Lords Sitting of 1 December 1992

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

Grant-Maintained Schools: Capital Programme
Lord Howell Lord Howell asked Her Majesty's Government:
Why the Department of Education wrote to all grant-maintained schools on 28th August informing them that in future swimming pools, sports halls, hard play areas and libraries must now rank as ineligible projects and what they calculate to be the effect of such a policy upon the community provision for sport and the arts and the role of the grant-maintained schools in contributing to such policies.
The Minister of State, Department of Education (Baroness Blatch): My Lords, my department's letter of 28th August invited grant-maintained schools to submit bids for the 1993–94 capital programme. In response to a request from schools themselves that advice should be given about priorities so that expenditure was not incurred in preparing bids which were unlikely to succeed, the letter indicated those projects which would not be eligible for funding. Priority areas such as essential health and safety work must take precedence.
Lord Howell: My Lords, although I am grateful to the noble Baroness for that explanation, may I ask her how grant-maintained schools can maintain their obligation under the curriculum requirements to provide physical education if they cannot provide hard play areas, playing fields, swimming baths and the like which are absolutely essential for physical education? If we add that to the problem with dual-use schools and to the recent threats of local authorities to sell playing fields (which resulted from the Chancellor's statement on capital receipts), may I ask the noble Baroness what policy the Government have on sport?
Baroness Blatch: My Lords, we know of no problems with grant-maintained schools in this respect. A survey of grant-maintained schools that was published on Friday shows that their sports pitches have been used by the wider public for football and lacrosse; gymnasiums and swimming pools have been made available for local people; premises have been used for adult education and other lettings; and music classes have been offered. Unfortunately, however, although some schools have said that they would like to extend their facilities even more, many local authorities simply will not allow it and are being obstructive.
Lord St. John of Bletso: My Lords, bearing in mind the importance of sport and recreational facilities in improving life for those who live in the inner cities, when the national lottery Bill is introduced will the Minister encourage allocating money that is raised from the national lottery to be used for sport and recreational facilities? Is the Minister aware that there is one indoor tennis court for every 136,000 people in Britain, compared to France and Germany where there is one indoor tennis court for every 9,000 and 18,000 people respectively?
Baroness Blatch: My Lords, that is not only a question for another of my noble colleagues; it is also a question for another department.
Lord Donoughue: My Lords, following that last reply, does not the decision by an educational assets board to remove a sports centre from community use, together with the Chancellor's statement encouraging schools and local authorities to sell their sports fields, to which my noble friend Lord Howell referred, threaten to reverse 30 years of sports policy in the United Kingdom, which was to encourage community sports participation through the dual use of facilities? That has been the policy. It was the policy when I was a member of the national Sports Council a quarter of a century ago. May I ask the Minister who is actually deciding sports policy in this Government? Is it the Department of Education or the Treasury? Does the Department of National Heritage approve of a reversal of sports policy? When will the Minister responsible for sport speak up for sport?
Baroness Blatch: My Lords, there is no reversal of sports policy. Policy is determined by my department for national curriculum purposes. May I ask the noble Lord which decision has been taken to remove which sports hall from which local authority or from which school?
Lord Howell: My Lords, may I refer back to the noble Baroness's earlier answer to me about sports being played on the sports grounds of opted-out schools? I entirely agree with that, but all those facilities were supplied by local authorities before those schools opted out. What we are now talking about in this latest circular—
Noble Lords: Question!
Lord Howell: My Lords, is it not the case that what we are now talking about in the latest circular is how the opted-out schools will contribute to community sports policy in the future? I am sure that the noble Baroness will agree that that is absolutely essential when we have 1 million youngsters out of work. We need to attract them to recreational and sporting facilities.
Baroness Blatch: My Lords, the point that I made when I was answering the noble Lord is that, since those schools became grant-maintained, there has been a much wider use of their facilities, not only by the schools, but by the wider community.

VAT: Bloodstock Industry
2.41 p.m.
Lord Peyton of Yeovil Lord Peyton of Yeovil asked Her Majesty's Government:
What consideration they have given to bringing the VAT rate of the United Kingdom into line with those in force in France and the Irish Republic; and whether they have considered the consequences for the United Kingdom bloodstock industry if they do not do so.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Strathclyde): My Lords, we prefer to maintain a single positive rate of VAT in the United Kingdom, but extensive discussions with UK bloodstock interests to find other ways of minimising any distortion of competition are continuing.
Lord Peyton of Yeovil: My Lords, I wonder what my noble friend means by the verb "continuing". The discussions have been going on for a very long time. Do Ministers need to be reminded that we have two serious problems in this country: unemployment and the balance of payments? Does it not seem exceedingly foolish to allow either of those to suffer damage when an easy remedy is available—either a dual rate of purchase tax or the registration of owners? Either would do. It is no good my noble friend saying that discussions are continuing—1993 will alter the rules.
Lord Strathclyde: My Lords, discussions are continuing, but also a great deal has been achieved. We are working hard with the industry to find ways of helping it. We have introduced an agricultural flat rate scheme at the bloodstock industry's request. We introduced a reduction in betting duty in the last Budget worth £10 million to the industry, and we have encouraged the use of distance selling methods to get round the VAT regulations. I understand what my noble friend says about the state of the industry, but we are very keen to help it.
Lord Bruce of Donington: My Lords, in view of the imminence of the Edinburgh summit at which all kinds of backstairs deals may conceivably be done, will the noble Lord give the House an assurance that the Government will adhere strictly to their often-repeated pledges of continuing zero rating in respect of food, fuel, transport, children's clothing and other items which are at present zero rated?
Lord Strathclyde: My Lords, the noble Lord hits on a very important point. It is the same European Community law that allows the Irish to set their low VAT rate on horses which protects our own very important British Government policy on zero rating.
Lord Renton: My Lords, is my noble friend aware that some 30 years ago when the bloodstock industry was having a very difficult time, a Conservative Government persuaded Parliament to introduce the horserace betting levy? That is still being paid, but VAT differential rates are having a very bad effect on the industry in spite of the levy. Although my noble
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friend has said that the Government are further considering the matter, can he say when a favourable decision will at last be reached?
Lord Strathclyde: My Lords, I thought I had indicated to the House that we have already achieved many things to help the industry. But VAT is not the only problem it faces. Overall, there are too many horses for too few owners; and the price of horses has dropped over the course of the past few years. That has reduced profits to the bloodstock industry. There are many other problems inherent within the industry than just VAT.
Lord Mellish: My Lords, is it not a fact that the bloodstock industry is in a very parlous condition? A lot of its work is being transferred to Ireland because VAT there is very much lower. That is not right. Surely, this country ought to take into account VAT as it applies to an industry which is suffering from the threat of the loss of many jobs. This is an all-party matter.
Lord Strathclyde: My Lords, of course we take VAT into account; but even if it were possible under Community rules to allow a second low rate of VAT, it would be difficult to avoid making the argument for so many other industries. For example, the tourist industry, the car manufacturing industry and many other industries which believe that they have an important role in our national life.
Baroness Sharples: My Lords, is my noble friend aware that with so many studs closing, veterinary surgeons are having a very difficult time?
Lord Strathclyde: My Lords, I am grateful for that information. That indicates the problem which exists in the horseracing industry.
Lord Barnett: My Lords, I agree with the noble Lord, Lord Peyton, and others about the problems of the bloodstock industry; but the first part of the Question relates to VAT as a whole. In that respect, the Minister insisted that government policy is to stick with a single positive rate. Will the introduction of the single market on 1st January have no consequences for government policy in that regard?
Lord Strathclyde: My Lords, the Commission has decided on a Community framework of a standard rate of VAT of not less than 15 per cent. It is that which guides us. The Irish are protected on their low rate on the same basis as I answered the noble Lord, Lord Bruce of Donington. We are not sure that the French low rate is a legal rate. That is something that the Commission will have to take up through the European Court of Justice.
The Viscount of Falkland: My Lords, what does the noble Lord estimate the loss to be in terms of revenue to this country should Messrs. Tattersall move their operations to Ireland? I believe it is their plan to do so.
Lord Strathclyde: My Lords, we have no estimates of that figure. We regret the decision; but it is a commercial decision for them to make.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that whatever figure is produced now, we are losing a important and valuable industry in this country? The battle that is going on is a battle that the general public seems to think we are losing. What can we do about it?
Lord Strathclyde: My Lords, the point is that there are many factors affecting the British horseracing industry. The British VAT rate is only one factor which buyers and breeders take into account when making their decisions as to where to purchase or sell horses. I have said that we have a great deal of anxiety for the industry and are continuing our discussions with it. We shall do what we can within existing VAT regulations to help the industry.
Lord Donoughue: My Lords, will the Minister accept that the answer that "discussions are continuing" is totally unsatisfactory in the light of identical answers given to me by different Ministers on 15th January 1991 and 11th March 1992 of this year? The canary has changed but the song remains the same. It is not good enough. As the noble Lord, Lord Peyton, suggested, there are two clear potential solutions to that problem. The first is to adjust our bloodstock VAT levels to those prevailing among our European competitors in Ireland and France in order to create a level playing field. The second is to enable horse owners to register for VAT as a business. Given the existence of those solutions, why are the Government dithering while tens of thousands of jobs are at risk?
Lord Strathclyde: My Lords, as regards adjusting VAT rates, I believe that I have made the position clear, given our Community obligations. We must exist under the current framework. Racehorse owners can register for VAT if they can prove that they are a business. Until now racehorse owning has not been regarded as a business. However, I am advised by Customs and Excise that if those owners were to eat their horses and produce food from them, they could demonstrate that they are a food production business.
Lord Donoughue: My Lords, before the Minister sits down—and I hope that he enjoyed his lunch—will he not agree that in eight of the 12 countries of the European Community racehorse owners are allowed to register for VAT as a business?
Lord Strathclyde: My Lords, I have no information as to whether or not eight out of 12 is the accurate figure. I understand that the French get round the problem, but we all know about their particular culinary tastes. The European Commission has still to take up with the French Government as to whether or not their rules apply.
Lord Elton: My Lords, in the Minister's reply to my noble friend Lord Harmar-Nicholls, he spoke as though it were only the buying and selling of horses which is in question. Will my noble friend register that it is concerned also with the training, racing and breeding of horses? That is a very much larger
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industry? A great deal is at risk and the House has demonstrated that all parties favour some emergency action.
Lord Strathclyde: My Lords, my noble friend is right. We are talking about the whole industry. However, this particular aspect of VAT affects only those people who are not registered for VAT as a business; that is, the owners who must pay VAT but cannot claim it back. Rather than allowing this discussion to continue further, I should say that I understand those anxieties which have been expressed to me today. I shall draw them to the attention of the Treasury in order to see whether or not something can be done.
Lord Peyton of Yeovil: My Lords, that at least gives me the opportunity to say "thank you". When my noble friend visits the Treasury, will he tell those Ministers who are not always receptive of communications that there is some surprise that they do not seem to have realised that 1st January 1993 will see a change in the rules of a very serious kind? Will he say also that there is some surprise that no assessment appears to have been made of the damage in terms of exports lost, revenue lost and jobs lost?
Lord Strathclyde: My Lords, my experience of discussing this question with Treasury Ministers and Customs and Excise officials leads me to believe that they are aware of what has been said.

Derelict Land Grant
2.55 p.m.
Baroness Fisher of Rednal Baroness Fisher of Rednal asked Her Majesty's Government:
Whether they will increase derelict land grant allocations in order to speed up reclamation and redevelopment projects.
Lord Strathclyde: My Lords, the resources for derelict land grant have been increased by more than 30 per cent. in real terms since 1989–90. The programme for the current year totals £106 million. We are maintaining that level of support for 1993–94 so that there will be no slackening in the rate at which land is reclaimed as the programme transfers to the Urban Regeneration Agency.
Baroness Fisher of Rednal: My Lords, I thank the noble Lord for that Answer. Will he tell the House what is involved as regards the agency which the Government have now set up? What are its terms of reference? What is its accountability? What is its relationship with the urban programmes and the city challenge programmes?
Lord Strathclyde: My Lords, the agency will be given powers to acquire and develop land and buildings by agreement or compulsorily. It will issue grants and loans for reclamation and development of land. It will bring together the existing schemes of the derelict land grant, city grant and English Estates. I understand that there is no problem as regards the

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agency working in city challenge areas. A Bill is currently going through another place which will reach this House in due course.
Lord Taylor of Gryfe: My Lords, will the Minister agree that it is not the grants which are holding up development but the state of the property market? Will he tell us what steps the Government are taking in order to encourage the reclaiming of some of those sites for reasonable property development which will help the construction industry?
Lord Strathclyde: My Lords, it is the reduction in the price of the property which creates a great opportunity for local authorities to use the derelict land grant because they will be able to buy more land for their money.
Baroness Nicol: My Lords, is it not the case that there are some 40,000 acres of derelict land in England and Wales? Is it not important that the Government should give every encouragement to the use of that land for development rather than using green field sites? Will the Minister assure the House that that aspect of the matter is continually in the Government's mind?
Lord Strathclyde: My Lords, the noble Baroness is quite right. That is precisely why we are in the process of setting up the new Urban Regeneration Agency.
Lord Williams of Elvel: My Lords, does the Minister mean that the Urban Regeneration Agency will be yet another unelected quango which is able to override elected local authorities? Will there be no derelict land grant available to local authorities after the agency has opened for business? Is the noble Lord aware also that, if the Government are determined, as they seem to be determined, to shut down the British coal industry, there will be plenty of opportunities for the reclamation of derelict land and that local authorities will have a vital role to play in that area?
Lord Strathclyde: My Lords, of course local authorities have a vital role to play. The Urban Regeneration Agency will create partnerships between local authorities and the private sector to help reclaim derelict land and thus improve the quality of the environment to which the noble Baroness, Lady Nicol, referred.
Baroness Fisher of Rednal: My Lords, will the noble Lord explain what he means by partnership? Does he mean that local authorities will be given more money or that the agency will bring its own money to extend the work already done by local authorities?
Lord Strathclyde: My Lords, there is every desire for the agency to work very closely with local authorities. There is an extremely important role for local authorities to play in the reclamation of derelict land.

Car Tax
2.58 p.m.
Lord Monson Lord Monson asked Her Majesty's Government:
What proportion of the tax revenue (approximately £750 million) which will be lost by the abolition of the 5 per cent. car sales tax is attributable to sales of cars manufactured abroad, and whether they intend to recoup this sum by taxing the British motorist.
Lord Strathclyde: My Lords, about 55 per cent. of new car registrations are in respect of imports. The burden was borne by British motorists irrespective of whether they were purchasing a British or a foreign produced car. The Chancellor has already confirmed that the cost of abolition from 1993–94 will have to be met from motoring taxes. The precise means will be considered as part of his next Budget.
Lord Monson: My Lords, I thank the noble Lord, Lord Strathclyde, for that very straightforward reply. Given that 55 per cent. of new car sales are accounted for by imported cars, will the noble Lord agree that the tax forgone on those imported cars as a result of the abolition of the car tax amounts to about £410 million per year? In order to compensate for that it will be necessary either to raise petrol tax or to raise the road fund licence by between £16 and £17 per year, in addition to the £13 per year by which it will be necessary to raise it in order to compensate for the tax forgone on British-made cars? Thus, the total will be raised by about £30 on top of the existing £110 per annum. Does that not demonstrate once again that the Government are favouring business motorists, who can normally afford to change their cars every year and write off their petrol and other expenses against tax, at the expense of private motorists, who cannot normally afford to change their cars very often and who must pay for petrol and road fund licences out of their own pockets?
Lord Strathclyde: My Lords, under our international trade obligations it would be impossible to discriminate between foreign manufactured cars and British manufactured cars, and we shall not do so. Between November this year and whenever the Chancellor makes his Budget announcement, the cost will be £100 million. That is a price worth paying to boost the vehicle industry. After that, it will be the British motorist who pays and again there is no discrimination between the business buyer and the private buyer.
Lord Richard: My Lords, the Minister has just said that it will be for the British motorist to pay. Can he confirm that if the cost of abolition were to be borne by vehicle excise duty alone, it would have to increase from £110 to £142 a year? If it were done by duty on petrol, the cost would be an additional 2.2p per litre on leaded petrol and 1.8p per litre on unleaded. It is a strange policy which, on the one hand, encourages people to buy cars and, on the other, makes it much more difficult for them to run their cars.
Lord Strathclyde: My Lords, of course these are decisions for the Chancellor to make. He has provided an opportunity during the past few months of this financial year for a fiscal boost to the car-buying public. I shall not quibble with the noble Lord the Leader of the Opposition on the figures that he gives because they are broadly similar to those I possess. However, the announcement made by the Chancellor was clearly that the tax would be made up in the Budget.
Lord Marlesford: My Lords, does my noble friend agree that there are far too many cars cluttering up our roads? Far from what the Leader of the Opposition said, the rate of vehicle excise duty has fallen behind other rates. In April 1975 when the party of the noble Lord, Lord Richard, was in power, the vehicle excise duty was set at £40. If that is adjusted for inflation, as all other taxes are, the vehicle excise duty today would be £166. In 1975 there were under 15 million cars; there are now about 22 million. If the Chancellor were to increase the vehicle excise duty from £110 to £166, he would receive an extra £1.2 billion. Would that not be a good idea?
Lord Strathclyde: My Lords, I am sure that that is precisely the kind of idea that my right honourable friend the Chancellor of the Exchequer will examine closely early next year.
Lord Ewing of Kirkford: My Lords, is not the Minister sending the wrong signal to the prospective new car purchaser? He is saying today that there is a threat that the vehicle excise duty will be increased in the Budget next year, but the Chancellor was saying only two weeks ago that the abolition of the 5 per cent. sales tax was in order to assist the car industry.
Further, what does the Minister understand is a car manufactured abroad? The matter is much more complicated than appears at first sight, since part of the range of the Ford Motor Company is wholly manufactured abroad. If the Minister is suggesting that, for the same company, there should be two levels of taxation depending on where a car is manufactured, that will damage the British car industry.
Lord Strathclyde: My Lords, of course my right honourable friend the Chancellor made it quite clear in his announcement that this was a short-term measure to give a short-term boost to the vehicle industry in regard to cars being sold in this country.
As to the second part of the noble Lord's question, there is no question of the Government deciding on what are foreign manufactured cars and what are British manufactured cars. That was the thrust of the original Question from the noble Lord, Lord Monson, and I gave the same reply in my original Answer.

Criminal Justice Bill [H.L.]
3.4 p.m.
The Minister of State, Home Office (Earl Ferrers): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the amendments for the Report stage be marshalled and considered in the following order—

Clauses 1 to 31,

Schedule 1,

Clauses 32 to 37,

Schedule 2,

Clauses 38 to 48,

Schedule 3,

Schedule 4.

On Question, Motion agreed to.

British Coal and British Rail (Transfer Proposals) Bill
3.4 p.m.
The Minister of State, Department of Transport (The Earl of Caithness): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(The Earl of Caithness.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 1 [Power to act in relation to proposals for transfer of functions, property etc.]:
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 27:
Page 1, line 14, at end insert:
("(1N) The British Railways Board shall ensure that in exercising the powers conferred upon it in subsection (1) above it shall—

(a) consider the effect of any actions on services currently provided in rural areas; and

(b) publish a statement explaining such effects.").

The noble Lord said: I beg to move the amendment standing in my name and also those of my noble friend Lord Underhill and the noble Lord, Lord Ezra. The debate concerns rural transport. Perhaps I may say at the outset that the Minister will know that concerns have been expressed to his department about the effects of privatisation on rural services. The Bill sets the tone and to some degree our debates enable anxieties to be expressed and, we hope, allayed by the Government. I hope that the Minister will not say in response that this is a purely technical privatisation Bill, because the issues are real.
No one should underestimate the value of rural rail services. Sometimes they represent the only link for thousands of people living in isolated communities. The anxieties to which I have already referred which pervade a number of rural communities—and a considerable number of representations have been made to me about the matter—relate to the fact, or at least the suspicion, that rural lines will become unattractive for private investors and therefore those services will be at risk.
Rural lines are at present subsidised through a public service obligation grant, as well as being cross-subsidised by other BR sectors. The anxiety is that since rural services will continue to require

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subsidy, with BR providing a service of last resort, presumably those lines could well be exposed to Treasury cost-cutting exercises.
Considerable interest has been evinced in the matter by the Central Transport Consultative Committee's report; with which, again, the Minister will be familiar. I wish to refer to one or two passages relating to rural transport in that report. Paragraph 23.4 states:
"There is one particular aspect of charging policy on which we do wish to comment at this stage and this concerns rural lines. The cost of running a train over a heavily trafficked route will inevitably be lower than that of operating a small number of trains per day over a single track line. There are high fixed costs, irrespective of how many trains are run and unless rail track cross-subsidises a large number of routes it seems unlikely that any company will be able to afford to bid for a franchise in rural Wales or northern Scotland without a very large subsidy or by proposing to charge higher fares. We trust that the charging rules will not result in pressure for higher fares on relatively lightly-used rural routes".
I, and I am sure the Committee, would like to know the Government's thinking about that representation. What response have the Government given so far, and if they have not given a response what response are they contemplating? Will the regulator be sensitive to these concerns? Will he be guided by an overall objective of ensuring that the interests of rail users—that should certainly include those using rural lines—are paramount? I am not altogether encouraged in that regard as I noted that in another place reference was made to an advertisement, published by the Department of Transport for the regulator, which specified,
"knowledge of public transport not essential".
That is a rather strange concept for the regulator who is supposed to be in charge of, or at least invigilating, our rail services in the future.
I also express concern that rail privatisation may have results comparable to those that occurred with bus deregulation. That was another point made by the Central Transport Consultative Committee, which is certainly not a Labour Party organisation. I have referred to this matter previously. What happened there—contrary to what was suggested would be the case—were reduced bus services and in some cases no services at all in rural areas. There have been increased fares and the abandonment of joint ticketing schemes which are of particular importance to rural communities. There is even the strange situation that where the better operators have tried to co-operate together in such joint ticketing schemes, the Office of Fair Trading has intervened and caused them to abandon those passenger-friendly amenities.
I realise that in the Government's calculations environmental costs simply do not figure. They do not appear on any balance sheet. Consequently, road traffic forecasts, which suggest a massive increase in car usage on country roads over the next 30 years—the estimate is for a quadrupling of car usage—have not been addressed in the White Paper. It should have addressed that issue.
I believe that there is another oversight. Community groups and individuals have helped to maintain railway infrastructures, notably stations, in rural areas. They have helped to refurbish station
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buildings; they have even printed extra timetables. They have maintained station gardens. They have raised money to cover maintenance and improvement costs. None of those community efforts can be valued simply in terms of assessing rural railways in a conventional business sense. I realise that the Government have undertaken to support by way of grant what they call socially necessary services. The White Paper states:
"There is no reason to believe that the proposals will lead to the closure of services".
However, that was said about bus privatisation. I refer again to the CTCC report. It states at paragraph 71.2, with regard to closures:
"It should not be for the franchising authority to determine that a service is no longer socially necessary. This would present a prima facie case for closure which the Secretary of State would find hard to overrule. The franchising authority should be required to make a case for closure but it should not be permitted to conclude that a service is no longer socially necessary".
That committee has expressed a positive view to the Government. I should be interested to know what the Government have to say to allay that particular anxiety. However, the committee also make the point that closures could occur regardless of social need. The committee states at paragraph 71.1 of the report:
"We feel that the Government need to make a stronger commitment about the size of the rail network".
The committee is referring particularly to rural services in that context.
This is an issue where the Government need to be much clearer than they have been in the White Paper. They say very little about rural services in the White Paper. I believe the Minister would have to concede that. I imagine he would say that it is all caught within the umbrella of social service provision that would be made in relation to privatisation. However, he needs to be much more specific. I await with interest what he has to say. I beg to move.
3.15 p.m.
Lord Ezra: I wish to support the amendment, as moved by the noble Lord, Lord Clinton-Davis. It may well be argued that this is a matter which could be more exhaustively debated—as no doubt it will be—when the privatisation measures are put forward. Nonetheless it is a matter of such importance and of such concern for so many people in this country that an early statement of reassurance seems desirable.
The Committee will recall that in discussing previous privatisation measures, particularly those relating to telecommunications and electricity, the question of the maintenance of rural services loomed large. It is undoubtedly a matter of great concern. I hope that the Minister in replying to the amendment will give us the reassurance that we need.
The Lord Bishop of Norwich: I speak not only as the bishop of a rural diocese but as the former vice-chairman of the Archbishops' Commission on Rural Areas. The report of that commission, entitled Faith in the Countryside, continues, three years on from its publication, to be widely used as an authoritative account of the factors which affect community life in rural areas. The decline in public transport services in rural areas has been well

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documented in the report and elsewhere. Its effects on the rural economy and the quality of life, especially for the young, the old and young families, are serious and well known. But because deprivation in rural areas is often masked by beautiful surroundings the uncomfortable facts tend to be quickly forgotten.
I remind the Committee that in rural areas 22 per cent. of households have no car. In 44 per cent. of households there is only one car which is usually not available during the day for members of the household other than the main user. Following the Transport Act 1985 and the deregulation of bus services, as the noble Lord, Lord Clinton-Davis, has pointed out, the trend in this area has continued downward at an accelerating pace as county councils in particular have reduced their support of private initiatives. The rail services have already been cut almost to the bone. If there is any possibility of further cuts, it is vital that this is known because it will add yet another factor which is undermining or making impossible life in a village for all but the prosperous who can afford to be independent of public provision.
Transport is a key element in the viability of rural communities. It is wrong that economic arguments alone should be brought to bear in formulating policy which affects communities. We must ask ourselves what kind of society we want in the countryside. If we believe, as I hope we do, that villages should be balanced communities with a place for the young as well as the old and for those at work as well as the retired, the provision of public transport in rural areas will have to be given a far higher priority than it has been given so far. This amendment is a modest one: it seeks only that those important questions should be asked. I hope that the Committee agrees with me that the amendment deserves our wholehearted support.
Lord Taylor of Gryfe: I very much wish to support what has been said. Living as I do in Scotland I realise the importance of the survival of rural communities. That applies not only to my interest in railways but also to my interest in forestry, which is well known. Has the Minister taken into account the importance to rural communities of feeder rail services which are connected to the InterCity lines? If the feeder services are withdrawn those communities are isolated from the InterCity network and main railway services.
I should also like to ask the Minister whether the existing procedures in respect of the closure of lines will apply under the new arrangements? I see that the noble Lord, Lord Marsh, who was my chairman when I served on the British Rail Board, is in his seat. As I understand it, there had to be a public inquiry into the closure of any branch station or branch line. I should like an assurance from the Minister that those provisions will continue. That is the purpose of the amendment before the Committee.
The existence of a healthy rural community is important to the balance of our general life in this country. I do not believe that one can have a healthy society when people are concentrated in cities and the opportunity for the kind of lifestyle which some people enjoy outside those heavy concentrations is neglected. That provides an important balance in our society. Therefore, I hope that the amendment will be
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accepted or that the Minister will give an assurance that communities will not be increasingly isolated and that services will be available.
The Earl of Caithness: As usual, the noble Lord, Lord Ezra, was right. The amendment is essentially one for the main privatisation Bill. However, it raises an issue of great concern to Members of the Committee and it is only right that I should go into some detail as to our thinking on the matter.
I have to declare an interest to the right reverend Prelate the Bishop of Norwich and the noble Lord, Lord Taylor of Gryfe. The noble Lord, Lord Taylor of Gryfe, will know full well that I was brought up in a part of Scotland which is probably as far away from a mainline station as it is possible to be. I know the importance of feeder services to local communities. I say to the right reverend Prelate that there is no chance of my being able to ignore the question of transport in the rural areas of Norfolk. My parents-in-law live there. I shall be going there this weekend and I am sure that I shall be reminded forcefully of that point once again.
I say to the right reverend Prelate, however, that as a result of bus deregulation the bus service in the area of the Cotswolds where I live has improved out of all recognition. Villages which did not have bus services now have a service through the Villager bus service, which has linked villages and communities which were previously excluded from any possibility of a bus service under the old regime. There were considerable benefits from bus deregulation, not only in the area in which I am lucky enough to live but also in other parts of the country.
Without doubt, the question of rural services is a cause of concern to people living in the country who are affected by them. They rely on rural rail services and wish to see a modern and efficient railway with a sound and long-term future. The progressive franchising of passenger services, including rural rail services, will enable the efficiencies and flexibility of the private sector to be brought to bear on the operation of services.
When the privatisation of the railways was first being discussed many people were naturally worried that privatisation would lead to the closure of a large number of lines and fears were raised that services in rural areas, many of which are loss-making, would suffer most. However, we shall not just be franchising those passenger services which make a profit. There is no reason why only the profitable services should benefit from the improvements we believe the private sector will bring. We recognise that there are many services which are important locally but which do not make money, including many rural services. The noble Lord, Lord Clinton-Davis, rightly reminded the Committee that the taxpayer, through the Government, provides a subsidy for those services now. In fact, the PSO grant to regional railways in 1991–92 was £550 million. The rail privatisation White Paper makes clear that the Government are committed to providing continuing subsidy to support those services, whoever operates them.
I believe that it would be for the benefit of the Committee if I were to read paragraph 71 of the White

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Paper. The noble Lord, Lord Clinton-Davis, read just one sentence; I think that it would be helpful if I were to read the whole of it. It says:
"The Government has made clear that it will continue to make grant available to support socially necessary services. The fact that a service is operated by a franchisee will not affect the availability of grant".
I hope that that this is reassuring to the right reverend Prelate. It continues:
"There is no reason to believe that the Government's proposals will lead to closures of services. But if in future, as a result of change in demand, the Franchising Authority decided that a service was no longer socially necessary and there was no case for continuing that service then the same statutory closure procedures would apply as now".
I am glad to see that the noble Lord, Lord Taylor of Gryfe, nods in appreciation at that.
I also wish to draw the Committee's attention to the last sentence of that paragraph, which reads:
"In such cases the final decision about whether a service should be retained or withdrawn will continue to be taken by the Secretary of State".
That is a firm commitment in the White Paper, which I hope allays the anxieties of many Members of the Committee.
I also take this opportunity to consider for a moment the existing closure procedures, which was an issue raised by the noble Lord, Lord Taylor of Gryfe. Currently, to withdraw completely a passenger service, either on a stretch of track or to a particular station, British Rail must comply with the closure provisions of the Transport Acts 1962 and 1968. That procedure requires that: British Rail publishes an advance notice of intent concerning the proposed closure; British Rail publishes the proposal for closure itself stating that objections may be lodged with the area Transport Users' Consultative Committee (the TUCC); any objection to the proposal must be sent to the relevant TUCC within six months; British Rail provides the TUCC with information on the proposal under a heads of information document and can make additional representations; the TUCC considers them and may hold a public hearing; BR is given an opportunity to comment on any objections and the objectors receive copies of BR's heads of information and comments; the TUCC reports to the Secretary of State on any hardship the proposed closure would cause and how it might be alleviated; the Secretary of State considers the TUCC report and any other relevant matters, including economic and social factors, before reaching a decision on whether to give his consent to closure.
Consent may be given with or without conditions, although the Transport Act 1985 empowers the Secretary of State to require BR to arrange a substitute bus service which would be paid for by BR. Such bus services are then also subject to the rail service closure procedure. There has been only one bus substitution condition to date, concerning the Tilbury Riverside service. By convention BR does not run down the level of service after giving notice of the intention to stop supporting a service. There is no statutory obligation to maintain the level of service after proposing closure but any reduction in frequency may result in a challenge to the validity of the proposal.
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That is a comprehensive summary of the Transport Acts 1962 and 1968. I repeat that in the main Bill which will come before your Lordships, I hope in the not too distant future, similar provisions will be made. I hope that that will allay the justifiable anxieties of the Committee.
It is fair to point out in summary that there are enormous benefits to be achieved through the franchising of rail services, not only for the profit-making lines but also for rural lines. Subsidy will continue to be paid where there is a need for it. As I said, the public service obligation grant for 1991–92 was £550 million. We have also written into the White Paper, as we shall into the main Bill, protection for those rural lines on a basis similar to the existing provisions.
Lord Clinton-Davis: The noble Lord was emollient. He is not always but he was on this occasion. Perhaps it was because of the presence of the right reverend Prelate the Bishop of Norwich. But the fact is that he has not really answered some major points that I put to him, and most particularly the points that were raised in the consultative document of the Central Transport Consultative Committee itself or the representations that it made.
Specifically, in answer to the suggestion that the Secretary of State would be ultimately responsible, the committee said that the problem was that, because the franchising authority determines that a service is no longer socially necessary, that represents a prima facie case and it would be very difficult for the Secretary of State to overrule it. That may or may not be right. But it is a perfectly reasonable protestation made on behalf of an organisation with which it is to be hoped the Government have very close links. If it expresses that concern, then I do not believe that such fears will be totally allayed by what the Minister has said this afternoon.
The right reverend Prelate made a very strong case about rural services, but in particular he took the view, contrary to that of the Minister, that there has been a decline in the value of bus services so far as rural communities are concerned. This may not be the situation all over the country. But there is a very widespread anxiety about what has been happening. It is not good enough for the Minister to say, "Well, I am perfectly satisfied because in the Cotswolds things are different". I can assure the Minister from my peregrinations around the country during the general election that views expressed to me by people involved on both sides of the industry and by local authorities were far removed—not in all instances, but in many—from the point of view that has been expressed by the Minister.
Assurances have been given before. I am sure they were all given in good faith. But unfortunately perhaps the facts of life in the bus transport industry have done something to undermine the practicability of those assurances being brought into proper effect.
My noble friend Lord Taylor of Gryfe speaks with a considerable amount of experience in this industry. He raised certain issues. I just happen to believe that the Minister, despite the assurances he gave, has not answered those points. I fear that, while he is right and

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we shall come back to them later on, he has missed the opportunity to be much more specific. I do not feel that the Minister has carried conviction in the way in which he answered the debate. Consequently I think it appropriate that we should test the opinion of the Committee on this amendment.
3.34 p.m.
On Question, Whether the said amendment (No. 27) shall be agreed to?
Their Lordships divided: Contents, 113; Not-Contents, 162.

Division No. 1

CONTENTS

Addington, L.

Jacques, L.

Airedale, L.

Jay, L.

Ardwick, L.

Jay of Paddington, B.

Ashley of Stoke, L.

Jeger, B.

Attlee, E.

Jenkins of Hillhead, L.

Aylestone, L.

Jenkins of Putney, L.

Banks, L.

John-Mackie, L.

Beaumont of Whitley, L.

Judd, L.

Birk, B.

Kilbracken, L.

Blackstone, B.

Llewelyn-Davies of Hastoe, B.

Blease, L.

Lockwood, B.

Bonham-Carter, L.

Longford, E.

Boston of Faversham, L.

Lovell-Davis, L.

Bottomley, L.

McNair, L.

Broadbridge, L.

Mar, C.

Brooks of Tremorfa, L.

Mason of Barnsley, L.

Callaghan of Cardiff, L.

Merlyn-Rees, L.

Campbell of Eskan, L.

Milner of Leeds, L.

Carmichael of Kelvingrove, L.

Mishcon, L.

Carter, L.

Molloy, L.

Castle of Blackburn, B.

Monson, L.

Cledwyn of Penrhos, L.

Morris of Castle Morris, L.

Clinton-Davis, L.

Mulley, L.

Crook, L.

Murray of Epping Forest, L.

David, B.

Nathan, L.

Dean of Beswick, L.

Nicol, B.

Desai, L.

Norwich, Bp.

Donaldson of Kingsbridge, L.

Ogmore, L.

Donoughue, L.

Parry, L.

Dormand of Easington, L.

Peston, L.

Ennals, L.

Ponsonby of Shulbrede, L.

Ewing of Kirkford, L.

Prys-Davies, L.

Ezra, L.

Richard, L.

Falkender, B.

Robson of Kiddington, B.

Falkland, V.

Rochester, L.

Fisher of Rednal, B.

Sainsbury, L.

Fitt, L.

Seear, B.

Gallacher, L.

Serota, B.

Galpern, L.

Shackleton, L.

Gladwyn, L.

Stallard, L.

Glasgow, E.

Stedman, B.

Graham of Edmonton, L. [Teller.]

Stoddart of Swindon, L.

Strabolgi, L.

Greene of Harrow Weald, L.

Taylor of Blackburn, L.

Gregson, L.

Taylor of Gryfe, L.

Grey, E.

Thomson of Monifieth, L.

Grimond, L.

Thurlow, L.

Hampton, L.

Tordoff, L. [Teller.]

Hamwee, B.

Turner of Camden, B.

Harris of Greenwich, L.

Varley, L.

Healey, L.

Wallace of Coslany, L.

Hilton of Eggardon, B.

White, B.

Hollis of Heigham, B.

Wigoder, L.

Hooson, L.

Williams of Elvel, L.

Howie of Troon, L.

Wilson of Langside, L.

Hunt, L.

Wilson of Rievaulx, L.

Ingleby, V.

Winchilsea and Nottingham, E.

NOT-CONTENTS

Aberdare, L.

Allenby of Megiddo, V.

Addison, V.

Alport, L.

Aldington, L.

Archer of Weston-Super-Mare, L.

Alexander of Tunis, E.

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Arran, E.

Kinloss, Ly.

Astor, V.

Kinnaird, L.

Astor of Hever, L.

Kintore, E.

Barber, L.

Knollys, V.

Belhaven and Stenton, L.

Knutsford, V.

Bellwin, L.

Laing of Dunphail, L.

Beloff, L.

Lauderdale, E.

Bessborough, E.

Lloyd-George of Dwyfor, E.

Blatch, B.

Long, V.

Blyth, L.

Lucas of Chilworth, L.

Boardman, L.

Lyell, L.

Borthwick, L.

McColl of Dulwich, L.

Boyd-Carpenter, L.

Mackay of Ardbrecknish, L.

Brabazon of Tara, L.

Mackay of Clashfern, L.

Braine of Wheatley, L.

Macleod of Borve, B.

Bridgeman, V.

Manton, L.

Brightman, L.

Margadale, L.

Brookeborough, V.

Marlesford, L.

Brougham and Vaux, L.

Marsh, L.

Butterworth, L.

Merrivale, L.

Cadman, L.

Mersey, V.

Caithness, E.

Morris, L.

Caldecote, V.

Mottistone, L.

Campbell of Alloway, L.

Mowbray and Stourton, L.

Campbell of Croy, L.

Moyne, L.

Carnegy of Lour, B.

Munster, E.

Cawley, L.

Murton of Lindisfarne, L.

Cayzer, L.

Nelson, E.

Charteris of Amisfield, L.

Norfolk, D.

Clark of Kempston, L.

Oppenheim-Barnes, B.

Cochrane of Cults, L.

Orkney, E.

Cockfield, L.

Orr-Ewing, L.

Colnbrook, L.

Oxfuird, V.

Cox, B.

Park or Monmouth, B.

Cumberlege, B.

Pender, L.

Davidson, V.

Peyton of Yeovil, L.

Denton of Wakefield, B.

Plummer of St. Marylebone, L.

Downshire, M.

Porritt, L.

Eccles of Moulton, B.

Prentice, L.

Effingham, E.

Pym, L.

Elibank, L.

Rankeillour, L.

Elles, B.

Reay, L.

Elliot of Harwood, B.

Renfrew of Kaimsthorn, L.

Erne, E.

Renton, L.

Erroll of Hale, L.

Richardson, L.

Faithfull, B.

Rippon of Hexham, L.

Ferrers, E.

Rodger of Earlsferry, L.

Fraser of Carmyllie, L.

Roskill, L.

Gainford, L.

St. Davids, V.

Gardner of Parkes, B.

Sanderson of Bowden, L.

Gisborough, L.

Seccombe, B.

Glenarthur, L.

Shannon, E.

Goold, L.

Sharples, B.

Goschen, V.

Shrewsbury, E.

Gridley, L.

Simon of Glaisdale, L.

Grimston of Westbury, L.

Soulsby of Swaffham Prior, L.

Grimthorpe, L.

Stanley of Alderley, L.

Hailsham of Saint Marylebone, L.

Stodart of Leaston, L.

Strange, B.

Halsbury, E.

Strathcarron, L.

Harding of Petherton, L.

Strathclyde, L.

Hardinge of Penshurst, L.

Strathmore and Kinghorne, E. [Teller.]

Harmar-Nicholls, L.

Harmsworth, L.

Swansea, L.

Haslam, L.

Terrington, L.

Hayhoe, L.

Teviot, L.

Henley, L.

Thomas of Gwydir, L.

Hesketh, L. [Teller.]

Thorneycroft, L.

Holderness, L.

Trefgarne, L.

HolmPatrick, L.

Trumpington, B.

Hood, V.

Ullswater, V.

Hothfield, L.

Vaux of Harrowden, L.

Howe, E.

Vivian, L.

Hunter of Newington, L.

Wade of Chorlton, L.

Huntly, M.

Wakeham, L.

Hylton-Foster, B.

Whitelaw, V.

Inchyra, L.

Wise, L.

Ironside, L.

Wynford, L.

Johnston of Rockport, L.

Resolved in the negative, and amendment disagreed to accordingly.
3.44 p.m.
[Amendment No. 28 not moved.]
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 29:
Page 1, line 14, at end insert:
("(1Q) Powers exercised under subsection (1) in so far as they relate to safety shall be exercised by the Secretary of State or relevant corporation in full and open consultation with representatives of the workforce and, in the case of railways, of passengers, and all advice received by any relevant corporation or the Secretary of State on safety shall be made available within one week to representatives of such workforce or passengers.").
The noble Lord said: In moving this amendment I shall speak also to Amendments Nos. 30 and 35. Amendment No. 29 relates to consultation with passengers and the workforce. Amendment No. 30 deals with recognition of the Health and Safety Executive as the independent safety regulatory authority. Amendment No. 35, standing in the name of my noble friend Lord Donoughue, deals with the record of transferees in relation to employment, health and safety and public safety. My noble friend will deal with the amendment as regards coal mines and I will deal with the rail issues.
No one can doubt the significance of safety issues. Despite accidents on the railways the safety record is good overall because British Rail has applied itself to high safety standards. I appreciate that the Government too have applied their mind to that issue in the White Paper. Contrary to what the Minister said yesterday I have never suggested otherwise. It would be ridiculous for me to do so. Notwithstanding the fact that safety issues are referred to in the White Paper, we are addressing them because we believe that some need a different emphasis and approach.
I wish to refer again to the representations of the Central Transport Consultative Committee on the basis of the White Paper. Paragraph 8(a), which deals with safety, states:
"There are fears that standards could decline under the proposals. For example, a franchisee facing possible loss of franchise for failure to achieve quality standards could be tempted to take risks with safety to attain those quality standards. With the different foci of responsibility under the White Paper's proposals, safety could come to be seen as one factor among many others".
It is clear that constant vigilance and effective enforcement is required in dealing with the matter. Furthermore, the involvement of the workforce and passengers is a paramount necessity. The effective involvement of the workforce depends largely on the way in which it is treated generally. That is an issue about which in relation to some franchisees we expressed some anxiety, and I dealt with that in part yesterday.
Past experience suggests that some operators confronted by financial pressures would be prepared to ignore safety regulations and try to get away with it. They may not succeed; the Government may mount a successful enforcement process. But the risk exists and it is not without precedent. The CTCC introduced the experience of the bus industry and stated:
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"Experience in that industry suggests that some operators faced with financial pressures are prepared to ignore some of the safety regulations governing road vehicles. Similar deficiencies in a rail operation could have dire consequences".
That is the view of an enlightened committee and the Government must take strong account of it. But safety is costly and the Government must be prepared to put their money where their mouth is in order to ensure enhanced safety on the railways. Safety is contingent on the existence of effective co-ordination between track, signalling, trains and crew. The discipline of one operator with prime responsibility in this area will in future be divided between a number of different bodies. Again, the CTCC views that fragmentation with "grave misgivings", which was the phrase it used at paragraph 78. All that requires the clearest statutory undertaking for full and open consultation with trade unions and user organisations concerning safety.
I turn to the Health and Safety Executive. The White Paper indicated that there was to be an examination of the safety implications of rail privatisation which it vested with the Health and Safety Commission. Our view is that if we are to proceed with the legislation a safety framework should emerge which would recognise the HSE as the independent safety regulatory authority. But, more than that, the HSE would require a commitment from government that it would not be starved of adequate resources to carry out the effective enforcement of safety regulations. There is no such commitment in the White Paper. Perhaps the Minister will allude to that point in his reply. In parenthesis, I add that we should strongly oppose any form of privatisation of the HSE, which has been subject to close invigilation and has stood up very well to it.
I come to the subject of transferees' records of employment, health and safety practices. Fragmentation causes anxiety, as I have already said. Consequently, we require close investigation of the issues to which I am referring and which are contained in the amendment before the franchises are granted, and transparency is critical in that regard. There should be no doubt as to the validity of the records of anyone seeking to exercise a franchise in this area.
Finally, with regard to health issues, I should like to know whether the new undertakings will be responsible for past liabilities. I am aware that that involves primarily the point about the coal industry to which my noble friend will refer later, but it is a matter which also affects the railway industry. I hope that the Minister will be able to reply to the point. I beg to move.
The Earl of Caithness: The amendments raise the extremely important issue of safety in the rail and coal industries. I can assure the Committee that there is absolutely no issue of principle between the noble Lord, Lord Clinton-Davis, and the Government as far as safety is concerned. Safety issues must be paramount in preparing for the future of both the coal and rail industries. The Committee will recall I had a great deal to say about that yesterday when we discussed Amendment No. 3. I have rather more to

1267
say now. The amendments seek to impose requirements on the Secretary of State and the relevant corporations to ensure that no new owner or operator can come into those industries without demonstrating that they can do so safely and that there is full and open consultation on safety matters.
In both industries safety standards and investment in safety are given the highest priority. I am happy to reaffirm today, and I know that my noble friend Lady Denton concurs, that we regard safety as a matter of the highest importance in both the coal and the rail industries. The Government have made that clear on many occasions. The safety record of the British coal-mining industry is among the best in the world and rail travel remains one of the safest of all forms of surface transport. We intend that the present high levels of safety in both industries are maintained after privatisation. Indeed, that is critical. Safety considerations are therefore paramount.
There is no question of an operator being allowed to disregard established safety policies in either industry. That would not be tolerated today and it will not be tolerated in future. All new operators will therefore have to ensure that their approach to safety will fulfil high current standards. Simply because potential operators have a good safety record elsewhere does not mean that their methods of working will be subject to any less scrutiny than that of another operator with an inferior record. That clearly would be foolhardy. The essential issue is to ensure that we continue with the uniformly rigorous standards that apply to both industries.
The Government have been and will continue to be guided by advice from the Health and Safety Executive. When the rail privatisation White Paper was published, the HSC was invited to undertake a thorough study of the safety implications of our proposals and to make detailed recommendations. We await the findings of that study, but the Government have already given a commitment that the advice will he published (paragraph 77 of the White Paper). Our proposals for rail privatisation set out the framework for safety and made it clear that safety validation of all operators would be required. We have welcomed the comments that we have received on safety aspects.
Amendment No. 30 asks the Secretary of State to recognise the Health and Safety Executive as the independent safety regulatory authority. That is already the case for the coal and rail industries and I am not saying anything new when I say that that will continue to be so in the future. Indeed, the rail privatisation White Paper says so explicitly (paragraph 78(b)).
As far as the future of the coal industry is concerned, my honourable friend the Minister for Energy, Mr. Eggar, wrote to a number of interested parties, including representatives of the workforce, earlier in the year to seek their views. My honourable friend also wrote to the chairman of the Health and Safety Commission to seek its advice on safety matters in the context of coal privatisation. The commission was therefore given an early opportunity to consider that important issue. The chairman's reply is available in the Library. The commission is of course a tripartite
1268
body, with representatives from business, trade unions and local authorities. Proposed regulations, approved codes of practice, industry-wide committees or any other important safety initiatives that are approved by the commission are always issued to interested third parties as part of formal consultation. Trade unions are included in those formal consultations.
Anyone who becomes involved in operating mines or running rail services must have proper safety policies which will ensure that they meet the high standards of safety required for both industries. Of course we should not want anyone to become involved in those industries who disregards or seeks to undermine the vital role of safety and I can assure the Committee that we will not let that happen.
However, we are not at that stage yet. It would be premature to specify the mechanisms we need to put in place to ensure that only those able to meet the highest safety standards can become involved in the running and operation of coal and rail activities. It would not therefore be appropriate to have the amendments on the face of the paving Bill, although I hope that I have demonstrated that the Government are in sympathy with their spirit.
I hope I have also been able to demonstrate that the consultations that have taken place have been extensive and are continuing. Those consultations are valuable because the Government attach the highest importance to safety in the coal and rail industries and recognise that that issue is of general interest. The consultation process is open and has provided opportunities for trade unions, passenger representatives and others to express their views. I know that my right honourable friends the Secretary of State for Transport and the President of the Board of Trade will read with interest what the Committee has had to say on that matter and other matters connected with these industries. Our formal consultations with the HSC and HSE, our direct invitation to the coal trade unions, this summer's rail White Paper and the accompanying invitations to meetings with the rail trade unions and passenger representatives have enabled all interested parties to express their views on the proposals.
Lord Ezra: I was pleased to hear from the Minister the importance the Government attach to safety in both industries which are the subject of the Bill. It is clear that in relation to the railways the Government, as the Minister pointed out, in paragraph 77 of the White Paper have asked the HSC to arrange for a thorough study of the safety implications of the proposals set out in the White Paper for the privatisation of the railways. Will the Government be asking the HSC to conduct a similar inquiry in relation to coal once the privatisation measures are known?
4 p.m.
Lord Donoughue: I wish specifically to speak to Amendment No. 35 in my name, which requires that the Secretary of State obtain and publish records of potential purchasers in the areas of employment, and

1269
health and safety, both internationally as well as domestically. It asks that those records be examined and approved by the Health and Safety Executive.
I welcome the large number of assurances the Minister has given, many of them inevitably in general terms at this stage. I should, however, like the assurance that international as well as domestic safety records will be included. Some potential purchasers may be personally resident in this country but operate internationally in the mining area. It is most important that their records of safety and health overseas be examined.
The basic concern of the amendment is a fear that safety standards will inevitably fall after privatisation. We believe that that danger arises for two reasons. The first is the dominance of the profit motivation above the priority of safety. Secondly, the structure of safety regulation could be dangerously fragmented. I do not say that it will be, but much will depend on the structure of the industry after privatisation.
I should like to say a brief word on each of those aspects. With regard to profit motivation, the view that safety standards will fall after privatisation is not a doctrinal view. It is based on the evidence that faces us in the world. For example, in the mining world the private mines have the worst safety record. If one looks at the world's private mines with the best record—I am informed that they are in Australia—the fatal accident rate is double what it has been in the UK's nationalised mines. In the UK the accident rate in the private mines, over a longish period and omitting the odd year, is much worse than it is in the public sector. We are therefore concerned that after privatisation profit motivation will come before safety. We will look at the details of the relevant Bill when it comes before us to try to ensure that that is not the case.
The threat to the safety structure is the possible fragmentation of the industry after privatisation. Many Members of the Committee who know the industry well will know that the efficiency of the safety structure of the coal industry is, and has been for a long time, dependent upon the fact that it is nationally integrated. It is a complex organisation containing the national Health and Safety Commission, the Health and Safety Executive, the employers, who are national, the unions, which are national, the rescue services and the medical services. Altogether, it is nationally focused.
The role of that national structure is the establishment of general national safety policy and the exchange of information. It is within that national context that local pits have their own individual safety committees and the key body, the mines inspectorate, operates. The amendments collectively seek to establish that the national integrated safety structure be maintained. If possible we should like some assurance of that. We know that it is subject to the structure of the industry. I should like to know the Minister's reaction to that. We ask that it be statutorily entrenched. It would be helpful if the Minister could give some commitment in that direction.
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Finally, I turn to a specific point on the historic health liabilities for compensation in the mining industry. We know that large numbers of ex-miners are suffering especially from emphysema, bronchitis and diseases related to the lungs. Many test cases are either before or about to be brought before the courts. That could involve thousands or tens of thousands of claimants and liabilities running up to an estimated £1 billion. Can the Minister say who, after privatisation, statutorily will carry the liability for compensation on that scale?
Lord Boyd-Carpenter: The noble Lord suggests that privatisation would be likely to result in a diminution of safety standards. A number of industries in this country have been privatised in recent years. I am glad to see that we are proposing to privatise more. Can the noble Lord point to any of the industries of this country where, following privatisation, safety standards diminished? If the noble Lord cannot give those figures, it would seem that his apprehensions in that respect are not acute. I ask the noble Lord also to consider this. We have a private sector of British civil aviation and it is one of the safest in the world
Lord Donoughue: I am happy to answer that question. Much of the privatisation has been too recent for proper figures to be provided. The figures produced on bus privatisation suggest that safety standards have in fact declined. My basic point relates to coal. I am sure that Members of the Committee, if not the noble Lord, Lord Boyd-Carpenter, appreciate that coal is and always has been a special industry in relation to safety. This country has a magnificent record of which it can be proud. I was arguing solely in relation to the coal mining industry that according to facts and figures known from the world private industries have a worse record. In this country also private industries have a worse record of safety. That is the basis of our concern. I am sure that the Minister and the Government share that concern. The positive manner of his earlier response suggests that. Together we can approach the issue. But we need to look at it. It is a serious point.
Lord Boyd-Carpenter: Can the noble Lord quote the figures in respect of the bus industry on which he relies?
Lord Clinton-Davis: Perhaps the noble Lord will take the trouble to look at the report from which I quoted extensively. He will see the deep concerns expressed by an independent objective organisation—even the noble Lord, I believe, will not dispute that it comes within that category—which has expressed deep concern in regard to the way in which the bus industry has developed.
Lord Boyd-Carpenter: But with no figures.
Lord Clinton-Davis: The noble Lord is saying that it is invalid. I suggest that he takes the trouble to read the report and then to consult with the organisation. I believe he will see that his concerns in that respect are not made out.
Lord Boyd-Carpenter: But still no figures.
Lord Haslam: Perhaps I can return to coal. While I understand the Committee's concern with regard to safety, I do not believe that safety standards will fall. I have worked in many industries in my life. The commitment to safety in British Coal is outstanding. Further, it is a safety record which, as has been said, compares favourably with that of any mining operation in the world. It may be said that I am praising British Coal. But one must recognise that the safety factor is so inculcated into the management and the miners that it will survive any kind of change thrown at it. It is extremely positive.
We must recognise also that we have a fine mining inspectorate in this country which shares those high standards. I am sure that it will continue to administer the mining laws in a meticulous way. I believe that that too will not change following privatisation.
Much has been said about profitability leading to a falling-off in safety standards. That has not been true of British Coal where the level of profits has improved over the recent period, and with it in fact the safety standards have also improved. The reason is that it reflects two things happening. First, is mechanisation of the mining industry itself and, secondly, the productivity that flows from that development.
At the time I entered the mines there would be a coalface 200 metres long with 40 miners exposed to the roof, each of them filling off 10 or 15 tonnes of coal a day. They would have to set their own roof supports and as the face advanced they would have to withdraw progressively some of the roof supports, which was a dangerous operation. All that has now gone. There are small teams of men, five or six in number, working a 200 metre coalface. The supports are massive chocks which are moved forward hydraulically, so that miners are working in the safest possible conditions that can be devised; and one cannot see that changing.
The noble Lord, Lord Donoughue, referred to the situation in the UK private mines. The private mines have not advanced to the stage that British Coal mines have in relation to mechanisation. If the new owners are interested in profitability they must embrace more mechanisation. That will improve safety standards. The noble Lord referred to the situation in Australia. In Australia most of the coal mining up to now has been opencast mines. They are only recently learning to work coal mines underground in Australia, whereas we have a long history of so doing. Therefore, I do not have the concerns that are being expressed under these various amendments.
Lord Ezra: The noble Lord, Lord Haslam, is right that the standards of safety in British mining as carried out in British Coal, previously in my time the National Coal Board, are very great indeed. It is difficult to consider that, with any change of ownership, that attention to safety would diminish. Nevertheless there are going to be structural changes, and it lends point to the question I asked the Minister earlier on; namely, would the Government be minded to ask the Health and Safety Commission to arrange the same sort of inquiry into the safety implications of the changes proposed on the privatisation of coal as they have in fact done in the case of the railways?
The Earl of Caithness: I think that the additional contributions to the debate have been most worthwhile. I am particularly grateful to my noble friend Lord Boyd-Carpenter for balancing some of the remarks and statements that have alluded to the private sector being less safety conscious than the public sector. There are many instances where the private sector has shown the way, and particularly where privatisations have taken place. An area I know well is the aviation industry, where the private sector continues to set a high standard and a lead throughout the world.
In answer to the noble Lord, Lord Ezra, we are determined that, in consultation with the Health and Safety Commission and its executive, the current high standards and improvements to health and safety in the industry will be maintained after privatisation. That is why we have already formally approached the HSC to enable it to give early consideration to this important issue, and to ensure that a comprehensive and effective safety regime continues to operate in the British coal industry. As the noble Lord will be aware, the initial advice has been received and is available. The HSC has affirmed its commitment to the continuation of the strong safety culture in the British coal industry and the need to maintain and strengthen the existing regime where necessary.
The noble Lord, Lord Donoughue, asked about compensation. I can give the noble Lord the assurance that privatisation of the coal industry will not affect the rights of current and former employees to claim compensation for ill health or other industrial injuries that have occurred during their employment with British Coal. We have made no decisions on the detail of privatisation, including the allocation of liability for meeting such claims, but just to repeat my assurance, there will be no effect on their rights. I am sure we shall wish to come back to that point at a future date.
The noble Lord, Lord Donoughue, also asked whether we would publish information about the safety standards that occurred overseas, or apper-tained overseas, to any purchaser wishing to purchase either into British Coal or British Rail. Of course we will look at those standards, but the safety standards, as we have just been discussing, in each country tend to vary. What is important is that the safety standards we set in this country will have to be met by every purchaser.
4.15 p.m.
Lord Donoughue: It is not the standards but the record; in other words, whether potential purchasers have a track record that is good or bad in their international operations.
The Earl of Caithness: To some extent the record depends on the standard, but on this issue of safety, raised by the noble Lord, there are three important points that I want to make. First, there is the question of standards. Those vary from country to country depending on the part of the world in which one lives; but, of course, one must set the highest standards. One must not skimp when it comes to safety.

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But standards alone are not good enough. It comes to the question of enforcement. Here the British system is an effective system and leads the way. In answer to the noble Lord, Lord Donoughue, it is not only the setting of standards but the enforcement thereof in this country that matters. Any purchasers of either a rail operation or a coal operation will know quite clearly from the beginning that they will have to meet a certain standard and, in addition, that the standard will be enforced regardless of what they have done in the past either here or overseas.
There is a third point, in regard to safety, which was brought out clearly by my noble friend Lord Haslam, with all his practical experience from which the Committee undoubtedly benefited in this debate; that is, the need to engender the notion of safety into all those who work in the industry. That is the key requirement for every operation. It is true not only in the case of coal and rail but also, as I can attest, in the aviation and shipping fields, with which I am well acquainted. Safety is now a culture that flows through the whole operation and in every person who works in those industries.
Safety needs to be encouraged and pursued. We are extremely grateful for the work that has been undertaken already, particularly in the coal-mining industry, which has set such a good example and which my noble friend knows so well. I believe that my noble friend was right when he said that it is now so ingrained into all those who work in the industry that it will not be shaken in the future, and we will not let it be.
Lord Clinton-Davis: The Committee acknowledges that in his two contributions the Minister has made positive comments about the issue of safety in both industries. I am the first to acknowledge that. I agree with him that no issue of principle divides us on that, and also on the point of enforcement. Of course, the question of enforcement in a changing situation could be quite different. As was pointed out by the noble Lord, Lord Haslam, and, indeed, the noble Lord, Lord Ezra, who held such distinguished offices in the coal industry and have vast experience in it, a culture of safety operates in the industry. Indeed, it also operates in the railway industry.
The problem is that with greater fragmentation there may be a possibility of attempts being made by some—I sincerely hope that it will not be the case—to cut corners, particularly when they are encountering financial difficulties. However effective an enforcement agency may be, and however well equipped in terms of resources it may be, unless that culture can be evinced in the industry as a whole to avoid the possibility of accidents, all it can do is to investigate the situation after the event.
What I want to see, and what I know the Minister wants to see, is that there is a deterrent value established so far as an effective enforcement agency is concerned, and that requires constant invigilation. Nothing can be taken for granted. In that way the culture of safety in the industry can be built up regardless of ownership. Nonetheless, we have these apprehensions. I was pleased to hear what the
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Minister said with regard to responsibility for past liabilities. The Committee will feel that that assurance is worthwhile, and I am glad that the point was raised.
I come back to the last point which was raised emphatically by my noble friend Lord Donoughue. It relates to the track records on safety of organisations which may have been established outside this country. I feel that the Minister has again given us assurances which are worth while. There have been serious breaches in certain instances in the United States, Canada and elsewhere. Therefore I hope that the Health and Safety Executive will ensure that those track records are not only investigated but, where appropriate, are made known to the public. Again, I feel that transparency is critically important in these matters. The workforce and the public are entitled to know. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 30 not moved.]
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 31:
Page 1, line 14, at end insert:
("(1 S) Before the British Railways Board shall exercise any of the powers vested in it in subsection (1) above, it shall consult the Central Transport Consultative Committee, Regional Transport Consultative Committees, local authorities, its workforce and such other organisations as the Secretary of State deems appropriate.").
The noble Lord said: It may be for the convenience of the Committee if I speak also to Amendments Nos. 34 and 36. Amendment No. 31 relates to consultation concerning the railways, Amendment No. 34 concerns consultation with the coal industry and Amendment No. 36, which in many ways is the most critical, deals with consultation affecting the new undertakings.
Salutary lessons have to be learnt from the recent pit closures fiasco, particularly on the issue of consultation. Evidently it was deemed to be of little or no consequence so far as the President of the Board of Trade was concerned, together with others of authority. I suppose I ought not to say any more about that because so far as British Coal is concerned the matter is sub judice. However, it is of major importance that the duty of consultation in relation to this privatisation exercise and its consequences should be undertaken before it is too late. That duty should extend to all those referred to in Amendments Nos. 31 and 34.
I should not have to underline to your Lordships that, when it conies to people who have given long service to the industries, whether rail or coal, they are obviously intimately concerned with the need for consultation. But privatisation would also affect communities, local authorities and the users of railways. Consequently we believe that consultation is particularly important in these regards. Unless the duty to consult is made mandatory, I do not believe that it will always be observed. Apparently it is not always observed where it is already mandatory, but it is more likely to be observed in that instance. I do not propose to say anything more about this issue, but my noble friend may wish to say something about consultation in relation to the coal industry. I beg to move.
The Earl of Caithness: These amendments refer to consultation, but I do not think this is something that needs to be imposed on either British Rail or British Coal because they will be fully aware of their obligations in this respect. I am sure that both organisations will accept the spirit of the amendments, but I do not believe that as a general principle amendments which are too prescriptive or exclusive should commend themselves to the Committee. It is also the case that the Bill enables both corporations to consult anybody they consider appropriate for the purposes of facilitating the implementation of these proposals. I am sure they will do so. Let me reassure the Committee that we too are aware of the importance of consultation in such circumstances.
On rail privatisation, I can tell the Committee that there have already been meetings between my right honourable friend the Secretary of State and my honourable friend the Minister for Transport with the CTCCs and the RTCCs, specifically mentioned in the amendment. They have the important role of representing the interests of rail users. At the time of the publication of the White Paper, my right honourable friend offered to meet the three main rail unions to discuss the privatisation proposals and what they mean for the employees they represent. Those meetings have now taken place. My right honourable friend and my honourable friend have also met with representatives of the PTAs and the PTEs. This consultation is a very important part of the process of working up the details of proposals for the main privatisation legislation which we shall introduce as soon as we are in a position to do so. Publication of the rail privatisation White Paper, setting out the Government's proposals for the privatisation of British Rail, has provided an opportunity for all interested parties to make their views known on the proposals, and we value this input.
The amendment of the noble Lord, Lord Donoughue, also emphasises the importance of consultation in ensuring that appropriate machinery is put in place for the settlement of terms and conditions of employment and questions relating to safety, health and welfare of employees likely to be involved in transfers. I am probably going to pre-empt the questions the noble Lord has in mind, but it might save him asking me those questions. These are key issues, the importance of which we have recognised in the earlier debates in this Committee. The rail privatisation White Paper emphasised that employees' rights and terms and conditions of employment, including pensions and concessionary travel, will be safeguarded on their transfer to new employment. That is in paragraph 86 of the White Paper.
On coal privatisation, I know that there has been extensive consultation, and this will no doubt continue. My honourable friend the Minister for Energy wrote to a number of organisations with an interest in the coal industry, including the Health and Safety Commission, to seek their views on privatisation. Replies were requested by the 22nd June. A list of the organisations written to is in the Libraries of both Houses, and a list of those who responded was given in another place in response to a question from
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the honourable Member for Sherwood. We are grateful for the replies that have been received and we are considering all the submissions carefully. We have also agreed to make public the details of all communications from the chairman of the Health and Safety Council on the safety consequences of rail privatisation, which we discussed at length earlier.
I hope I have been able to demonstrate to the Committee that we realise the importance of consultation. It is not lost on the Government, on British Coal or on British Rail.
Lord Donoughue: I wish to speak to Amendments Nos. 34 and 36 standing in my name which relate to coal. If I may say so, I thought the Minister was a little complacent perhaps in what he has just said in the light of recent experience. The background to what we are seeking here is well known to all, and to some in the industry it is very painfully known.
As regards the recent proposals to close a large section of the coal industry, I accept that there was proper consultation earlier in the summer, but that was not about the closure of these mines. The proposals to throw tens of thousands of miners who have given years of service and commitment to the industry on to the industrial scrapheap were put forward with a deplorable lack of consultation, in my view and in the view of the miners and their representatives. Existing arrangements and understandings about consultation were ignored by British Coal. The modified colliery review procedure was brushed aside unilaterally. The understandings on voluntary redundancy policy were unilaterally broken. A compulsory redundancy programme, never agreed with the workers, was declared unilaterally. I think that experience is somewhat different from the tone of what the Minister said.
This recent appalling experience of what I think we must call mismanagement—it was temporary, and there have been many years of good management—appeared to abandon 50 years of progress on consultation and joint agreements in industry. British Coal suddenly began to behave as we fear private management might behave after privatisation, and it is after privatisation we are concerned with. I am not sure that the Minister's replies dealt with that.
The purpose of these amendments is to ensure that after privatisation at least the basic standards of management good practice in the modern world will be maintained in the private coal industry. In particular, under Amendment No. 36 we seek to ensure that the new owner has a statutory duty to have joint machinery for consulting on terms and conditions of employment, health and safety. The amendment also puts British Coal under a prior duty to consult the workforce on its proposals. These amendments are probing. I should like to ask the Minister what assurances we have for the future after privatisation and whether he thinks that within British Coal in the past two months best practices have been followed.
4.30 p.m.
The Earl of Caithness: The noble Lord, Lord Donoughue, went into a little bit of history with regard to British Coal. As your Lordships will know, in this country legal advice is very expensive. When one is offered it freely one grabs it with both hands. I am grateful to the noble Lord, Lord Clinton-Davis, for saying that these matters are sub judice and it would be wrong for him to comment further. I follow the noble Lord and say that it would be wrong for me to comment further.
As to the future, I know that the noble Lord, Lord Donoughue, will, with his usual care, read what I have said. I commented on the future and the consultations that my honourable friend the Minister for Energy had undertaken and the representations received. Those are being carefully considered. When one is carefully considering replies to questions it would be wrong to comment any further. I understand the concern that exists. Undoubtedly this is a matter to which we will return.
Lord Clinton-Davis: I do not propose to trespass on ground that is being covered by the courts at the present time, but I think it is wrong for the Minister to assert—because implicitly that is what he is doing—that British Coal needs no reminders about this. That is a matter upon which the courts will adjudicate.
I indicated that I thought Amendment No. 36 was in many ways the most important because it dealt with the new private sector interests that would evolve in the coal and rail industries. I know perfectly well that the Government have given an undertaking in paragraph 86 of the White Paper on the railways that trade unions will be consulted about matters affecting their members' employment. That is an undertaking which covers the Government in relation to the privatisation proposals. But the Minister does not go further than that: he does not indicate whether or not there will be a condition in relation to the franchises that will require such consultation to take place as far as the successor companies are concerned. That is what the Committee needs to hear from the Government. Since there was nothing said about it by the Minister I ask him to reply to that particular point.
There are quite a number of private employers who today do not recognise trade unions and who perhaps have their own in-house tame employee organisations. In the private sector there are some who take consultation very seriously, as I well know, but others do not. To give chapter and verse, I visited a plant in Plymouth where the question of consultation was dealt with in a rather derisory manner by the managing director of a very large group. He said, "Minister, I do not know why you are so concerned about consultation and participation because those people would not be where they are if they were of any value." That cannot be a proper or representative view of British industry. It was however a salutary thing for me to hear from the lips of someone who should have known a great deal better and whom I reported to his head office.
Unless there is a mandatory duty provided by the Bill for consultation it will not always be observed. I
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should like to hear from the Government their thinking on that point. I am not saying that we need to deal with the specific point now, but some assurances from the Minister need to be forthcoming. The matter is causing some concern.
The Earl of Caithness: The noble Lord, Lord Clinton-Davis, takes us back to a point we discussed in part yesterday, and it is appropriate to mention it again. In the White Paper we said that employees' rights and terms and conditions of employment would be safeguarded on the transfer to new employment. I can give an assurance to the noble Lord that we are currently working up the details of that. As he knows, the Transfer of Undertakings (Protection of Employment) Regulations (colloquially known as TUPE) have to be considered. That is exactly what we are considering at the moment, and until we have finished that consideration it would be wrong for me to say anything further.
Lord Clinton-Davis: We shall obviously need to come back to this issue later, perhaps not necessarily within the scope of this Bill. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 32 to 36 not moved.]
Lord Ezra Lord Ezra moved Amendment No. 37:
Page 1, line 14, at end insert:
("() In exercising the powers conferred by this section special regard shall be paid to the need—

(a) to safeguard the interests of present and future pensioners;

(b) to maintain standards of health and safety in the industry; and

(c) (in the case of coal) to maintain adequate facilities for continuing research into clean coal technology.").

The noble Lord said: This amendment covers three issues: safeguarding the interests of pensioners; maintaining standards of health and safety; and, in the case of coal, maintaining adequate facilities for continuing research into clean coal technology. I do not intend to say anything on the first two issues because they have already been dealt with under other amendments. I should like to spend a moment on research into clean coal technology. The future of the British coal industry, however it may be owned in future, depends upon two things: its competitiveness and the ability to burn or use coal in a way that is acceptable in the light of increasingly stringent environmental standards. Clean coal technology is intended to achieve that purpose.
When I was in the coal industry—I am sure that this applied also to the noble Lord, Lord Haslam—a lot of effort was put into developing those technologies. However, they were of such a long-term and wide-ranging nature that even with the concentration of coal mining within a single enterprise it was felt that they were too costly to be financed entirely by the coal industry. A degree of government support was therefore asked for and forthcoming; indeed, there was also some support from other enterprises and international organisations.
The risk as I see it under privatisation, particularly if it leads to a degree of fragmentation, is that the new owners may feel even less able than the old coal board

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entirely to finance this kind of research. They may even want to give it up all together. Therefore, I should like to ask what the Government have in mind in the case of this very basic and important research from the point of view of safeguarding the British coal industry—I do not use the expressions "British Coal" or "National Coal Board" because I am talking about the British coal industry—because its future depends essentially on the successful development of clean coal technologies. So, what sort of provision do the Government contemplate making when the privatisation Bill finally appears for ensuring that a satisfactory degree of resource is devoted to that sort of research? I feel that, unless it is continued on a combined basis (however much the industry might be fragmented at the time of privatisation), it is unlikely that the necessary effort could be put into it. This is a very important question for the future of the industry and I shall be glad to hear what the Minister has to say about it.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Baroness Denton of Wakefield): As has been made clear on a number of occasions, the basic purpose of this Bill is to enable British Coal and British Railways to do no more than act in relation to the proposals for the transfer of their functions, but the noble Lord, Lord Ezra, raises an issue about which I know that he has considerable anxiety. I am pleased to assure him that the Government also recognise the importance of the development of clean coal technology. We shall give careful consideration at a future date to the future of British Coal's research in this area. Perhaps I may point out that development work on the other key feature of the topping cycle technology—the partial gasification stage—is continuing at the moment. Obviously, all these matters will be considered at the appropriate time when the privatisation Bill is introduced.
Lord Ezra: I thank the noble Baroness for that reply and look forward to seeing how this issue will be dealt with when we see the draft legislation. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Donoughue Lord Donoughue moved Amendment No. 38:
Page 1, line 22, at end insert:
("() Every proposal made under subsection (1) above shall provide that all mineral rights shall revert to the Crown.").
The noble Lord said: Amendment No. 38 which stands also in the name of the noble Lord, Lord Ezra, concerns mineral rights and seeks to provide that those rights be returned to the Crown. At present, as I understand it, under the 1946 Coal Industry Nationalisation Act, the National Coal Board as it then was—now British Coal—owns all coal reserves, assets and mineral rights. In other words, a public corporation accountable to Parliament holds those rights. That will change on privatisation, especially the accountability element.
We are proposing that the right to ownership of the mineral coal is retained as Crown property. Obviously how that will operate is open to discussion. We might suggest for consideration that an independent agency
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be established which, on behalf of the Crown, might issue licences to let, lease or license the right to extract coal (deep or open cast). It is quite possible that the residual rump of British Coal could be retained in order to be involved in this activity. However, I believe that the agency's independence and its public accountability are very important and I look for firm assurances now on those matters.
Lord Boyd-Carpenter: I can well understand why the noble Lord, Lord Ezra, declined to move this quite astonishing amendment. I do not think that I am using excessive language when I say that it could be described as a "wrecking amendment". It apparently means that, where a privatisation takes place, the mineral rights in respect of which the privatisation is being arranged shall revert to the Crown—in other words, shall be renationalised. It is a most astonishing amendment. We have had no explanation of it from the noble Lord opposite. He has not agreed or disagreed with the interpretation which on reading the amendment I have put on it. As it stands, it seems to me a most damaging and very extreme amendment. Like the noble Lord, Lord Ezra, I feel no enthusiasm for it.
4.45 p.m.
Lord Ezra: It was not because I felt no enthusiasm for the amendment that I did not speak; it was simply because I thought that it was the turn of the noble Lord, Lord Donoughue, to move an amendment. I certainly support the amendment. I am a little surprised at the remarks of the noble Lord, Lord Boyd-Carpenter, because if he throws his mind back to the period before 1946 he will no doubt recall that the mineral rights in coal were owned by a body known as the Coal Commission. The commission operated the licences for extracting coal in exactly the same way as at the moment licences are granted by the Crown for the exploitation for oil and gas reserves in the North Sea. It seemed to me to be an eminently sensible proposition that, now that the privatisation of the mines is contemplated, the Crown should take back the ownership of these mineral rights and should license their operation according to the same sort of conditions as in the case of oil and gas (given the different circumstances of the North Sea). I must repeat that I am very surprised that the noble Lord, Lord Boyd-Carpenter, has objected to this. I normally listen with great attention to his words of wisdom.
Lord Boyd-Carpenter: I am interested in what the noble Lord says because I spoke in another place—although technically another place was in this place—against the nationalisation of the coal industry when this issue arose, as the noble Lord with his admirable memory will recall. Therefore, I have been not unfamiliar with this for quite a number of years.
If, when one is privatising an industry which has proceeded on the basis that the mineral rights belong not to the Crown but to a state organisation, one then makes the mineral rights on privatisation revert to the Crown, it seems to me that one is removing quite a large part of the privatisation which we are going to some trouble to legislate for. Therefore, I shall be

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interested to hear what my noble friend the Minister says. On the face of it, I find this the most surprising amendment that has been moved this afternoon.
Lord Swinfen: I wonder whether the noble Lord, Lord Donoughue, can enlighten me when he responds. I assume that his amendment is intended to relate only to coal, but it refers to "all mineral rights". Does that include copper, lead, gravel or anything else of a mineral nature that might be mined?
Lord Donoughue: Perhaps I can help the noble Lord. I was referring to the mineral coal. I repeat that I was referring to coal, not to other minerals.
Lord Swinfen: I believe that the noble Lord's amendment covers all minerals rather than just mineral coal.
Lord Hylton: Under the precedent of the Crichel Down case, is there not an argument that these redundant assets that are now held by the state should be offered back to their former owners—that is, their former owners even before the Coal Commission came into being? I suppose that I should declare a mild interest as the grandson of a former very small mineral owner.
Baroness Denton of Wakefield: Whatever else we may say about this amendment, it seems to have attracted considerable interest. Perhaps I may assure the noble Lord, Lord Donoughue, that we recognise the importance of the issue of the ownership of mineral resources which is raised in the amendment and we had assumed that the noble Lord meant coal. However, my amazement is that the amendment would require that every proposal for a transfer of functions, rights and liabilities should also include proposals concerning the reversion of mineral rights to the Crown. As worded, the amendment would therefore mean that even a proposal relating to the interests of British Rail, or one concerning a coal issue unrelated to mineral rights, such as pensions, would have to include proposals relating to mineral ownership. I am sure that that is not what the noble Lord intended.
It is not possible for us to accept the amendment. The Bill allows no transfer not permitted under current powers. The time and place to bring about major changes in the ownership of coal would be in a comprehensive Bill designed to bring about the restructuring of the present framework of the coal industry. It is at that point that the issues of ownership would be discussed. However, I can perhaps give comfort to the noble Lord by saying that we recognise the need to avoid the potential conflict of interests inherent in the present system where British Coal owns a resource which it licenses to its own competitors. We will be coming forward with details of our plans in conjunction with the passage of the coal Bill planned for the future. I hope therefore that the noble Lord will be content to wait for those to be brought forward.
Lord Donoughue: I thank the Minister for showing a constructiveness and positiveness towards the
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amendment which was not necessarily 100 per cent. apparent elsewhere. The amendment is not dissimilar to an amendment moved in another place which led to a constructive discussion on the issue. That is what we were seeking. I take on board what the Minister says. The Government are obviously considering this matter seriously. At the appropriate time we will scrutinise the Bill very closely because, as the Minister quite rightly said, the potential conflict of interests is basically what concerns us. On that basis, I am happy to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 39:
Page 2, line 10, at end insert:
("() Before exercising the powers contained in this section the British Railways Board shall in respect of any matter relating to rail services provided under or in accordance with section 20 of the Transport Act 1968 consult any organisation representative or Passenger Transport Authorities and Passenger Transport Executives in the metropolitan areas.").
The noble Lord said: I propose to take a little time developing the arguments on this issue because it is extremely important. Amendment No. 39 deals with the question of consultation with the PTAs and PTEs. Amendment No. 40 deals with their assets. At the outset I must declare an interest. I am the president of the Association of Metropolitan Authorities. The AMA has made substantial representations to me, and, as the Minister is aware, it has had discussions with the Secretary of State. The AMA is not satisfied with the outcome of those discussions. So this is a useful opportunity to ventilate the issue here. I hope that the Minister can say that he will encourage further discussions. I am not proposing at this moment to do more than probe the matter; so the Minister can tell his Back-Benchers that they can go home, regardless of any other business.
The meeting that took place on 10th November with the Secretary of State was perfećtly friendly but there was no meeting of minds. The argument advanced by the AMA on behalf of the metropolitan authorities was that PTAs and PTEs should become local franchising authorities. The Secretary of State has not been able to accept that argument. He has said that he envisages a major continuing role for those bodies and that he wants the discussions to be continued in that context. But he has rejected the basic submission that they should become local franchising authorities. The association does not understand what precise role the Secretary of State envisages for the PTAs and PTEs other than as a kind of conduit for setting the subsidy for local rail services. I hope that the Minister will be able to clarify the situation more than the Secretary of State was able to do.
Perhaps I may now turn to the arguments in favour of enabling the PTAs and PTEs to become the local franchising authorities. Under Section 20 of the Transport Act 1968 the seven PTAs and PTEs specify and finance urban rail services. As a result such services have certainly grown over the years and plans are well advanced to continue that growth into the next century. In 1991 the authorities directly supported more than 150 million passenger journeys, 1,695,400 train journeys, more than 955 miles of track,

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516 stations and 1,320 rail carriages. The contribution that they have made to the development of the rail industry in this country is very considerable indeed. In urban areas—this is the purpose of the provisions of Section 20—rail policy is part and parcel of what is known as a unitary development process; an integrated transport system within the areas concerned. Policies in relation to buses, public transport and highway authorities as well as rail are taken in conjunction. That is an extremely good precedent which ought to be followed nationally.
Section 20 provision ensures that a locally accountable authority is responsible for decisions concerning the levels of service and the conditions and the decisions relating to investment. Those concerns were acknowledged as very important indeed and thoroughly legitimate by Mr. Freeman, the Minister of State, during the course of the Committee stage in another place.
What the Government have said is that these authorities will continue to be responsible for specifying and financing urban rail services but that it is the franchising authority that will have responsibility for deciding how to franchise services to private sector operators. Along with the AMA, we believe—it is also, I understand, the view of the Liberal Democrats—that this would erode the accountability of the PTAs and PTEs for their expenditure on local rail services. They would have no direct relationship with the operator. All negotiations over service specifications and delivery would have to be undertaken at arm's length and the ability of these authorities to be proactive in developing local rail services and to support wider objectives—local transport, social, economic and environmental—would be impaired.
I believe that a single franchising authority gives rise to considerable problems. Local needs and opportunities could be overlooked. One can conceive of different operational arrangements on local rail within a single PTA area. The PTAs' and the PTEs' monitoring of local rail performance and the ability to influence this area would be substantially reduced.
A franchising authority, without the local knowledge that those authorities currently possess, would be unlikely to take full or proper account of changing local needs and circumstances. It would not have the same accountability, or anything like it. Moreover, without that interface from the PTAs and PTEs, a franchising authority is likely to encounter difficulties when dealing with short-term marketing and ticketing initiatives.
So we argue that those authorities should become the local franchising authorities based on, among other things, their experience, local accountability and the need for integrated policies in the areas which relate to them. So far as concerns discussions with the Secretary of State, as I have indicated, the AMA has not been satisfied. It has submitted a note setting out its detailed concerns. I am sure that the Minister will agree that this is a matter of public importance. Perhaps I should just recount those essential concerns. The AMA believes that the expertise and experience of the PTAs and PTEs would be maximised if they could
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participate in decisions by the franchising authority as to how Section 20 services are to be grouped in franchises; if they were able to participate in the shortlisting of respondents to invitations of interest in franchising; if they could be involved in the negotiations with the franchising authority, Railtrack and the regulator, about train paths, timetabling and other such issues; and if they could specify in detail the services that they wished to support and determine precisely how they would feature in franchises. In addition, they should have a right to determine all fares on the services that they subsidise; they should have responsibility for setting performance standards for services that they support, monitoring performance on those services and imposing penalties where appropriate; they should have the right to agree any service developments and enhancements involving the services which they support. Finally, they should have a right of appeal against any decision by the franchising authority or regulator affecting local rail services. As I have said, the AMA has requested another meeting with the Secretary of State. I am sure that the Minister will agree that that would be desirable. At least, I hope so.
I come to the next amendment, which relates to the assets of PTAs and PTEs. It is important that past investments should be protected, but the authorities are also keen to ensure that passengers should continue to receive the benefit of publicly financed infrastructure and rolling stock investment. I hope that the Minister will be able to say whether the PTAs and PTEs will be able to insist that franchisees will be required to use new rolling stock now allocated to PTA services, especially when it is owned or used by a PTA.
Secondly, the franchising document, with respect, reveals a lack of clarity in the Government's thinking about the future role of PTAs and PTEs in grant-aiding rail investment. Paragraph 2.7 refers to PTEs continuing to have powers:
"to make capital grants, for infrastructuring projects such as station improvements or the purchase of assets such as new rolling stock".
Paragraph 2.11 cites Railtrack's continuing role in undertaking investment in infrastructure. Paragraph 3.4 floats the possibility of a franchisee investing in track and signalling and, in what I think is something of an understatement, paragraph 5.5 states:
"There will clearly need to be a degree of liaison between Railtrack, the Franchising Authority and franchisees on the planning of infrastructure investment".
As I said at the outset in dealing with this point, I am worried that the Government's thinking shows no clear reasoning. I shall listen with interest to the Minister. I am not sure which of them is to reply because the noble Earl is a little removed from the Dispatch Box.
The Earl of Caithness: I shall be there.
Lord Clinton-Davis: I am glad that the Minister for Transport is replying to what is essentially a transport point. I beg to move.
Lord Teviot: I am one of those Back-Benchers who has not gone home whom the noble Lord, Lord Clinton-Davis, has described. I agree with a great deal

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of what he said. He covered the subject fully. Perhaps I may dot the i's and cross the t's. Contrary to what one thought at the time, the PTEs established under the 1985 Act have been a remarkable success. However, I agree with the noble Lord that the Government might take a different view on whether they should be the franchising authorities. With the bus industry they have been extremely impartial authorities. They have in no way favoured the previous passenger transport companies. They have been impartial and a success.
Does my noble friend agree that this system will be more bureaucratic? Under the present Section 20 arrangement there are two parties involved—the PTE and BR. It will now be the PTE with the franchising authority which will have to consult the track authority until the other authorities, whose names I do not have, are established. The whole scheme is cumbersome and expensive. In one PTE the director responsible has a staff of four which deals with a £30 million budget and the two bodies—the PTEs and BR. If they have to take on this scheme, everything will grow like Topsy. More staff will be needed. Decisions will not be made and timetables will be stretched. It all sounds rather strange to me. That relates to Amendment No. 39.
Amendment No. 40 relates to the assets. Authorities could feel injured where they have sponsored the rolling stock and paid for this and that. Regard should be paid to them. Like the noble Lord, Lord Clinton-Davis, I am waiting to hear my noble friend's reply.
The Earl of Caithness: As has already been made clear, the Bill gives both corporations powers to consult anyone they consider appropriate for the purpose of facilitating the implementation of privatisation proposals. I believe that the Committee will agree with me that we can leave it to BR to carry out its consultations as best it sees fit. For the Government's part, my right honourable friend the Secretary of State has met PTA and PTE representatives recently to discuss with them the privatisation proposals. I know that my honourable friend the Minister of State has been keeping in touch with those organisations' representatives.
I am sure that the Committee is aware that the PTEs and PTAs are involved in providing local rail services in seven conurbations. Under our privatisation proposals, the White Paper made it clear that the PTAs and PTEs will continue to be responsible for specifying the services to be provided in their areas. Services will continue to be run under contract, initially by BR. The franchising authority, taking the PTA/PTE specification, will be responsible for franchising those services to private sector operators.
Turning to Amendment No. 40, as the noble Lord, Lord Clinton-Davis, reminded the Committee, some PTEs and PTAs have invested, for example, in rolling stock. The treatment under our privatisation proposals of property or assets funded partly or in full by PTAs and PTEs is an important matter and one that is currently under consideration.
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I am glad that the noble Lord, Lord Clinton-Davis, declared his interest in the matter. The points he raised were the same issues as were put to my right honourable friend the Secretary of State at a meeting with the representatives on 10th November. I have to say that they are still very much under consideration. We are grateful for the points that were put forward and of course I note what the noble Lord said today. I can tell the Committee that we envisage that specific provisions on the role of PTAs and PTEs in the franchising process will be incorporated in the main legislation. I have no doubt that all of us will be discussing the issue again when we come to that legislation.
Given what I have said and the fact that there was a meeting less than a month ago and that we are considering the points that were put to us, I wish to say to the noble Lord, Lord Clinton-Davis, and my noble friend Lord Teviot that we have taken on board the points that have been made. I shall draw to the attention of my honourable friend the Minister with responsibility for transport what both noble Lords have said before we draw conclusions as to where we proceed from here.
Lord Teviot: Before my noble friend sits down and the noble Lord, Lord Clinton-Davis, winds up, I am heartened by much of what my noble friend said. However, I repeat that it is not as simple with the PTEs and the franchising authority. Whereas British Rail speaks with one voice, the franchising authority must talk to two or three other authorities before reaching a decision. The matter is still not cut and dried.
5.15 p.m.
The Earl of Caithness: That is why we are considering the consultations. I am grateful to my noble friend for what he said and for his elucidation. I do not believe that the situation is quite as difficult as he portrayed, but we are considering it. We wish to work on it in the future.
Lord Clinton-Davis: I am glad that the discussions are being encouraged by the Minister. That is one point with which I specifically asked the Minister to deal and consequently I take encouragement from his reply. I assume also that the issue of whether the PTAs and PTEs might be the local franchising authority is no longer ruled out of court by the Minister. I hope that he will specifically refer to that. It is one of the most important issues, which not only I, but also the noble Lord, Lord Teviot, in his intervention, raised.
The Minister said little about the protection of assets funded by passenger transport authorities and executives. The noble Earl will know that the investment they have undertaken in the rail network is very substantial. It relates to resignalling, electrifica-tion, new rolling stock, station improvements, the opening of new stations, and so on. One can cite many examples of the extraordinary work which has been undertaken.
The PTAs and PTEs are anxious and I therefore invite the Minister to say a little more when he speaks

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again, as I hope he will. They are concerned about the way in which the assets will be dealt with in the light of the Government's proposals.
Perhaps I may summarise the anxieties: there are three. The PTAs and PTEs wish to ensure that rail passengers and the areas that are covered continue to benefit from the improved levels of service which are being achieved as a result of the investment to which I referred. Secondly, they wish to ensure that no other organisation benefits financially from the disposal or transfer of locally funded assets. The Minister said nothing about that. Thirdly, they wish to ensure that the position concerning future investments is clarified as quickly as possible. On that point, I agree that it is a matter under discussion and I do not specifically ask the Minister to comment at this stage unless he chooses to do so. However, the first two points are ones which he should address.
The view of Mr. Roger Freeman was that these are problems that need to be addressed. He said in Standing Committee A of another place on 9th June 1992 at col. 50:
"We want to ensure that any changes that we propose are sensible in relation to their continuing responsibilities".
Quite a lot of time has elapsed since he said that and it would be helpful if the Minister could explain the position in that regard to the Committee now. The fact is that while the Minister now acknowledges that there is a problem, nothing is said about it in the White Paper.
The franchising consultation document acknowledges that the regional railways' partnership with local authorities has been in a way the driving force behind the development of the regional commuter networks. The document confirms that PTEs will continue to have powers to make capital grants towards rail investment. So far so good. But while the document also contains a good deal of detail on the rights of franchisees, it does not explain how the provisions relate to rolling stock which is funded by PTAs and PTEs. It does not indicate whether franchisees would be required to use rolling stock financed by a PTA or PTE as part of a package of improvements on a particular route.
While it is helpful that the Government should recognise that there is a continuing role for these authorities in grant-aiding rail investment, the gravamen of my observations today is that it is unclear at present how all that will work in practice. I would have hoped that the Minister would be able to be a little more forthcoming. Recognising the importance of the issue, as the department does, I would have hoped that the Minister would have seized the opportunity this afternoon to add to the clarity of the Government's thinking which leaves something to be desired.
I put those points to the Government again in the hope that the Minister will have something more to say. Of course, I recognise that many of the issues can also be regarded as matters of detail for further discussion. But I promise him that we shall come back to the issue at further stages of the Bill. Before I seek leave to withdraw the amendment, I invite the Minister to answer the points that I have just made.
The Earl of Caithness: The noble Lord would be wrong to assume that we have changed our minds as to who should be the franchising authority. That is not what I said. I said that my right honourable friend the Secretary of State had taken note of the points put to him and we are considering them. The noble Lord has explained his points in greater detail than perhaps on other amendments because of his anxiety. He is very knowledgeable on the matter. That highlights the difficulty of trying to raise such amendments before we come to the main legislation. I have tried to be as helpful as I can to the noble Lord, I said that we have listened with care to what the PTAs and PTEs said at the meeting on 10th November. I have listened with equal care to what the noble Lord and my noble friend Lord Teviot said today. We are considering the matter and have not reached firm conclusions.
It is difficult to give specific answers to specific questions when we are not dealing with the major legislation. We are on a paving Bill and have not come to a final conclusion. When we do so, it will then be clear what the decision is. I have absolutely no doubt that we shall discuss this and all the various other amendments that the noble Lord raised when we come to the main legislation.
Lord Clinton-Davis: Before the noble Earl sits down, I wish to clarify this point. I thought he was implying that all the issues were still open for debate as concerns the department. But he then went on to say that the Government had not changed their mind about the PTAs and PTEs being the local franchising authority. I wish to know now and the Committee will want to know whether the Government are still of the view that this is not an issue on which they will be capable of changing their minds. Are they absolutely rigidly adhering to the view that the PTAs and PTEs will not be the local franchising authority?
Lord Teviot: I must come to the defence of my noble friend. I was not expecting to do that. I think he has made himself perfectly clear. He has not made up his mind one way or the other. This is the paving Bill. I have not noticed a change of drift.
The Earl of Caithness: I am grateful to my noble friend Lord Teviot. He expressed the position rather better than I did. The Government's position is absolutely clear. When the noble Lord has read the White Paper and the other documents and has taken note of what the PTAs said when they reported back to him after the meeting with the Secretary of State, I believe he will find that the Government's position is clear. We have noted the points that have been made and we are still discussing the matter internally. Until we have reached a conclusion, how the heck can I answer the noble Lord?
Lord Clinton-Davis: The noble Earl has said that the Government have not changed their mind about the role of the PTAs and PTEs. That is the simple response to the point he has just made. Unlike the noble Lord, Lord Teviot, I find the Minister startlingly unable to clarify this issue. I simply do not know where he stands on this matter. I have one further point to make. The arguments that I have

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adduced today are not simply the arguments of the AMA, as he knows, but are also the arguments of the Central Transport Consultative Committee. That is a statutory body. The noble Lord, Lord Boyd-Carpenter, does not trust the arguments of that body. However, it is one that carries considerable authority. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 40 not moved.]
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 41:
Page 2, line 14, after ("thing") insert ("subject to subsection (4A) below").
The noble Lord said: In moving Amendment No. 41, I wish to speak also to Amendment No. 42. Environment and transport questions are matters which the Opposition consider very important. We wish to canvass some arguments this afternoon on those issues, notwithstanding the standard reply we shall receive from the Minister, or from both Ministers for that matter, as they are both in cahoots on this issue. They always have been in cahoots on privatisation paving measures. Nonetheless we are entitled to raise these issues and we shall do so.
We take the view that, if rail services are to continue to play a major role in economic, environmental and land use strategies, it is essential that broader policy criteria are reflected in a number of areas—for example in the Secretary of State's guidance to the franchise authority; in the factors taken into account in the Government's principles for access and for charging; in the factors taken into account in determining the duration and geographical extent of a franchise; in the capital grants made to Railtrack and the level of return which it is expected to make on its assets; in the qualitative criteria used by the franchising authority in shortlisting potential franchisees and in repackaging service specifications; and in the franchise authority's decision on which application for a franchise represents the,
"best overall value for money".
All those points are referred to specifically in the franchising consultation document.
I should have thought the Government would join with us in seeking reduced congestion, fewer accidents and more environmental benefits, but the trouble is that none of these issues is automatically reflected in the revenue raised by a rail operator, or by Railtrack for that matter; they have no direct interest in those factors. Do the Government propose to establish a mechanism whereby these issues will be taken into account in investment decisions? As regards environ-mental protection, no one can doubt the significant role which is undertaken by the railways in protecting the environment. Road congestion has been estimated by the CBI to cost British business £15 billion a year. That is a situation that will get worse.
The forecast increase in road traffic suggested by the Government themselves in their White Paper on the Environment was for growth between 1988 and the year 2025 of between 83 and 142 per cent. As regards greenhouse gases, the main greenhouse gas, carbon dioxide, is likely to increase, according to
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calculations which have been made by reputable people, by between 60 and 120 per cent. by the year 2025. The Government are committed to stabilising carbon dioxide emissions at 1990 levels by the year 2005. That forecast is absolutely undermined by their own policies, particularly in relation to their emphasis on road transport as against rail. Exhaust emissions give rise to far greater costs for road than for rail transport. These matters are not reflected in balance sheets but they ought to be reflected in the Government's considerations. I beg to move.
Lord Donoughue: I wish to speak on the coal industry particularly as regards Amendment No. 42, which requires that the relevant corporations should have regard to the environmental effects of their actions and requires that they publish the details of any such effects. There are a number of serious environmental issues arising in relation to the coal industry. Those issues will be particularly noticeable after the privatisation of coal. Central to them are questions concerning the statutory responsibility for environmental hazards deriving from coal mines, whether open or closed. As one example of this—although there could be many—I refer to the matter of discharges from closed mines. These are often very toxic and acidic. Shafts fill with water which becomes polluted by metals and chemicals. In time that polluted water seeps out and pollutes our rivers. I believe that that is already a serious problem in South Wales.
The question is: who precisely will be responsible for cleaning up pollution and who is responsible now? I believe the National Rivers Authority says it is British Coal. Whose responsibility will it be after the privatisation of British Coal? I believe that at present there are no controls over discharges after closures. We shall witness a large number of closures. Who will be responsible for the environmental hazard of discharges after closure? There is a huge range of responsibilities that relate to environmental hazards from coal mines. There are the questions of water pumping, pit shaft capping, methane control, spontaneous combustion underground, land subsidence and the toxic pollution of land. After privatisation who will be responsible for those hazards? As I have said, even now it is often difficult to establish who is responsible. Have the Government yet formed any views about who will be responsible after the fragmentation of privatisation?
I wish now to consider a particular environmental aspect of British Coal land. I have already considered British Coal water. There is the question of derelict land. A recent Department of the Environment report identified over 20,000 hectares of land already made derelict by British Coal activities where there is no liability for reclamation. I believe that arrangements are under way for such land to be reclaimed following past and current closures. Therefore, that problem is being dealt with.
However, given the scale of potential difficulty after privatisation, what arrangements are there to ensure that private operators restore derelict land resulting from their future closures of mines? What if a private owner extracts coal, particularly if it is an opencast

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mine, takes his profit and then disappears and there is no continuing body which can be held responsible? Who then is responsible for the costs of restoring that derelict land?
This is an important and complex environmental problem. There already exists a huge inherited legacy of responsibilities for environmental safety relating to mines. The problem increases with the prospect of more closures after privatisation. It also becomes more problematic because of the uncertainties regarding responsibility for hazards and for compensation in relation to those hazards after the fragmentation—assuming it is fragmentation—of privatisation.
These are probing amendments, particularly Amendment No. 42. We are seeking from the Government the assignment of clear responsibility for environmental hazards deriving from mines. A body of some kind must ultimately be designated. That body must be accessible and accountable, and it will have to be properly funded.
Environmental duties have, I believe, been placed on British Coal's opencast activities but there is no equivalent duty in respect of deep mine operations. We urge the Government to establish such a statutory environmental duty and to establish a proper body to enforce it. Without it the Bill paves the way for an environmental disaster. We look to the Government to meet our concerns on that aspect. I look forward to hearing whether the Minister can give us any indication as to the Government's thinking.
5.30 p.m.
Lord Boyd-Carpenter: The noble Lord, Lord Donoughue, has touched on a point of real importance and substance, and I am very glad that he has done so. However, whether he has raised it in an appropriate way is a more open question.
Let us suppose that there were to be no steps to privatisation and the ownership of the coal industry continued as at present. It is obvious that there must be further pit closures. I agree that how many and how quickly is a matter for argument and discussion, but there must be some. The continuing closure of pits must give rise to questions of pollution and who should be responsible for remedying that pollution. As the coal corporation becomes smaller and poorer it is increasingly unlikely that it will be able, even if it so intended, to deal with those problems. Therefore, it is useful to raise the question as to what will happen in that respect whether privatisation goes ahead—as I hope it will—or whether it does not. It will be a problem in either case. I do not know whether my noble friend the Minister is fully briefed to answer that question.
Having said that, I do not consider that the amendment does much good. To place on a body the responsibility for "having regard" to likely effects is not an effective sanction. It is always possible to say, "Yes, of course I had regard to that, but I decided that nothing needed to be done". If one's obligation is simply to have regard to something that is an
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insubstantial and ineffective sanction. Therefore, I do not believe that the amendment copes with an important and serious situation.
if the amendment were pressed to a Division, which seems somewhat unlikely, I should vote against it. However, there is a serious question concerning how the increasing pollution deriving from the decline of the coal industry is to be dealt with. There are obvious limits to what my noble friend the Minister will be free to say at present, but I believe that the Committee will be interested to hear any reassurance that he can give us.
Lord Hylton: I support the general thrust of the amendments. I shall content myself simply with quoting two current examples concerning the mining of minerals. They happen to be examples drawn from the mining of base metals but similar considerations can apply to coal mines, particularly when pumping of underground water ceases on the closure of the mine.
The first example is in Cornwall. The former Wheal Jane mine, which is now closed, is presenting considerable and costly problems relating to water purification. The other example comes from the Continent. In former Yugoslavia a lead, zinc and cadmium mine is threatening the River Drina with toxic, corrosive and poisonous effluent, with possibly severe consequences for the whole of the Danube basin downstream. At present, as Members of the Committee may have read, efforts are being made to shore up a darn. We must all hope that they will he successful; otherwise the consequences will be horrendous.
Lord Haslam: The debate today suggests that we have never closed a coal mine. I have to remind the Committee that we have closed 120 mines since the miners' strike. I do not believe that that has created great difficulties in environmental terms. British Coal has endeavoured to do as much as it can to remove any dereliction after the closure of mines because that is the only way in which the land can be sold. That has been a firm policy.
I believe that any private owner closing mines in the future will have the same desire. Also, what has been said is somewhat contrary to what the noble Lord, Lord Donoughue, said yesterday about new owners "ripping us off" by selling such land. There is no way that that land can be sold until it has been restored.
The average opencast coal site in this country lasts about five years. The restoration of these sites is as good as anything one will see anywhere in the world. That is being achieved by a combination of private contractors and British Coal. Instead of just returning the land to agriculture local authorities may prefer a golf course or a nature reserve. British Coal and the contractors will endeavour to provide whatever local authorities want which fits the requirements of the local community. For example, a runway for a STOL airport has been laid out recently at Tinsley Park outside Sheffield.
On both counts British Coal has a good record. I believe that the profit motivation to which the noble

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Lord, Lord Donoughue, referred yesterday will ensure that any new owners will have to restore derelict land if they are to sell it.
Lord Ezra: The noble Lord, Lord Haslam, is absolutely right to emphasise the high regard for environmental issues exercised by the National Coal Board and, more recently, by British Coal. There is no doubt that, quite apart from the impact of closed mines on the environment, there has been consider-able regard for the way in which both deep mining and opencast operations have been conducted. The restoration of opencast land as operated by British Coal is of a very high standard.
What we are concerned about, as indicated clearly by the noble Lord, Lord Donoughue, is what will happen in future. What standards will be applied and how will they be enforced? I feel that if there is to be some form of licensing of mining operations, which there might be, the way in which the new owners, the licensees, take account of environmental considerations, not only during the course of their current operations but when those operations cease, ought to be a condition of such licences. That is an important issue and we should all be pleased to have some elucidation.
Baroness Denton of Wakefield: I thank the noble Lord, Lord Clinton-Davis, for recognising the consistency between my noble friend and myself. I confirm that this is a paving Bill. It is solely concerned with making preparations for privatisation and in particular with removing any doubt that the corporations may act in relation to and advise on privatisation proposals.
As such, the action taken under the powers to be conferred by the Bill would not in itself have any environmental effects since those powers in themselves do not effect any substantive changes. These will be the powers that this Chamber will be invited to consider in later Bills. Nevertheless, I recognise that this amendment was an opportunity for Members opposite to raise issues of major concern and to identify their concerns, which will be subject to considerable discussion at a future date when the relevant Bills come forward.
I assure the Committee that the Government fully recognise the range and complexity of the environ-mental issues connected with coal mining and railway operations. We fully recognise the importance of securing that future coal mining activity proceeds only with proper regard to the environment and its protection, and that will be fully taken into account.
My noble friend Lord Boyd-Carpenter suggested that I may not be fully briefed on these matters. On future matters, no; on the matters involved in the paving Bill, yes. But, I am happy to reassure him that we shall make absolutely certain that the responsibilities are identified and taken into account.
Perhaps I could draw the attention of the Committee to the fact that privatisation has in the past identified and quantified certain issues which had not fully been dealt with before the necessary regulation and study of privatisation. I think in particular of how
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the decommissioning costs of nuclear were brought forward. Without doubt in the case of both these Bills it will bring forward issues on which decisions will have to be made.
The noble Lord, Lord Donoughue, raised the important matter of water pollution. That can be considered only when ideas of how to deal with it within the context of privatisation are brought forward. But I assure him that his views will be taken into account. Today's debate will obviously be well noted by my honourable friend the Minister of State for Energy.
All the Government's proposals for a new framework of working rights for the private sector coal industry will be brought forward in due course, taking into account the coal review. But full account will be taken of planning issues. All planning permissions for new mines or open cast developments will contain appropriate conditions as determined by the planning authorities for the restoration of the site etc. after the completion of coal extraction. Planning authorities have powers to enforce management schemes in respect of existing tips continuing in use.
My noble friend Lord Haslam pointed to the work which has already been done. I acknowledge that British Coal has a good record in site management and restoration. We certainly wish to make sure that future coal operators maintain equally high standards.
The Government are committed to a greener future in Britain. We want to see the railways play their part. We recognise that rail transport offers important environmental advantages over road. British Rail has published a policy statement about protecting the environment. It has a good record, both in terms of the environmental management of existing activities and in considering the environmental impact of new investment. We would want everyone who provides rail services to adopt standards which are at least as high. The rail privatisation White Paper makes clear that the Government intend to place appropriate duties on the rail regulator to ensure, through the requirements of a licensing system, that all new operators do just that.
The noble Lord, Lord Hylton, identified specific instances where issues of other mineral activities created problems. I note the seriousness of those matters. But in this instance I hope I have been able to reassure noble Lords that when in due course the relevant Bill comes forward they can be quite certain that the matters they raise will be treated with the highest of priorities. I hope that the amendments will be withdrawn.
5.45 p.m.
Lord Clinton-Davis: The first speaker from the government side was the noble Lord, Lord Boyd-Carpenter. He acknowledged that this is an important issue. I am delighted to hear that. I can tell him that nothing could have given my noble friend Lord Donoughue greater pleasure—perhaps more pleasure than anything else he can recall—than to think that he has enjoyed the support of the noble

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Lord. I counselled him that if the noble Lord supports us on this issue, at least in principle, then he should take care. We may well be wrong.
The noble Lord, Lord Haslam, referred to the fact that British Coal had a good record. Nobody disputes that in the environmental field. The point was also made by the noble Lord, Lord Ezra. But we wish to know—we shall come back to this point no doubt later on—the sort of conditions the Government have it in mind in imposing upon new entrants to the coal industry these environmental considerations. It is not always a matter of sale of the land, which was touched on by the noble Lord, Lord Haslam. Land can become derelict and may remain unsold. It is important that the conditions should apply equally in that situation.
I noticed that the noble Baroness referred to the considerations after coal extraction had been completed. But it may not be completed. It may just be interrupted, perhaps for rather a long time. Those are matters on which we look forward to hearing more from Ministers in due course.
The noble Baroness referred briefly to the railways and acknowledged the part that they play in the development of environmental policy. The trouble with that, however, is that the Government's priority in relation to transport is still essentially—overwhel-mingly—based on roads. I quoted statistics earlier and gave the Committee information (which in any event is within its knowledge). The Government's vision of green issues is substantially blurred by reason of the damage that is continuously being done through the great emphasis given to road haulage as against rail freight. That will become even worse if we suffer major pit closures, since something like 60 per cent. of the freight carried by rail at the moment comes from the coal industry.
We were not entirely satisfied with the Ministers' responses—but neither would we have expected that. They were tied to the concept that they can say little about these issues until we have moved outside the paving Bill provisions. However, when issues about which the Government are seeking to consult are being discussed this Chamber is also entitled to be consulted. Therefore, I hope that they will not continue to talk about the Bill being a paving Bill, saying that it is inappropriate to raise these issues. Of course it is appropriate and we shall continue to do so. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 42 not moved]
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 43:
Page 2, line 17, after ("exercisable") insert ("subject to subsection (5A) below").
The noble Lord said: The amendment gives us the opportunity to look at the Government's franchising document. It has gone out to consultation but only on a limited basis. There is still considerable uncertainty about the way in which the franchising authority will operate. The document was aimed specifically at seeking views from prospective franchisees. Is that how the document is to be seen, or are the Government interested in the views of other organisations about its contents?
An area of uncertainty is the criteria to which the franchising authority will work. The White Paper casts no light on that matter. The consultation document refers to responses to requests for initial bids for franchises being "evaluated against a number of criteria". What are those criteria? How will they be set?
The document indicates that the Secretary of State will set high-level objectives on a range of issues, including the grouping of services in franchises and so forth. However, they do not appear to include the establishment of criteria for the assessment of bids. Why not? The consultation document also asserts that the authority will,
"be responsible for paying subsidy to franchisees where necessary within overall budgetary constraints set by the Secretary of State".
What criteria will the authority use in allocating resources? Will the Minister outline the consultation which the Secretary of State will carry out before issuing guidance to the authority? Will he also indicate the criteria which the authority will use in undertaking its work?
I turn now to an issue which was not dealt with in the White Paper; if I am wrong I stand to be corrected. It is the potential conflict between franchising and the concept of open access. The consultation document does not enlighten us further on that point. It indicates that a franchise will not protect a franchisee from competition from other operators. That provision muddies the water even further. Therefore, it is difficult to understand the Government's assumption that some operators will be prepared to pay the franchising authority for the right to operate profitable services under a franchise. We have open access provisions on the one hand and the fact that a franchise provides no protection from competition on the other. What are the circumstances in which that will happen? For the reasons that I mentioned briefly it is important that the Minister should try to cast light on that issue. This Chamber is entitled to be consulted on the question of franchising, as are other outside interests.
The manner in which the Government's proposed access and charging regimes operate in practice is bound to have a fundamental effect upon the nature of the rail services provided in this country. The White Paper referred to a major consultancy in that regard. The franchising consultation document states:
"The Government plans to make its decisions on the principles known by the end of 1992".
It is essential that there is full consultation on the results of the consultants' work before any final decisions are taken. Will the Minister confirm that that will be the case?
On the question of objectives, the Government believe that access and charging regimes should meet certain objectives relating to issues such as efficiency, competition and discrimination. If rail services are to play a major part in maintaining healthy regional and local economies, it is essential that the objectives should be drawn more widely. The range of objectives which are established in the White Paper—com-petition for track slots, in particular into main stations at peak times—could have the effect of squeezing out

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local commuter services. Perhaps the Minister will acknowledge that that will be most deleterious. We ask that the objectives shall relate to environmental, social and economic issues and to transport needs.
The fulfilment of the railways' contribution to land use and environmental policy hinges on investment. The volume of investment and the way in which it is planned and advanced are critical. The White Paper makes it clear that that will be the responsibility of Railtrack primarily but the document does not sufficiently reflect the urgency or significance of that issue.
Those are critical matters. I repeat that the Chamber is entitled to be consulted about the Government's thinking, as are the potential franchisees. It is incumbent on the Minister to be a little more open with the Committee than he has been in respect of other issues using as a camouflage the nature of the Bill as sufficient reason for not going into detail. The issue is different at the very least. He must acknowledge that on the basis that the franchising document has been issued for consultation.
Recent press reports have suggested that the Government no longer intend to publish the proposed Coopers & Lybrand report on access and charging principles. A report to that effect appeared in the Independent on 22nd November. The newspaper reported that the Government intend to publish their own report in the New Year setting out a financial regime for sharing track costs. Will the Minister say whether those press reports are accurate? Is there any reason why the Government should not publish the consultants' advice? Will he confirm that there will be full consultation on that aspect of the Government's proposals? I beg to move.
The Earl of Caithness: I listened to the noble Lord, Lord Clinton-Davis, with great care. Unless I am mistaken his comments did not relate to the amendment. Perhaps he can explain that.
Lord Clinton-Davis: I thought that what I said was germane to the amendment.
The Earl of Caithness: I understand that the effect of the amendments will be that BR will have to exclude from its consideration and advice any proposal which involves the transfer of its functions, properties, rights or liabilities to Railtrack or to anyone who might become responsible for track or infrastructure, the rail regulator and the franchising authority. I do not recall the noble Lord moving that type of amendment. He spoke at length about the franchising document and I am happy to respond to some of the points that he raised. But, with due respect to the noble Lord, if he wishes to talk about a particular subject, it would be helpful if the amendment were relevant to that subject. That would help me to give him a fuller answer.
As regards franchising, the noble Lord said that he thought that the document had gone out for limited consultation. We sent out over 2,000 copies of the document and we have received useful responses from
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a wide range of parties, including nearly 50 expressions of interest. I was able to tell the Committee that yesterday.
As the noble Lord will be aware from reading the franchise document, it was deliberately set out in terms that we wanted to know what people who were likely to be interested in franchising services felt was important. We have given a great deal of thought to that area but we thought that it would be wrong to give a prescriptive set of rules in a document such as this. We believed it important that the matter should go out for consultation and we are considering the replies to the consultation document on franchising. We shall make a decision in due course on that. However, the responses that we have received have been extremely helpful.
I should have thought that the noble Lord, Lord Clinton-Davis, would welcome that. If we had said, "This is exactly how the system will work despite all the various different types of services that are provided", the noble Lord would have said that the Government were being far too prescriptive. Having thought about it carefully, the Government have taken a very different approach and have set out some generalisations and asked for consultation. The noble Lord now wants more detail. I understand that, and he will be given more detail in due course.
I turn to the amendments as I understand them. As I said earlier, the effect of the amendments would be that British Rail would exclude from its considerations any advice on proposals—
6 p.m.
Lord Clinton-Davis: I do not wish to get off on the wrong track here. This Bill enables British Rail to facilitate government proposals to transfer its functions and assets to other people. In order to consider the merits of that, it is important that we should have a clear understanding of the likely functions of those transferees. The aim of this amendment is to probe the Government on that point. If the Minister did not understand that, it may be my fault because I did not make myself clear.
The Earl of Caithness: I am trying to help the noble Lord on that. Over the past two days my noble friend and I have been extremely constructive in trying to answer questions raised. The noble Lord knows that on some issues we cannot go very far because consultations are still taking place with various bodies, including the PTAs and the PTEs. In other areas we can be much more forthcoming because decisions have been taken. At this stage, by the very nature of the amendments before us, we must respond generally.
I shall deal with the amendments as I understand them. Members of the Committee will appreciate that it is important that we can have British Rail's input into our proposals for the establishment of Railtrack, the appointment of the rail regulator and the franchising authority, as into any other proposals that we make. Indeed, those are central elements of the privatisation proposals.

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The Government are proposing that one part of BR will become a track authority—to be known as Railtrack—with responsibility for operating all track and infrastructure. Reference to that can be found at paragraph 16 of the White Paper. The franchising authority will be responsible for negotiating, awarding and monitoring franchises and will therefore have a key role in the future passenger railway. The rail regulator too will have an essential role in overseeing the application of arrangements for track access and charging, for promoting competition, preventing abuse of monopoly power and anti-competitive practices, promoting the interests of consumers and ensuring that network benefits are maintained.
It is clear to me that those three bodies are critical to the successful privatisation of the railways and that it is important not to exclude BR from playing its full part in providing input into our detailed proposals in that respect. BR's input can only be to the benefit of the privatisation process. I realise that the noble Lord does not like that process.
Lord Clinton-Davis: The Minister can never spare himself the little shaft at the end of his remarks, although it is rather unimportant and trivial. The Minister has failed to respond to two very important points which I raised. First, he says that 2,000 consultation documents have been sent out. To what category of organisation has that document been sent or has it been sent generally to everybody interested in rail transport? Perhaps the Minister can give an indication on that.
Secondly, I asked about the Coopers & Lybrand report, on which he was completely silent. Perhaps the Minister will respond to that before I indicate what I propose to do as regards the amendment.
The Earl of Caithness: Coopers & Lybrand have been providing advice to the department as part of the work on the charging regime. That work is still under consideration. The results will be published shortly.
Lord Clinton-Davis: I am glad to hear that the results are to be published, because that refutes the story in the Independent on Sunday. The Committee will thank the Minister for that information. The noble Earl has not responded as regards the other matter and I invite him to tell me about the general nature of the organisations to which the consultation document was sent.
The Earl of Caithness: As I said, 2,000 copies of the document were sent out from the department. They were available on demand but I do not have with me—and I apologise to the noble Lord—a complete list of the 2,000 recipients of the document.
Lord Clinton-Davis: I am not asking for a complete list. I am interested in the general nature of the people to whom it was sent. I am glad to know that the document is available. Will the Minister take into account the views of people other than potential franchisees?
The Earl of Caithness: As I said, the document was available on demand. It was open to anybody to ask
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for a copy and that person or organisation would have received a copy and would have then sent in a reply which would have been considered.
Lord Clinton-Davis: I am delighted with that response from the Minister. In his usual benign manner he has eventually given me a reply. It is always very difficult to extract that from him. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 44 and 45 not moved.]
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 46:
Page 2, line 19, at end insert:
("(5C) It shall be the duty of the British Railways Board and the British Coal Corporation to communicate their intentions to the Secretary of State who, within four weeks, shall present a report of such proposals which shall be laid before Parliament.
(5D) Any intentions in subsection (5C) above, which require action under subsection (1) above shall only be made by order of the Secretary of State.").
The noble Lord said: In moving this amendment, I shall speak also to Amendment No. 51. This amendment deals with the question of how accountability to Parliament will be met within the terms of the Bill. Amendment No. 46 deals with the requirements on the part of British Rail and British Coal. Amendment No. 51 deals with the obligations of the Secretary of State. I beg to move.
Baroness Denton of Wakefield: The noble Lord was refreshingly brief in moving the amendment and I hope that I have understood the point of his remarks. It may be that the noble Lord is anxious that without this amendment Parliament will be unable to scrutinise privatisation plans in detail before they are implemented. I am pleased to assure the noble Lord that that anxiety is misplaced. Parliament will have ample opportunity to debate the Government's plans as regards both these industries when substantive proposals are brought forward.
In the meantime, this Bill does not allow privatisation schemes to be implemented. That can only happen under the main privatisation legislation. I should add one further important point, which applies to British Coal. It is possible that in the coal review, options will be considered. For example, it may be that British Coal will wish to make an input as regards the extraordinary opportunities for the private sector in the production of coal. The amendment would hinder their making a full contribution to the development of such options. I cannot believe that the Committee wishes to put such obstacles in the way of British Coal making a contribution to developments which may be helpful to the nation's coal mining industry. I hope that I can reassure the noble Lord that there will be ample opportunity for both Houses to consider the issues of privatisation.
Lord Clinton-Davis: I like the reassurances given by the noble Baroness; they are much nicer than those given by her noble friend. I shall consider her remarks and in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 47 and 48 not moved.]
Clause 1 agreed to.
Lord Donoughue Lord Donoughue moved Amendment No. 49:
After Clause 1, insert the following new clause:
("Research and welfare
. Before any proposal is made under section 1(1) of this Act in relation to the coal mining industry, regard shall be had to the need for the application out of any proceeds of sale or transfer of the property and assets involved of sufficient funds for the following purposes, namely—

(i) the maintenance of the Coal Research Establishment on the basis of an actuarial calculation of its requirements at the date of implementation of the proposal; and

(ii) the maintenance of the Coal Industry Welfare Organisation on the basis of an actuarial calculation of its requirements at the date of implementation of the proposal; and

(iii) suitable arrangements for the sale or transfer to ensure the continued supply of concessionary coal to any person entitled to such coal as a result of his or her spouse's employment at any coal mine affected.").

The noble Lord said: Amendment No. 49, standing in my name and that of the noble Lord, Lord Ezra, seeks that before the implementation of Clause 1, the proceeds of privatisation should be used for three specific purposes among others—to maintain the Coal Research Establishment, to maintain the Coal Industry Welfare Organisation and to maintain the continued provision of concessionary coal. I shall speak briefly on each point.
I believe that the Coal Research Establishment is the only research centre undertaking research into coal utilisation in the British Coal industry. It is apparently funded from diverse sources. British Coal contributes around £8 million per annum net; the private sector, particularly the power plant manufacturers and operators, contribute and there are some EC grants. The total investment is already inadequate. British Coal's research and development expenditure is only one-twentieth of that in Germany. It is less than that in the United States. We bear in mind the sad experience of Grimethorpe and note that the United Kingdom is the only OECD major coal producer with no operational clean coal power technology.
Our fears are that research and development—already inadequate—will disappear altogether after privatisation, as we know happened in electricity where the CEGB research centre closed down. With that fear in mind we suggest the establishment of an endowment fund from the proceeds of privatisation to endow the Coal Research Establishment permanently.
The Coal Industry Welfare Organisation originated with the Acts of 1920 and 1952. It is financed by a levy on tonnage produced. Can the Minister say whether that levy will continue after privatisation? It is important that those valued welfare activities, especially in relation to the disabled, should continue in the devastated mining communities. Therefore, again we suggest the setting up of an endowment fund. However, these are probing amendments. We are not committed rigidly to the suggestions but wish to give the Government an opportunity to say that they are committed to the continuation of the Coal Industry Welfare Organisation.
Concessionary fuel is a major item. It affects around 260,000 beneficiaries. The future liability costs are astronomical. I believe that it was estimated by the Rothschild Report—we have not officially seen that report but I am sure the Minister has—that through to the year 2000 it will cost £785 million. Can the Minister give an assurance that that concession, on such a scale, will continue after privatisation. I beg to move.
6.15 p.m.
Baroness Denton of Wakefield: For the sake of the record I must repeat that this paving Bill is not the method by which the privatisation of the coal industry will be achieved. No sale or transfer of assets that is not already possible under existing legislation can take place until further legislation has been passed by both this Chamber and another place. Therefore the paving Bill is not an appropriate place for the detailed provisions such as those contained in the amendment.
However, I acknowledge that the noble Lord, Lord Donoughue, raises important issues. I should like to set out the Government's thinking on them, as I hope I did on the question of research and development in answer to the noble Lord, Lord Ezra, when I was able to assure the Committee that privatisation considerations will include careful attention to the future of the research work carried out by British Coal and to the future of the Coal Research Establishment. I can assure the Committee that we will take account of the points raised both yesterday and today on the question of research.
With regard to concessionary coal arrangements, my honourable friend the Minister for Energy gave categoric assurances on the subject in another place. I shall repeat them now. Entitlement to concessionary fuel will be safeguarded. The Government recognise the importance of the coal industry's social welfare arrangements which contribute to the wellbeing of miners, former miners, their families and mining and former mining communities. The Coal Industry Welfare Organisation plays a valuable role in co-ordinating, administering and funding social welfare arrangements and activities. It provides direct benefits and services.
In the context of privatisation the Government will want to be as responsive as possible to the anxieties about the future of the coal industry social welfare arrangements and will be giving careful consideration to the importance of the sensitive issues involved, including funding.
The points raised are important. I acknowledge that those and the points raised during the discussion of the Bill in Committee are matters which concern the Committee and were raised for that purpose. In relation to Amendment No. 49 I hope that the noble Lord will recognise that it is not appropriate for this Bill and will agree to withdraw it.
Lord Donoughue: We are grateful for the positive and characteristically constructive way in which the Minister approached what she rightly saw as an opportunity to raise the issues. We note with pleasure that she gave firm assurances on two points and a

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categoric assurance on the third. At whatever is the later stage that is appropriate for the Government to state what they have in mind, we look forward to receiving categoric assurances on all three issues. With that in mind, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 [Short title, financial provision and extent]:
[Amendment No. 50 had been withdrawn from the Marshalled List.]
[Amendment No. 51 not moved.]
[Amendments Nos. 52 to 54 had been withdrawn from the Marshalled List.]
Clause 2 agreed to.
House resumed: Bill reported without amendment.

Income Support (General) Amendment (No. 3) Regulations
6.20 p.m.
The Countess of Mar The Countess of Mar rose to move to resolve, That, in the light of the report by the Social Security Advisory Committee that the Income Support (General) Amendment (No. 3) Regulations 1992 (S.I. 1992 No. 2804) should not be proceeded with, this House calls on Her Majesty's Government to take account of further evidence on the effect of the changes proposed by the regulations and accordingly to reconsider the desirability of the regulations.
The noble Countess said: My Lords, the Secretary of State for Social Security believes that the effect of these regulations,
"will be to ensure that single people and couples without dependent children who are not actively seeking work will have no access to benefits for the unemployed, including income support hardship payments."
There are to be three exceptions. Where the partner of an unemployed person is in receipt of income support disability premium, where a claimant is pregnant or is the partner of a pregnant woman, and where there are dependent children or young people in the family, existing access to hardship payments will he retained. The latter two were accepted upon the advice of the Social Security Advisory Committee.
In all the years that I have been in your Lordships' House I cannot recall another instance of a government proceeding with regulations when the Social Security Advisory Committee has recommended,
"that the proposed regulations are not proceeded with".
It will be the first time since the Poor Law of 1601 that individuals are left with no means of state support. It will also be the first time that a distinction between the deserving and the undeserving poor is made and written into our statute book.
I agree with the Government that individuals who are unemployed should make a concerted effort to find work and that they should be receptive to advice and assistance if they do not know how to apply for jobs. What disturbs me about the regulations is that, like the fishermen who operate illegally, the Government's mesh in their fishing net is too small. Despite the Secretary of State's denial that the regulations are to catch the New Age travellers who seem so blatantly to flout the existing law, it seems to all who have studied
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the evidence that this is what spurred the Government into action. Unfortunately, it would appear that a great many more people than those who have no intention to seek work will be caught in the new net. I have my doubts that the regulations will be any more effective than the existing ones in achieving their objective. We must remember that those who intend not to look for work often have enough intelligence to "work the system". It will be the honest and the borderline people who suffer. Other speakers will no doubt give the noble Lord the Minister examples.
Until October of this year claimants of unemployment benefit, who were suspected of not actively seeking work, were sent a warning letter following an interview with an employment service officer. If the claimant failed to furnish the interviewing officer with satisfactory evidence of his job-seeking activity, the case would be referred to an unemployment benefit officer who could suspend payment of benefit. The claimant should have been advised that he could claim income support hardship payments until his case was determined by an adjudicator. It does not appear that this advice was always given, for in the year ending March 1992 there were only 1,493 applications for severe hardship payments from claimants who had failed the actively-seeking-work test, and of those only 850 applicants succeeded. In that same year over 25,097 warning letters were issued and 6,333 cases were referred to an adjudication officer. Of those, 1,768 were disallowed benefit.
Even considering that more than one warning letter may have been sent to some claimants, the number of people judged guilty without evidence is considerable. Since October 1992 warning letters have not been issued unless the unemployment benefit officer considers that the claimant has genuinely failed to understand the rules. The letters were withdrawn because the department believed them to be ineffective. The figures I have just quoted would appear to belie that.
The issue of warning letters is an administrative procedure. However, the letters give claimants clear warnings that they must produce evidence that they are actively seeking work. May I ask the noble Lord the Minister whether he is absolutely satisfied that the new procedures will provide sufficient safeguards for those who are not deliberately seeking to flout the regulations? May I ask him to bear in mind particularly the report of the chief adjudication officer?
The Secretary of State at paragraph 7 of his reply said:
"I am bound to take account of the results available from the research and evaluation undertaken which have demonstrated a clear need to modify the legislation to curb abuse by those who claim benefits on the basis that they want to work but make no effort to do so".
I ask the noble Lord the Minister: what research has been done and where may the published results be found? Without that evidence we have only the memorandum of the Policy Studies Institute to the SSAC in which it states:
"Our own research identified a very high commitment on the part of claimants to effective job search. There was strong

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evidence that claimants were flexible in the type of work they sought, and that they took the steps to seek work expected of them in the legislation".
That would appear to be corroborated by the evidence that only 0.2 per cent. of those claiming unemployment benefit each year have their benefit disallowed because they have failed the actively-seeking-work test. Does the Government's evidence contradict that?
Those claimants who are thought not to be actively seeking work will be asked verbally to provide proof that they have been doing so. Other speakers will elaborate on the circumstances when such proof is not immediately available. Lack of proof of an active job search would oblige the unemployment benefit officer to suspend payment of benefit and to refer the case to the adjudication officer. There may be a considerable delay before the claimant's case is reviewed. In the meantime the claimant loses not only his unemployment benefit but his housing benefit, community charge benefit, and passported items like free prescriptions because he has no entitlement to income support.
The SSAC expressed its concern about,
"the wider implications of leaving people without any visible means of support for a period including possible homelessness and resort to crime".
The Secretary of State's response is,
"Those who seek to evade their personal responsibility to look for work and turn to crime will face the full force of the law".
How is a person with no income to feed, clothe and house himself unless he turns to crime? Cynically, I could say that if he does so he will be arrested and probably imprisoned, there to receive the succour of the state at a much greater cost to the taxpayer than that of severe hardship payments or even of unemployment benefit. The SSAC clearly outlines the "perceived problem". It deals with the difficulties created by suspension of benefit and the operation of the safety net and goes on to state that the means of dealing with the problem are already in place. I have no doubt that the noble Lord the Minister will have read them very carefully.
The SSAC recommended,
"that the proposed regulations are not proceeded with and that the administrative measures introduced are monitored and kept under review".
The committee anticipated that the Government might not accept its recommendations by adding four groups of people who should receive additional safeguards. As I said, the Government have accepted that pregnant women and 16 to 19 year-olds dependent upon their parents should be protected.
I live in hope that the noble Lord the Minister will feel able to ask his right honourable friend the Secretary of State to reconsider his decision in the light of the information he is given tonight and that he will be able to reassure me and many of the SSAC respondents who perceived that the withdrawal of the warning letter was,
"an indication that the Government had decided to proceed with the regulations in advance of the Committee's report",
for I fear that this exercise may be another example of the Government's pseudo-democracy. I beg to move.
Moved, That, in the light of the report by the Social Security Advisory Committee that the Income
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Support (General) Amendment (No. 3) Regulations 1992 (S.I. 1992 No. 2804) should not be proceeded with, this House calls on Her Majesty's Government to take account of further evidence on the effect of the changes proposed by the regulations and accordingly to reconsider the desirability of the regulations. (The Countess of Mar.)
6.28 p.m.
Baroness Hollis of Heigham: My Lords, we are all grateful to the noble Countess, Lady Mar, for introducing this Motion tonight. Had she not done so these regulations for policing the work-shy would have come into force on Thursday without debate. What these regulations do, as the noble Countess has said, is to withdraw hardship payments to those available for, but not actively seeking, work.
I want to suggest tonight that this is perverse, indeed one of the most perverse changes in regulations that it has been our misfortune to encounter. It is perverse because it assumes first that there is a labour shortage; that is, that we need these reluctant workers in work. Secondly, it assumes that unemployed claimants are qualified to fit those vacancies, but that, thirdly, they are failing to do so because they are work-shy. It assumes that they can afford to be work-shy because benefits are too generous, and that therefore abuse and fraud of the system is on the increase. Finally, it assumes that if, to quote the Minister's phrase, a short, sharp shock is administered, claimants will alter their behaviour, and actively seek, and presumably find, work, thereby saving the taxpayer money and improving their own moral fibre.
Every one of those propositions, in my view, is false. Every pressure group, charity, church, local authority association, the research of the Institute of Policy Studies, on which I have drawn, and above all the Government's own Social Security Advisory Committee have told them so and have called on the Government not to implement these changed regulations. Why? First, the changed regulations assume a labour shortage but, as a claimant in Newport said, "If the jobs ain't there, you won't find them, will you?" Competition is intense, and that same benefit office in Newport found that 82 per cent. of all job vacancies were filled within one week of being listed. As of June 1992, there were something like 3 million claimants and a stock of 124,000 registered vacancies. One can multiply by three perhaps to get the total vacancies in the country but you still have eight claimants for every job. If one claimant takes a job, another person becomes a claimant. As the Social Security Advisory Committee itself says, in times of high unemployment the actively-seeking-work rules should be eased and not tightened. To tighten them is cruel and perverse.
Secondly, the changed regulations assume that claimants are able to fill the vacancies, but employers want skilled and experienced people. Many employers will not use job centres precisely because many claimants are illiterate, innumerate or inexperienced, and, if they do use the job centres, employers find themselves deluged with applications which they cannot field. Indeed the claimant's request for

1307
evidence that they are actively seeking work from employers is actually deterring employers from using the job centres themselves. No matter how hard claimants may search, they cannot thereby alter how suitable they are to an employer who wants the requisite qualifications and experience. Indeed, as nearly half all the vacancies notified are in any case part time, and anyone seeking work actively must seek a full-time job, I think one can see that this is irrelevant.
Notwithstanding that, the Government apparently believe that many claimants remain claimants because they are work-shy. On the contrary, as the noble Countess, Lady Mar, has said, all the evidence suggests that they are desperate for work. What stops them working, then? It is the stigma of being, in the eyes of employers, one of the long-term unemployed. It is their lack of basic skills, their poor health, their lack of money to job search, to travel, to have respectable clothes. It is sometimes discrimination: by age, by gender, by race and by where they live in the countryside perhaps. For many people it is the problem especially of the vicious cycle of joblessness and homelessness, but, above all, it is the lack of jobs—a 3 million lack of jobs.
That is why the marginal are unable to re-enter the labour market: not because they are choosy, not because they are work-shy and not because they demand too-high wages, but because they face unemployment such as they have never known. For these men and women, as the Policy Studies Institute has pointed out, the actively-seeking-work rules are seen as an irritant which contributes not to job seeking but to a pointless recording of fruitless efforts chasing non-existent jobs for which they are probably not qualified.
Yet the Government insist perversely that there is a core of the work-shy, presumably kept afloat by a benefit system and hardship payments at 60 per cent. of income support rates which are thought to be sufficiently generous to encourage scrounging. A single person gets £25 per week hardship payment, with £49 a week for a couple. But, given, as the noble Countess, Lady Mar, has said, that claimants almost invariably responded to the Government's warning letters about needing evidence to show that claimants are actively seeking work, it is clear that they do recognise that benefits depend on a willingness to work. Now of course the Government have seen fit to withdraw the warning letters.
Why? For heaven's sake, why? It means that many more people will unwittingly fall foul of the actively-seeking-work rules, will be referred to an adjudicating office and will, while their case is being considered, have benefits suspended and will not now after Thursday—unless your Lordships see fit to alter the situation—be eligible for hardship payments. They will therefore be destitute. The Government appear to believe either that benefit is generous, which it is not, or that fraud is increasing, which it is not. Indeed, the number of fraud cases handled by the benefits agency not only is not increasing but has actually fallen. The number of benefits suspended during 1989 was 104,000; that is now down to 67,000.
1308
What is worse is that when a benefit officer has doubts about a claimant actively seeking work, benefit is suspended until the case is determined. In two-thirds of all cases involving availability and actively seeking work, the original decision has been found to be wrong. As a result, 300,000 innocent people per year have lost benefit and will in future have no recourse to hardship payments and, with that, the passport to benefits for housing and community charge. The chief adjudicating officer is extremely worried about this. In his 1989/90 report he commented:
"Too often time is wasted on an appeal to an appeal tribunal when the original decision was clearly wrong and ought to have been revised".
There were 300,000 people losing benefit who should not have done. Now, if these regulations go through, they will have no access to hardship payments while their claims are being investigated. In other words, it is not a problem of people claiming benefit when they should not have it but of claimants losing benefit when they should continue to receive it.
But at least we have had the fail-safe of hardship payment, even though only one in five of those who were entitled to it actually applied for it. That suggests there is no evidence of "feather bedding". Now, under these regulations, there is nothing at all: no buffer between an unsafe decision and destitution. As the Social Security Advisory Committee itself says—and I read from its report at paragraph 26:
"This is a severe penalty to suffer on the basis of a doubt about which, until the Employment Service adjudication officer has decided the matter, the person has no redress. We regard"—
this is the Government's own advisory committee—
"leaving a person without even a reduced level of income whilst the doubt is considered as unjust and we urge the Secretary of State to reconsider this proposal. We regard it as unacceptable to put at risk an unknown number of people in order to deal with the problem of New Age travellers. We are concerned about the wider implications of leaving people without any visible means of support for a period including possible homelessness and resort to crime".
What do we expect? Do we expect destitute people to starve quietly or do we instead expect them to beg, pilfer or steal? The Government assume that the withdrawal of benefit and hardship payments will modify the behaviour of claimants and will administer a short, sharp shock, especially to the New Age travellers. I am not, by any stretch of the imagination, here tonight defending New Age travellers. What I will argue is that these people will not he caught by these regulations. They are sufficiently streetwise to produce evidence that they have indeed sought work but were refused. They can engineer refusals. Indeed, if they were probably not available for work in the first place as well as not actively seeking it, they will continue to be available and to apply for hardship payments under Regulation 8(3). So these regulations will not catch the travellers. Who will they catch?
They will catch the honest, the foolish and the fragile; they will catch the marginally employable—those who are illiterate and therefore do not keep records of actively seeking work. They will catch the million people with learning difficulties who may not know that they need to keep records. They will catch those for whom English is not their first language and who therefore do not keep records in English. They

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will catch those who have mental and physical difficulties in holding down work, those recently discharged from long-stay hospitals and those who experience severe depression. They will catch those who are partially sighted, those with hearing problems, those suffering from epilepsy and those with chest and heart conditions; or indeed those actively visiting people in hospitals or who are themselves carers in the home. They will catch those who dare not actively seek work, such as battered wives in hostels without their children who are avoiding rough husbands. They will catch those with AIDS who are shunned by the labour market.
Who else will the regulations catch? They will catch the unskilled, long-term unemployed older man in an area of high structural unemployment who has gone through several bouts of employment training, been rejected from countless jobs and who is now among the ranks of the discouraged workers. One is insisting that such people undergo yet further rebuffs.
We believe that the regulations will catch 30,000 such people: the vulnerable, the marginal, the isolated, the partially-disabled adult with low self-esteem and few skills at the very edge of the labour market, from whom for the first time in 400 years government will withdraw all visible and legitimate means of financial support. In this context, to talk about a short, sharp shock is cynical and callous.
Will we have more examples like the following? I cite the case of a man with three children who failed the availability for work test because he had spent one day per week in hospital having his kidneys matched for a kidney transplant to his sick brother. He lost his benefit. I cite the case of a woman who was on invalidity benefit for two years and was taken off by the DHSS on the 26th December without being told about it. She learned of it on 19th January, applied for benefit and was refused on the ground that she had not been actively seeking work during the previous three weeks when she had not known that she needed to. I give an example from my own city, Norwich, which occurred in July 1990. Youngsters who were training for heavy goods vehicle licences to make themselves marketable lost their benefit because they undertook training.
I could go on and on by referring to dozens of such cases. What I hope they show is that the regulations and the assumptions on which they are based are deeply and profoundly perverse—the most perverse regulations it has been my misfortune to encounter. It is my misfortune but claimants' misery. For those who lose not only their income support but housing benefit and hardship payments, such perversity will make them destitute and perhaps homeless, unless your Lordships will otherwise tonight. We plead with government to think again.
6.43 p.m.
Earl Russell: My Lords, I too am grateful to the noble Countess for introducing the debate. I hope that the Government do not regard it as a minor matter to leave people without visible means of support. I must express my regret that a change of this magnitude is
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being brought in by regulation. Not for the first time it raises the question of how this House should discharge its duties as a revising Chamber in relation to regulations, but I shall not detain the House with that now.
The regulations were brought forward with a fanfare of publicity about travellers. I am unsympathetic to travellers for the good Liberal reason that they have a lifestyle which interferes with the liberty of others. The noble Earl, Lord Ferrers, will confirm that I wrote to him in August suggesting possible ways of dealing with the problem of travellers. Like the Social Security Advisory Committee, on the whole I was looking in the public order direction. I do not believe that he found my remarks unhelpful, whether or not they were practical. But this is not the right way to address the problem of travellers. Travellers are by definition itinerant; benefit officers are stationary. I believe there will be some difficulty in catching up with travellers.
As the noble Baroness, Lady Hollis, suggested, the regulations will catch only the artless dodgers. As the Social Security Advisory Committee put it in paragraph 19 of its report:
"We understand that it is not possible to draw up regulations in such a way as to identify precisely those people who clearly have no intention of actively seeking work and who seek to maintain an alternative lifestyle supported by state benefits".
Most of the people caught by the regulations will not be travellers. As a response to the genuine problem of travellers it will be about as effective as pursuing a pickpocket down Oxford Street with a shotgun. If the regulations are in the event withdrawn, I hope that the Government will pay attention to various alternative routes to tackle the problem of travellers. We agree that there is a problem that needs to be tackled.
I object to these measures on three different grounds. First, there is a list of people withdrawn from exemption on whom the requirement actively to seek work is now placed when it was not before: for example, childless women in refuges. My noble friend Lady Hamwee intends to speak further on this. What she will say will be said with the full support of these Benches. I say only this: that this is a subject on which I have hitherto spoken warmly of government policy. I would be very sorry to have to cease to do so. In addition, the actively-seeking-work regulations are being applied to those with minor disabilities insufficient for a premium—for example, people who are educationally subnormal. That has caused considerable concern to Mencap and many others. To my surprise, it applies to the newly disabled. Being newly disabled is in every meaning of that overworked word traumatic. It takes most people a little while to know what work they will be fit for after becoming disabled and whether they should register as disabled. The effect of the regulations will be to make people register as disabled when they might not otherwise have needed to do so.
The second matter that concerns me is the total withdrawal of the safety net, which is the most serious aspect of all. One is talking of £20.15 a week. If that is a perverse incentive it is a very little one. I cannot think of many people who would change their whole

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lifestyle for the sake of £20.15 a week. Some people have already been deprived of the safety net. It seems to me important—and unfortunate —that we do not know what has happened to them. No research has been done on it and we are destitute of information. That seems to me to be a little incurious of the Government, and I hope they will not reply like Goldfinger, who said, "She left my employment". We should know what happens to people without the safety net before we propose to put a large number into that category.
But on both sides of the House I think we must face the fact that in some respects we are experiencing here a clash between right and right. We on these Benches support the requirement that people should actively seek work. We do not regard it as acceptable that people should simply take benefit and do nothing. But that is not the only factor we regard as right. We also believe it is right that people should not die of starvation and that the use of starvation as an instrument of policy is unacceptable. If we deliberately decide to withdraw sustenance from other people, we diminish ourselves.
One of my friends was once catching a train from Waterloo when she slipped and fell. She was wedged between the train and the platform. The train was just about to move, which naturally caused her anxiety. She called for help, but the other passengers on the platform just looked at her and walked away. I think that the people who did that were diminished by doing it. Similarly, if we see people absolutely without means of support and do nothing we risk diminishing ourselves.
So, how do we solve this clash of right and right? Depriving people totally of benefit is like switching off a life-support machine. One can make a powerful case for saying that that should never be done, but that is not what I intend to do. What I intend to do is to say that, rightly, those who wish to switch off a life-support machine must shoulder a very heavy burden of proof. It is that burden of proof which I do not think that this Government at present can shoulder.
Let us look, for example, at the way in which the Government are applying the actively-seeking-work test now. They are disentitling people—the citizens' advice bureaux have reported a number of cases—for not showing written records of job applications even when they are illiterate. I raised the possibility that this might happen when the actively-seeking-work regula-tions were introduced in 1989. I told the story of the occasion which is seared on my childish consciousness—when my father was refused a ration book on the grounds that he was illiterate. The noble Lord, Lord Skelmersdale, who was at the Dispatch Box replied:
"If the claimant cannot read or write, we shall not expect him to write letters to employers or indeed to read advertisements in newspapers".—[Official Report, 22/6/89; col. 392.]
In the light of that assurance, I hope that my noble kinsman will consider whether more guidance is needed on the question of the illiterate. I could make similar points about the mentally handicapped, and many similar points about those with an undiagnosed mental illness. There is a lot of evidence to suggest that
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that is common among people on benefits, but I shall invoke only what noble Lords have seen on our streets.
On the question of the burden of proof, which is the one the Government must answer, the crucial evidence to me is the withdrawal of the warning letter, which is not even in the regulations. It is a Department of Employment circular of last August. This makes it seem like what the first Lord Burghley described as,
"rather a device to seek for offenders than to reform any".
In fact, it prompts in my mind the suspicion that what is at issue here is not the moral principle—not even the travellers—but a financial savings target connected with what we know has been a very tough public spending round. Of course, I know that savings are needed, but we might consider whether savings will actually be achieved. If these people become disentitled to benefit they will disappear from the records of the Department of Social Security, but they will not, I hope, instantly disappear from the globe. Something else will happen—and whatever that something else is, it may have cost implications.
The Secretary of State says that he hopes that when they have received their short sharp shock these people will behave in a more socially responsible manner. He did not say,"Get a job"; he used language in a more socially responsible manner. This is not just because there are no jobs; it is also because actively seeking work is a very expensive process. My two sons have been doing it recently. In London it costs them something over £10 a week. I know that because I audited it. I heard recently from a voter in South Molton explaining that in South Molton actively seeking work is impossible unless one has a car. Those of your Lordships who know South Molton, will, I am sure, find that believable. However, one does not run a car on no visible means of support. So, if one physically cannot actively seek work, one will not.
I have tried to estimate the net costs. It is a hypothetical question, but one must try. I do not think that more than 5 per cent. of those involved are likely to get work. I have estimated a saving in the region of £55 million—perhaps £1 million more as a result of tax and national insurance contributions from those who get work. A certain number will, of course, sponge. Some, ironically, will become New Age travellers and create public order costs which I have made no attempt to quantify.
Perhaps about 25 per cent. will become ill. It seems likely that we shall be dealing with about 25,000 people, so that means 6,250 people becoming ill. Here we have something a little like the old procedure of ducking witches. It always seemed to me unfair that the innocent witch sank and was in danger of drowning and the guilty witch floated and was quite safe. Those who are not prepared to behave illegally are those who are liable to become ill. As a hypothesis—and this is not unreasonable—I have assumed that of those 6,250 people, 10 per cent. may become mental hospital patients. According to the Mental Health Foundation, that would cost £26,280 a year per patient. For 625 people, that would amount to £16.5 million, and one could probably add on £5 million in

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administration costs. I have not costed those who will rely on anti-depressants. That is rather tricky, but it is a real figure.
Perhaps about 50 per cent. will turn to crime. The MORI report on 16 and 17 year-olds and the case studies that I have recently received from the Nottingham Young People's Benefit Campaign show that theft, drug pushing and prostitution will be among the crimes selected. The Secretary of State says that they will feel the full rigour of the law. Fair enough, but he has to catch them first. More of these crimes will lower the detection rate. I shall not dwell on the risks of the bankruptcy of a major insurance company, but it is not impossible. Shoplifting may put up prices. My noble kinsmen can tell me what it would cost the Department of Social Security to have a 0.1 per cent. increase in the retail prices index. I think that it would wipe out all his savings. Putting someone in prison costs £4,779 a year. If 10 per cent. of these people were imprisoned, that would cost some £6 million.
Some will go into prostitution, and some of those are likely to get AIDS. I have used an estimate here of perhaps 125 people. This is out of an initial sample of 25,000 people. I have assumed—and this is not an unrealistic assumption to make about prostitutes—that each of these 125 might infect 50 people. The cost of treating an AIDS sufferer in a hospice is £104,025 a year, which adds another £13 million. That means that £40 million of the £55 million saving has gone in identifiable costs. I have not calculated the police costs, the GPs' costs or the security costs.
We are often told that humanity is all very well but we have to count the cost. I agree that we have to count the cost and I think that humanity is the best policy.
7 p.m.
Lord Stanley of Alderley: My Lords, not for the first time I find myself wishing to support this Motion and also the Government's order. I am sure that many, if not most, of your Lordships have been in a similar position. The problem—or perhaps the privilege —of sitting on these Benches is that the Whips do not put pressure on us to vote against our consciences, so I get no help from them. If I decide wrongly, I hope that I am the guilty witch and not the innocent one.
I have tried to tackle the problem as follows; first, is the intention behind the order correct? Secondly, does the order encourage the right methods to achieve its intention? Thirdly, what improvements, if any, can your Lordships make to either the intention or the method? Many of your Lordships have implored the Government to do something about people who exploit the welfare state, in particular New Age travellers. I have pressed, and will continue to press, the Government to make it more difficult for New Age travellers to disrupt and exploit the lives of the public. I am pleased to hear that the noble Baroness, Lady Hollis, and my noble kinsman Lord Russell take a similar view so far as concerns New Age travellers. The order certainly makes an attempt to do that. I hope that other measures will be forthcoming. I must
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therefore come to the conclusion that the intention behind the order is correct. I had hoped that all noble Lords would agree, but I fear that the noble Baroness, Lady Hollis, does not. Perhaps I interpreted what she said too narrowly.
I turn to my second question. Does the order encourage the right methods to achieve its intention? Having listened to your Lordships and read brief after brief from many organisations which are experts in the field of social security, I am not so sure. I am inclined to think that the order may catch the innocent helpless person rather than the New Age traveller for whom, as I have already said, I have absolutely no financial sympathy. But I am probably one of the least knowledgeable of your Lordships on the workings of social security payments so I am not in a position to judge. Assuming the worst, as any farmer always does, that the method advocated in the order is at fault, what can your Lordships do to encourage the right method to achieve the order's objective, with which I am fully in agreement?
As I see it, your Lordships have an alternative: to press the Motion or to accept what my noble kinsman Lord Henley is going to say. I hope that my noble kinsman will spell out what action the Government could take if they find the order flawed. I shall listen to him very carefully.
I support the intention behind the order. I am worried as to whether the method is correct, but even if its method is flawed we cannot and should not overturn the order. Apart from anything else it has a financial aspect. However, the Motion before us does not do that but its effect if agreed would have no practical result in altering the order. It might even discourage the department from keeping the matter under review, which is what I hope the Government will do. Certainly I shall be extremely worried if that is not said by the Government.
Therefore I come to the conclusion, for better or worse, that the best way forward is to make sure that the Government keep the matter under review. To press the Motion would be childish; it might be petty; but it certainly would be pointless.
7.5 p.m.
Lady Kinloss: My Lords, I wish to support the Motion of my noble friend Lady Mar. I find it strange that the Government should ask the Social Security Advisory Committee to advise on the Income Support (General) Amendment (No. 3) Regulations 1992, and have then refused to accept many of its recommendations. I cannot agree with fraud in the social security system in any sense, but, reading the report of the SSAC, it would appear that there are already sufficient regulations to achieve the Government's object.
The present system penalises those people who have been referred to the Employment Service adjudicating officer for a decision on "actively seeking work" and are later found to satisfy the test. Under the present regulations, if the adjudicating officer believes that any of these people would suffer hardship, he may agree to a reduced payment of income support while awaiting a decision. However, under the proposed changes, they would be left without any income. Such people

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constitute a significant proportion of those referred to the adjudicating officer. In the six months to March 1991, a high percentage of those referred had their claims allowed. The proposed regulations would remove any discretion to make a hardship payment to a single person or a couple without dependants, even if hardship would result, while awaiting an appeal hearing. Would the Minister not agree that this could force people into crime? In suspending benefit while an adjudicating officer decides on a case, surely then the person concerned is treated as guilty before any decision has been made which is appealable. Is this not contrary to the spirit of English justice?
Many of the voluntary agencies dealing with persons of varying disabilities are concerned that the interviewing officer may not fully understand their particular difficulties, such as those with physical, sensory or learning difficulties, in seeking work. The two latter disabilities may not be obvious, particularly those with learning difficulties, who may well not understand the need to keep a record of job applications. The withdrawal of the warning letter, except where the person is considered genuinely to have misunderstood what is expected of him, may cause the disabled further distress.
The Social Services Advisory Committee also suggested that one letter of warning would be sufficient in any period of unemployment before any further action was taken. This would at least warn people of the need to take action. The Association of County Councils fears that the Government's proposals will affect a large number of disadvantaged and vulnerable people, such as those of no fixed abode, whose mental and emotional health may be poor and who are on the margins of unemployment/sickness benefit. The effect may well worsen the very marginalised destitute single people.
The Spastics Society feels that the Government's proposal to remove access to hardship payments of income support from certain groups of claimants, while appreciating their attempt to protect disabled people from these charges, breaks the "safety net" in the social security system and is afraid that some disabled people will not be protected by the exclusions. MIND finds that inquiries to mental health work schemes for help when benefit is under threat of suspension indicate that people in this group do need the chance which the warning letter gives them to avoid this action. The knowledge that suspension of benefit can be done in this way can heighten the anxieties of claimants and be detrimental to those with a psychiatric history.
The CABs are reporting considerable hardship under existing rules, when benefit is suspended if a doubt arises about entitlement to unemployment benefit, when it is believed that they have left work voluntarily without good cause, or appear not to be actively seeking work. At present an unemployed person can apply for a hardship payment, but under the new regulations an unemployed person whose case is before an adjudicating officer will have no recourse to any payment. What do they live on? Thin air?
A CAB in North London reports the case of someone whose local unemployment benefit office
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insisted upon him completing a written job search record, despite his having stated that he could neither read nor write. What will happen in such cases if these new regulations come into force? Should not the interviewing officers perhaps be encouraged to help claimants such as the case I have just mentioned?
One group of people who may find it hard to prove that they are actively seeking work are women without children who are in a refuge because of sexual abuse and violence. This group may find it very difficult to show evidence of actively seeking work, because of their need to be as discreet as possible of their whereabouts. The SSAC believes that some discretion to make hardship payments should be retained where fear and the need for protection makes it more difficult actively to seek work. I hope that the Minister will agree to bring this point to the attention of his right honourable friend the Secretary of State.
My noble friend Lord Rix, who is unfortunately unable to be here this evening, has asked me to speak of the worries that the charity Mencap has with regard to people with mild disability, with no educational qualifications, little or no literacy, and deficient in social skills, struggling to live independently and falling outside the scope of services increasingly focused on those with a more severe learning disability. They may be very anxious to work, but quite unable to organise their affairs and present their case in a way which will defend their benefit interests. It would be a tragedy if these people were to fall through the safety net.
Finally, perhaps I may remind your Lordships that 20th November was the 50th anniversary of the publication of the Beveridge Report on social security. Are we now to go backwards?
7.12 p.m.
Baroness Hamwee: My Lords, I support the Motion. One of the few things that has been said in the debate with which I do not agree is the analogy of my noble friend Lord Russell. He said that the regulations were comparable to using a shotgun to catch a pickpocket in Oxford Street. I believe that a different weapon would be the correct analogy—one whose shot is scattered more widely; or perhaps a fishing net which catches many minnows but does not necessarily catch the big fish. Among the minnows are the women to whom reference has already been made by a number of your Lordships who are in refuges and who have suffered from domestic violence. They are single women and women without children.
I should like to expand a little upon the recommendations of the advisory committee with regard to those whom it describes as vulnerable women. I hope that your Lordships will forgive me if I concentrate upon that group. It should not be taken as an indication that I do not support the anxieties expressed about other groups.
Not all residents of refuges have children. There are many single women—"single" as defined in the regulations. They may be young women who are especially vulnerable due to family violence or sexual abuse, older women who have endured many years of violence and who finally leave home when their

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children can lead independent lives or women who have left home in such desperation that they have gone without their children and who claim as single individuals until their circumstances are sorted out.
Women in those circumstances may need to go a long way from home to find sanctuary. They may need to move several times to find a secure environment where abusing partners cannot easily track them down. I fear that the new regulations will limit the mobility of those women because they will need to stay in one place to find work, if that is possible. For reasons that I shall mention, the ability to look for work is especially difficult in their cases.
I hope that your Lordships will forgive me if I use language which may seem extreme, but the situation of those victims is extreme. Abusing partners are known to track down women through a variety of means. Recently a man was convicted of murdering his wife, who had escaped to a refuge far from home. Men are—this is a disgrace, but it appears to be the case—able to obtain information about their wives through DSS benefit offices. There are countless stories of men who have turned up in places of employment. Many single women escaping domestic violence feel forced to give up their jobs through fear. The intention cannot be to say to such women, "You have no ties. Why should we assist you? You have given up your job. You are young and able-bodied". If that is the line of argument, it does not take into account the trauma experienced by single, abused women. They are not "able" in the same way as a single person not suffering from such a background is "able" to seek work. They are often not in a fit state to seek work.
It may be said that such women can go to their GPs for a medical certificate. They would have to rely upon the discretion of their GPs, but shame, humiliation and embarrassment often prevent women in those circumstances from disclosing their abuse. Nor should we underestimate the effects of fear. Many women who have experienced extensive periods of violence and intimidation feel so frightened that they will give up their jobs.
I have heard from a worker in one refuge—we have over 200 refuges, but that is not enough—that during a period of four years she knew at least 50 women who had given up their jobs through fear. An anecdote was repeated to me about a woman and a daughter who had been abused by the husband and father. The daughter worked for a building society. She plucked up the courage to tell the personnel department about the position. It gave her compassionate leave and helped her to move to another branch; but within six weeks the father had found her. There is a limit to the number of times an employer can be expected to relocate an employee, even if that is possible in the first place.
The knock-on effect of the regulations on housing benefit has been mentioned. It presents a genuine dilemma. Either the women or the refuges will suffer. The refuges which are in receipt of housing benefit for such women will be affected adversely. They may find it difficult to accommodate single women who will not
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be eligible for benefit. They may need to reconsider whether to provide such accommodation. Such women cannot easily or appropriately be assessed on whether they are likely to be able actively to seek work when they apply to a refuge.
It is not possible to ask a woman who is using a crisis line telephone number whether she is able actively to seek work. Such an interrogation would be inappropriate. On arrival at a refuge, in all humanity, that cannot be the first consideration. I am sure that your Lordships can envisage the situation and will understand the anxieties that I am expressing.
The Secretary of State's reply to the advisory committee, when rejecting its recommendation that the entitlement be retained in the case of women in the care of refuges or similar agencies, stated that current legislation required an adjudication officer to take all the circumstances of a case into account. I understand that, but the adjudication officer will be faced with enormously difficult judgments and will need to have an extremely wide knowledge in order to make a safe, reliable decision in such a case. Reference has already been made to the report of the chief adjudication officer.
I urge the Minister to consider the need for guidance and for training adjudication officers so that they can understand the scale and effect of domestic violence. I have to say that this is very much a fall-back position. I should not like to think that it would be necessary to apply such a judgment. It is too precarious a situation for the relatively small number of women who are affected. But if they remain within the regulations, I hope that adjudication officers will have the necessary training to enable them to assess the circumstances. However, I strongly urge reconsideration of the regulations.
7.21 p.m.
Baroness Faithfull: My Lords, I wish to join other noble Lords in thanking the noble Countess, Lady Mar, for bringing the subject to your Lordships' House. I support the Income Support (General) Amendment (No.3) Regulations as applied to New Age travellers. I suggest that many of them are available for work and could actively seek it, but many will know how to get out of it. Therefore, many who should be brought before the adjudication officer will know how to work the system and I am not sure that the regulations will affect those people to any great extent.
I agree with the statement in the report of the Social Security Advisory Committee that:
"The Committee has every interest in preventing fraud in the Social Security system".
However, the report goes on to state:
"We believe that the proposed regulations would not achieve the Government's objectives but would be likely to create potential hardship to a vulnerable group of people".
I am bound to ask my noble friend why the department has set up this advisory committee only to disregard its views and reports. It seems strange and perhaps a waste of money to have a good committee with knowledgeable people and then to refuse to accept its recommendations. I should like to know

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what reason the Minister can give for refusing the recommendation of the Social Security Advisory Committee.
In Paragraph 2 of the regulations Her Majesty's Government are using a sledgehammer to crack a nut. The regulations will not achieve what the Government are setting out to do and it is not clear which groups of vulnerable people the Government are targeting. I imagine that it is those whose mental and emotional health may be poor, the destitute single people, as mentioned by the noble Baroness, those with limited education and few capabilities.
We are suffering a recession and, as the noble Baroness, Lady Hollis, said, there are few jobs for the many people requiring them. I contend that not only are we experiencing a recession, we are experiencing an industrial revolution. In this age, manual workers are being replaced by those with technical skills and many vulnerable people in our society do not possess technical skills, they are mostly manual workers.
I give one example. I placed a boy with the Oxford City Council to keep St Giles's clean and he kept it very clean, but it took him the whole week to do it. Along came the Audit Commission which said, "This is very expensive". So a machine was bought which cleans St Giles's in two days and as a result the boy with manual skills was given notice and is now out of work. That is being applied throughout the country to many people, particularly the vulnerable.
Are not the regulations putting on to adjudication officers unrealistic responsibilities? How can they know the personal histories and capabilities of clients? I have much sympathy with the staff of social security offices; they have a hard task. I cannot believe that they can always know the exact backgrounds of those with whom they deal.
The regulations will apply to the most vulnerable. What considerations have been given by the Department of Social Security to their future? They will, I fear, become the flotsam and jetsam of society. As has been said by other noble Lords, they will find themselves without sustenance and without work and without a place to sleep. What will happen then? They will become a responsibility for other departments and will be more costly to the country as a whole. It is worrying that departments work separately, in isolation, instead of with each other. I have to say that I consider that the Department of Social Security should have consulted the Minister for Health concerning the social services departments.
I realise that it is 15 years since I was a director of social services, but in time gone by there used to be industrial training units. They were workshops where the mentally handicapped and people without great skills could be trained and helped to earn a living. It is true that many social services departments have closed the workshops, but some still have them. I cite the Oxfordshire social services department which applied to the European Social Fund for training for those with disabilities. I think they are called the blind handicapped industrial workshops. Sheltered work-shops are provided for people who seek, where possible, practical sheltered employment, if the client can be placed in employment.
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If these regulations are to be brought in there must be a safety net for these very vulnerable people. Furthermore, we must not lose them in a kind of morass where they do nothing and ultimately become a greater charge on the state. We must use what capabilities they have; we must train and help them.
I cannot understand how it is that one department can bring in these regulations without consulting another department as to who will deal with those people, who will help them and who will creatively and positively give them work. That would be possible but, I have to say, over a period of time. Therefore, in all humanity, to bring in these regulations without a safety net damages the people themselves, but ultimately it will also be at great cost to the country in other areas, and certainly to the young people.
Like my noble friend Lord Stanley, I find myself in some difficulty. I hope that my noble friend the Minister can give your Lordships the assurance that these regulations will not be brought into play until a safety net and creative help are provided by another department to help those vulnerable people who need help, training, support and advice. Unless that assurance is forthcoming I find myself unable to support him.
7.30 p.m.
Lord Henderson of Brompton: My Lords, I am very happy to follow the noble Baroness whose speech shows the deep unease felt throughout the House and not simply on the Benches from which speeches have hitherto been delivered. The noble Lord, Lord Stanley of Alderley, although less committed, was critical of the effect of the regulations, if not the intent. However, I should remind him that hell is sometimes paved with good intentions.
After those powerful speeches there is not very much left for me to say that is new. However, like others, I wish to express my disappointment and dismay that the Government, or the Secretary of State, should have seen fit absolutely to reject the carefully argued principal recommendation of the Social Security Advisory Committee and all but reject the subsidiary recommendations. Like the noble Baroness, I wonder what the purpose of the Social Security Advisory Committee is if its carefully considered recommendations are to be summarily dismissed in that way.
The regulations were sold to the public as measures to deal with the plague of so-called New Age travellers. As we have heard, they do not seem capable of doing so. I have to differ unfortunately from the noble Baroness, Lady Faithfull. Like other speakers, I feel that the plague of the New Age travellers cannot be cured in this way. I do not need to elaborate. The Minister knows, as I do, because we live in the same county, about the plague of travellers which very nearly came our way. I may say it came nearer to me than to him.
The travellers were diverted—here I entirely agree with the noble Earl, Lord Russell—by a combination of public alertness combined with police co-operation. To my mind that is the route for dealing with this undoubted plague—not through social security. I feel

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that the whole exercise is being adopted vainly because it will not catch the New Age travellers. Instead it will put in peril and in fear something like 25,000 of the most vulnerable people in our society.
The regulations represent a tear, a rent, in the safety net which the Secretary of State, Peter Lilley, curiously enough claimed so proudly that we had. He said we had a safety net as,
"comprehensive and secure as any of the other members of the European Community".
This rent in the ultimate safety net is surely a rather cynical way of celebrating the 50th anniversary of the Beveridge Report, to which the noble Lady, Lady Kinloss, drew our attention. It is indeed a cynical measure because it reduces the final net in the complex of nets which we have enjoyed in our society. It is a further rent, in addition to other recent holes which have been torn in the net, not only by the removal of single payments and the substitution of that leaky sieve, the social fund, but also by the removal of benefit altogether from young people who have just left home or school, the 16 and 17 year-olds who can, by the gracious leave of the Government, receive, if they fulfil certain conditions, half the payment which anyone else can receive. However, that only applies if they can prove they have been actively seeking work. I believe they receive a mere £25.25. To add to those rents in the safety nets, we now have no hardship payment for those alleged not to be seeking work.
We have heard much about the lack of evidence to support the Government's taking of such a drastic and inhumane step. There has been so much said that I hope the Government will take note of all the evidence which has been adduced during the debate up to now, including unpublished evidence from the Minister's own department and from the Employment Service, which the Secretary of State does not seem to have taken account of. All this hard evidence which we have, and which the House has heard of this evening, points to the fact that the number of those not actively seeking work is very small. Indeed it is so small as not to be worth the elaborate machinery and effort for such a small and pathetic catch. It is a very small and pathetic catch that will eventually be drawn up. However, 25,000 people or so are put in fear and are put at risk by the measure. That is a large number of people. As we have heard, most are inadequate people. The really "fly" ones can easily get round the regulations if they wish to. The large number of inadequate people I have referred to are being targeted, unfortunately, by the regulations. And at what cost? The noble Earl, Lord Russell, touched on the matter. He made some attempt at a cost benefit analysis. Have the Government made any attempt at a cost benefit analysis? We have not heard how much this elaborate fishing expedition will cost.
The noble Baroness, Lady Faithfull, told us—I entirely agree with her—that the Secretary of State seems to have embarked on the regulations without consulting his colleagues in the Government. If he had done so, he would have realised what huge potential costs will be incurred by the Government if the regulations are put into effect. Among the large
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number of departments incurring costs will be local authority social services departments, which were mentioned by the noble Baroness. There will certainly be increased pressure on hostels for the homeless. There will be increased pressure on the National Health Service; on the police; on prison cells; on the courts; on legal aid; and on the prison service. All those are very expensive. The total cost must hugely outweigh any benefit which could conceivably accrue to the Government from chasing a few inadequate people and putting in fear some 25,000 inadequate people.
It is late so I shall not speak for much longer. I wish only to say that during the employment debate of 26th November my noble friend Lord Harris of High Cross, in his usual rather naughty way, referred to the moral hazards of social benefits. I ask the Government to weigh against those supposed hazards the undoubted moral hazard of the destitution to which the regulations will bring a large number of inadequate people without catching the so-called New Age travellers.
I am sure that we are all grateful that the right reverend Prelate will be speaking. He will be able to help the noble Lord on the Front Bench by giving some moral guidance on the question.
If Her Majesty's Government cannot be persuaded to reconsider the regulations in terms of the human cost, will they not at least reconsider the regulations on the basis of the cost in cash terms?
7.41 p.m.
Baroness Carnegy of Lour: My Lords, I hope that your Lordships will forgive me if I say a word before the right reverend Prelate speaks. I had not intended to speak but I believe that your Lordships have given insufficient emphasis to certain issues during the debate.
Noble Lords have quite rightly identified the many groups about whom they are concerned. A number of those groups were represented in letters about the order sent to your Lordships. There are fears that those people will be caught by a measure which is intended for a different purpose, a purpose with which everybody on all sides of the House appears to agree. It is the purpose of catching the people to whom the noble Baroness, Lady Hollis, referred as the work-shy. It is right and it is the duty of this House to express those fears. We shall all listen with the greatest possible care to the Minister's reply.
There is one point, however, which seems to have been forgotten by most speakers—namely, the skill, concern and care of the people in the employment service who interview claimants and discuss with them whether they are looking for work. Do noble Lords really suggest that those people in the employment service do not have the skill, experience and perception to identify the vulnerable and ensure that they receive their payments? Should mistakes be made—and they are made sometimes—do noble Lords suggest that the adjudicator will not, likewise, have great skill and understanding? I believe that it is important not to underestimate the professionalism of these people. It should not be suggested that they are

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there just as a matter of form and do not do a wonderful job. My experience of the Employment Service, having been present at some interviews, is very much to the contrary. The staff are greatly to be admired and we should support them.
Are speakers not forgetting all those people who are in work and who much resent seeing the money which they earn and which they pay in tax being handed over to people who could work but make no attempt to do so? We must remember those people. They are one of the reasons why the change is being made. The advisory committee naturally emphasised the other side of the argument, but elected representatives know the point of view of those people, who resent the illicit claiming of benefits. That viewpoint was expressed very well by Mr. David Blunkett, who was reported in the Daily Express in June 1992 as saying:
"Labour has been linked to freeloaders for too long. I was brought up on a council estate and know ordinary folk expect rewards for hard work. They have no time for people who lie in bed when they are fit and able to get a job".
We must also be concerned with the people Mr. Blunkett talked about. I shall listen to the Minister with interest but please let us remember, besides the vulnerable, those other people on whom we depend for so much.
Baroness Stedman: My Lords, before the noble Baroness sits down, perhaps I may ask whether she really believes that, with the pressure resulting from the number of people who are unemployed now, the staff in social security offices will be able to deal with every case on its merits in the kind and considerate way she mentioned.
7.45 p.m.
The Lord Bishop of Norwich: My Lords, in supporting the Motion of the noble Countess, Lady Mar, I shall not repeat the detailed arguments and persuasive statistics which have already been mentioned in the debate. I simply wish to make two general but not unimportant points.
I have read with care the advice given to Her Majesty's Government by its own Social Security Advisory Committee. Clearly the membership of that committee is highly qualified and experienced in a variety of disciplines and has researched its subject thoroughly. The report reveals, as one would expect, a clear and sympathetic understanding of the problems faced by the Government in this matter. Its conclusion is carefully argued and it is emphatic in its recommendation.
I may be dense, but I am comforted to know that the noble Baroness, Lady Faithfull, shares my difficulty. I find it impossible to understand why the Government choose to ignore the chief recommendation and the authoritative voice of that eminent and knowledgeable committee.
My second point concerns the way in which moral judgments are made. Moral choices, both for individuals and institutions, are rarely simple choices between right and wrong and between good and evil. They are usually much more complex, and often involve weighing the good against the better or else
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judging which is the lesser of two evils. In this issue the Government are faced with just such an ethical dilemma.
The purpose of the legislation is to counter an abuse of the benefit system. That is a good objective which deserves support. But the moral issue is not simple because all the evidence, including the evidence of the Government's own advisory committee, points to a greater evil which the legislation, despite its good intentions, would bring about. The advisory committee summarises that starkly in paragraph 12 of the report. The report considers a likely consequence of the regulations to be an increase in socially unacceptable factors such as homelessness and crime. By any standards, even the possibility of such a consequence is a far greater moral evil than the abuse of welfare by some people. I believe that there is a clear moral choice facing Her Majesty's Government in this matter.
7.48 p.m.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): My Lords, it might be helpful if I begin by reminding the House what the amendment regulations are not about. First, they are not about the actively-seeking-work test itself—despite what the noble Baroness, Lady Hollis, said—which has been a fundamental condition of entitlement to benefits for unemployment for some three years now, since the Social Security Act 1989. All the evidence suggests that during that time the test has become accepted as fair and reasonable by the public, including unemployed people themselves.
In passing, perhaps I may refer to evidence that my right honourable friend the Secretary of State has looked at. The noble Countess, Lady Mar, and the noble Lord, Lord Henderson, both asked on what evidence my right honourable friend had based his decisions and what were the research and evaluation that he had referred to in the Social Security Advisory Committee's report. I answered a Question for Written Answer on this matter only last week, on 26th November, from my noble kinsman Lord Russell. I listed there three major pieces of research—one commissioned by my department, the Department of Social Security, and two commissioned by the Employment Department—that my right honourable friend had examined. So I believe I can say that this is not something we have jumped into blind; it is not something we have jumped into without any research at all.
These regulations will impose a tougher penalty on a very small minority of people who are not taking reasonable steps to find work. On that we are quite clear.
The second point I would like to make, about what the regulations are not about, is that they are not, despite what my noble kinsman said, in any way an attempt to save money. They are not a savings measure. On the contrary, it would seem obvious that if what we are trying to achieve was achieved and we encouraged more people actively to seek work, we would increase expenditure, as those who do actively

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seek work will obviously be entitled to full employment benefit or income support, whichever is appropriate in their conditions.
Thirdly, the regulations are not exclusively concerned with New Age travellers. I think everyone would agree that there is no way in legislation that one could particularly isolate such a group. I would also say that the New Age travellers are not primarily a social security problem. Quite rightly, as my noble kinsman Lord Russell said, the main issues relate to public order and illegal and anti-social behaviour, and they are matters for other government departments. Bearing in mind what has been said by many noble Lords on the occasion of this debate, I am sure that all other government departments will note what has been said and what might possibly be done to deal with problems relating to New Age travellers.
The Government have made no secret of the fact that the so-called travellers who openly flout the rules are one of the main targets of these regulations. But they are not the only target.
Let me now say a few words about the Social Security Advisory Committee and its report. The noble Countess, Lady Mar, my noble friend Lady Faithfull and the noble Lady, Lady Kinloss, as well as the right reverend Prelate, all seemed to imply that we were riding roughshod over what the Social Security Advisory Committee had said. That is quite simply not the case. The Social Security Advisory Committee, as is its duty, made a number of recommendations to my right honourable friend. My right honourable friend, as is quite right, responded in due course. I refer the House to the response of my right honourable friend and particularly the response in paragraph 3 of the statement by the Secretary of State for Social Security where he says that he rejects the primary recommendation but does accept:
"two of the secondary recommendations made by the Committee: namely cases involving pregnancy or young persons should be added to those claimants exempted from the requirement actively to seek work".
In response to that, my right honourable friend amended the regulations that are now being debated before the House.
One has to say that in the end it is not a matter for the Social Security Advisory Committee to make decisions. It is a matter for Ministers and Parliament to decide.
I also say to my noble friend Lady Faithfull that of course other government departments have been consulted. They always are. I should also stress that the local authorities, if not consulted by the Social Security Advisory Committee, certainly were able to make their submissions to the Social Security Advisory Committee which were taken on board by that committee in coming to its views.
The Government are determined to step up efforts to counter fraud and abuse. Those deliberately not looking for work should not expect open-ended support from the taxpayer as a right. As my noble friend Lady Carnegy of Lour said, that would be an insult to both employers and people in work, upon whom the burden of state support largely falls. It would be an insult to the vast majority of unemployed
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people who are desperate to get back into work and make every effort to do so. So the tougher penalties that we propose will rightly extend to most single people and childless couples. Bona fide travellers who move around in search of work and satisfy the normal conditions of entitlement will quite rightly remain eligible for financial support when they are unemployed.
Lord Henderson of Brompton: My Lords, I wonder whether the noble Lord will give way. He has twice mentioned the word "penalties". If he looks at the statement by the Secretary of State for Social Security on the report of the SSAC, he will see in paragraph 11:
"Nothing in the regulations imposes any penalty".
Lord Henley: My Lords, that is quite right. Nothing in the regulations imposes any penalty. The noble Lord failed to read the next five words:
"for failing to find work".
We are talking about a failure to actively seek work. A failure to find work makes no difference at all. All we ask is that people should actively seek work. Failure to find work is deeply tragic, but it is not relevant to the regulations now before us. If the noble Lord is to start quoting from that document, it would help to include the relevant words that I quoted.
Many of those who have spoken expressed concern that the regulations will hit many vulnerable people whose ability actively to seek work has been affected by their personal circumstances; for example, the homeless, or women forced to take refuge from violent partners. The Government fully recognise and share those concerns. I shall try to deal with as many as possible.
I start by referring briefly to a document which I received only late this afternoon. It is a Labour Party press release. I must thank the noble Baroness for failing to send me any copies of it in advance, as is customary on these occasions. That document was quite simply scaremongering. There is no evidence whatsoever that under the existing regulations the vulnerable unemployed people—for example, people with learning difficulties or women living in refuges without children—are currently having their benefit reduced because of doubts about their job search. The same is true of the illiterate and the newly disabled. It is simply mischievous scaremongering to suggest that from tomorrow employment service staff will single out such people for harsh treatment. That is exactly what the Opposition said would happen in 1989 when we brought in the "actively seeking work" test and it is exactly what has not happened. It will not happen now because we are not changing the regulations in that respect.
I believe my noble kinsman Lord Russell quoted my noble friend Lord Skelmersdale as saying that illiterates should not be made by their employment advisers in the employment service agencies to read newspapers for advertisements. I accept that that is the case and should be the case.
The noble Lady, Lady Kinloss, quoted examples from the National Association of Citizens Advice Bureaux of illiterate people being, in their job search, made to read and write. That simply cannot be right.

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I stress that it should not be happening. If the noble Lady can give me details of the particular case I shall be more than pleased to look at it.
Baroness Hollis of Heigham: My Lords, perhaps the noble Lord will give way. Does he accept that, under these proposed changes of regulation, when a reasonable doubt has been raised about whether a person—such as someone in a refuge, someone partially disabled, someone partially sighted or illiterate—is actively seeking work, even though subsequently the adjudication officer has discretion to take all those factors into account and benefit will be awarded, nonetheless, during the period in which that doubt is being considered all those groups will have lost not only their benefit but their hardship payments? All the evidence shows that in two-thirds of the cases where benefit was lost during the adjudication officer's review the people were subsequently found to be "innocent".
Lord Henley: My Lords, the noble Baroness has hold of the wrong end of the stick. Perhaps I may begin with the example of the woman living in a refuge in fear of violence. She is living on her own, and we accept that if children are involved she will have full entitlement to income support. That woman living in a refuge in fear of violence cannot go out actively to seek work. Therefore, the first test that one must apply has nothing to do with actively seeking work; it is to ascertain whether she is available for work. The first thing that an employment adviser would have to say was, "If you have a genuine fear—and that is up to me to decide—you are not therefore available for work and the regulations do not apply". We are talking not about the availability for work test but the actively-seeking-work test. The two are very different.
The noble Lord, Lord Henderson, appeared to say that the actively-seeking-work test was not worth bothering about. I was grateful to receive some support for that test from the Liberal Democrat Benches. It is primarily about motivating people to look for work. It is right that unemployed people should take a personal responsibility to look for work. As I said previously to the noble Lord, there is no penalty for failing to find a job.
I was pressed on why we did not follow the other secondary recommendations to retain the hardship provisions for women in refuges, those with disabilities insufficient to qualify for a disability premium, the newly disabled and others at the discretion of an adjudication officer. It is for that officer to take into account all the circumstances when deciding what steps are reasonable for a person to take actively to seek work. But as I said in response to the noble Baroness, Lady Hollis, there are those such as carers, women in refuges and the newly disabled who because of their circumstances are quite simply not available for work.
Perhaps in passing I may stress in answer to a point made by the noble Baroness, Lady Hamwee, that men should not be able to get details from either my department or the employment service of the whereabouts or the jobs of their estranged wives. If the noble Baroness has examples of such cases I shall be
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more than happy to look at them. Obviously in organisations as large as the Department of Social Security and the employment service mistakes can happen. People who work in such organisations are only human. However, we try our hardest to make sure that mistakes do not happen, and if the noble Baroness will give me the evidence I am prepared to look at it.
The noble Baroness, Lady Hollis, gave an example of a man failing the actively-seeking-work test because he attended hospital for only one day to receive renal dialysis. I stress that the test is a weekly test and does not have to be satisfied on a daily basis. I should be prepared to look at any cases which the noble Baroness has relating to someone who has been refused benefit on the basis that they attended hospital for one day. I shall make inquiries into any examples.
The noble Baroness went on to suggest that the New Age travellers are sophisticated people and will try to avoid work by saying that they are not available for work. If such a person failed to provide any reason for unavailability for work, the availability question would be put to the adjudication officer. In the case of a New Age traveller taking such a line, it would be quite fair to conclude that a hardship payment should not be awarded. The person could simply avoid hardship by making himself available for work and look for work.
It was further suggested by the noble Countess and the noble Baroness, Lady Hollis, that this is the first time in 400 years that benefit has been suspended in such a way. That is not so. The right to suspend benefit is not new. The Secretary of State has power to suspend payment where there is a doubt about whether conditions of benefit have been fulfilled. However, the decision to suspend will be taken only after a detailed personal interview in which individuals will have been given every opportunity to make their case. In any case, where benefit is suspended the adjudication officer must be asked to reach a decision as soon as possible and certainly within 14 days where possible.
I ought to emphasise that a benefit suspension because of a doubt about active job search is for a maximum of two weeks only. If at the next signing-on day the normal conditions to entitlement are satisfied, payment of benefit will resume irrespective of whether the adjudication officer has reached a decision in relation to the period to which the suspension related. People will not therefore be suspended if there is a delay in the adjudication process.
Earl Russell: My Lords, I am sorry to intervene but I should be grateful if my noble kinsman could tell me whether he has any evidence to show what happens to such people during those two weeks.
Lord Henley: My Lords, as we have made clear, those people in vulnerable groups will be protected. However, we do not see a case for protecting those who fail quite blatantly without making any effort whatever actively to seek work. If they are prepared actively to seek work they will receive benefit; if they are not there will be no benefit. It is as simple as that.

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My noble friend Lady Faithfull asked about industrial training units. They were replaced by skill centres during the 1970s and have recently been replaced by employment training and employment action. Help on the government employment and training programmes for unemployed people is being increased by almost 500,000 opportunities during the next year. That is a rise of some 50 per cent.
The noble Countess was the first to refer to the removal of the warning letter, and other noble Lords followed. When the actively-seeking-work test was first introduced in 1989 we thought it right to undertake that people would be given a written warning if their job search was inadequate. We have fully honoured that commitment. However, the test has been in operation now for some three years. It has been accepted as fair and reasonable by the public, including unemployed people.
All newly-unemployed people now receive a detailed interview at which the actively-seeking-work test is explained to them. A personal back-to-work plan is devised and the consequences of failing to look for work are also explained. Those who genuinely misunderstand, or who appear to be in a position of not being able to understand what is happening to them, as was suggested by the noble Lady, Lady Kinloss, will continue to receive written warnings. But others will no longer be able to exploit the warning letter regularly to evade their responsibility to look for work.
Employment service research using a sample of almost 900 people showed that 16 per cent. were warned at least twice and some five times or more during the same spell of unemployment. The new administrative arrangements will end that open abuse of the system. Again I wish to stress to the noble Lady, Lady Kinloss, that the interviewing officers, the employment advisers and others will be instructed to treat with especial care all those who are illiterate or who have learning difficulties. The policy is quite clear. Those officers must take into account the personal abilities of any individual unemployed person.
The actively-seeking-work regulations require the officer to have regard to all the circumstances of any individual's case. In response to the intervention of the noble Baroness, Lady Stedman, I am happy to say that officials in the employment services agency and those in the Department of Social Security who are involved to a lesser extent, can deal with those matters even now in a time of recession in a sensitive, capable and caring manner.
There is also specific provision in the regulations to allow the homeless to seek accommodation. Those built-in safeguards have worked very well and they are unaffected by the amendment regulations being debated this evening. Moreover, the Government have been careful to ensure that those people whose availability for work is in doubt because of their personal circumstances will remain eligible for the reduced rate of income support if they or a member of their family would otherwise suffer hardship. Despite what was said in the Labour Party press release, the safety net will remain for carers who are not
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automatically exempt from the requirement to be available for work but whose prospects of work are adversely affected by their caring responsibilities.
At this point I turn to the regulations themselves. As I mentioned earlier, their effect will be to ensure that most single people and childless couples who fail actively to seek work will not be entitled to income support. But, where a person has the care of a child or a young person or is pregnant, entitlement to a reduced rate of income support will continue if an adjudication officer is satisfied that the child or young person or pregnant person will suffer hardship. We have also provided similar protection where a disability premium is paid. There is no change here for those people. It is simply that those single and childless couples who fail actively to seek work will not be entitled to income support.
The principle is clear. It is right that the Government should continue to protect those who are unable to support themselves but able-bodied adults without family responsibilities who are capable of work but unwilling to look for it cannot expect open-ended support at the taxpayers' expense.
Baroness Hollis of Heigham: My Lords, will the Minister confirm again that, while those queries about whether someone is actively seeking work are being investigated, the person or couple being investigated will, for that period of time, not only lose benefit, as now, but will also lose hardship payments even though, for two-thirds of them, the doubt was not valid?
Lord Henley: My Lords, I do not accept the second part of the noble Baroness's premise but I can confirm that those single people or childless couples who are fit and capable of work but who fail actively to seek it will not receive benefit during that two-week period. However, as long as they have made that effort actively to seek work, in the next two-week period they will regain their entitlement to unemployment benefit.
Lord Winstanley: My Lords, just before the intervention of the noble Baroness, the noble Lord referred to able-bodied men and women. Does he include among those able-bodied men and women a person who must attend on one day a week for dialysis treatment?
Lord Henley: My Lords, I cannot deal with that off the cuff but my view would be that in that case the person would not be able bodied. He would have some entitlement. He must attend hospital and his availability for work is somewhat restricted, although I must stress that the actively-seeking-work test is a weekly test. I suspect that in that case there would be an entitlement to benefit. We are talking about those who are able, active, single or, in the case of childless couples, without responsibilities for children. I see no reason why such people should obtain an entitlement to benefit and play the system as has been done in the past and continue to receive benefit. Those who combine that unwillingness to look for work with

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anti-social and illegal behaviour, often at the expense of local communities, should forfeit their right to benefit.
As I stress, income support is only lost for a short, past period—usually two weeks, in line with the fortnightly signing-on cycle. As my right honourable friend made quite clear in his response to the Social Security Advisory Committee, the intention is to administer a short, sharp shock to those who fail to help themselves. People will not lose out if the adjudication takes too long and, if it is not settled two weeks later when they sign on again, they can regain entitlement to income support by actively seeking work.
It is even more important in the present labour market conditions that unemployed people should maintain their efforts to find work. I totally reject the suggestion made by the noble Baroness, Lady Hollis, that now is the time to relax the actively-seeking-work rule.
Baroness Hollis of Heigham: My Lords, I was simply quoting the Government's own Social Security Advisory Committee's comment.
Lord Henley: My Lords, I take it then that it is not the view of the noble Baroness that now is the time to relax the actively-seeking-work rule and I welcome her support for that rule. I would go further and say that now is the time that people should be looking even harder for work. I stress to the noble Baroness that some two-thirds of the newly unemployed find jobs within six months. Now is the time when it is most important for those unemployed to retain their job-seeking skills. Even during a recession, there are jobs to be had. As the noble Baroness will probably know, employment services have already placed some 700,000 people in work in the current financial year.
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The Motion standing in the name of the noble Countess that we are debating this evening asks first that the Government should take account of further evidence about the effect of the changes proposed and accordingly asks us to reconsider the desirability of the regulations. As always, I can give the House a categorical assurance that, as regards the first part of the Motion, we shall take all and any evidence into account as we continue to monitor and review those regulations. We shall take account also of any submissions, suggestions and comments from local authorities—referred to by my noble friend Lady Faithfull—or from any body affected by the system. if necessary, we shall bring forward changes.
As regards the second part of the Motion, we intend to go forward with the regulations on 3rd December. On the basis of the evidence before us now, we are satisfied with the desirability of those regulations. But, if there were further evidence that these regulations are catching those whom it is not intended to catch and not dealing with those who consciously and deliberately fail actively to seek work, obviously we would then reconsider—in the words of the Motion—their desirability. On that basis, we do not intend this evening to oppose the Motion.
The Countess of Mar: My Lords, I am extremely grateful to the noble Lord. He has rather taken the wind out of my sails, as I was about to take issue with him on many of his remarks. In the circumstances, I should say that I am extremely grateful for their reassuring speeches to all noble Lords who have taken part. In spite of what the noble Lord said. I wish to test the feeling of the House.
On Question, Motion agreed to.
House adjourned at eighteen minutes past eight o'clock.