so many noble Lords wish to speak in this debate. There are many other aspects that other speakers can discuss in support of my case. My objective in initiating the debate is to raise awareness of the problems faced by an industry that is vital to the economy of this country. I wish to ensure that the Government are aware of the need to initiate constructive measures quickly to help this industry. If the industry deteriorates further, much effort will be needed to regenerate it.
6.49 p.m.
Lord Lucas of Chilworth: My Lords, I am sure the House will be grateful to the noble Lord, Lord Dean of Beswick, for tabling this Question. I note that his Question seeks to address the present difficulties of the motor car industry. I was a distributor in the 1950s. The industry has always had difficulties. That the industry is so resilient is to its credit. It has survived the most enormous setbacks in the 40-odd years I have known it. So perhaps in some ways the present difficulties are no greater, though sometimes no less, than they have always been. What has accentuated the problem is the change in the way in which the industry is structured. I can recall standing on the spot where my noble friend the Minister will stand in an hour or

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so. I set out the strategic decisions that government through Parliament had decided to take about the way in which the motor manufacturing industry had to go. I believe that those decisions were misplaced. At that time we were too involved in the emotional contortions that the words "British indigenous motor industry" conjured up in people's minds. It was absolute nonsense, as the past half dozen or so years have shown.
In the motor industry what is more indigenous than General Motors or the Ford Motor Company, with 60 or 70 years of existence in this country, offering so much investment, employment and the promise of even more of both? There can be nothing more indigenous. But at that time certain decisions were made which I believe gave rise to some of our present problems.
As the noble Lord, Lord Dean of Beswick, urged, let us consider the industry. In the current financial year it has produced something like £21.5 billion in taxation. That is a little more than the noble Lord indicated but I shall not argue with him. Most of that comes from what I call the indigenous industry. At present Ford takes some 22 to 23 per cent. of the UK market, General Motors has something like 18 per cent. and the Rover company something like 13 per cent. All that comes from home based industry.
What does the home based industry look like today? Huge investment is demanded. It requires £1.5 billion to bring a new model to the market place. There is enormous investment in new plant, new factories and employment. The industry is now so colossal that we are in what is called (I do not like the buzz term) a global industry, to which joint ventures, whether they concern engines, transmission, bodies or even research and so on, give a global nature. That is what we are talking about.
What does the industry mean in terms of this country and our progress? We have to look at the United Kingdom element of that worldwide industry. We must consider first how it will survive, secondly, how it will grow and, far more importantly, how it will be able to compete with our West European competitors. I put it that way. I did not say "EC competitors" because most of the home based manufacturers expect to call themselves European manufacturers and quite rightly so, because that is what the Community and industrial co-operation mean.
However, within that context there is competition. It is between the West Europeans as distinct from the Americans, perhaps even the Koreans and the Japanese—who make up the smaller element of what we produce. There are three areas in which we alone discriminate against our home based industry compared with West European manufacturers. Frankly, they are in the Treasury Department and concern taxation. It is not design, productivity, distribution or distributors' arrangements which compare badly. Those are small elements. The fundamental issue is the way in which the Government —successive governments—have viewed the industry. The three areas in question are first the special car tax,
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secondly VAT and, lastly, the way in which we treat the company car benefit (so-called). I should like to say a few words about each of those areas.
Noble Lords will recall that prior to 1973 we had a variable purchase tax rate. In the top bracket, at 25 per cent., were the luxury items. A motor car came in that category. When we abandoned that format and went to a 10 per cent. purchase tax system, we retained the luxury element in relation to the motor car and called it the special car tax. The noble Lord, Lord Dean of Beswick, accurately described that element of motor car taxation—that element of the 27 per cent. motor vehicle taxation. It is one of the highest rates in Europe and one of the highest across the area in which we try to compete. It has stayed with us and appears still to be with us. Special car tax is a misnomer because 65 per cent. of the 1.7 million cars that will come on the market this year will have a business connotation. They are a tool and not a luxury. Indeed, the other 35 per cent. kept for totally private use can hardly be called a luxury. They provide necessary transportation, particularly in rural areas. As the noble Lord rightly said, the car tax on tax, coupled with purchase tax of 17½ per cent. means that one is looking at taxation of £1,000 or £1,500 per saloon car. The fact that no other European Community car-producing country levies that kind of tax is indicative of the edge that those countries have over us.
How then can the car be called a luxury? I should like to see that description disappear. Output in the heady days of 1989 was 2.3 million cars. In 1990 it was 2 million cars, and this year the figures are 1.5 to 1.7 million. Output is declining. Special car tax is one of the reasons for that decline.
The second reason is VAT. Of all the products that industry buys—computers, robots, telephones or whatever, from the highest to the lowest item, why is the car singled out to exclude VAT as an admissible charge? It is absolute nonsense. Indeed, that element produces out of the £21 billion tax take a sum of £3.3 billion. It is wrong. If it were abolished in to to the increased profit that would accrue to business, and thereby to manufacturing industry, would almost neutralise the effect by virtue of corporation tax.
The last item is the company car tax as a "perk", which was born of the need to control wages and salaries. Health, schooling and the motor car were seen as perks and a way of enhancing salaries. Such perks are now out of date, but they are hung on to. That element is worth about £1.5 billion.
The lower paid are at a disadvantage. The threshold for the tax is £8,500, and there is hardly a salesman on the road who is not affected. The salesmen, the earners and the grafters who drive a company car cannot leave it in the company car park; they have to take it home. Therefore they are penalised. That is wrong.
That package amounts to about £4.55 billion of the £21 billion. The company car is a business tool and that aspect has to be examined. Over the past four years the benefit scales have placed an additional burden of some 300 per cent. on the users of company

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cars. Those people tend to be the lower paid, who drive the smaller, more efficient and cheaper cars. That must be wrong.
I do not wish to enter into the argument about the way cars are priced. I believe that that is the industry's business and, as the noble Lord, Lord Dean, said, the Monopolies and Mergers Commission is to report on the issue.
The problems facing the industry, both manufacturing and retail—and the retail motor industry employs half a million people and contributes £1.2 billion through purchase tax on repairs and parts—can only be addressed by the Treasury. I hope that my noble friend the Minister will not talk about the Government providing a climate in which business can thrive, because the Treasury impost is a depressant. I should like to see those charges disappear, preferably overnight. There will he winners and there will be losers. Either way, whether they are eliminated in one year or in five, there will be grumblers and those who say it is their right.
If we do not make those changes, dramatically and soon, there will not be just winners and losers: UK Ltd. will be the loser.
7.2 p.m.
Baroness Denton of Wakefield: My Lords, the first time I had the pleasure of meeting the noble Lord, Lord Wilson, was at a typical London corporate dinner. All the other executives played golf. I had stood on the terraces at Huddersfield Town. Real knowledge gave me an advantage. For 20 years I have earned my living in the motor industry—as a dealer, as head of a leasing company and latterly as a director of a manufacturer. I hope that real experience will allow me to bring some value to your Lordships' debate this evening. I certainly have a love of the industry.
I was delighted to see that the noble Lord, Lord Dean of Beswick, had deleted from his original Question the word "British". Had he left it in we should have been restricted to talking about Rolls-Royce Motors, Morgan Cars and Formula One.
The size of the investment required for the industry to be a player is enormous if the industry is to operate in the truly international scene. For example, last week Fiat announced that it would be spending 32.6 billion dollars on development. Even Rolls-Royce has a US transmission—"US" meaning United States in this cafe. The networks are complex and extensive: Ford with Mazda, Suzuki and Isuzu with General Motors, Mitsubishi with Volvo in Holland, Rover with Honda and, as suppliers, Peugeot and VW among others. There is no new British gearbox now.
There must also be more than a domestic market for sales. We have had vivid evidence of that since the beginning of this year when domestic sales fell drastically but production in the UK rose, largely because of the buoyancy of the German market. As has been mentioned, that market has now suffered a downturn and the consequences are apparent.
There has been government interference in the motor industry. Past governments were responsible
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for moving the industry from its skill base in the West Midlands to Linwood and Ellesmere Port. When the cold winds next blew the unprotected branches fell off.
I worked for Rover when it was in the care of the DTI. The focus was not on the customer but on Victoria Street and the cars were built to meet politicians' timetables. Could there be any other excuse for the Maestro? We had the National Enterprise Board. As a measure of government success in running industry, its record was graphic —35 companies folded, 38 were sold at a loss and only 29 returned the taxpayers' money.
It is not the Government's job to pick winners and losers in industrial areas but—and my noble friend Lord Lucas did not want this said—to create a climate in which any industry, including the automotive industry, can survive. The enormous ups and downs we suffer in currency and in inflation have to be levelled out. No manufacturer can work in those circumstances. Although a few accountants think it clever when the only profit in a major manufacturing company comes from currency dealings, that is not the way to build a manufacturing base.
The Government have worked wonders in attracting inward investment into this country from automotive companies and, latterly, in ensuring that the Japanese cars built here can be exported to Europe. They must continue to defend that right of export, which was not easily achieved.
Japanese manufacturers here have shown us that we can build cars of world quality and the lesson has been well learnt. Apparently, in Sunderland they know when they are building better quality cars than the Japanese: the latter do not send their figures. Significantly, some of the research and development budgets of Nissan have come to this country recently, which is a great step forward.
There is much that the Government are doing. Perhaps they could go further in some areas. They could provide more help at overseas trade fairs and more economic counsellors at embassies whose job is not only to help find customers but also joint ventures to link this country with the global network. As the noble Lord, Lord Dean, mentioned, we have a labour relations climate in which incoming companies can negotiate a single union contract. The AEU has been at the forefront in creating that climate.
The other area where the Government may consider helping is in the strengthening of relations with universities and polytechnics, particularly the latter, to help the industry exploit its innovations quickly and remain competitive.
As others have said, the whole of this discussion must be taken in the context of the fact that a report from the Monopolies and Mergers Commission is with the DTI. What its findings will be no one knows. Without doubt it will comment on the issue of the pricing of cars. That is an area where, unlike my noble friend Lord Lucas, I believe the industry as well as the Treasury has some way to go.
The industry supplies its dealers through a franchise system, with fixed agreements and margins. Traditionally, manufacturers have always given extra support to the car rental companies, to increase the

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numbers of vehicles which that market takes and as a means of promoting models to new customers. Therefore, the rental companies were receiving much better margins than the dealers who had invested heavily in the franchise. That could—just—be supported as a marketing expense. However, in difficult times the manufacturer extended that additional discount to several large fleet owners. Consequently, those fleets are returning to the market used vehicles much more cheaply than can a dealer who is a franchise holder. The whole market for those models has therefore depreciated. The dealer takes less profit and the cost of those extra discounts to the fleet market are reflected in the price which the private customer pays.
Not only private customers but all customers lost value when a manufacturer recently used a price reduction across the board to stimulate sales. That is not a good definition of customer care. If manufacturers were to return to orderly marketing with simply an advertising support scheme for rental cars—substantial if need be—the market would undoubtedly slowly return to a more prosperous state.
We should remember that the motor industry does not mean only manufacturers. The retail side of the sector has an annual turnover of £55 billion and directly employs some half a million workers. Indeed, the retail motor industry is the largest employer of a full-time labour force in any retail sector. It has undoubtedly suffered tough times and in dealing with these much reliance has been put on the profits obtained from used cars.
In this country VAT on a used car is paid on the margin not on the total selling price. That is not the case throughout Europe and there were fears that the Community would direct away from our system. However, this was well protected by the Government. It is important that it continues to be so and that as the other VAT implications are dealt with—for instance, some member countries allow business users to reclaim VAT—the Government continue to be pro-active to ensure that our retail industry does not lose out.
It would also be helpful to the retail industry were the Government to remove the cyclic nature of sales driven by the annual prefix registration letter. By forcing such a large percentage of sales through August, the system puts enormous strain on the finances of retail dealerships and is supportive of imports whose factory holidays work to a different pattern to home manufacturers. The customer would benefit too by being removed from the crush.
The industry has always asked for the abolition of car tax. However, this raises large sums in revenue and is not totally out of line with European Community practice; five countries have additional sales taxes similar to car tax and others have luxury rates of VAT. Again, I suggest that some of the cost of the cars is as much with the manufacturer as with taxation. The industry used to say that it could not reach 2 million units without the removal of the car sales tax. It did, and did so substantially.
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One possible reason for the removal of car tax would be if the Government were to tackle the issue of the company perk car. One of the contributing factors to the decline of the British motor industry has been the company car. Cars were built for transport managers who argued about the second wing mirror and were happy with vinyl upholstery. The consequence was that the UK built cars for these people but the private customer with money to spend looked elsewhere for his vehicle; in particular, to European imports. If the tax benefits were to be removed would we not also create an environmental benefit—undoubtedly smaller cars would be used—and there would also be great traffic benefits as people who commute in their company car by themselves would be much more likely to share transport or, where available, use efficient public transport.
It is an area much discussed, but can there be any justification for the accountant who drives only to his office, day in day out, having a car over the person driving to work on the line in the same company, or to a checkout in an off-centre shopping mall?
Such a move would also benefit the private customer who would have more power in his purse. As long as the fleet buyer is king the private customer will get, in many dealerships, a second-rate deal. Indeed, when Ford's UK chairman can say in today's marketplace that people want to come and bargain for the best deal that they can get I suggest that there is a failure to recognise today's customer. It is the nurse who needs a car for shift work, the mother who can get the children to school only by private transport and the young man whose parents do not own a car.
I conclude on an upnote; not about what the Government can do but why industry can do it without the Government, or perhaps alongside them. Originally, Japanese manufacturers planning to produce vehicles in this country assumed that they would have to bring their own component supplies with them but they have been amazed by the high quality of components available to them. Instead of relocating Japanese component manufacturers to this country their main routes are to buy from European companies where possible and, if not, set up a joint venture with such a company in order to ensure supplies of the quality that they need. As an alternative, they would buy a local company and find that it took very little time to turn the production round. Only as a final resort do they feel it necessary to persuade the Japanese component manufacturer to set up in this country. That is a great credit to the change which the component industry has driven for itself. The benefit of government focus on inward investment to this country is at its most obvious when these component manufacturers become more competitive and attract global customers.
Demand is not simply driven by the price of a product. Removing car tax would not bring back into the showroom the person who has discovered that his car does 60,000 miles quite efficiently. Nor would it change values on what brings quality to his or her life. What the Government can do is to continue their concentration on creating an economic climate by

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defeating inflation and continuing to reduce interest rates so that the car industry can both reduce costs and stimulate demand.
7.15 p.m.
Lord Brougham and Vaux: My Lords, I too wish to thank the noble Lord, Lord Dean of Beswick, for giving us the opportunity to debate this important subject. The motor car industry is important to the British economy. The noble Lord quoted the export successes and therefore I shall not repeat them.
Every year the industry invests billions of pounds in new plant, equipment and R&D to make the product more exciting to own and operate and more reliable, safe, fuel efficient and environmentally friendly and to offer good value for money. For example, during the past 10 years Ford has invested £960 million at Dagenham and £580 million at Halewood. During the past 18 months it has invested a further £200 million at Dagenham. Vauxhall and other companies have done the same and there has been new plant from Japan. Cars today are becoming more technically sophisticated, with growing levels of advanced electronics which will continue to require well-trained dealers and service personnel.
During the late 1970s the industry was heading for extinction. It was non-competitive in quality, cost and reliability of supply. At that time the market growth was filled by an increase in imports. By 1979 imports were at 55 per cent., reaching a high of 58 per cent. in 1989. The plants were overmanned; for instance, at Jaguar where I took an industry and parliamentary fellowship course 18 months ago. When Sir John Egan took over in 1980, 14,000 workers produced 13,000 cars of fairly poor quality and reliability. Nine years later a workforce of 12,000 produced 50,000 cars of better quality and reliability.
Output per head has increased by 90 per cent. since 1980 but there is still much to do to match our European competitors in terms of productivity and quality levels. It will be hard to achieve in some of our old plants built years ago, whereas a new greenfield plant such as Nissan has the advantage. It is now exporting cars to Japan which are, I am told, as good if not better than cars made in Japan.
As I said earlier, the industry is producing safer and more reliable and environmentally friendly cars and soon the electric car will he with us. There is also the catalytic converter which eliminates a major portion of exhaust gas pollutants. Today all engines are more fuel efficient by an average of at least 17 per cent. We also see diesel engines which are quieter, more powerful and more fuel efficient than their counterparts. On average emissions are down by about 30 per cent. aid they are 30 per cent. more fuel efficient than the petrol driven car with a three-way catalytic converter.
During the past few years the industry has made cars safer and has introduced a range of security features to deter thieves. It is working further to improve security. However, standards differ so a common BSI vehicle security standard adopted throughout Europe would be in the best interests of us all.
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The noble Lord's Question asks whether Her Majesty's Government have any proposals to alleviate the present difficulties of the motor car industry. The industry would not expect the Government to move it to greenfield sites, but it could and should be helped in two ways, the first of which my noble friend Lord Lucas dealt with regarding VAT and special tax.
A second way to help the industry is to have a larger differential between environmentally friendly and non-environmentally friendly fuels. There should be a greater incentive to use unleaded petrol in order to encourage its use and the purchase of cars equipped with catalytic converters. Again, given the environmental and fuel efficiency advantages of diesel, the taxation incentives should be enhanced to further its acceptability among consumers. In France there is a considerable difference between the price of diesel and other petroleum fuels. The result is that about 30 per cent. of all new vehicles sold are diesel powered compared with just over 8 per cent. of vehicles sold in this country for the year to date. Furthermore, there should be a standardisation of diesel which will allow engine designers to work with a consistent fuel.
Why do we not remove all taxes on cars and collect the revenue from the fuel bought at the pump? That could not be done overnight but it is worth considering. It would reduce the environmental effects of motoring, thus forcing the manufacturer to compete in the area which really counts—fuel efficiency.
The UK motor industry has come a long way since the 1970s. It is now extremely important in the spheres of employment, exports and basic manufacturing infrastructure. It needs not support but equal opportunities to enable it to compete on the so-called level playing field. However, it still faces challenges as it goes towards the next century.
7.21 p.m.
Lord Stoddart of Swindon: My Lords, I join with other noble Lords in congratulating my noble friend on bringing forward this Question this evening. I confirm from my own experience what he said about the truck industry. Last Tuesday I visited Ford Iveco in Slough to see the new cargo model being made. I learned from that visit that the number of trucks produced had fallen from 14,900 to 6,000. There had been a drop of £200 million in turnover and a reduction in employment from 1,400 to 800 people. Therefore, there is no doubt that the truck industry is undergoing severe difficulties even though British manufacturers are producing some of the best trucks ever.
As noble Lords have said, in the last Budget the tax burden on cars was raised to more than 27 per cent. We must bear in mind that that compares with 14 per cent. in Germany and 22 per cent. in France. Combined with a 20 per cent. increase in company car tax scales and the imposition of national insurance contributions on the company car and fuel benefit, the British motor industry was dealt a body blow just at a time when it was already suffering considerable difficulties and a downturn in UK sales as a result of the recession.

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Sales at 1,600,000 this year will be down by 22.5 per cent. on the 1990 figures but since the projections in 1989 for sales in 1991 were 2,200,000 there is a real reduction of over 27 per cent. in the expected sales for this year. That is the real measure of the recession which is taking place and of the problems which the car industry is having to cope with. In fact, it was budgeting for sales at 2,200,000 and has had home sales of only 1,600,000. That could not have come at a worse time—only a year before the advent of the single market when competition from the Continent will be much stiffer. There, car manufacturers seem to receive a better deal from their governments especially where the car industry is state owned.
In my view the industry resents the lack of leadership by the Government. The industry needs leadership. Can the noble Lord, Lord Reay, say just what is expected of the car industry and where the car is expected to fit in with any transport policy which the Government may have?
It is accepted by the motor industry that the role of the car may very well have to change. There is a growing acceptance that the car as a means of commuting into town and city centres at peak periods is becoming non-viable and is increasingly seen by the public as a menace to safety and to the environment of built up areas. Until the Government give priority to public transport measures and other policies to deal with city centre congestion, the car will remain the favoured means of transport for journeys to work and shop.
We have heard what are the new tax burdens on car manufacturers. My noble friend pointed out that they amount to £20 billion this year and that has been confirmed by others. The manufacturers find those taxes more acceptable if the extra revenue was being used for better public transport provision. Extra money is being taken out of transportation generally just at a time when much more needs to be put into it, especially to assist the improvement and development of public transport.
The Government should encourage and help to speed up the change to more environmentally friendly cars. That means helping to enable people with older, environmentally unfriendly cars to buy newer cars sooner. That will not be achieved by heaping ever-increasing taxes on the motor industry and its products. Perhaps the noble Lord will comment on that aspect. Will he say what sort of discussions are being undertaken between the Government and the motor industry at present about the wide range of problems which exist? Can we be assured that the Chancellor will listen more closely to the representations of the motor industry before next year's Budget than he apparently did before this year's Budget o that he can avoid the serious mistakes which he made then?
Is the noble Lord satisfied that the British car industry is not being put at a disadvantage through hidden subsidies being made to European car makers especially in France and Italy? Are we investigating that? Are the Government making representations if such subsidies exist?
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Those are problems in the motor industry. I believe that the industry sees those problems. The Government must have a policy towards the industry. I wish we could find out what it is. Perhaps the noble Lord will help us when he replies.
7.29 p.m.
Lord Strathcarron: My Lords, I am grateful to the noble Lord, Lord Dean of Beswick, for initiating this debate on an extremely interesting subject. I worked in the industry for 43 years and have obviously seen many changes in that time. I have seen ups and downs galore. After the war it was a very difficult time for the industry because it was allowed steel to make cars only if a percentage were exported. The industry was quite pleased to export the cars but it forgot about all the spare parts which should have gone with them. Also, the cars were not adjusted to local conditions. On the Belgian pavés they literally fell to pieces. The American cars that went into Belgium had stiffer suspensions and shock absorbers and managed to survive.
At that time in the Midlands the car industry had a very insular attitude. I do not believe many people had driven competitors' cars from the Continent. The Austin Motor Company was always known as "The Austin". At The Austin they said that if it was not made in Brum it could not be much good. It was an extraordinary attitude and I am pleased to say that it no longer exists.
The industry has made enormous progress. It experienced terrible problems due to weak and ineffectual management. However, it survived all that and in 1989 the motor industry was as prosperous as it had ever been. I shall not repeat the figures already mentioned in regard to employment and job losses. However, it is interesting that 13 per cent. of all tax revenue is provided by the motor industry and its customers, which is an amazing figure.
I should like to say something with regard to the 10 per cent. special car tax introduced in 1973 as a temporary measure. Like most temporary measures it is still with us. The Government appear to be reluctant to get rid of the car tax. It seems to be unjust because it applies only to the motor industry and to no other goods. By the time VAT of 17½ per cent. is added, it adds around 27 per cent. to the price of a car. That has resulted in a reduction in car sales of about 24 per cent. The fact that VAT is not reclaimable on business cars discriminates against the motor industry. It is reclaimable for other business purposes such as office equipment.
The 1991 Budget increased personal benefit taxes on business by a figure way above inflation. Furthermore, employers' national insurance contributions will be payable on private use of business cars, whereas other benefits in kind are not so affected.
Truck sales are in a sad state and are expected to be the lowest since 1954. That is due to the recession. Companies make the lorries last longer. In some cases, with lack of business, they have taken one or two lorries off the road and are unlikely to be able to buy new ones for some considerable time. It is interesting that in 1989 the British and German markets were

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around the same size, and the German markets in 1991 will be three times the size of ours. That is a sad reflection on the state of the industry.
The motor cycle trade has been seriously affected, with sales only one-quarter of what they were a few years ago. It is true that few motor cycles are made in this country. But thousands of jobs are seriously at risk in the dealerships and service outlets. I thought it strange in the Budget—it was not mentioned at the time—that the annual tax on motor cycles was increased by around 20 per cent. yet nothing was added to the annual tax of cars. It is strange because a motor cycle uses less petrol than a car and takes up less road space. I believe their use should be encouraged.
I am surprised that the Government have done so little to encourage diesel cars. In some European countries such as France and Germany diesel fuel costs only two-thirds the price of petrol. As a result, in France almost 40 per cent. of new cars are diesel powered compared with around 9 per cent. here. In October this year diesel sales reached 10 per cent. for the first time. Diesel cars do not require expensive catalytic converters and use around one-third less fuel than their petrol equivalent. They are therefore favourable to the environment and should be encouraged.
The multinational companies, both Ford and General Motors, have been criticised in the past for importing cars made in their continental factories. For instance, all Ford Granadas and Sierras are now imported. Vauxhall imports all its Senators, Carltons and Calibras. In the whole of Europe the Vauxhall Nova is built only in Spain.
However, the motor industry is not all gloom. Ford now exports a large number of Fiestas from its plant in Dagenham; Vauxhall manufactures a great many Luton-built Vauxhall Cavaliers in left-hand drive form, and they are sold in export markets as Opel Vectras. Around 80 per cent. of Nissan production from Washington is exported, mostly to Germany, and the export figures for the successful Rover 200/400 series continue to rise. As a result, although sales are down by approximately 25 per cent., production is down by only around 10 per cent. That is encouraging. As long as the European market holds up car production will not fall too seriously.
It is a great pity that government policy towards the motor industry and its customers appears to be hostile. One must hope for a quick change of heart so that this great industry, which is so important to the prosperity of the country, will once again be able to thrive.
7.36 p.m.
Lord Braybrooke: My Lords, I too am most grateful to the noble Lord, Lord Dean, for allowing one to take part in the debate. This afternoon we are dealing with one of the major, if not the major, industries of the country and the problems therein. Motor manufacturers employ a large number of people and even more are employed in ancillary industries. Their security and livelihood is obviously
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of great importance and the destruction of this manufacturing base will be a tragedy which must be avoided at all costs.
Nevertheless, market forces play a major role in all businesses and alteration of product and diversification should be considered early before demand slumps to a dangerous level. One of the few businesses that has an ongoing clientele is the undertaking business. Even they experience competition from different firms and produce reproduction furniture in the summer when business is slack.
With your Lordships' forbearance I want to look beyond the downturn in the number of car buyers to prospects and possibilities for the future, star-gazing though that may be. I hope it will be of interest to your Lordships even though some may disagree.
The motor car is loved by many and deeply cherished. For most people it is their major purchase apart from their home. It gives the owner enjoyment, freedom, status and satisfaction. I am told that in some cases cars receive more attention than wives. Noble Lords may recall the story of a couple trapped in their new car in a traffic jam on Westminster Bridge. The wife said to the husband, "If you do not stop talking about this new car, Henry, I will throw myself off the bridge". He replied, "You always were a sport, Doris", quickly opening the passenger door.
I hasten to add that I have a great love affair with motor cars. I cannot imagine life without 12-cylinder Jaguars, although I doubt if I will ever buy another petrol-engine car—something about which I shall speak shortly. However, these privileges cost us dear. Perhaps I may draw an agricultural analogy, from what is another large business. Surely there is no inviolable right to produce cars beyond demand, any more than farmers can now demand agriculture as a way of life, with an assured market for all their lines of production. Farming is throttled. Many crops have quotas; production is limited and the rearing of animals for food production is in some cases totally uneconomic. It seems to be a crazy world when half mankind are alleged to be starving. But I understand that transport costs to far-flung lands cannot be borne.
We read that this month 101,000 units were produced in the motor industry in Great Britain and 58 per cent. of cars were imported in October. From that are we all to deduce that foreign cars are better? It is not the Government's task to interfere in design or endeavour to protect the home market. I suggest that exports must continue to be encouraged—and they have done remarkably well—with all speed. Only that will probably save the industry in its present state. Encouragement should also be given to buying British. I know that few cars are British these days though some of them carry British labels. For years we produced the best cars in the world and 50 years ago or more people who bought foreign cars were regarded as being a little unusual. It was mildly "non-U", almost like wearing co-respondent shoes. That is now no longer the case. I have been driving diesel Vauxhalls, and automatic ones too, for the past eight to 10 years. They are all made in Germany but my friends do not know because of the Vauxhall label.

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I wish to mention one point about the cost of diesel fuel. Over that 10 years, buying fuel in bulk, it has always been between six shillings and eight shillings a gallon cheaper than petrol. I use the old money to give noble Lords an idea of how much cheaper it is if you buy and store the fuel yourself. Like farmers, motor manufacturers should start thinking about diversification and ever-increasing exports. We threw away our motorcycle industry, through no fault of the people building the machines. I cherish my Velocette. We threw away our light aircraft industry, and again the employees were largely, if not completely, blameless. Cessna and Piper in the United States of America no longer produce single engined aircraft due to excessive product liability laws. That market—and a very valuable one it is—has been largely taken over by the French. The French, my Lords! I ask: why not Great Britain?
Some motor manufacturers indulge in the aircraft industry—Saab, in particular, on the Continent. Motor manufacturers are also pretty well placed to produce pressed steel or prefabricated items which could be done for the home market. I refer to cabinets, washing machines and the like. They could also produce panels, parts or even perhaps complete railway carriages. Heavyweight firms such as Vickers, who own Rolls-Royce, could produce railway locomotives, as could many other firms in the defence sector. Many motor manufacturers are now highly skilled in plastic moulding. I suggest that we must strive not to let the motor industry follow motorcycles and light aircraft.
The company car offers great advantages to the employee. There is of course no first cost of purchase. The choice of the car may be at the behest of the employee. Noble Lords may disagree, but I suggest that company cars are probably driven less thoughtfully and carefully than self-owned cars. Few company cars are diesel for obvious reasons. Why should an employee bother about the cost of motoring when it is not borne by him?
Sometimes farmers provide their employees with milk and heating oil. If, as an alternative, the employer decides to pay the farm worker more to cover these items on his own account, I suggest that he might possibly drink marginally less milk, but he would husband his heating oil most assiduously in order to get the maximum benefit from it at the least cost. I suggest that owner drivers do likewise.
With the probable demise of the company car diesel becomes even more attractive. I agree totally with the figures given by my noble friend Lord Strathcarron: that is, that 40 per cent. of cars sold in France and nudging 10 per cent. sold in this country are diesel cars. However, the carriage trade do not really like them. They burn too little fuel. There is too little service work to be carried out on the engines at £40 per hour. They probably also last too long.
Looking to the future I ask whether the industry, like agriculture, will ever have it so good again. In my view there are some warning signs. Is it acceptable to go on covering our beautiful island with ever more concrete? There is indeed foreign competition, but do
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foreigners always play by the Queensberry rules? There are environmental considerations which the production of electric cars would satisfy. Aggravation and nuisance in towns is likely to increase. Great strides have been made in safety of late but unfortunately we still lose 5,000 lives a year and 35,000 petrol engined motorcars catch fire each year. Jack-knifing a 40-tonne articulated lorry is not uncommon. Should its speed be directly related to its braking capabilities? For example, can a 40-tonne lorry, travelling at 70 miles per hour, stop without jack-knifing and in the same distance as a family car travelling at the same speed? If not, why not?
I suggest that competition would come from a properly modernised railway system, which we have not got in this country. It would provide greater speed, greater haulage capacity for the horsepower used, less land take, greater safety and far less damage to the environment. A journey time of under four hours now between King's Cross and Edinburgh would be impossible to beat legally in a private car and is a likely threat to air travel.
I now turn to freight haulage. There are privately owned locomotives running on British Rail between Foster Yeoman quarries in Somerset and Acton in West London. On 26th May of this year one of these locomotives (of General Motors manufacture) hauled a train in excess of a mile in length weighing 11,982 tonnes. That is the equivalent of 315 lorries of 38 tonnes each, which would need 110,250 horsepower as against the 4,500 horsepower required by rail to haul the same load of granite or 24½ times as much. I hope noble Lords will forgive me for suggesting that Sir Winston Churchill might have said, "Some train— some engine".
Finally, are these pointers for the future? Can we manufacturers of food and cars ignore the market? Perhaps wise men cut their cloth accordingly and survive.
7.49 p.m.
Lord Astor of Hever: My Lords, the UK's economic volatility is a major problem for our motor manufacturers. They need a more stable environment in which they can forecast demand and therefore plan production schedules, order supplies and specify manpower requirements with greater accuracy. As we have heard over and over again tonight, the UK market is at its lowest level for many years. I shall not go into the figures, but they are appalling. It is vital that our motor manufacturers are helped, and quickly, before European barriers are lifted in 1993. The Japanese will then increase their penetration at the expense of European volume makers. That is projected to cost the UK's largest car manufacturer alone, Rover, over 20 per cent. of its total European export volume. Last year its export sales, which were 43 per cent. of the total output, were worth over £1,000 million.
It may be that the Government's hands are tied by EC regulations, but Rover is a company that directly or indirectly employs 180,000 people in this country. It would be a great pity if financial problems should cause it to abandon developing cars scheduled for

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1994 and beyond, some of them among the most interesting cars that it has ever conceived. I have three proposals, one or two of which the Government might consider and none of which should fall foul of Brussels. Unfortunately, all have been mentioned already, so at this late hour I shall be brief.
The first is the removal of the 10 per cent. car tax which places us among the highest taxed countries in the EC as regards new car purchases. No wonder there is now a form of "nearly new" trading, with lower margins for manufacturers and dealers. The second is the introduction of generous financial incentives to encourage greater interest in cars with environmental benefit s. We have heard from other noble Lords about the price differential in France between petrol and diesel, while Germany encourages drivers to buy cars equipped with catalytic converters by exempting them from the road fund licence for the first three years.
As in Germany, VAT might be reclaimed where a company car is legitimately used for business purposes and not just for an executive to go back and forwards to work. On my farm I can reclaim VAT on a tractor and a van. To many firms a car is just as important as a business tool. The last Budget was not helpful to the motor industry; I hope that the Government may consider some of these proposals.
7.52 p.m.
Lord Clinton-Davis: My Lords, may I at the outset congratulate my noble friend Lord Dean on initiating a debate which has been of a very high standard and one in which a number of very interesting propositions have emerged. The debate ranged over a wide field and even included the daring revelation of the noble Lord, Lord Braybrooke, about his love affairs—albeit with motor cars.
I did not detect very much, if any, support for the policy of this Government in relation to the car industry. The Minister would do well to note that most of the speakers in the debate came from his own side. The clearest common denominator has been the significance for the United Kingdom's manufacturing position of the motor vehicle industry.
As my noble friend Lord Stoddart said in a very fine speech, the industry faces very tough times. Indeed, in briefing your Lordships' House, the motor car industry made explicit and serious charges against government policy. I quote:
"The Government's fiscal policy is putting the future at risk".
Perhaps it is one of those US components of the Government's policy to which the noble Baroness, Lady Denton, referred. I think in this connection it is a different US from the one to which she was alluding. This is a charge which emanates from a very respectable source and it is incumbent upon the Minister to answer very clearly what has been said.
What is the bleak scenario depicted by the industry—an industry at its lowest point for more than a decade? Over the past 12 months new car sales have plunged ominously and the slide continues. My noble friend Lord Stoddart and the noble Lord, Lord Strathcarron, referred to truck sales being at their lowest level since the war. Reputable car dealers are
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declining into receivership and liquidation as never before and component manufacturers too are deeply affected by the slump. The scourge of unemployment haunts the whole industry. It haunts dependent industries and businesses and indeed many industrial areas of the United Kingdom. One does have to ask whether, to quote the Chancellor, this is part of "the price worth paying" for the way in which they have waged the war against their self-induced inflation.
The industry resents the fact that the Budget, whose principal design—it is as well to remember this—was to extricate the Government from the poll tax debacle, has hit the industry for six. It is a situation of absolute nonsense, to quote the noble Lord, Lord Lucas. Higher VAT, but no relief in the discriminatory special car tax.
One has to ask too where else among our competitors in Europe is the car industry singled out in such a discriminatory fashion? Why should cars be penalised, but not, for example, washing machines? The difference is very easy to explain. It is that huge revenues are enjoyed by the Treasury by embarking upon this injurious policy.
Regrettably the Government chose to ignore the representations which were made by the industry, as, indeed, they ignored the omens of decline which preceded those representations. What the Government preferred were the signs of false dawns. Car output remained stable until August, despite a massive fall in car sales. Exports were kept buoyant by a temporary increase in demand in Europe, notably in Germany. The rueful warnings of the industry went unheeded, despite the calamitous fall in production—30 per cent. in August, 11 per cent. in September —as the growth in exports slowed and the pace of decline in the United Kingdom car sales accelerated.
The difficulty—the main underlying problem—is that this decline, coupled with the run-down in jobs, is not just that these jobs, particularly skilled jobs, will disappear, but so will production plants, rendering the industry far less capable of meeting increased demands when the economy finally picks up.
Another important fact, seemingly overlooked by the Chancellor, is that motor cars account for more than 5 per cent. of total consumer spending. What he has been looking for is higher consumer spending to lift the economy out of the recession. There seems to be something of a non sequitur as far as concerns policy.
Let it be underlined, too, that Britain's trade deficit in times of greater economic activity is compounded by car imports. That is bad for our industry here and it is bad for the country. What is saving the car industry in Britain is regrettably not the British motor car industry but the motor car industry in Britain—and the two are different. It is the wave of inward investment by Japanese car makers into the United Kingdom that is responsible for that. Of course that has its very strong plus side. It has certain disadvantages as well. But the fact is that we have to be grateful that that has happened, as the noble Baroness, Lady Denton, said in what I think the whole House will acknowledge was a very remarkable contribution to the debate.

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The fact that the Government seem to have written off our own indigenous car industry has given cause for anxiety to noble Lords on both sides of the House. It has become rather fashionable for the Government to do that in the recent past. We have to ask if the judgment is right. Despite all its difficulties we do have the designers, the inventiveness, the technological skills and the work-force capable of promoting the industry; that has been made clear by a number of noble Lords tonight. What the industry needs is much more new investment to promote output, jobs, more environmentally friendly cars and the balance of trade.
Industry has major responsibilities in facing the industrial world of the future. There is a need to match the way in which the Japanese have mastered the art of producing many different models in a profitable way; the way in which they have concentrated on speeding up the time needed to change tools for different models, designing models that people want and selling them at a profit.
In the industry itself there needs to be less conflict, fewer restrictive practices, less "them and us", more flexibility, more devolution of responsibility and more information too for the workforce and for customers. Those are some of the ways in which we can work towards the radical overhaul in terms of human relationships at the workplace that is needed. There needs to be restructuring to meet the needs of modern manufacturing requirements. There is a need for more R&D to ensure that technology is kept at the leading edge in order to improve consumer choice and enhance environmental standards. The environment in the workplace must change, with democracy and the maximising of consensus wherever possible replacing division and autocracy. Happily, that situation is declining. Those are the ways to ensure commitment to the industry which is the key to industrial success.
The Government also have their responsibilities because the industry needs government. It needed government in causing the Japanese to invest in a major way in some of our regions. Those companies would not have established themselves here without substantial regional aid from the Government and from the European Community. There needs to be an increasing degree of partnership between the industry and government, each recognising the responsibilities of the other. The Government must be committed to an industrial strategy which provides stable and predictable exchange rates. That was said back in 1989 and has been said since by the CBI. I heard the noble Baroness, Lady Denton, speak at the CBI. I did not agree with as much of what she said there as I did with what she said today. There must also be an abandonment of the over-reliance on interest rates as an economic regulator which has clearly damaged this and many other industries.
My noble friend Lord Stoddart was right to say that policy in relation to the motor industry has to be related to an overall transport policy. What the Government do there is to indulge in ad hocery on a large scale. They do not have an integrated transport
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policy. Indeed, the Minister in this House, the noble Lord, Lord Brabazon of Tara, has denied that there is any such thing as an integrated transport policy. He is about the only transport Minister in Europe to make an assertion of that kind. There needs to be the promotion of links with higher education which has all too often been neglected by this and other industries.
We cannot afford to conclude the debate without referring to the consumer. The customer has been the subject of many anti-competitive devices. It is true that that is to be the subject of a report by the Monopolies and Mergers Commission. British consumers are required to pay more for their cars; consequently, they either do not pay those higher prices or, if they do, they have less to spend on other things, with corresponding damaging effects on the whole economy. Half the cars sold in the United Kingdom are imported. If we could cut a quarter of the cost of imports we could save nearly £2 billion a year on our balance of payments. It is important that sales of new cars are improved, not least because new, more environmentally friendly cars constitute one of the most effective safeguards against pollution of the environment.
There are new and massive challenges to be faced by the industry. There is the question of the recycling of cars and parts of cars. The German motor industry is demanding 100 per cent. recycling. That problem has to be faced up to. The noble Lord, Lord Brougham and Vaux, referred to electric cars. Possibilities are emerging in the United States of brand new technologies. All this will impact on an industry which requires to invest more and more in research and development to keep up the strenuous pace that is being dictated. The Government cannot divorce themselves from those factors and simply rely on the propositions of their ideology which are now vastly outdated, as they themselves concede day after day.
Once again I congratulate my noble friend Lord Dean on the excellent speech with which he introduced the debate and thank him for giving us an opportunity to range over so many issues widely in pursuit of a policy which we hope will be dictated by rather greater common sense than has been reflected by the Government's policy in the past year or more.
8.6 p.m.
Lord Reay: My Lords, I am grateful to the noble Lord, Lord Dean of Beswick, for raising this subject for debate. It has provoked an interesting, well informed, stimulating and enthusiastic discussion. The noble Lord must be gratified by the number of speakers from our Benches who have taken part in the debate, even though he may perhaps be disappointed by the number from his own.
I recognise that the recession has created severe difficulties for British car manufacturers, but I have been greatly encouraged by the way in which they have coped over recent months. I shall start by saying something about that commendable performance.
Despite the short-term slump in domestic demand, our major car manufacturers have managed to

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maintain their 1990 production levels and indeed Vauxhall, for one, is currently breaking production records at its Luton plant. Such achievements have been made possible by the manufacturers' tremendous export performance. In the first nine months of this year, British car production for export increased by a staggering 89 per cent. compared with the same period last year, helping to reduce the trade deficit in the automotive products sector by 79 per cent. in the first half of this year. The success of the export drive indicates that our car manufacturers are now more competitive than ever, indicating our policy of exposing companies to competitive pressures.
Some people have said that this tremendous export performance is purely a short-term phenomenon made possible by the German boom since reunification. However, that theory does not correspond to the facts. In the first half of this year British car manufacturers exported a total of 36,000 cars to Germany, representing only 12 per cent. of total British car exports to the EC. That compares with 82,000 cars exported to France and 91,000 to Italy in the same period—the latter being an increase of more than 500 per cent. on the same period last year. By increasing exports to countries such as those, where the overall level of demand is falling, British manufacturers have succeeded in substantially increasing their share of these markets; for example, from 1 per cent. to 7 per cent. of the Italian market, from 5.5 per cent. to more than 8 per cent. of the French market, and from under 2 per cent. to more than 5 per cent. of the Dutch market. Perhaps that, more than anything, is the clearest indication that British car manufacturers are once again able to compete with the best in the world.
However, noble Lords will be aware that government policy in general puts more emphasis on setting the climate for long-term competitiveness and growth rather than trying to cushion manufacturing industry from short-term fluctuations. I therefore propose to highlight how current government policy has played a major role in laying the foundations for what promises to be a tremendous period of change and expansion for the UK car industry over the next few years. I believe that three policies in particular look set to have a fundamental impact on the future of our car manufacturers, thus helping them to become leaner, fitter and more responsive to consumer requirements.
First, there is the success of the Government's step-by-step reform of industrial relations and trade union law over the past 12 years which is widely acknowledged to have had a profound effect on the car sector and will clearly continue to do so. It is no coincidence that the widespread reduction in strikes and th3 overall improvement in industrial relations has occurred since government legislation was introduced. For example, it has outlawed secondary picketing, required secret ballots before official strikes, protected union members from unjustifiable union discipline, protected businesses and jobs against unofficial strikes and made all closed-shop practices unlawful.
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In turn, the curbing of union power has enabled manufacturers to introduce new and more effective working practices. Of particular note among such reforms currently being introduced in the automotive sector are the recent changes in working practices which Rover and Vauxhall have introduced. At its plant at Ellesmere Port, Vauxhall has abolished demarcation lines, introduced team working and scrapped the multi-union negotiations in favour of a "single voice" bargaining system. Rover's "New Deal" involves the introduction of similar working practices based on trust in the workforce; for example, the abolition of clocking on. These changes are clearly the way forward if British manufacturers are to attain world best practice levels of productivity, and would simply not have been possible without government legislation to reduce the excessive power previously held by the unions.
Secondly, the fact that the three largest Japanese car manufacturers chose to locate in this country is very much a result of our policy of encouraging inward investment. By the time all three are fully on stream in the mid-1990s they will have brought at least 500,000 units of new annual productive capacity and 8,000 new jobs to the United Kingdom. However, the benefits of such projects are not confined to new production capacity and employment. Honda and Toyota will soon be joining Nissan in bringing a whole new philosophy to car manufacturing in the UK, involving not only radically new production techniques but also totally new working practices which lay emphasis on teamwork and trust; practices which can develop in the new industrial relations climate we have created. Already, during its short history in the UK, Nissan has established itself as one of the most efficient car plants in the world and, with Toyota and Honda soon to come on stream, the UK is set to become the centre of European best practice in the motor industry, enjoying the fastest rate of growth in car production anywhere in Europe.
Our policy of encouraging inward investment by the car manufacturers is also having a tremendous revitalising effect on the UK automotive component industry, as my noble friend Lady Denton of Wakefield recognised. Many component suppliers have had to improve product quality and reliability in order to meet Nissan's exacting standards and, at the same time, have been helped by Nissan to achieve those standards. By the time Nissan's Sunderland plant is at full capacity in 1993, producing 220,000 units per annum, the company will have an annual expenditure on European sourced components of £600 million, of which £400 million will be with UK suppliers. By the time all three of the Japanese inward investors are at full capacity in the mid-1990s, their combined annual expenditure on European components will have almost reached the £2 billion mark. It is clear that the British component industry is facing a unique opportunity, which I trust it will grasp with both hands.
Thirdly, our policy of ensuring free and fair competition and working toward the single European market is of great importance to the success of the United Kingdom investments made by the Japanese

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car builders. That has been most apparent in our struggle to have so-called "transplant" production treated in the same way as cars produced by the European Community's more established manufacturers. We are therefore pleased that the recent agreement on Japanese car imports after 1992 secured our main objective of obtaining free circulation within the EC for such transplant production. I can assure my noble friend Lady Denton that we shall be maintaining close contact with the European Commission to ensure there is no breach of the free circulation principle in future.
However, progress has not been restricted to the Japanese manufacturers. We must not forget the remarkable turnaround which one of our more established manufacturers has experienced since the late 1980s. Since privatisation, Rover has experienced a phenomenal reversal of fortunes, with the consumer once again being able to have confidence in the quality of its products. In addition to quality improvement, Rover's productivity has soared from six cars per worker per annum in 1979, to 18 in 1989 and to no less than 35 cars per worker this year. That level of productivity is not far off Japanese levels, and, in fact, one of the main reasons for Rover's remarkable turnaround has been its ever increasing links with Honda. That alliance, which started when Rover was in the public sector, has proved invaluable, particularly in the field of product development.
Several noble Lords raised the question of the special car tax. Indeed, my noble friends Lord Lucas of Chilworth and Lord Strathcarron did so. Other noble Lords took up various aspects of taxation. I do not think that noble Lords would expect me to go into any detail on the subject. I am aware that tax is an issue of concern to the industry. I am sure that my right honourable friend the Chancellor of the Exchequer will seriously consider the various representations which will have been made to him when considering next year's Budget.
The noble Lord, Lord Dean of Beswick, raised the question of car prices. The matter was also raised by several other noble Lords, including the noble Lord, Lord Clinton-Davis. The MMC report on the supply of new cars was submitted to the Secretary of State for Trade and Industry on 31st October. He is carefully considering its recommendations. The report will be published as soon as is practicable.
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The noble Lord, Lord Dean of Beswick, also referred to the current depressed state of the truck market, which was also mentioned by the noble Lord, Lord Stoddart of Swindon, and by my noble friend Lord Strathcarron. It is inevitable that there have been cutbacks in sales of trucks and commercial vehicles as companies have deferred purchases during the recession. That point was made by my noble friend Lord Strathcarron. Economic recovery will lead to an upturn in sales. British truck manufacturers are well placed to take advantage of the recovery in commercial vehicle sales and they will benefit from the strength inherent in the new international alliances which have been established such as Iveco/Ford and Leyland/Daf.
My noble friend Lord Brougham and Vaux mentioned the mounting concern on the issue of car security. The DTI and the Home Office have discussed the issue with British manufacturers with a view to improving the security features of new and current models.
My noble friend Lord Astor of Hever argued that Rover's sales to the European Community would be hit in the future by Japanese imports. All I can say is that we believe in the benefits of free trade and free competition as a stimulus to efficient manufacture, choice and low prices for the consumer. Rover is a company which has been reborn in the private sector, as I have argued, and seems more than capable of competing with the world's best.
In conclusion, the next few years promise to be an exciting period for car manufacturers throughout the world as they introduce fundamental changes in every aspect of their operations to meet the challenges of efficient car production in the 1990s. The fact that the British car industry has shown itself capable of responding positively to the current difficult conditions leads me to believe that its future is secure without special interference from government. Our policies of setting the framework for less adversarial industrial relations, encouraging inward investment and privatisation and promoting the single market will be seen to have an overwhelmingly positive and long lasting effect on our motor car industry as it prepares to meet those challenges. I therefore have every confidence that the UK car industry will continue to save itself by its own exertions.
House adjourned at nineteen minutes past eight o'clock.