Lords Sitting of 7 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 St. Albans.

London Central YMCA
Lord Stoddart of Swindon Lord Stoddart of Swindon asked Her Majesty's Government:
Whether they are aware of the proposed sale, and consequent closure, of the London Central YMCA premises and what alternative facilities they will make available for the educational, cultural and physical needs of young people in central London.
The Minister of State, Home Office (Earl Ferrers): My Lords, the Charity Commissioners are considering an application from the Central YMCA for consent to the sale of 112 Great Russell Street, part of which property is let to the London Central YMCA Ltd.
Government funding already supports a very wide range of facilities for the educational, cultural and physical needs of young people in central London. We have no plans to make any alternative facilities available.
Lord Stoddart of Swindon: My Lords, I thank the noble Earl for that helpful and considerate reply. Does he agree that the loss to London of the facilities provided by YMCA London Central branch will be grievous? It is happening due to the selfish, self-centred attitude of a consortium of banks and a property company which wish to get hold of the property. Will not this do the banks even more harm? They are unpopular enough as it is. Is the noble Earl able to make representations to the banks with a view
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to them softening their attitude and giving the YMCA London Central branch a few more months in which to re-schedule the debt and save the facilities there?
Earl Ferrers: My Lords, I am sure that there will be a sense of loss if the provisions which the London Central YMCA Ltd. give at the moment are no longer forthcoming. The noble Lord, Lord Stoddart, says that these are the selfish results of the banks. I should not be prepared to comment on that and it is certainly not for the Government to intervene over it. As I understand it, the Central YMCA borrowed a lot of money about three years ago to develop the property. It took full professional advice and the fact is that the return is less than anticipated and the income does not meet the outgoings. The organisation will have to make its own commercial judgment as to what is best to do.
Lord McIntosh of Haringey: My Lords, is not the Question wider than the issue of the behaviour of the banks? I understand that the Minister cannot comment on that, but does not the matter concern the disposal of the assets of a charity? Should not the Charity Commissioners be concerned? Perhaps it is a case where the Charity Commissioners might intervene to protect the interests of those for whom the YMCA provides a valuable service in London.
Earl Ferrers: My Lords, the noble Lord is absolutely right. It is a matter for the Charity Commission, and Her Majesty's Government have no power to intervene. The commissioners have been consulted. They have not yet given their consent to the disposal of the property and will not give it unless they are satisfied that the sale is in the best interests of the charity in the situation which it faces.
Lord Stallard: My Lords, does the noble Earl accept that there is much more to this than just the closure? There is widespread anxiety among all those people who work with youngsters in London at the fact that the building is to be sold and a valuable asset will be lost for us in London.

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Perhaps I may quote from an article in the Evening Standard which referred to the YMCA being forced to close. It says that the Evening Standard showed
"that the bank syndicate has forced the cash-strapped YMCA to sell to a Knightsbridge property company, backed by Arab sheikhs."
That must be something on which the Government could bring pressure on the Charity Commissioners or the banks or both. They have only to convene a meeting of all the parties concerned to see whether some amicable solution could be found to save this valuable asset.
Earl Ferrers: My Lords, the situation is quite complicated. The YMCA has, as part of its organisation, the Central YMCA which owns the building at 112 Great Russell Street to which I referred. Part of that building belongs to the London Central YMCA Ltd. Because of the difficulties which the Central YMCA is experiencing, it has been necessary to dispose of the whole property, of which London Central YMCA Ltd. is a part. The noble Lord says that it is undesirable—or that was the inference—that it should be sold to the sheikhs. I can only tell him that the Charity Commissioners have suggested that other alternative offers should be considered and have advised the trustees that if alternative offers are received, they should be examined.
Lord Kinnaird: My Lords, without in any way wishing to criticise the Question on the Order Paper, I wish to ask whether the Minister thinks it ironic that in the name YMCA, the "Y" stands for "Young", the "M" for "Men", and the "A" for "Association". There is no mention of Christianity but it was Christian people who started the organisation, my grandmother being one of them.
Earl Ferrers: My Lords, I had always rather assumed that that was what the "C" stood for.
Baroness David: My Lords, does the Minister realise this is another blow to youth services in London? Last week I tabled a Question about provision being reduced, and this latest measure will surely reduce youth service provision in London if nothing is done to help the YMCA.
Earl Ferrers: My Lords, I quite agree that this is a most unfortunate occurrence. However, one has to take a commercial judgment, or at least the YMCA has to. The YMCA had purchased property which it could not adequately service and therefore it had to dispose of it. The fact that as part of that disposal the Central YMCA Ltd. has to lose its source of provision is a great pity, but that is part of the commercial situation which results.
Lord Stoddart of Swindon: My Lords, I understand the Government's difficulties over this. However, is it true—perhaps the noble Earl can advise me—that the type of loan which was negotiated was negotiated at the behest of the Charity Commissioners? If that is the case, have not the Charity Commissioners some duty
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to the YMCA to ensure that as a result of that advice the facilities are not closed down? Is there nothing that they can do to assist the charity at this stage?
Earl Ferrers: My Lords, the commissioners have to ensure that any action taken by the governors of the charity is taken in accordance with the legislation for which the Charity Commission is responsible. The commissioners did not ask for the loan to be at a fixed rate of interest. That decision was taken by the governors acting on the professional advice which they received. The commissioners' order which authorised the borrowing required that the rate should be reasonable having regard to market rates prevailing from time to time. As I understand the position, that was adhered to.
Baroness Seear: My Lords, my question is perhaps a little wide of the Question on the Order Paper but I believe it is relevant. To what government department, if any, are the Charity Commissioners responsible, or in what way is it possible to question through Parliament the actions of the Charity Commission?
Earl Ferrers: My Lords, the Charity Commission operates independently but is funded by the Home Office. Therefore any questions relating to the Charity Commission are answered by the Home Office. However, the responsibility of acting is solely that of the Charity Commission; in other words, the Home Office cannot tell the Charity Commission what it should or should not do. The Home Office is merely responsible for charity law.

Coal Gasification
2.46 p.m.
Viscount Mersey Viscount Mersey asked Her Majesty's Government:
Whether they favour the fuelling of the new combined cycle gas turbine power stations with coal gas as well as natural gas.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Baroness Denton of Wakefield): My Lords, in an uncertain world we need to make full use of all available sources of energy to provide diversity of supply with coal, nuclear, renewables, oil and gas, with each making an appropriate contribution.
Viscount Mersey: My Lords, I thank my noble friend for that reply. Is she aware that in the United States coal gasification combined cycle plants are being built in both Illinois and Florida? Does she not hold out high hopes for this technique, as in this country it could produce more fuel for our "dash-for-gas" power stations and it would also produce an additional clean use for coal, thereby quite possibly preventing the closure of the 31 pits which are at present under threat? Is this not rather an elegant solution to our problems?
Baroness Denton of Wakefield: My Lords, I have recently become aware of the activities in this area in the United States. The Government have recognised for many years the importance of developing coal

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gasification technologies. Around £220 million was invested in this area by British Gas in a major research programme over the past decade or so. Much of this expenditure was incurred when British Gas was in the public sector. We have a memorandum of understanding with the United States and I am sure that these plants will be part of our discussions.
Lord Mason of Barnsley: My Lords, if we are to take advantage of all forms of energy production why did the Government abandon the fluidised bed combustion technology at Grimethorpe colliery?
Baroness Denton of Wakefield: My Lords, the Government continue to support much activity in this area and it will be taken into account in the coal review.
Lord Ezra: My Lords, bearing in mind that the experiments of British Gas at Westfield to which the noble Baroness referred have been successfully concluded and that the process can now be applied in a development sense, will the noble Baroness indicate whether support is being given to any such projects in the UK? I should here declare an interest as I am involved in one of them.
Baroness Denton of Wakefield: My Lords, as the noble Lord will know better than I, several approaches have been made to government about support for new projects to demonstrate the use of gasification technology and the issue will be considered in the light of the current coal review.
Lord Cochrane of Cults: My Lords, does my noble friend agree that coal is already an excellent fuel for the reheat stage of combined cycle plants but that until a proper gas purification system is developed it is not suitable as primary fuel? We have already heard a little of what the Government think about this, but should we not be developing this facility with much more energy against the time when oil and natural gas are more expensive than coal?
Baroness Denton of Wakefield: My Lords, I am pleased to assure my noble friend that the United Kingdom is in the forefront of the development of this technology. My department is supporting a major research programme in collaboration with British Coal, GEC Alsthom and PowerGen to develop British Coal's Topping Cycle clean coal technology which utilises hot gas clean-up. A key element in that £30 million programme has been the examination of the feasibility of operating a commercial gas turbine on coal-derived fuel gas at elevated temperatures. The Government are contributing £11.6 million to that work.
Lord Donoughue: My Lords, does the Minister agree that the information provided to the House by the noble Viscount is very important and suggests that we may be on the brink of a technological breakthrough which would ensure that coal is both price competitive and clean? In those circumstances is it not utter lunacy even to contemplate closing down the British coal industry?
Baroness Denton of Wakefield: My Lords, the noble Lord's question is a little outside the specific area of the Question on the Order Paper. He well knows the breadth of the discussions taking place under the coal review.
Lord Stoddart of Swindon: My Lords, will the noble Baroness allow me to disagree with her when she says that my noble friend's question was beyond the scope of the Question on the Order Paper? I think that it was very much on the ball. The noble Baroness has just told the House that coal gasification will be considered in the current review of the coal industry. Why was it not considered—or was it considered—before the Government came forward with their plans to close 31 pits? That is what the House wants to know. Will she please give us an honest answer?
Baroness Denton of Wakefield: My Lords, I am pleased to be able to tell the noble Lord that the coal task force carried out a thorough evaluation of the UK's coal research requirements. The Government will respond to the task force's report in due course. The Government are well aware of the issue. I should remind the noble Lord that coal gasification may enhance the competitiveness of coal but the volume of coal used for electricity generation depends ultimately on its ability to compete with other fuels and technologies.

Debt Counselling: Funding
2.52 p.m.
Lord Ashley of Stoke Lord Ashley of Stoke asked Her Majesty's Government:
How much money they contribute, directly or indirectly, for personal debt counselling; and what has been the real increase in the last five years.
Baroness Denton of Wakefield: My Lords, the Government's grant-in-aid to the National Association of Citizens' Advice Bureaux, Citizens' Advice Scotland and the Northern Ireland Association of Citizens' Advice Bureaux has increased over the past five years from £9 million in 1987–88 to around £13 million in 1991–92—an increase in real terms of almost 5 per cent. A breakdown of how much of that grant-in-aid is spent by those bodies on personal debt counselling is not available.
Lord Ashley of Stoke: My Lords, I believe that very little of that grant is spent by CABs on debt counselling because they have other responsibilities. Is the noble Baroness aware that last year no fewer than 1.7 million people approached the CAB with debt problems, some of them very serious indeed, and that not all of those people were the traditionally poor? In view of the great hardship involved does the Minister agree that the £1 million given by the credit industry on a voluntary basis is totally inadequate? Will she urge the Government to impose a levy on the credit industry and to match it pound for pound in view of the Government's own responsibility for this very sad state of affairs?
Baroness Denton of Wakefield: My Lords, I believe that the citizens' advice bureaux are involved greatly with debt counselling. NACAB has established some 18 money advice support units. We fully recognise the depth of the problem out there, but we do not believe that a statutory levy is the answer. The Government believe that a voluntary scheme of contributions is the right way forward and that such a scheme would react more readily to changing circumstances.
Baroness Gardner of Parkes: My Lords, is my noble friend aware that the building societies—I speak as a director of the Woolwich—have contributed to the Money Advice Trust? We have given £50,000 for three years. Is my noble friend aware that most building societies, both large and small, are providing help to debt counselling services on a voluntary basis?
Baroness Denton of Wakefield: My Lords, I am pleased to acknowledge that we are well aware that many building societies and other financial institutions are taking their responsibilities in this area very seriously. Their activities should not be counted solely in money terms but also in terms of the provision of secondees and other support.
Baroness Faithfull: My Lords, is my noble friend aware that many voluntary organisations give debt counselling, particularly, for example, the Birmingham Settlement which operates in a very poor area of Birmingham?
Baroness Denton of Wakefield: My Lords, I thank my noble friend for drawing the attention of the House to the invaluable work done by the Birmingham Settlement. We were pleased to see its skills and knowledge extended to the business sector.
Lord McGregor of Durris: My Lords, does the Minister agree that part of the present trouble goes back to the failure of the Government to implement the recommendations of the Payne Committee on the enforcement of judgment debts? It is my recollection that the committee reported at the end of the 1960s. It recommended the establishment of a central debt office to handle debts in all courts, associated with debt counselling to enable debtors to fulfil their obligations. Is the Minister aware that the failure to establish such a body as an integral part of the handling of debt by the courts is the origin of the present difficulties?
Baroness Denton of Wakefield: My Lords, I draw the noble Lord's attention to the fact that the Question relates to what we are doing now, and that was what I was able to tell the noble Lord, Lord Ashley.
Lord Monkswell: My Lords, are the Government aware that local authorities also provide personal debt counselling services? Are they aware too that the pressure on those services has escalated significantly as a result of the introduction of the poll tax, which created enormous difficulties in personal debt terms for local inhabitants? Is the Minister aware that the introduction of the council tax will not significantly
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lessen that burden? Will the Government make money available to local authorities to improve and enhance services in relation to personal debt counselling?
Baroness Denton of Wakefield: My Lords, the Government are well aware of the work of local authorities in this area. However, we believe—and there is evidence that this is also the view of your Lordships' House—that it is for local authorities to decide local priorities in the light of local needs and resources. I draw your Lordships' attention to the fact that local authority funding has risen over the five years in real terms by more than 50 per cent.
Lord Peston: My Lords, will the Minister clarify her Answer? The Question on the Order Paper asks how much money HMG have contributed directly. I take it that her answer to that Question is nought. Indirectly, the Government have contributed money to the citizens' advice bureaux, namely a 5 per cent. real increase, to deal with a problem which has shown a massive increase. Again, 5 per cent. is not much more than nought. Therefore, the straightforward answer to the Question is nought or nearly nought rather than the rigmarole in which the noble Baroness engaged.
In relation to voluntary contributions, is it not the case that the sum which it is suggested is needed by the Money Advice Trust is £9 million while the money contributed so far by the building societies in their beneficence is about £350,000 which, relative to £9 million, is again close to nought? Is it not about time that the Government took responsibility for the problem which they themselves have caused and decided to contribute a considerable amount of money?
Baroness Denton of Wakefield: My Lords, I am sorry that the noble Lord, Lord Peston, did not understand my first Answer. The moneys available were increased from £9 million to £13 million, through the bodies which are providing the debt counselling. The reason we cannot break that figure down is that the way in which those bodies balance their own requirements locally is a matter for them. I would also point out, as I tried to make clear in an earlier answer, that the Money Advice Trust has had support from the voluntary sector in both money and kind of over £1 million; it was looking for £3 million.
Lord Ashley of Stoke: My Lords, is the noble Baroness aware that we understood her first Answer only too well? I am driven to the conclusion that the Government simply do not understand and realise the magnitude of the debt and the fear, anxiety and genuine disorientation of thousands of people. I deplore her Answer. I hope that she will be able to think again on the issue.
Baroness Denton of Wakefield: My Lords, I should like to reassure the noble Lord that we do understand the problem. We believe that one of the jobs of government is to endeavour to work at the front end of the debt problem to make sure that it is not repeated and does not grow. We shall look at areas such as the new research that will come through Money Advice to see where further work can be done.

Marine Nature Reserves
3 p.m.
Baroness Nicol Baroness Nicol asked Her Majesty's Government: Whether there is any change in their policy for the creation of marine nature reserves.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Strathclyde): My Lords, no.
Baroness Nicol: My Lords, I thank the Minister for that rather interesting Answer. But since it has taken 11 years for two of the seven sites identified in 1981 to be designated, does he agree that it is time that the Government took a realistic look at the situation and decided that the present formula is not working? Does he further agree that it would be sensible to approach the matter from a different point of view altogether? Does he recall that in January this year his predecessor, the noble Earl, Lord Howe, said that in the face of the new habitats directive it would be necessary to look at the whole question of marine conservation? Can he say whether any moves have been made toward that new directive, and will the Government be putting their full weight behind it?
Lord Strathclyde: My Lords, I hope that the noble Baroness is not too disappointed. The overall policy of looking after our marine environment is working, albeit with a slightly different approach from that envisaged under marine nature reserves. We have a three-pronged approach: first, the MNRs where they are appropriate; secondly, the consideration of measures necessary to enable us to meet our obligations under the habitats directive, and we are fully committed to those considerations; and thirdly, a wide-ranging review of the management of the coastal zone and the role of coastal management plans, including consideration of the responses to our proposals for marine consultation areas.
Baroness David: My Lords, will the Minister confirm that the Prime Minister said very recently that the UK was not going to be in quite such a hurry to implement directives that came from the EC? Are the environmental directives to be grouped with those which we are not going to be in quite such a hurry to implement?
Lord Strathclyde: My Lords, it is not so much a case of being in not too much of a hurry; it is a question of seeing how fast other countries within the European Community implement their directives. On this issue, all member states have until recently concentrated on terrestrial conservation but now there is a discernible movement to address the marine issues. We are well in the vanguard of that movement.
The Viscount of Falkland: My Lords, can the Minister confirm that earlier this year there was a general consultation exercise among all interested parties? If I am right in saying that, will there be publication of any conclusions or proposals arising out of that exercise?
Lord Strathclyde: My Lords, the noble Viscount is absolutely right. We have recently completed a consultation on marine conservation areas, which is a voluntary agreement. I do not believe that there are any plans to publish the responses to that consultation, but when we have new proposals to take forward they will be submitted to Parliament.
Baroness Hilton of Eggardon: My Lords, in January this year the then Minister said that progress was being made on the site of the Menai Straits and that discussions continued at Loch Sween. Can he now say when he expects those discussions and that progress to come to some sort of successful conclusion?
Lord Strathclyde: My Lords, it depends if you define success in designation of an MNR. I prefer to see success in the fact that the marine environment is being protected. So at both the Menai Straits and Loch Sween we are working hard to get agreement from the local community, local authorities and local interests to make sure that our objectives are met.
Lord Stoddart of Swindon: My Lords, is the noble Lord aware that I find his answer to my noble friend Lady David quite incredible? He appeared to say that we would adjust our policy to the pace of other European countries. Does he not agree that that is quite absurd? Is it not about time that this Government looked after the affairs of this country without reference to what is good or bad for others?
Lord Strathclyde: My Lords, we are only interested in the interests of the people of this country. But we also have international obligations and international treaties. When we sign those we take them seriously and that is why I gave the answer that I did.
Baroness Nicol: My Lords, is it not the case that while this leisurely pace proceeds, considerable damage is being done to some of the areas which have been identified and that unless action is taken soon it will be too late? Does the Minister recall that while the long negotiations over Skomer were going on there was considerable damage to the seabed? It will be many years before it recovers.
Lord Strathclyde: My Lords, I am aware of the situation at Skomer. We do not have any evidence that there is further damage being done in other areas. The Government agree with the noble Baroness that any further damage would be extremely regrettable. As I said in my second answer, we are working hard on a three-pronged approach to solve some of the problems.
Baroness David: My Lords, does the Minister believe that it shows much enthusiasm for the environment when we wait for other people to take the first steps? Is that not a very stupid way to go on?
Lord Strathclyde: My Lords, perhaps the noble Baroness misheard me. I said that we were in the vanguard of moving forward in the marine area; that means that we are at the front of the rest of the Community.

Video Recordings Bill [H.L.]
Lord Birkett: My Lords, I beg to introduce a Bill to amend the Video Recordings Act 1984 and, in so far as it relates to evidence by certificate in respect of offences under the 1984 Act, the Criminal Justice (Scotland) Act 1980. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Birkett.)
On Question, Bill read a first time, and to be printed.

Liaison: Select Committee Report
3.9 p.m.
The Lord Privy Seal (Lord Wakeham)The Lord Privy Seal (Lord Wakeham) rose to move that the first report from the Select Committee (H.L. Paper 40) be agreed to.
The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper.
I think that the House is sufficiently familiar with the background to this report for it to be unnecessary for me to go over the ground again at length. Suffice it to say that, following the debate in June on what we have come to know—I am sure with at least some affection—as the Jellicoe Report, the Procedure Committee in July recommended the appointment of a Liaison Committee to keep your Lordships' Committee work under periodic review. That committee, of which I have the honour to be chairman, has met twice since the House returned and its report deals with three specific aspects of work of your Lordships' Select Committees.
First, we have looked at the proposals put to us for ad hoc Committees. There were a number of interesting proposals, and we thought that two of them in particular deserved further consideration on the basis of expert papers prepared for us by specialist advisers. These are the economics of sustainable development and relations between central and local government. We will re-examine these proposals in the light of the papers put to us, and also any other outstanding proposals, later in the Session.
But there was one proposal put to us which we were all convinced would be a suitable subject for a Select Committee of your Lordships' House to examine. This is euthanasia. Recent events have highlighted the public interest in the difficult questions surrounding euthanasia, and we thought that the medical, legal and ethical issues which arise might be scrutinised with advantage by a Select Committee of this House. We were also aware of the possibility that one or more Private Members' Bills on this subject might be introduced in the House of Lords. If such Bills are introduced, it would clearly be open to your Lordships to refer them to the ad hoc committee. Of course, I realise that this is a subject on which some Members of the House may have strong views. I can reassure them that the appointment of a Select Committee would not in any way mean that the House had come to a particular view about the issue, let alone that there was prima facie a need for a change in the law. It
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would simply mean that, as I say, it was considered an appropriate matter for investigation and perhaps for clarification. In any event, if your Lordships agree to this report today, a separate Motion will in due course be tabled.
The second matter which we addressed was the allocation of resources to the European Communities Committee. That, I realise, is a matter on which a number of your Lordships feel strongly. The Liaison Committee heard a very full and very persuasive argument from the chairman of the European Communities Committee, the noble Lord, Lord Boston of Faversham, that the committee should continue with its present level of activity. But against that, we were mindful of the Jellicoe Committee's recommendation for some reduction in the number of sub-committees and in the resources of the European Communities. We have sought to steer a middle way between these positions and have therefore recommended that the European Communities Committee should be able to appoint five sub-committees rather than the six at present.
It might be helpful if at this point I placed our recommendation in the broader context of committee work in your Lordships' House. The European Communities Committee currently absorbs about three-quarters of the committee resources of your Lordships' House, other than those devoted to our internal administration or to legislative scrutiny. If the House accepts our recommendation that the committee reduces its sub-committees by one it will still engage about two-thirds of the resources of the House. This is, I think, by any yardstick a testament of the importance which your Lordships attach to the scrutiny of European issues.
Moreover, it is our task as members of the Liaison Committee to make recommendations on the appropriate scale of committee work of your Lordships' House against the background of the available resources, both of staff and of Peers. As your Lordships are already aware, implementation of the other recommendations springing from Jellicoe, if I may use that phrase, and the continuing commitment to other forms of committee work—I am thinking here in particular of work on Private Bills—means that the overall activity of committees is already increasing. That is a point which really must be stressed. Appointment of a new ad hoc committee will add to those activities. In our opinion, it would be extremely difficult for the House to meet these other commitments without a corresponding adjustment in its existing committee activity.
I should emphasise that our recommendations, if agreed to today, would not—indeed, should not—preclude a further readjustment (either up or down) in the activity of the European Communities Committee at a later date. One of the great advantages which the House now enjoys as a result of the work of the Committee chaired by my noble friend Lord Jellicoe is that there is a permanent mechanism in place to continue to review committee activity in this House —to use an intriguing metaphor, a sort of "rolling Jellicoe". If, therefore, it becomes apparent that with its reduced size the European Communities

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Committee is unable to scrutinise effectively those issues which your Lordships deem should be scrutinised then I would expect, and indeed encourage, Members of your Lordships' House to raise it with the Liaison Committee. Indeed, in our report we expressly suggest that the workload and size of the European Communities Committee should be reviewed at the end of the present Session. I believe that this arrangement will enable the House to respond flexibly in the emphasis which it wishes to attach to any particular area of committee activity, and thus to respond to new and urgent demands as they arise.
Our third proposal relates to the Science and Technology Committee. Here we suggest that the Select Committee should continue to be able to appoint two sub-committees for the remainder of the Session. However, we recommend that the work of the Select Committee be reviewed towards the end of this Session in the light not only of other demands for Select Committees in your Lordships House but in particular of the work of the new Committee on Science and Technology recently appointed in another place. Our feeling is that, without pre-empting the outcome of that review, the Select Committee on Science and Technology might expect to reduce its activity in the next Session from two units of activity to one on an experimental basis. I should add that in making that recommendation we had the benefit of the views of the noble Lord, Lord Flowers, the chairman of the Select Committee. Of course, he and his committee would prefer to work through two sub-committees, but I think it fair to say that the kind of timetable that we propose for the committee's work to be reviewed was in response to his submission.
Finally, perhaps I may suggest the way in which we should proceed with the debate today. It may be for the convenience of the House if we take first the amendments standing in the the name of my noble friend Lord Aldington. After your Lordships have had the opportunity of debating those amendments, and after they have been disposed of, I suggest that we then proceed to debate other points arising out of the report, including the question of an ad hoc committee on euthanasia. I beg to move.
Moved, That the First Report from the Select Committee (H.L. Paper 40) be agreed to.—(Lord Wakeharn).
Following is the report:
ORDERED TO REPORT
1. The Committee was appointed on Thursday, 16 July 1992, with terms of reference set out above. In August a notice was issued to Lords drawing attention to the Committee's appointment and inviting Peers to submit proposals for the appointment of ad hoc committees and to signify their willingness to serve on select committees. Subsequently the Committee has met on two occasions.
TERMS OF REFERENCE AND METHODS OF WORK
2. The Committee has considered its terms of reference and the way in which it will carry out the work assigned to it. We draw the attention of the House to the following points.
3. The Committee notes the recommendation of the Procedure Committee' that we should not interfere in matters which should properly be left to the committees themselves.Our key role is to continue the process of review initiated
1 First Report, Session 1992–93, HL Paper 11.
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by the Committee on the Committee Work of the House ("the Jellicoe Committee") and to make recommendations about how the available resources should be distributed within a basic structure of committee activity.
4. The Committee endorses the findings of the Jellicoe Committee that "there is a finite limit on the number of Lords available for select committee work, which precludes any great net increase in select committee activity'. Our terms of reference require us to keep this matter under review and we will consider it in more detail later in the session.
5. In July the House agreed, on a recommendation of the Committee of Selection2, that in the case of the European Communities Committee and the Science and Technology Committee the rotation rule should be suspended until 31 December 1992 to permit more time for the reconstitution of these Committees. They should now be reappointed on the recommendation of the Committee of Selection as soon as possible so that they can begin work after the Christmas recess.
THE COMMITTEE STRUCTURE
Additional Demands
6. On the recommendation of the Procedure Committee, the House has already agreed to the appointment of a Delegated Powers Scrutiny Committee. It has also agreed, again on the recommendation of the Procedure Committee, that over the next two sessions two or three suitable bills should be referred to Special Standing Committees on an experimental basis. These initiatives will represent significant additions to the committee activity of the House. In addition, the Chairman of Committees told us that select committees on opposed private bills were likely to impose heavy demands on Peers and staff during much of 1993 and 1994.
Ad Hoc Committees
7. The Jellicoe Committee concluded that ad hoc committees should become a regular part of the committee structure. We endorse this recommendation and propose (in paragraphs 8 and 9 below) a programme of ad hoc committee work for the immediate future. We stress that Lords will in future be able to submit proposals for such committees for our consideration. We will consider any outstanding proposals later in the session.
Euthanasia
8. We recommend the appointment of an ad hoc committee to consider the subject of Euthanasia. If one or more private members' bills on the subject are introduced in the House of Lords, it would be open to the House to refer them to the ad hoc Committee, in which case they will form the order of reference. Otherwise we will recommend appropriate terms of reference for the Committee.
Other Subjects
9. We also propose to give further consideration to two additional subjects for ad hoc enquiries, both of which were mentioned in the Jellicoe Committee report, namely:

(i) the Economics of Sustainable Development; and

(ii) Relations between Central and Local Government

We will do so on the basis of papers prepared for us by specialist advisers setting out arguments for and against such enquiries and commenting on their likely scope. In future such preparatory papers will constitute the norm.
The European Communities and Science and Technology Committees
10. The Jellicoe Committee recommended that the European Communities Committee should develop a more flexible sub-committee structure and that there should be some reduction in the number of sub-committees and in the resources devoted to it. It also indicated that priorities and resources would sometimes dictate that the Science and Technology Committee should operate through one rather than two sub-committees.
11. We have considered these recommendations in the light of the debate on the Jellicoe Committee report on 3 June 1992 and of submissions put to us by the Chairmen of these two Committees. Both were in favour of retaining their respective sub-committee activity at its present level. The Chairman of the European Communities Committee stressed that the Committee was already fully stretched and that its scrutiny work would not be so effective if the sub-committees were
2 2nd Report of the Committee of Selection, Session 1991–92, HL 17.

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reduced in number. He also made the point that the new areas of inter-governmental cooperation under the Treaty on European Union (the Maastricht Treaty), once ratified, might require some form of scrutiny action by the Committee, which would be additional to its present work. The Chairman of the Science and Technology Committee pointed to a wide range of subjects which merited attention by the Committee in coming months. Whilst welcoming the recent appointment of a House of Commons Select Committee on Science and Technology, he emphasised that it was too early to say what the implications might be for parliamentary scrutiny of science and technology as a whole.
12. The Committee recognises the force of these arguments, and we have modified the recommendations of the Jellicoe Committee accordingly. However, if those recommendations are to be carried forward and bearing in mind the decisions already taken by the House on the Procedure Committee report in July, we consider that some redistribution of emphasis in committee work is essential. We recommend as follows:

(i) The European Communities Committee should be able to appoint five, instead of the present six, sub-committees. This will be reviewed at the end of the present session. It will be for the Committee itself to determine its own sub-committee structure within that limit. Each sub-committee, with the exception of Sub-Committee E, should be served by a single clerk.

(ii) The Science and Technology Committee should appoint two sub-committees for the remainder of the present session. At the end of the session this should be reviewed in the light of other demands for select committees and of the work of the Commons' Committee on Science and Technology. Subject to such a review, the Science and Technology Committee may expect that for a time thereafter and on an experimental basis the Committee should operate through a single sub-committee, or itself conduct an enquiry in the absence of sub-committees.

In future, before the end of each session the Liaison Committee will consider committee work for the next following session.
13. We invite the Science and Technology Committee and the European Communities Committee to consider those recommendations made by the Jellicoe Committee which are applicable to their work and which have not been considered by either the Procedure Committee or this Committee; and to submit their views to us before the end of the current session.
3.15 p.m.
Lord Aldington Lord Aldington moved the following amendment:
Paragraph 12, line 2, leave out from ("accordingly.") to ("We") in line 5.
The noble Lord said: My Lords, it may be for the convenience of the House if we also discuss Amendment No. 2 standing in my name. Amendment No. 1 is a paving amendment for Amendment No. 2. I wish to thank my colleagues on the Liaison Committee for their deliberations and their report. I have only one quarrel with the report, which is signalled by the wording of my amendment. I am in favour in particular of the idea of a "rolling Jellicoe", suggested by my noble friend the Leader of the House. I have known my noble friend for many years. I have known him to rove and to do many things but I have never seen him rolling. I look forward to that experience.
Perhaps I may remind your Lordships that I have an interest to declare in the matter; I have been chairman of Sub-Committee A of the European Communities Committee since December 1989. I should balance the declaration of that interest by adding that I shall cease to hold that position when we rise for Christmas. Therefore, I have no empire to
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build; I have just a little experience to offer to your Lordships. I know that I have the support of all noble Lords and noble Baronesses who are at present sub-committee chairmen. My noble friend Lord Selborne, who is unable to be present, has written to me indicating that he is fully in support of what he knows I have to say.
The purpose of the amendment is to re-establish what I have always regarded as the normal rule in this House; that Select Committees should determine their own structure and methods of carrying out their own terms of reference. The report of the Liaison Committee implies that rule on two occasions. Paragraph 3 notes the recommendation of the Procedure Committee that we should not interfere in matters that should properly be left to the committees themselves. In connection with the European Communities Committee, paragraph 12(i) recommends:
"It will be for the Committee itself to determine its own sub-committee structure".
The report adds the words, "within that limit", referring to the number of sub-committees. I regard that as contradictory.
The report asks your Lordships to direct that the number of sub-committees should be five instead of six as it is now. Of course, any committee must act within the limits of its terms of reference. Also, any committee must act subject to the resources made available to it by the House—in this case, the number of Clerks. At least, that is the way that I read the report of the Liaison Committee.
It is certainly true that there could be another limiting resource—that of the number of Peers. However, the report makes clear in paragraph 4 that that factor was not borne in mind when the decision was made about the European Communities Committee. If it had been, I would have felt bound to tell your Lordships that my experience over the past three years has been that more Peers wished to join my sub-committee than there was room for them.
My amendment includes words of support for the self-imposed discipline, in the European Communities Committee, of a standing review of structure and methods which the noble Baroness, Lady Serota, among the many other excellent things she did, established several years ago and which the noble Lord, Lord Boston of Faversham, carries on with enthusiasm and wisdom. It is useful in the first report of the Liaison Committee to bless the principle that Select Committees should accept that responsibility, which my experience tells me they have always accepted and still do accept, each in their own way.
The simple proposition that if you hire a dog to bark you do not bark yourself is widely accepted. It is, however, fairly widely breached in a number of places. Perhaps I may explain why it is important not to breach it at this time in the case of the European Communities Committee. It is most unwise to reduce that dog's barking ability by clipping out one vocal chord, which is what is proposed.
In my view and that of many noble Lords who serve on Select Committees, the number of five, which has been chosen, is damagingly wrong. The chairman of

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the Select Committee told the Liaison Committee why that was so. No argument at all is adduced to the contrary in the report. A possible explanation, which I believe follows from what my noble friend said, for choosing five as the number is that that is half way between the Jellicoe figure of four and the committee's figure of six. That does not seem to reflect on the merits of the matter at all.
I remind your Lordships of the role of the Select Committee. The volume of proposals for legislation and other action by and within the Community is well known. Accountability to your Lordships' House for that legislation and action has been, ever since 1973, through the European Communities Committee, which has established for your Lordships a high reputation both with Ministers and the institutions of the Community—the European Parliament and the Commission itself. The Jellicoe report confirmed that.
The key to the committee's work lies in the scrutiny of the documents referred to it, even more than in the reports on the subjects which are chosen for inquiries. The level of the load on the committee is governed by the quantity and importance of those documents. There is a commanding time factor in that scrutiny work in that Ministers have undertaken not to join in decisions at Councils of Ministers until we have cleared the documents, and so lifted the scrutiny reserve. That undertaking has lasted over many years.
The scrutiny factor fixes the number of sub-committees required. Sub-committees are groups of Peers chosen for their interest in named subjects. In the past there has been a requirement for seven sub-committees. Recently, in spite of the single market and constitutional proposals, we have managed with only six sub-committees.
If your Lordships have followed me so far, I hope that I have established that we have no individual discretionary choice about the level of work that we do; that is decided by the quantity of documents put in front of us for scrutiny. I assure your Lordships, as could any Member of Sub-Committee A, that the work load continues to be high. It could become higher with the ratification of Maastricht. The principle of subsidiarity could, and I hope will, lead to a reduction of the scrutiny load. But for the immediate future, each proposal must be scrutinised for subsidiarity, which may add rather than reduce the work level. It must be incontrovertible that the only body in your Lordships' House which can react quickly to changes in the load on your Lordships' Select Committee is your Lordships' European Communities Committee. No one else can react quickly or has the immediate knowledge to do so.
It may be said—I hope it will not—that Members of that committee are too closely engaged to make the right judgements. Surely we trust each other sufficiently to eliminate that argument. It may be said also that the committee has asked for one Clerk for each sub-committee and the Liaison Committee appears to have decided that only four Clerks plus the Clerk and the legal advisers for the Sub-Committee E shall he available. There are five Clerks at present. The report does not make that clear recommendation. It is not there for us to discuss as to whether four, five or
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six Clerks is the right number. However, that appears to be the assumption behind what my noble friend has just said.
Certainly, one Clerk for each sub-committee is more than desirable. However, in my view it is for the Select Committee to decide how best to carry on its business with the number of Clerks available. I said that we have five Clerks at present. We have not always had that. I hope that the mention of one Clerk to each sub-committee has not made some of your Lordships think that those excellent Clerks are employed full time on our work. They are not; nor should they be. For example, the excellent Clerk to Sub-Committee A, during the drafting stages of our report on enlargement, was also Clerk to the Advisory Panel on Works of Art and for a while was Clerk to a Standing Committee. I believe that she worked also on a Private Bill Committee. At the same time, she took her turn working in the Minute Room and on Divisions. It is right that that should be so.
I have emphasised the importance of the committee's work today and I wish to add one further reason. It has been one of the aims of my right honourable friend the Prime Minister, in the build-up to the Maastricht Treaty and since, to secure general acceptance, throughout the Community, of the importance of the role of national parliaments in ensuring the proper constitutional accountability of the Council of Ministers. He has been splendidly successful. I cannot be alone in believing that in Edinburgh at the end of this week Britain will give a further lead in emphasising the role of national parliaments in the life of the Community. Today is not the day, if ever there should be a day, on which this House should agree to an alteration of its procedures which, knowingly, and on the face of the report—your Lordships need look only at paragraph 11 and at what the noble Lord, Lord Boston, said —makes less effective our part in the accountability to national parliaments. Therefore, I confidently move this amendment, as I shall the second amendment in due course, with the support of your Lordships. I beg to move.
3.30 p.m.
Lord Bruce of Donington: My Lords, I rise to support the amendment so ably moved by the noble Lord, Lord Aldington. I am second to none in expressing my appreciation, which I have every reason to believe is widely shared in the country as a whole, for the contribution made by your Lordships' House in relation to the affairs of the country generally.
Frequently this House has been able to draw public attention to matters which for a variety of reasons —not least the pressure of time in another place—are of vital concern to the nation as a whole. Having said that, more particularly the European Communities Committee performs a valuable public service. Without in any way casting any reflection on similar committees in another place, there can be no doubt that the activities of the European Communities Committee in this House are far more thorough,

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searching and better documented than any equivalent report on European legislation, whether actual or proposed.
Your Lordships' House, through the Select Committee on the European Communities, has consequently acquired a justifiably high reputation. Indeed, over the past years one finds that it is the Select Committee that has alerted the country and another place, as well as your Lordships' House, to the dangers of uncritical acceptance of many nonsensical pieces of legislation or proposals emanating from the European Commission.
We are living in times when it is even more necessary that a critical eye, supported by expert evidence from all quarters, should be cast over all proposals that come from the Commission or the Council. There is an ever-increasing tendency for proposed legislation to come to the United Kingdom Parliament, not direct from the Council but endorsed by the Council on behalf of the Committee of Permanent Representatives of the European Community—a series of civil servants who decide matters in private by majority voting and under whose aegis much of the legislation that is proposed comes to this country. In those circumstances it is vital that the critical eye which examines those proposals, particularly on behalf of your Lordships' House, should be maintained intact. Indeed, there is every reason why it should be increased.
In common with many noble Lords I examined the 1,000-page document issued by the Court of Auditors last week which reveals maladministration and, indeed, fraud on a scale that would certainly not be tolerated by the United Kingdom Parliament in its own finances. In that one area of fraud and irregularity, value for money and control of the budget, all the expenditure of this House and the Treasury on the Select Committees is more than justified.
The affairs of Europe are of increasing complexity. The noble Lord, Lord Aldington, referred to the Maastricht agreement. Even if the Maastricht agreement did not come into operation—it is a lot of nonsense anyway—there would still be increasing scope for the activities of the committee. I cannot believe that a constriction of the funds available—which is what we are ultimately talking about—for the proper staffing and facilities of the European Communities Committee is in any way justifiable at this time. On the contrary, the expenditure of the British Parliament on the activities of the European Communities Committee should be considerably increased. The demand for its services over the years will increase further, aside even from the miserable complexities and ambiguities of Article 3b of the Maastricht Treaty relating to subsidiarity which is absurd.
When I first learned of the new Liaison Committee which your Lordships in their wisdom had decided to set up I wondered what on earth it was for. I am even more mystified now. I am talking to noble Lords present who are regular attenders of this House. I am at a loss to find out why we need a specific committee
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to determine the scope and functions of another specific committee, in this case the European Communities Committee, which has proved its worth both inside and outside the country. It does not need a committee composed of people who know nothing about the European Community to tell it what it ought to do and what its resources ought to be. That should be a matter for the House.
I trust that I am speaking across party boundaries; and I trust that I am speaking for those who are in defence of democracy in this country. An increasing number of people in the United Kingdom are beginning to regard this House as a significant safeguard to those liberties and powers that we retain as a national Parliament. I therefore hope that, after mature consideration—indeed deep personal and responsible consideration across party lines—regardless of party loyalties, personal dispositions and perhaps even prejudices, your Lordships will give favourable consideration to the amendment moved by the noble Lord, Lord Aldington, which I have the honour to support.
Lord Jenkins of Hillhead: My Lords, the noble Lord the Lord Privy Seal had a difficult and delicate task to discharge as chairman of the Liaison Committee in this matter. As a member of what the noble Lord, Lord Bruce, described as a mysterious committee, I feel it my duty to support the Lord Privy Seal both because of the difficulty of his task and on the merits of the issue.
There are difficult and conflicting considerations. On the one hand, in my view, it was his duty as Leader of the House to take into account the recommendations of the Jellicoe Committee. The Jellicoe Committee was set up by the desire of this House, and the noble Earl—whether rolling or not —produced what I believe was widely regarded as an excellent report. Having produced it, it would have been a nonsensical discourtesy not to act upon it. That means that some room must be found in your Lordships' proceedings. It is all very well the noble Lord, Lord Bruce of Donington, saying that we should spend infinite money and resources. Even if we spent extremely large sums of money, the number of Clerks could not easily be increased in the short run, and the number of Peers willing to serve on the Select Committees is limited.
The noble Lord, Lord Aldington, who argued most persuasively and who has a remarkable record of service to Select Committees of this House, said that he had no difficulty in persuading people to serve on his sub-committee; they were queuing up to do so. I suspect that there may be something in the fact that he always manages to get hold of the most interesting sub-committees and the ones whose reports have the greatest resonance.
There was a duty to take account of the recommendations of the Jellicoe Report. I am certainly not in the slightest doubt, leading on from what the noble Lord, Lord Bruce, was kind enough to describe as our depths of ignorance of the European Community, that the work of the European Communities Select Committee is a real jewel in the

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crown of your Lordships' House. It has achieved an outstanding reputation. I would be totally against anything which damaged that work.
Persuasive though the noble Lord, Lord Aldington, was, in a way he attempted to prove a little too much. He found a contradiction in the report and in the Lord Privy Seal's attitude. There was a slight contradiction in the argument of the noble Lord, Lord Aldington, when he said that we should not go from six to five sub-committees. There used to be seven. There is no particular rationale about it. Then he argued that the work which has to be done cannot really be determined by your Lordships' House. It depends entirely on what is forthcoming from Brussels. That situation has to be met.
If carried to its logical conclusion, that argument would be completely destructive of any attempt to allocate resources here. We would just be a port on the way as regards the amount of resources which have to be devoted. If I thought that the proposal would seriously damage the effectiveness and reputation of the European Communities Select Committee, I would be passionately against it. I find it a little difficult to believe that an adjustment from six to five sub-committees is going to be of such overwhelming effect. It is proposed that we should look at the matter again after a short period. If the Liaison Committee under the Lord Privy Seal is proved to have misjudged the issue, then I would be in favour of going back on it. However, for the moment, in the very difficult job of balancing Jellicoe with Aldington, if I may say so in those terms, the Lord Privy Seal has done the best he can. I propose to support him.
Lord Pym: My Lords, the noble Lord, Lord Jenkins of Hillhead, has brought a sense of proportion back to this debate. It might have been thought by someone listening outside that what we were concerned with would in some way destroy or seriously reduce the European Communities Committee, but in fact we are discussing the best use of the resources available to this House for Select Committee work. That was the origin of the setting up of the Jellicoe Committee. We had all the evidence before us on that committee on the importance of the European Communities Bill—which we totally support: its success, its reputation and everything else about it—as did the Science and Technology Committee. All the evidence mentioned today was before us.
We came to our conclusions. In its debates the House very broadly accepted them, but not in every detail. It then proceeded to dispatch some of its business to the Procedure Committee. In due course the House decided to set up the Liaison Committee precisely in order to decide how best to use the resources. It was very much in the mind of the Jellicoe Committee that it was extremely difficult, granted the limitation of our Peer resources, to leave the European Communities Bill with the same proportion of resources because it takes 75 per cent. of them. What has arisen now, and is before the House at this moment, is a reduction from 75 per cent. of all the committee resources to 66 per cent. of a rising total of resources.
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In the circumstances, I do not believe that that is so severe a reduction: it is certainly not one to cause any Member of this House to argue that in some way the European Communities Bill is being threatened. I am absolutely certain that if the proposals of the Liaison Committee are accepted, which I believe they will be, the European Communities Committee will still do its work in a most admirable way; that its reputation will be enhanced and that it will still play the crucial role which my noble friend Lord Aldington believes that it does and that it should play. I do not believe that we are taking any drastic decisions about this. The point about the Liaison Committee is that it is ongoing, carrying out an ongoing review, and that the matter is to be looked at again in this Session.
If we do not go that far we will find that we are stuck in this position: the European Communities Committee and the 75 per cent. of resources which it takes is sacrosanct and that everything else has got to go round that. I do not think that that is right because this House has immensely wide responsibilities to fulfil for the people of this country and as regards our parliamentary responsibilities. This comparatively slight change is something which the House should accept.
3.45 p.m.
Lord Shepherd: My Lords, my understanding of the noble Lord, Lord Aldington, is that while, like myself, he possibly regrets the reduction from six to five sub-committees, as suggested in the Liaison Committee's report, that is not really central to the amendment. My difficulty with the Liaison Committee has always been on the composition of the membership. The noble Lord, Lord Jenkins of Hillhead, felt, as Leader of the Liberal Party, and as a Member of the Liaison Committee, that he should support the Leader of the House, who is Chairman of the Liaison Committee. I do not know what position my noble friends Lord McIntosh or Lord Richard will take as regards the amendment moved by the noble Lord, Lord Aldington. The composition of the committee makes it difficult, in a sense, for the ordinary Members of this House to speak in direct opposition, as it may well be, to their respective party leaders.
Lord Tordoff: My Lords, perhaps I may—
Lord Shepherd: My Lords, perhaps I may develop that. It has been recognised that this is a matter for the whole House. Regrettably, the issue is not between five or six sub-committees as mentioned in the report. We are being required to accept that. The issue is that the Liaison Committee, having established what are the resources available to that committee, should decide how best those resources are to be utilised—that is, whether there are six, seven or three sub-committees. It is that committee which has the knowledge of what is required in its general responsibility to this House and to the country. It is a question of how its resources can be used and maximised to the greatest possible advantage.
The noble Earl, Lord Jellicoe, who has made an admirable report in many respects, complained about

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the rigidity of the European Communities Committee. He wanted to see more flexibility. In the report from the Liaison Committee we are seeing the very thing which the noble Earl, Lord Jellicoe, complained about; namely, the rigidity of five sub-committees. We do not know whether we want five. The only people who can make any judgment on that is the Select Committee itself, which this House appoints. The only restriction which that committee has placed upon it is that of resources.
We have to accept that situation. One might say, "That is the resource and it is less than what it was, but we recognise the importance. Neverthless, in order to do other things that is the resource available". However, surely it makes more sense to say to the committee, "Use those resources to the maximum advantage, not only to that committee but to this House and Parliament, in scrutinising the various proposals that come from the Community".
That has always been very central and part and parcel of this House—that is to say, we have always sought to avoid rigidity in all our rules and orders, relying on good common sense. I say to the Leader of the House: can he not leave it to the good common sense of the Select Committee, which this House appoints each year, to decide how the available resources are used to the maximum advantage of this House?
Lord Tordoff: My Lords, the noble Lord was unable to give way to me at an earlier stage of his remarks. I merely want to make the point that my noble friend the Leader of the Liberal Democrats is speaking on this occasion for himself and as a Member of the Liaison Committee. He is not speaking from a Front Bench leadership role in our party. As the noble Lord, Lord Bruce of Donington, said, I am sure that will also apply to Members on all sides of the House. This is precisely the kind of debate where the Whips take a back seat.
Lord Shepherd: My Lords, I am quite sure that the House will accept that because it is a very helpful explanation. But where we see party leaders supporting each other those on the Back Benches begin to be concerned.
Lord Ezra: My Lords, perhaps I may immediately illustrate what my noble friend Lord Tordoff has said by saying that I support the amendments which have been moved by the noble Lord, Lord Aldington. I agree entirely with the concept that there should be a review of the committee structure of this House. As was admirably put by the noble Lord the Leader of the House, the concept of "the rolling Jellicoe" finds favour with most, if not all. My only anxiety is that it does not roll too fast. I think that it does roll too fast in what is proposed in relation to the European Communities Committee. It is difficult to understand why, half way through a Session, we should have to change the structure and then have to look at it again at the end of the Session.
This has been a very difficult year for those of us who are involved in the work of the Select Committees
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—I happen to be one—and who chair the sub-committees because we have not been clear about the length of time available to us so that we can plan our work. I have been involved with my sub-committee in conducting two very important issues of scrutiny in about half the time that should have been devoted to them because of the constant changes or the prospect of change. In accepting the principle of having a Liaison Committee, I ask your Lordships that we should also have regard to the nature of the work of the committees about which it is making recommendations.
As I am sure that many others wish to speak, I conclude by asking whether, in the light of the amendments which have been moved so effectively by the noble Lord, Lord Aldington, the Liaison Committee will not think again and treat the European Communities Committee in exactly the same way as it has treated the Science and Technology Committee—that is, to say that for the time being it will retain its present structure so that it can continue the work that it already has in train. Then, at the end of the Session, let us review the whole thing. That will become particularly important in the case of the European Communities Committee because of all that is happening in the wider world in relation to Maastricht, subsidiarity and the other issues with which your Lordships are well familiar.
Baroness Elles: My Lords, I rise to support the amendment which has been moved by the noble Friend, Lord Aldington. While totally recognising the value of the report which was produced by my noble friend, Lord Jellicoe, and the debate which was held on it, I feel that one or two practical points have been overlooked. They certainly have not been mentioned today.
The first is the question of the timing of the reports from the European Communities Committee. I speak with the experience of having chaired Sub-committee E during the past year. Its terms of reference involve it advising on any changes in United Kingdom law. Presumably, that implies that the reports should be available for the Government and your Lordships' House before decisions are taken in Brussels or by the Council of Ministers.
We have produced three short reports. On the recommendation of my noble friend Lord Jellicoe, which we found very valuable, we were able to produce what might be termed "mini-reports" in order to place the main substance of the relevant matters before your Lordships' House. We produced two of those reports in time for the Government to be able to use them when negotiating at the Council of Ministers. If they had not had those reports they would not have had many of the issues before them. We have received correspondence from the relevant Ministers expressing their gratitude for the points which we raised.
I mention this point only because, if we as a Select Committee or those members who will serve on the Select Committee are to be efficient and effective—two rather popular words at present—we must be able to produce our reports on time so that they are useful to

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your Lordships, the Government and other institutions of the Community. With the best will in the world and even with our most able Leader of the House, I do not see how we can decide which reports should be produced immediately.
I believe that the scrutiny list which is prepared by the noble Lord, Lord Boston, contains 47 draft proposals which need to be scrutinised soon by the sub-committees. However, having had three months' Recess and five or six weeks unavailable because of the general election, no doubt some of the sub-committees are now way behind in the task that they are meant to perform. Therefore, I ask my noble friend the Leader of the House whether, in view of the points that have been made in great sincerity and to try to help the good functioning of this House, there cannot be a postponement of the decision of the Liaison Committee until the end of this Session. Perhaps we could review proceedings when we see the kind of draft proposals with which the sub-committees will be faced.
Lord Flowers: My Lords, perhaps I may say a few words on behalf of the Science and Technology Committee, and change the subject slightly. First, however, I apologise for being unable to attend the meeting of the Liaison Committee at which its report was approved. I was abroad on business at the time. Nevertheless, I am satisfied with the recommendations in so far as they affect the Science and Technology Committee, and I should like to thank the noble Lord the Leader of the House and the members of the Liaison Committee for that outcome.
Whether we continue in future years with the present two sub-committees will be reviewed later. We are confident that we can convince the Liaison Committee that we should, and we shall proceed on that basis. However, the manner in which the new House of Commons Select Committee on Science and Technology conducts itself over the coming months may affect the outcome.
Perhaps I may give just one example of why I think that we should be able to continue at the level to which we have been accustomed. Our recent speedy contribution to Mr Waldegrave's proposed White Paper on Science and Technology —so recent that I do not think that many of your Lordships will have seen it—was possible only because it drew on a broad range of deeply researched reports prepared over the past 12 years. That breadth would have been impossible without the work of the sub-committees. Therefore, I hope that it will eventually be agreed that we should continue beyond the current Session.
In passing, I am glad to note the emphasis that has been placed on the ad hoc committees. I proposed that a study of the economics of sustainable development might be profitable. I agree that the other two subjects (euthanasia and relations between central and local government) are both ideally suited to studies by this House.
If I may say so, the noble Lord, Lord Aldington, is asking for a blank cheque in his amendments—not, of course, in terms of money or staff but in terms of the use to which those staff (the Clerks and others) are put. The real issue is the number of Clerks and other
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staff that the House can afford to provide. Given the staff, the European Communities Committee should be free to make the best use of them. However, unless the number of sub-committees is limited, the natural enthusiasm of the committee might overload its loyal staff unmercifully. I have seen it happen. The staff are first-rate—and we are extremely fortunate that that is so—but even their capacity is limited. I suppose that that is the reason why the limitation on the number of sub-committees has been proposed by the Liaison Committee. Therefore, I do not feel that I can support the amendment although I shall, of course, be happy to support the Motion.
Having said that, however, the whole thing really seems a bit ridiculous. It is only a matter of providing one more Clerk. That is all. The committee work of the House is generally acknowledged to be extremely distinguished and is influential abroad as much as at home. Surely, one more Clerk could be afforded. I am all for Jellicoe (whether rolling or roving), but one more Clerk would be of infinitely greater value than any Liaison Committee however distinguished and gracious its membership. I most earnestly beg the Government to be a little more generous to the committee work of the House.
4 p.m.
The Earl of Lauderdale: My Lords, following on from what the noble Lord has just said, perhaps I may draw the attention of the House to the fact that a basic question predates this whole study; namely, the number of Clerks that we have. The Clerks are grossly overworked. They are wonderful people. They work with great intelligence and dexterity but they are absurdly overworked. One consequence of their being too few in number is that documents coming before sub-committees are not themselves properly gutted in advance.
I draw attention to this matter and support the amendment of the noble Lord, Lord Aldington, as being myself a long-standing satellite of the sub-committee dealing with energy. The noble Lord, Lord Ezra, is our chairman. I was chairman of that committee years ago. I was chairman for five years but then I was found out and I was pushed off. Now that the Department of Energy has disappeared into the Department of Trade and Industry ours is the only official committee in either House of Parliament which deals with energy. With the disappearance of the Energy Department, the Select Committee on Energy in another place disappeared too. So it is only our sub-committee in this whole building which deals with energy. A few months ago we had a great row—we shall have more—about the mines. I mention it because it is one of the sub-committees of the Scrutiny Committee which does very important work on this and other subjects. If we cut the number down they will do less work. I support the amendment of my noble friend Lord Aldington particularly because I believe that the number of staff is quite inadequate and grossly overworked.
Lord Varley: My Lords, I want to support the amendment moved by the noble Lord, Lord

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Aldington, and I shall not take more than a minute or two to do so. When I was a Member of the other place I regarded Select Committees as vehicles for under-employed politicians with time on their hands. That is not the case in your Lordships' House where the work of the Select Committees equals the work of the Chamber itself. As the noble Lord, Lord Bruce, has already said, the reports are well researched and well thought out and invariably they are debated in this House unlike the reports in another place.
The Leader of the House ought to be prepared to admit that he has disregarded the advice of the noble Lord, Lord Boston, and the evidence he gave to the Liaison Committee; namely, that the scrutiny work of the European Communities Committee would not be so effective if the number of sub-committees was reduced. That is certainly the case. I have only been a member of the European Communities Committee for a relatively short time. Twenty years ago or so I started out as a Euro-sceptic. I suppose that I am a Euro-enthusiast now. But it does not diminish my enthusiasm for the scrutiny work of the European Communities Committee. It is absolutely essential, as noble Lords have already said.
It is quite wrong for the Liaison Committee to try to lay down how the European Communities Committee should conduct its work. It may well be, as my noble friend Lord Shepherd said, that four sub-committees would survive or seven would be required depending on the work. While it was extremely superficially attractive when the noble Lord, Lord Pym, said that we are only going down from three-quarters of the resources available to the European Communities Committee to two-thirds, we have to take into account what is going to happen over the period ahead.
For example, I have in my hand a letter which the Foreign Secretary addressed to the chairman of the European Legislation Committee of another place. It was copied to my noble friend Lord Boston of Faversham. In the letter the Foreign Secretary said:
"I believe there is a real opportunity now for national parliaments to involve themselves more closely in Community business".
The Foreign Secretary actually wants us to do that. He copied his letter all over the place but I see that he did not copy it to the Lord Privy Seal. No doubt the Lord Privy Seal or his office received a copy. The Foreign Secretary attached to that letter a memorandum in which he said:
"Finally, the Government hope that the increasing contact and co-operation between specialist committees and national parliaments and the committees of the European Parliament may be developed further".
That is why we need the European Communities Committee. We need that committee to decide exactly how it should conduct its work.
The answer to the dilemma was given by the noble Lord, Lord Ezra, and the noble Baroness, Lady Elles, who said that the Liaison Committee has already conceded that all this will have to be reviewed at the end of the present Session. Rather than have disruption now, why cannot the European Communities Committee determine its own work
28
within the framework of existing resources and that review take place at the end of this Session? Surely that would be the best way to go about it rather than try to bludgeon this through at this time. I hope that the Leader of the House will agree that a pretty strong case has been made out by the noble Lord, Lord Aldington, and that he can accept the amendment. If he cannot, I hope that the noble Lord, Lord Aldington, will test the opinion of the House.
Lord Thurlow: My Lords, I am sure that there is no question of the noble Lord the Leader of the House trying to bludgeon anything through anybody this afternoon. I am what the noble Lord, Lord Shepherd, described as an ordinary Member of the House —a very ordinary Member of the House. I have served on your Lordships' Select Committee for only four or five years. I have no experience to match the authority and experience of those who have already spoken but what I would say is that we are dealing with a question of balance.
As a member of the Jellicoe Committee, and then of the Liaison Committee, I can say that we were presented with nearly all the arguments that we have heard today. We had to form a balanced judgment. It has been suggested that there is bad logic in first of all taking a certain resource and then not letting the European Communities Committee decide for itself how the resource should be used. But there is another form of logic—a balancing logic—that applies. I refer to the practical logic. It is important and necessary in the light of experience that each Clerk should have one sub-committee to work for. The noble Lord, Lord Aldington, suggested that the number of Clerks available to the European Communities Committee is being reduced. That is not my understanding. My understanding is that with four Clerks for sub-committees it is practically desirable and necessary that the number of sub-committees should be reduced to four. That is a practical thing. If at the end of the Session it appears that it does not work and will not work and that we need more Clerks for the European Communities Committee—they cannot be conjured out of the air quickly: suitable Clerks do not grow on gooseberry bushes—I hope and believe that reconsideration by the Liaison Committee and the co-operation of those concerned will result in the necessary increase. In the meantime, I hope that your Lordships will agree to the recommendations of the Liaison Committee.
Lord McIntosh of Haringey: My Lords, I was present at the meeting of the Liaison Committee on behalf of my noble friend Lord Richard who was not able to attend. I repeat the assurance already given. We consider that these are matters for the House and not for political parties or the usual channels. Therefore the views of my noble friends and their right to vote as they please will always be respected on these Benches.
A few points need to be made about the recommendations of the Liaison Committee. That involves marginally widening the scope of the debate. I went to that meeting determined that the opportunity given by the Jellicoe Committee to extend

29
the range of ad hoc committees of the House should not be lost. I want to record my satisfaction with the decision of the Liaison Committee to appoint one extra ad hoc committee now and to make a choice between two others in the coming weeks. That of course involves a considerable increase in the burden both on the House and on Peers available to take part on these committees. It is in that context that the House should consider the proposals now before us for the European Communities Committee.
The second point I want to make is that at the committee meeting I sought an assurance from the Leader of the House that the proposal was not motivated by a desire for economy or because of staff considerations. I received the assurance from the Leader of the House that, although the overall level of committee work and the costs involved were relevant factors, they should not determine the outcome of the committee's deliberations. In other words, I believe that the committee reached its conclusions not on the grounds of cheeseparing; and that is an important element to be considered.
Therefore, as one who was present, I am bound to support the proposals of the Liaison Committee. But I hope at the same time that the Leader of the House when he replies will feel able to express some support for the views of my noble friend Lord Shepherd, who I thought modified the amendment in the name of the noble Lord, Lord Aldington, quite effectively and had a genuine and valuable point to make. The fundamental point about the European Communities Committee is that at the end of this Session nobody knows the amount of work that is going to be placed on the committee. It could be double or even treble the amount now if Maastricht goes through.
Lord Belstead: My Lords, I was a member of the Liaison Committee of my noble friend the Leader of the House, and I wish to say only the briefest words in support of what he proposes. Like the noble Lord, Lord Thurlow, from the Cross-Benches, when we sat on the Liaison Committee I felt that we needed to face what had been served to us by the Jellicoe Committee. There were the twin recommendations that came from Jellicoe of a more diversified committee structure and also a greater use of ad hoc committees. It is right this afternoon to remember that this is not pie in the sky but something that is happening now.
The appointment of the Delegated Powers Scrutiny Committee and the experimental use of the special standing committee procedure are already happening and will represent a significant increase in committee work in your Lordships' House. Then, as my noble friend the Lord Privy Seal said in moving his Motion today, we have a proposal in the report for an ad hoc committee on euthanasia and serious consideration to be given to a further ad hoc committee or committees either on local and central government or on sustainable developments.
We are conducting the discussion this afternoon in the context of wanting what the House obviously wants and what Jellicoe wanted, which is a more diversified committee structure. In this mix of course we have to defend the splendid work of the European Communities Committee. Any of your Lordships who
30
have had even a passing knowledge of what is done in these Select Committees, both the Science and Technology Committee and the European Communities Committee, would be absolutely mad if we did not say that this afternoon. But that is what we are going to do under the proposal put forward by my noble friend. Even then, if we agree to my noble friend's proposal this afternoon, two-thirds of the available resources for committee work in your Lordships' House will be taken by the European Communities Committee for the future, and I support that and believe it is absolutely right.
Before sitting down I must address what the noble Lord, Lord Shepherd, said. With the greatest of respect to the noble Lord, who can forget more about the work of this House than I think I will ever learn, if this afternoon we simply leave it to the European Communities Committee to decide how many sub-committees it wishes to have, the words of the noble Lord, Lord Thurlow, will be proved both prophetic and true —under the splendid leadership of the European Communities Committee we will find that the committee Clerks will be worked harder and harder, even though that is not actually the intention.
Because I believe that the balance is right in what is being proposed by my noble friend from the Government Front Bench —namely, that we forge ahead with a more diversified and increased use of committees but at the same time be careful about how our existing Select Committees continue to move forward—I support what he has put before the House this afternoon.
4.15 p.m.
Lord Beloff: My Lords, I must disagree with my noble friend Lord Belstead because in general there are two quite different problems before us. One is the proposed expansion or alteration of the committee work of the House and the other, which in my view is much more immediate, is the capacity of the European Communities Committee to continue to fulfil its role at a time of extreme complexity in Europe's affairs.
I speak, I regret to say, with little intimate knowledge. For the usual three-year span I was a member of Sub-Committee E, the legal sub-committee, but my efforts to get back onto the committee after the expiry of the statutory year were frustrated. Whether I am alone among available Members of your Lordships' House or whether there are other unused resources is a question that we might discuss along with the question of the Clerks, because obviously if there are no Peers there are no committees. But on the basis of one Peer's experience, I venture to question that, particularly since we have been so mightily reinforced on all sides of the House in recent months.
It would be wise if my noble friend the Lord Privy Seal were to accept broadly the amendment on these grounds. It is almost impossible to be certain—I think that the noble Lord, Lord McIntosh, said this—of the kind and volume of work in the future, and, as my noble friend Lady Elles said, it is often necessary to investigate certain matters quickly. Sometimes the result may have an immediate impact on the

31
negotiating position of Her Majesty's Ministers; sometimes the benefit of the consideration may be delayed. When I was on Sub-Committee E, for instance, under the chairmanship of the noble and learned Lord, Lord Scarman, we investigated in detail the matter of frontier controls after the coming into being of the single market, and that work certainly should not pass unnoticed now.
It is not only that the volume of the work cannot be foreseen but also its division—the subject matter into which it falls. The number of sub-committees does not seem to matter. That could be argued about in terms of resources and Clerks, not overworking them, and so forth. It might also be for the European Communities Committee to decide that it needed a different division of labour. To take an extreme and optimistic example, let us suppose that the common agricultural policy was finally ditched, to the benefit of most people. That would mean that we would not need an agriculture sub-committee any more and the resources there could look at some other aspect of Community affairs that might be more alive and challenging.
It would be singularly ill-timed in the week of the Edinburgh summit to limit the capacity of the European Communities Committee to organise its own business within the limits of its own resources and to look after its own affairs. The arguments put forward by the noble Lord, Lord Shepherd, that the matter might be postponed until the end of the Session when we have a better idea of where Europe is going, if it is going anywhere, may be arguments that my noble friend the Lord Privy Seal will wish to consider.
Lord Wakeham: My Lords, I should like to state that I am not trying to bludgeon anything through your Lordships' House. My whole political life has been one of gentle persuasion. Bludgeoning is totally alien to my nature.
The report that I have presented to the House is a unanimous report by noble Lords from all parties and those with no party affiliation. It is for the House and not for me to decide such matters: they are certainly not party matters.
Following the debate on the report of the noble Earl, Lord Jellicoe, and the subsequent report of the Procedure Committee, which was approved by the House, we felt that our report was very much in the spirit of those reports. Paragraph 193 of the Jellicoe Report recommends a reduction in the number of sub-committees and in the resources devoted to the committee, particularly the number of noble Lords who serve on it. We could hardly have recommended any lesser move in that direction and we acted within the spirit of the way in which the House debated Jellicoe and in the light of the Procedure Committee report which it subsequently approved.
As I anticipated, my noble friend Lord Aldington moved the amendment with his customary persuasiveness. I do not think that there is very much between us. I entirely agree that the European Communities Committee has built up an impressive reputation both in your Lordships' House and outside, and that the role of the committee in ensuring that the Council of
32
Ministers is accountable to this House is one which your Lordships much value. Equally, I am sure that the House will join with my noble friend in supporting the efforts that will be made by my right honourable friends the Prime Minister and the Foreign Secretary at the Edinburgh summit later this week.
Nevertheless, I do not think that your Lordships will be well advised to accept the amendments. They would grant to the European Communities Committee the power to determine its own sub-committee structure within its terms of reference, making use of the staff resources that are allocated to it.
I believe that there are major problems with that approach. It goes against the whole rationale of the establishment of the Liaison Committee to allow Select Committees themselves to determine their own scale of activity. I should like to emphasise that the Liaison Committee has not sought to, and will not, seek to monitor committee work closely or interfere with that work. However, its function is to allocate resources and take decisions about priorities in a balanced and sensible way. The thrust of the Jellicoe Report was that some such mechanism was needed to continue the oversight of committee activity on behalf of your Lordships' House and to report thereon with recommendations to the House from time to time. That mechanism has now been established in the form of the Liaison Committee. For my own part, I think that the work of the Liaison Committee would be circumscribed—perhaps fatally circumscribed—if the European Communities Committee were to continue to determine the number of sub-committees that it may appoint.
Our terms of reference, agreed to by the House, include that of advising the House on the resources required for Select Committee work and of allocating resources between Select Committees. I cannot see how we can properly exercise that function, and how the House can consider our advice, if the European Communities Committee, or any other committee of your Lordships' House, is able to establish independently its own scale of activity. That might lead to a situation where the resources required by the European Communities Committee, both in terms of the efforts of your Lordships and in the demands made on the staff of the House, were such that it would become impossible to meet other requirements which your Lordships may have for an extension of Select Committee work. I recognise that that is not an outcome which my noble friend intends, but I fear that if your Lordships were to accept the amendments, it would be a possible result.
Moreover, my noble friend appears to accept that it will be for the House to determine the best allocation of staff resources. He therefore suggests that the European Communities Committee should be able to determine its own activities within that framework. He has told the House that he would envisage those activities exceeding the five sub-committees that we recommend. I should like to point out that we did not recommend five sub-committees. It will be seen from the report that we stated that the

33
committee should be able to appoint five sub-committees instead of six. In our view five was the minimum reduction that moved in any way towards the Jellicoe Report and the subsequent Procedure report which the House has approved. Therefore, we recommended five sub-committees.
That situation might lead to one of two outcomes. Either the number of sub-committees will exceed the number of staff available to man them, thus going against a key recommendation, originally made by the European Communities Committee, that each sub-committee should have its own Clerk; or there will be a number of active sub-committees and a number of inactive ones. I suggest to my noble friend that there is an alternative means of securing his objective, and that is to increase the flexibility between the five sub-committees which we propose the European Communities Committee should have. There is nothing to prevent the committee from establishing a new sub-committee to cover an area which demands urgent scrutiny and closing down, for the duration of the inquiry in question, one of the existing sub-committees. Alternatively, the committee could take up the recommendation that was made by the Jellicoe Committee and establish an ad hoc committee which could consider any urgent matters that are referred to it which do not fall within the remit of the other sub-committees.
I am sure that noble Lords would wish the Liaison Committee to be as flexible as possible. I have heard expressions of concern from noble Lords, many with deep and long experience of the work of the European Communities Committee, in all parts of the House. If my noble friend feels able to withdraw the amendment, I give an undertaking to have discussions with the chairman of the European Communities Committee and others in order to find some flexibility which will enable concerns to be met while at the same time adhering to the report which appears to us to be the correct response to the Jellicoe Report and to the Procedure Committee report which this House has approved.
Lord Aldington: My Lords, I should like to thank all noble Lords for the part that they have taken in this very valuable and important debate from the point of view of the procedure of the House. I thank my noble friend the Leader of the House very much not only for the care with which he replied to the debate but also for the tone of his response.
There is a fundamental cleavage between the line that I have taken and that adopted by other noble Lords who have spoken. It arises from the fact that we exist to scrutinise the proposals—there are 47 before us at the moment—that come from the Commission, the Court of Auditors, the Council of Ministers and the Parliament. It is that, not our predatory nature as somebody indicated, that forces the load of work upon us; and it is that knowledge that makes us suggest to the House that we should be left to decide at any given moment how we organise ourselves, how many sub-committees there should be and what, if any, extra demands we should make upon Clerks in relation to an urgent position. Leave it to us because we understand what has to be done. I have to say to
34
my noble friend Lord Pym, and to the Leader of the House, that until one sees the scrutiny process in action one simply does not understand it. It is all very well to say, as I think the noble Lord, Lord Jenkins, said, that one would be cutting by only one, but we all know the argument that it is "only one" or that it is "only a little one".
I have to say that there is an uncontradicted statement from the one Member of your Lordships' House who should know and who has responsibility that to do what we are being asked is to make our scrutiny less effective—in the week in which the Prime Minister and Foreign Secretary are asking other countries to follow more closely our procedure for bringing the Commission, the Council and liaison with Parliament closer to the national parliaments. I agree with what my noble friend Lord Beloff had to say.
I regret to disappoint my noble friend the Leader of the House as I intend to press my amendment.
4.32 p.m.
On Question, Whether the amendment shall be agreed to?
Their Lordships divided: Contents, 106; Not-Contents, 106.

Division No. 1

CONTENTS

Ackner, L.

Holderness, L.

Aldington, L. [Teller.]

Houghton of Sowerby, L.

Alexander of Tunis, E.

Hunt of Tanworth, L.

Aylestone, L.

Jeger, B.

Barber of Tewkesbury, L.

Jenkins of Putney, L.

Beaumont of Whitley, L.

Kilbracken, L.

Beloff, L.

Kinloss, Ly.

Birdwood, L.

Kinnoull, E.

Boardman, L.

Lauderdale, E.

Boyd-Carpenter, L.

Liverpool, E.

Brentford, V.

Llewelyn-Davies of Hastoe, B.

Bridges, L.

Longford, E.

Brightman, L.

Macaulay of Bragar, L.

Broadbridge, L.

Macleod of Borve, B.

Bruce of Donington, L.

Mallalieu, B.

Cadman, L.

Marlesford, L.

Carmichael of Kelvingrove, L.

Masham of Ilton, B.

Carnegy of Lour, B.

Mason of Barnsley, L.

Carr of Hadley, L.

Mersey, V.

Carter, L.

Moran, L.

Clanwilliam, E.

Morris, L.

Clinton-Davis, L.

Mountgarret, V.

Cockfield, L.

Mowbray and Stourton, L.

Cullen of Ashbourne, L.

Mulley, L.

David, B.

Nathan, L.

Denman, L.

Nelson, E.

Donaldson of Kingsbridge, L.

Nicol, B.

Elles, B.

Orr-Ewing, L.

Ezra, L.

Park of Monmouth, B.

Finsberg, L.

Pitt of Hampstead, L.

Gainford, L.

Plant of Highfield, L.

Gallacher, L.

Portland, E.

Galpern, L.

Prys-Davies, L.

Geddes, L.

Quinton, L.

Gladwyn, L.

Rankeillour, L.

Glenamara, L.

Rea, L.

Gray, L.

Renwick, L.

Greenhill of Harrow, L.

Roskill, L.

Gregson, L.

Sainsbury, L.

Grey, E.

Seear, B.

Gridley, L.

Serota, B.

Hanworth, V.

Shackleton, L.

Harding of Petherton, L.

Shepherd, L. [Teller.]

Harrowby, E.

Sherfield, L.

Hayter, L.

Slim, V.

35

Slynn of Hadley, L.

Turner of Camden, B.

Stedman, B.

Underhill, L.

Stoddart of Swindon, L.

Varley, L.

Taylor of Blackburn, L.

Wallace of Coslany, L.

Templeman, L.

White, B.

Terrington, L.

Wilberforce, L.

Thomson of Monifieth, L.

Williams of Mostyn, L.

Thorneycroft, L.

Zuckerman, L.

NOT-CONTENTS

Aberdare, L.

Howe, E.

Allen of Abbeydale, L.

Hylton-Foster, B.

Astor, V.

Ingrow, L.

Auckland, L.

Jellicoe, E.

Belstead, L. [Teller.]

Jenkins of Hillhead, L.

Bessborough, E.

Johnston of Rockport, L.

Blatch, B.

Kintore, E.

Blyth, L.

Knollys, V.

Bonham-Carter, L.

Lindsay, E.

Borthwick, L.

Long, V.

Brabazon of Tara, L.

Lyell, L.

Braine of Wheatley, L.

McIntosh of Haringey, L.

Butterworth, L.

Mackay of Clashfern, L.

Buxton of Alsa, L.

Mancroft, L.

Campbell of Croy, L.

Margadale, L.

Cavendish of Furness, L.

Melville, V.

Chalker of Wallasey, B.

Merrivale, L.

Chilver, L.

Morris of Castle Morris, L.

Clark of Kempston, L

Moyne, L.

Cochrane of Cults, L.

Munster, E.

Colnbrook, L.

Norfolk, D.

Constantine of Stanmore, L.

O'Cathain, B.

Cranborne, V.

Oxfuird, V.

Cross, V.

Pearson of Rannoch, L.

Cumberlege, B.

Pender, L.

Davidson, V.

Plummer of St. Marylebone, L.

Denton of Wakefield, B.

Pym, L.

Dormand of Easington, L. [Teller.]

Renton, L.

Richard, L.

Elibank, L.

Ridley of Liddesdale, L.

Ellenborough, L.

Ritchie of Dundee, L.

Elliot of Harwood, B.

Rix, L.

Elliott of Morpeth, L.

Rodger of Earlsferry, L.

Elton, L.

St. Davids, V.

Erne, E.

Seccombe, B.

Flowers, L.

Shannon, E.

Fraser of Carmyllie, L.

Shaughnessy, L.

Fraser of Kilmorack, L.

Stewartby, L.

Gardner of Parkes, B.

Strange, B.

Geraint, L.

Strathclyde, L.

Goschen, V.

Strathcona and Mount Royal, L.

Graham of Edmonton, L.

Gray of Contin, L.

Taylor of Gryfe, L.

Hailsham of Saint Marylebone, L.

Teviot, L.

Thomas of Gwydir, L.

Harmar-Nicholls, L.

Thurlow, L.

Harris of Greenwich, L.

Tordoff, L.

Hayhoe, L.

Ullswater, V.

Henderson of Brompton, L.

Vivian, L.

Henley, L.

Wakeham, L.

Hesketh, L.

Wigram, L.

HolmPatrick, L.

Williams of Elvel, L.

Hood, V.

Young, B.

Hooper, B.

Younger of Prestwick, L.

Hooson, L.

The Lord Chancellor (Lord Mackay of Clashfern): My Lords, there have voted: Contents, 106; Not-Contents, 106.
There being an equality of votes, in accordance with Standing Order No. 54 which provides that the Question before the House shall be resolved in the negative unless there is a majority in its favour, I declare the amendment disagreed to.
Resolved in the negative, and amendment disagreed to accordingly.
4.41 p.m.
[Amendment No. 2 not moved.]
Lord Allen of Abbeydale: My Lords, I should like to seek guidance on a point arising from paragraph 8 about the proposal to set up a Select Committee on Euthanasia. In consultation with a number of noble Lords, I have been considering the possibility of introducing a Bill which would enable persons to give directions in advance to their physicians regarding the withholding or withdrawal of life-sustaining treatment in a terminal condition.
My difficulty is that this is not, as I understand it, euthanasia. It has no relevance to the two cases which have given rise to so much publicity, one of which is still before the courts. But it arouses rather similar emotions and reactions and, I suspect, controversy. I cannot quite see how the House could consider such a Bill in isolation from the proposal put forward for a Select Committee. But equally, it seems to me that it would be unfortunate if the Select Committee concentrated its whole attention on what is almost a side issue compared with the considerations arising from euthanasia taken as a subject on its own.
I have decided not to introduce such a Bill, but perhaps I may, at the very least, ask that, when the Select Committee's terms of reference are prepared, they should be wide enough to cover the kind of legislation which I have been trying to describe.
Lord Wakeham: My Lords, I can give the noble Lord this assurance. I should have thought that the best way to proceed would be for us to have discussions about it. Obviously, to give a definite answer on the noble Lord's point one would wish first to see what were the terms of reference of the Select Committee and they would have to be brought before this House to be approved. One would wish to see the Bill which the noble Lord is thinking of introducing, but it might be helpful to all of us if we had discussions beforehand on how best to deal with it.
Perhaps I may say to my noble friend Lord Aldington that it seems to me that flexibility is the order of the day in these matters. Referring back to the previous point, I gave an undertaking that we would approach the matter flexibly and that still stands, notwithstanding the result of the vote.
Lord Allen of Abbeydale: My Lords, I am much obliged.
On Question, Motion agreed to.

Damages (Scotland) Bill [H.L.]
4.45 p.m.
The Lord Advocate (Lord Rodger of Earlsferry): My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Damages (Scotland) Bill, have consented to place their prerogatives and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Bill read a third time, and passed, and sent to the Commons.

Bankruptcy (Scotland) Bill
4.46 p.m.
The Minister of State, Scottish Office (Lord Fraser of Carmyllie): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Fraser of Carmyllie.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 1 [Accountant in Bankruptcy]:
Lord Macaulay of Bragar Lord Macaulay of Bragar moved Amendment No.1:
Page 2, line 23 at end insert:
("( ) the provision of advice on the advantages or otherwise to an individual debtor and to his creditors of sequestration proceedings when such advice is sought by a debtor;
( ) the duty to provide advice to debtors about sequestration procedures under this Act in every area of Scotland in so far as is practical and where there is a demand for such advice;").
The noble Lord said: This is one of several amendments to which we look forward to hearing the Government's response between now and the Report stage of this important Bill, which will no doubt take place next year. The purpose of the amendment now before the Committee is to fill the "advice gap", as it has been termed by the citizens advice bureaux, which will be left with the introduction of the summary administration procedure.
The amendment aims to ensure that the debtor can receive advice suited to his or her own personal circumstances and to reduce the possibility of inappropriate bankruptcies. It is anticipated that that kind of advice cannot be gained by reading through a leaflet, no matter how well intentioned or how detailed the leaflet may be. There must always be a place for advice in the scheme of things in relation to bankruptcy. The main object should be to avoid bankruptcy, if possible, while at the same time protecting the interests of the creditor.
The citizens advice bureaux have already set out in detail —I am sure that the Government have been advised of this —the fact that they have dealt with 279,916 inquiries concerning money advice in 1991–92. Of these, 2,223 were referred by the CAB to an insolvency practitioner to discuss the possibility of sequestration. That represents less than 1 per cent. of the overall total. So the great majority of inquiries obviously do not lead necessarily to bankruptcy. Thereafter, advice is given to point the possible bankrupt in the correct direction to obtain expert advice from insolvency practitioners who can provide the evidence in this complex area.
The insolvency practitioners' role seems to be undermined by the terms of the Bill. The fear is that unless, within the statutory framework of the Bill, there is set up an advice scheme—and I do not pretend that the amendment is not capable of being further amended—on terms of principle, the Bill should spell out that there will be advice available to the parties involved.
The citizens advice bureaux maintain that they do not have the professional qualifications or the number of professionally qualified people to deal with this complicated issue. They fear that with the introduction of summary administration and debtor petitions the role of the insolvency practitioner will disappear except in cases where a secondary level of advice is available.
It has been recognised that access to suitable professional advice is necessary so that a considered view can be taken as to what is to happen to any particular individual. In the Government's view the tendency seems to be that a guide to bankruptcy procedures will be enough. I respectfully suggest that the existence of a general guide is not enough because that deals with information and what is of the essence is advice, and good advice.
A further proposal, which I believe was dealt with on Second Reading, is that solicitors should step into the breach. However, experience has already shown that, first of all, solicitors are not particularly trained to step into the breach, nor are they very keen to do so. A person seeking advice may be driven back on to legal aid advice which is becoming more and more restricted for one reason or another. In rural areas of Scotland there may be no access to a solicitor's office. It is therefore the Government's duty —as they are taking the line they are in this Bill in relation to bankruptcies—to build in a good advice scheme in the legislation rather than leave the matter to chance. I beg to move.
Lord Fraser of Carmyllie: This amendment invites the Committee to place a statutory obligation on the Accountant in Bankruptcy to offer specific advice to individual debtors considering sequestration and a duty to provide this advice in every part of Scotland where there is a demand and it is practicable to do so.
While I accept that debtors contemplating sequestration should have access to information on the procedures and consequences of sequestration and should be encouraged to seek advice to enable them to reach a view on the merits of the proposal in their particular circumstances, I do not believe that it would be right to impose this duty on the Accountant in Bankruptcy. The Government do not believe that it would be an appropriate role for a public official who is charged with administering sequestrations on behalf of creditors to have the task of counselling individual debtors on whether to petition for sequestration. Nor do I believe we can justify the substantial resources required to operate such a service, when the accountant would be duplicating advice which is currently available in the voluntary and private sector. I can see real difficulties arising in terms of conflict of interest if the accountant were given such a role. On the one hand he will have a responsibility to ensure that sequestrations are administered efficiently in such a manner as to reduce the overall cost to the taxpayer. At the same time, if this amendment were accepted, he would be required to advise debtors whether sequestration was right for them. One can well imagine the arguments which could arise if the accountant's staff recommends against sequestration. People might ask whether they did so because that was

39
the correct decision for the individual or because it would reduce the volume of sequestrations and therefore the cost to the public purse.
The Government do not believe that the potential for this conflict should exist. The advice which debtors obtain should be independent of any involvement which the adviser might have in the conduct of the sequestration. The involvement of the Accountant in Bankruptcy should begin after the decision to petition is taken, not before. Having said that, the Government do accept that the Accountant in Bankruptcy should take responsibility for preparing a general factual guide to sequestration procedures and the consequences for debtors and creditors. Such guidance material could be made available to consumer and money advice bodies and others advising individual debtors. He may also, in the normal course of business, deal with factual enquiries about procedures from debtors or others. However, that is very different from providing the kind of counselling service which the noble Lord has advanced.
The Government already provide significant resources to money advice centres and the citizens advice bureaux to enable them to provide, among other things, this kind of advice to consumers. Some £1.25 million was provided through the urban programme last year to support money advice projects while DTI provided some £l.4 million to Citizens Advice Scotland as core funding. Such bodies are more used to dealing with individual debtors and are seen by debtors as being more accessible and informal in their approach. In the great majority of cases—indeed the figures given by the noble Lord would bear this out—a debtor will already have approached such a body for advice before he considers sequestration. Those bodies will already be dealing with his case and will be able to provide the information to allow the debtor to reach a decision. They cannot take such a decision for him—no one should—but they can help him to arrive at a conclusion in the full knowledge of the consequences.
If the amendment were accepted, the Accountant in Bankruptcy would have a responsibility to provide advice on sequestration. He could not give advice on other debt related matters or on alternatives to sequestration. The service he provided would therefore be more limited than that which a debtor can receive from such bodies as citizens advice bureaux or money advice centres. Also that would obviously be an expensive service to provide.
For those reasons I do not consider it would be appropriate to place this statutory burden upon the accountant. I believe that more can be achieved through the use of voluntary bodies and others already active in the field. With that explanation, I hope the noble Lord will consider that he can withdraw his amendment.
Lord Macaulay of Bragar: I listened with interest to what the noble and learned Lord said. This amendment probably applies to the wrong part of the Bill as we are discussing the supervisory functions of the Accountant in Bankruptcy. The idea behind the
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amendment is not to get the Accountant in Bankruptcy or his department involved in giving direct advice but to give him a duty to provide advice; in other words, to set up some body which would give people involved in sequestration independent advice on what steps they should take. However, as I have indicated, I tabled the amendment to see what the Government's response was. I shall read with interest what the Minister has said. In the circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clause 2 [Appointment and functions of interim trustee]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 2
Page 5, line 24, leave out from ("by") 24 to ("deed") in line 25.
The noble Lord said: Like my noble friend Lord Macaulay of Bragar, I, too, must thank some of the active bodies in Scotland who are involved with debt for the great help they have provided on this complicated Bill. To those bodies debt is becoming an everyday occurrence. They are dealing with these problems every day. Therefore I have great respect for the points they have made.
In moving Amendment No. 2 I should like to speak also to Amendment No. 12. This amendment seeks to ensure that a debtor who petitions for sequestration can secure the immediate appointment of an interim trustee prior to award of sequestration to protect and preserve the interests of creditors, in particular to supervise the carrying on of a business of which the debtor is sole proprietor.
At present, as I understand it, a debtor who petitions for sequestration with a concurring creditor could secure on the same day as the petition is presented an award of sequestration and at the same time the appointment of an interim trustee. The Bill proposes that in the event of a petition at the instance of a debtor, award of sequestration cannot be made until not less than eight days after the date of the presentation of the petition. The Bill also allows an interim trustee to be appointed prior to the award of sequestration only in the event of a petition at the instance of a creditor or a trustee acting under a trust deed. That is stated at Clause 2(5).
One can imagine the position of an individual who is a sole trader or a sole proprietor. The examples which come to mind are a public house, a small building business or a farm. Does the legislation really mean that the debtor requires a limbo period of not less than eight days before an interim trustee can he appointed to control his assets and take responsibility for the running of his business?
It appears that the draftsman may not have fully recognised the practical implications of a delay of not less than eight days. The eight days are intended to allow the Accountant in Bankruptcy to ensure that he receives a copy of the petition and that the debtor has provided a copy of his list of assets and liabilities. The amendment does not seek to upset that procedure, which can still be carried out after an interim trustee

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has been appointed prior to the award of sequestration, but it deals with that specific point of the sole proprietor. I beg to move.
5 p.m.
Lord Fraser of Carmyllie: The amendment seeks to change the provision in Clause 2 of the Bill which allows the court to appoint an interim trustee when granting a warrant to cite the debtor in the case of creditor or trustee petitions.
The Bill simply re-enacts a provision which presently appears in Section 13(1) of the 1985 Act. The early appointment of an interim trustee prior to the award of sequestration is possible only where the debtor consents or where the creditor or trustee shows cause as to why such an appointment should be made. The obvious reason for making such an appointment is where there is a need to safeguard the estate against the possibility that the debtor may try to dispose of or hide assets to prevent them being found by the trustee. Such action is most likely where the debtor is opposed to the sequestration and is trying to thwart his creditors.
If, however, the debtor has himself brought the petition, then I can see no good reason why there is a need to have the interim trustee appointed prior to the award of sequestration. If the debtor wished to dispose of his assets, it is reasonable to assume that he would do so before bringing his petition, not during the short period allowed in the Bill between the presentation of the petition and its being dealt with by the court.
I hope that with that brief explanation the noble Lord will appreciate why that distinction has been maintained within the Bill and will feel able to withdraw his amendment.
Lord Carmichael of Kelvingrove: I am grateful to the Minister for that explanation. That appears a very reasonable answer to the amendment. Other arguments may be put to me before Report stage, but for the time being I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Lyell Lord Lyell moved Amendment No. 3:
Page 5, line 42, at end insert:
("( ) Where the court appoints an interim trustee in terms of subsections (1), (2) or (5) above, the Sheriff Clerk shall send a certified copy of the interlocutor pronounced by the court to the interim trustee forthwith." ").
The noble Lord said: Clause 2 deals with the appointment and functions of the interim trustee. I am grateful to my noble friend for providing me with a child's guide, which was necessary for a mere accountant attempting to work through this somewhat complicated Bill and associate it with the 1985 Act.
The Committee will see that the amendment attempts to add a small paragraph. In so doing I seek guidance on one particular aspect of these sad cases of insolvency and the appointment of an interim trustee. I understand that time is of the essence in such cases, both for the resolution of the debtor's affairs and for
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the benefit of creditors. I understand that there are informal procedures whereby the Sheriff Clerk can indicate that an interim trustee may start his duties —which are set out in Clause 2 of the Bill—immediately.
Under Section 21 of the original Act, which should be read in conjunction with the Bill, the interim trustee must call a statutory meeting within 28 days. He must give seven days' notice of that meeting to creditors that he can discover. Therefore he has 21 days after the granting of the certificate in which to obtain a list of creditors and call a meeting. Therefore, the quicker the notification the better the chance of any muddle in the debtor's affairs being resolved and of the creditors obtaining the maximum benefit.
I understand that in the case of company liquidations there is a provision in the Act of Sederunt Sheriff Court Company Insolvency Rules 1986 that the clerk of the court will send a certified copy of the interlocutor which appoints the interim liquidator. The amendment sets out to adapt the same procedure to sequestration.
I am given to understand that a committee of the Scottish court Rules Council has already been formed to draft rules to accompany the legislation which we are discussing and which has already been dealt with in another place. It is possible that that council could incorporate procedural instructions within the rules which would meet the intention behind the amendment. The 1985 Act incorporates many instructions regarding the registration of court orders. For example, Section 14 of the 1985 Act refers to the registration of court orders. Therefore, since a similar provision already exists, I wonder whether it would be appropriate to incorporate my small amendment in the main statute. I hope that I have not spoken for too long with this small point. I await the wise words of my noble and learned friend. I beg to move.
Lord Fraser of Carmyllie: I can understand why my noble friend has been moved to bring forward this amendment. Under the 1985 Act an insolvency practitioner may be appointed as interim trustee in a sequestration without any prior knowledge on his part that a case had been brought before the court. By putting forward his name to be added to the list of interim trustees held by the court, the insolvency practitioner accepts that possibility, and he has a duty to administer any sequestration assigned to him by the court. In recompense, he has the reassurance that should the debtor's estate have insufficient assets to meet his remuneration and outlays, the state will meet any shortfall. He is therefore placed at no financial risk.
I appreciate that that is not the point with which my noble friend is particularly concerned, but rather that it means that on some occasions under existing law the insolvency practitioner may not learn of the burden that has been placed on him until some time after the event. However, I hope that I can reassure my noble friend that that situation cannot arise under the new procedures introduced in the Bill. In the future an insolvency practitioner will always know if his name has been put forward to the court in any petition. Indeed, by virtue of subsection (3) of the new

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Section 2 which is inserted by Clause 2—which is found at the top of page 5 of the Bill—a petition which names an insolvency practitioner must be accompanied by a written undertaking from the practitioner that he is willing to act as interim and permanent trustee in the sequestration.
Consequently, the insolvency practitioner will have been directly involved in the petition and can take steps to ensure that he is informed of the court's decision without there being any need to place an additional duty on the court staff. It is because I consider this amendment to be unnecessary given the changes that are proposed in the Bill, that I invite my noble friend to withdraw it. It is not out of any sense that he has not come across what I would consider in the existing law to be a good point.
Lord Lyell: I am very grateful to my noble and learned friend for tactfully pointing out that perhaps the solution would lie at the top of page 5. He thought that it was terribly unlikely that I would refer to the financial provisions as dealt with by these practitioners. Nothing could be further from my mind, and no doubt from the mind of my noble and learned friend. I have been interested, and certainly for today well satisfied, by what he had to say.
Reflecting on his winding up remarks, I believe he said that he could take steps to make sure that the interim trustee could start his work as interim trustee immediately. If that is the gist of what he said, I think he has met my points. At the outset I mentioned what I called an informal procedure, which is well understood by my noble friends and by the insolvency practitioners. If I heard my noble and learned friend aright and steps can be taken, then I say to him just two words. One begins with "t" and the other begins with "y": thank you. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
Clause 3 [Petitions for sequestration]:
5.15 p.m.
The Deputy Chairman of Committees (The Earl of Listowel): Before I call the next amendment, I should point out to the Committee that if Amendment No. 4 is agreed to, I cannot call Amendment No. 5.
Lord Macaulay of Bragar Lord Macaulay of Bragar moved Amendment No. 4
Page 6, leave out lines 18 to 28, and insert:
("(c) (i) the debtor is apparently insolvent; or
(ii) the debtor has granted a trust deed and the trustee has complied with the requirements of sub-sub-paragraphs (a) to (c) of paragraph 5(1) of Schedule 5 to this Act but has received notification as mentioned in sub-sub-paragraph (c) of that paragraph; or
(iii) the debtor, or other person acting on his behalf, gives notice in the prescribed form to every creditor known to him, by recorded delivery, of an offer to pay instalments to each creditor and within the period of 21 days beginning with the date of posting of such notice the debtor, or other person acting on his behalf, has not received notification in writing from all creditors of acceptance of such offer.
For the purpose of paragraph (c) (i) a debtor shall not be apparently insolvent by reason only that he has
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granted a trust deed or that he has given notice to his creditors as mentioned in paragraph (b) of section 7(1) of this Act.").
The noble Lord said: In moving this amendment, it may be for the convenience of the Committee if Amendments Nos. 6 and 11 are spoken to at the same time.
The grouping of these three amendments is designed to provide an additional condition which will allow a debtor to petition for sequestration where he can show that a reasonable offer to pay by instalments has been made to creditors, but not accepted by all creditors. Clause 3(2B) of the Bill allows a debtor to petition for his own sequestration without requirements for a concurring creditor provided certain conditions apply. Subsection (2B) (c) as it stands requires the debtor to be "apparently insolvent" (as defined by Section 7 of the 1985 Act), excluding Section 7(1) (b) and other than the granting of a trust deed.
The effect of implementing this subsection is perceived to be a great restriction of the debtor's access to the sequestration process. In practice, the debtor will require to wait until a creditor takes steps to serve a statutory demand for payment or a charge for payment following a court decree. Neither the inability to pay debts as they fall due nor the failure to come to satisfactory repayment proposals with creditors will be sufficient to allow self-sequestration by the debtor.
Many debtors with no realisable assets are pursued forcibly by creditors and may not have the disposable income available to satisfy competing demands. It has to be recognised that some debtors are more resilient than others when under such pressure. Some debtors, however, suffer extreme stress and anxiety even at the early stages of collection. In such a situation there must be a clear public policy argument to allow self-sequestration where the debtor can demonstrate that he is unable to satisfy the demands from his creditors.
The Government have projected the number of sequestration awards to be made in Scotland over the next two years and have made plans accordingly to staff up the Department of the Accountant in Bankruptcy. If the Bill is not amended, the number of awards could reduce by as much as 85 per cent. to 90 per cent. During previous discussions in the other place the Government stated firmly that this legislation is not intended to restrict the access of a debtor to the sequestration procedure. But that, I am afraid, is not what it appears to do on a reading of the Bill as it stands.
This amendment has been tabled in an attempt to balance the interests of the debtor and the creditors. It would provide creditors with information on the debtor's financial situation and allow them to have some influence on the future prospects for repayment of their debts. This would overcome the criticism levelled by creditors that a debtor will often proceed to self-sequestration without any prior communication with his creditors.
Considerable thought has been given to the phrase "all creditors known to him". The debtor will be liable to a fine or imprisonment should he have failed to

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notify every creditor. These penalties would also apply if the debtor failed to take account of assets not yet received, for example, damages or insurance claims. The position of a creditor who may have been prejudiced as a result of being omitted from the circular letter of offer is protected in terms of Section 17(1) of the 1985 Act in that he can present a petition for recall of the sequestration. I beg to move.
Lord Mackay of Ardbrecknish: If I may intervene briefly on this little group of amendments, and in particular on Amendment No. 4, I listened with care to the comments of the noble Lord, Lord Macaulay of Bragar, when he introduced this amendment. There are one or two rather worrying points to which my noble and learned friend the Minister might address himself when he comes to reply. Perhaps he intends to address them anyway.
If I read Amendment No. 4 correctly, if one creditor does not answer, for whatever reason, then the whole pack of cards could collapse and the debtor could go into self-sequestration. Alternatively, if a ridiculous offer is made to the creditors and they find it impossible to agree, the self-sequestration route could then be pursued, and Amendment No. 4, if it had been put into the Bill, would have been obeyed on the face of it. But in fact it would not have been obeyed because the offer was one which no self-respecting creditor would accept. I accept that Amendment No. 11 is designed to try to stop that, but I am not entirely sure that it would do so.
Having regard to all the circumstances, the reasonable phraseology would be very much up to the quality of the advice being given by the adviser. If one reads some of the material, especially a document by a Mr. Gray, which has been published to advise people, I personally would not have too much confidence as a creditor that the advice being given by the advice bureaux using that document would be evenly balanced between the debtor client and the creditors. I shall be interested to hear what my noble and learned friend has to say on those points.
Lord Fraser of Carmyllie: I am grateful for both contributions to this group of amendments because they go directly to the heart of the sequestration process, being concerned with the ability of a debtor to obtain access to sequestration. Their implementation would affect not only the debtor but also his creditors and their prospect of recovering the debts owed to them. They also have implications for the courts.
Before looking in detail at the specific amendments which the noble Lord has introduced, it is worth reminding ourselves of the purpose of sequestration, of the thinking that lay behind the provisions in the 1985 Act and of the intentions of the Bill. Sequestration exists primarily as a means whereby the estate of a debtor can be realised and distributed to his creditors in an orderly manner in partial recompense for the debts owed to them. It is the ultimate form of diligence and, in the words of the Scottish Law Commission,
"a support for the system of commercial credit".
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For the debtor it provides protection from individual diligences and, in due course, it will lead to the discharge of the pre-sequestration debts and the opportunity to make a fresh start.
In its report on bankruptcy law which led to the 1985 Act, the Scottish Law Commission addressed itself to the question of how a debtor might obtain access to sequestration. It concluded that a debtor should have access to sequestration but that the right to petition should be exercised only with the consent of a creditor.
The commission saw the involvement of a qualified creditor as a necessary check to ensure that at least one of the debtor's creditors considered that sequestration was appropriate. It also saw that involvement as a useful safeguard against any tendency by a debtor to seek to exploit sequestration not to secure the reordering of their affairs, but for the ulterior motive of evading the financial responsibilities which the debtor had freely entered into.
In examining the amendments before us it is important to keep these aspects in mind—the need for balance between the interests of debtors and creditors and the need to safeguard against abuse of the law.
It is also important to recall that sequestration is intended to be a summary process. A petition for sequestration should be dealt with expeditiously by the courts to ensure that there is no lingering uncertainty over a debtor's financial status and that steps can quickly be taken to safeguard any assets in the estate. To that end the grounds for seeking an award of sequestration should be clear, straightforward and objective; capable of ready proof without the need for protracted consideration of evidence.
The 1985 Act followed those general principles, as does the present Bill. I am concerned, however, that the amendments put forward by the noble Lords stray away from those principles to a significant degree.
In bringing forward the present Bill the Government were aware that the procedures for bringing a petition for sequestration were not operating in the manner envisaged by the Scottish Law Commission or by Parliament when enacting the 1985 Act without serious disagreement between both sides of either House. Instead of debtor petitions being subject to the consent of creditors, a debtor was effectively able to petition indirectly by signing a trust deed and leaving it to the trustee to apply immediately for sequestration on the debtor's behalf. The use of that device has now become so widespread that even an organisation of the calibre of Citizens Advice Scotland can suggest in its briefing paper for your Lordships that that had been an intention of the 1985 Act. That was, of course, never the case. The present Bill therefore takes steps to place trustee petitions on the basis originally envisaged by the Scottish Law Commission.
At the same time, however, the Government recognise that circumstances have moved on since 1985. We accept that it is no longer sufficient to rely solely on the willingness of a creditor to concur in the petition of a debtor. Therefore, in addition to allowing a petition with a creditor's consent, Clause 3 of the Bill provides that a debtor may petition when he is

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apparently insolvent (other than when he has granted a trust deed or sent a written notice to his creditors) or if he has granted a trust deed but has been unable to secure the agreement of the creditors.
In putting forward the amendments the noble Lord has tried to set up a balanced structure. However, he is arguing that the grounds available in the Bill are insufficient. He suggests that a debtor needs to be able to bring a petition even if his creditors are not pressing for payment through the courts.
I find that approach puzzling. If the creditors are not pressing for payment by legal action, why does the debtor need to take the drastic step of sequestration? What is there to prevent the debtor from agreeing new arrangements for the payment of his debts with his creditors? If all else fails, why cannot the debtor simply inform his creditors that he is unable to pay his debts and give them the choice of writing off the debts or sequestrating him?
It is important to recall that in the overwhelming majority of sequestrations at present the creditors receive no dividend at all. The sole effect of the sequestration is to write off the debts owed. The advantage lies entirely with the debtor; there is no advantage to the creditor.
As my noble friend Lord Mackay of Ardbrecknish pointed out, if the amendments were introduced a number of extraordinary difficulties would emerge. What would constitute a reasonable offer? The sheriff is required to take account of aliment in reaching a view on the reasonableness of the offer, but for a debtor receiving state benefits would an offer of nothing or £1 or £2 a week be considered reasonable? Are creditors to present arguments to the court as to whether or not the offer is reasonable?
There are significant difficulties in the proposals. I apologise for taking a little time to cover them but they are the centre of the Bill. I do not believe that the amendments before the Committee offer any advantage in procedural terms over the existing provisions of the Bill. As my noble friend has pointed out, significant difficulties would emerge if they were adopted. In those circumstances I invite the noble Lord to withdraw his amendment.
Lord Macaulay of Bragar: I am grateful to the Minister for that detailed reply. I accept the technical difficulties in the interpretation of the clause which were pointed out by the noble Lord, Lord Mackay of Ardbrecknish. At this stage we are dealing with the principle rather than particulars in the clause. It is clear that the objective behind the amendment was to reinstate matters as they were before the Bill was introduced and to try to provide a degree of fairness to the debtor while looking after the interests of the creditor.
I am sorry if I strayed away from the principle; I try not to do so. The principle is that the debtor should be provided with a better approach to the courts than the Bill provides. The Minister summed up the matter in saying that the amendment goes to the centre of the Bill and if it were accepted the purpose of the Bill would be defeated. I understand therefore that he would not be happy to accept any of the amendments
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in the group. I will read what he said with interest and in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Macaulay of Bragar Lord Macaulay of Bragar moved Amendment No. 5:
Page 6, line 24, at end insert:
("( ) the debtor either—

(i) satisfies the Court that the value of his assets is less than the amount of his liabilities, taking into account his contingent and prospective liabilities, providing that he has not granted a trust deed; or

(ii) satisfies the court that he is unable to pay his debts as and when they fall due for payment, provided that he has not granted a trust deed.").

The noble Lord said: Having been effectively kicked out of the park, in footballing terms, perhaps Amendment No. 5 takes another shot at the goal from a different angle. The amendment sets out to allow a debtor to petition for sequestration when he can clearly demonstrate to the court that he can no longer meet his liabilities. That objective would appear to meet some of the points made by the Minister in relation to previous amendments. The creditor's position would be made clear to him. It boils down to the fact that it would be clear to the creditor that to start taking action against the debtor would be a waste of his time and that of everyone else. The creditor might incur an expense which he might not be able to recover.
The amendment will allow a debtor who is in reality insolvent and is unable to meet his or her liabilities, but who does not fit into the definition of apparent insolvency for the purposes of the Act, to take steps to minimise the extent of his or her debts by petitioning for sequestration. That will have the effect of benefiting both the debtor and the creditor by reducing the overall extent of the debt due by the debtor and by averting the necessity of a creditor embarking upon both time-consuming and expensive proceedings to allow the debtor to fit into the narrowly defined category of apparent insolvency. The cost incurred by the creditor in taking those steps are unlikely to be recoverable and, accordingly, the amendment would prevent unnecessary expense to the creditor and would allow the debtor to try to take sensible and reasonable steps to prevent his or her debts from escalating uncontrollably. I beg to move.
5.30 p.m.
Lord Fraser of Carmyllie: The amendment proposes that sequestration should be awarded if the debtor has satisfied the courts that the value of his assets is less than the amount of his liabilities. As the noble Lord will appreciate, that is a test of absolute insolvency which is a notoriously difficult concept to prove conclusively since it depends critically on the assumptions made about the value of assets. Indeed, from time to time some of us may find ourselves being what might be described as technically absolutely insolvent; that is, one may have borrowed extensively for some purpose and if all the existing liabilities were suddenly called in, one could not meet them.

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In practice, creditors are principally concerned about whether one has the income to meet the debt repayments. If so, one may well he absolutely insolvent but no one will care at all so long as the payments continue to be made. Therefore, I do not see how one can safely found a ground for sequestration which could include individuals with high income and high borrowing but with low assets.
Similarly, there is a question as to whether it is reasonable to allow the sequestration of a debtor because he is unable to pay his debts as they fall due —a test of practical insolvency. That may well be an indication of serious financial problems but at the same time it may be a short-term cash flow difficulty which prevents the debtor meeting his obligations. In such circumstances, it makes more sense to reschedule debts.
If the noble Lord will consider what I have said, I believe that he will appreciate that the test of apparent insolvency, which is the basis on which this Bill is structured, is indeed the more appropriate test. At first blush it may seem slightly curious that apparent insolvency rather than absolute insolvency is a better basis on which to proceed, but on reflection I am sure that the noble Lord will agree that that is the case.
Lord Macaulay of Bragar: I shall take the advice of the noble and learned Lord and consider what he has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 6 not moved.]
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 7:
Page 7, line 9, leave out ("and liabilities") and insert ("liabilities, income and outgoings.").
The noble Lord said: The sentence in the Bill which this amendment seeks to amend is that which states:
"Where the petitioner is the debtor … he shall lodge with the petition a copy of a list of his assets and liabilities and such other information as may be prescribed in such form as may be prescribed".
It sounds rather like a doctor's surgery with all this prescription. My amendment is designed to make it clear on the face of the Bill that the debtor's income and outgoings are factors which will no longer be disregarded in the sequestration process.
The Government gave assurances in another place that the debtor's income and outgoings will be a prescribed item in the list of information to be included by regulation. I ask the Government to go further and to incorporate those words about the income and outgoings on the face of the Bill.
I understand that their inclusion in regulations was conceded in the other place. However, there seems to me to be no reason why, if that concession was made in the other place, we should not see the words on the face of the Bill. Why should assets and liabilities be seen as more significant than income and outgoings when for most people the reverse is true, as my noble and learned friend explained in answer to the previous amendment in the name of the noble Lord, Lord Macaulay?
When the debts in question were undertaken, the person involved would do his calculations on the basis of paying the debt out of income and not out of assets.
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It is essential that the Bill should send a clear message to debtors and their advisers on this point. It may be important also that the legislation should send a clear message to the European Community, which is beginning to become involved in these matters and which equally seems to be tempted to look only at assets and liabilities and not to consider income and outgoings.
Since the 1985 Act came into force, the practice of considering income and outgoings has almost been ignored by those accountants who deal in the lucrative business of insolvency. As the Government have conceded in another place that income and outgoings should be taken into account, they should put that on the face of the Bill. I beg to move.
Baroness Carnegy of Lour: I support my noble friend. He is following a point which I made on Second Reading. I believe that it is important. It may well be that the Government have given an assurance that they intend to include this matter in regulations and that they are sympathetic to the point. However, a government of a different complexion in the future may well have different views, and it would he all too easy, should there be less sympathy for creditors and more sympathy for debtors, to change this provision by regulation.
It seems sensible that this matter should be written on the face of the Bill and my noble and learned friend should consider it very seriously. There seems no reason whatever why that should not be done. I hope that the Government will accept the amendment.
Lord Taylor of Gryfe: Having listened to the persuasive submissions of the noble Lord, Lord Mackay, I too give some support to the principle involved. In assessing the value of businesses it is generally agreed that you not only take into consideration the assets and liabilities but you look also at the cash flow. That is essentially what the noble Lord proposes in this case. I regard cash flow as highly relevant in assessing the value and total liabilities of the debtor.
Lord Fraser of Carmyllie: I understand fully the anxieties which have prompted my noble friend to table this amendment and I am not surprised that he has been supported by my noble friend Lady Carnegy and the noble Lord, Lord Taylor. I too have discussed the anxieties which lie behind the amendment with representatives of creditor bodies. However, for the time being I remain unpersuaded of the need to amend the Bill.
It is not a matter of being unpersuaded by the anxieties that have been expressed. The Bill provides already in the subsection to which the amendment is directed that the list of assets and liabilities lodged by the debtor with his petition may include also,
"such other information as may be prescribed".
As my noble friend indicated, my ministerial colleagues in another place have already given an assurance that that power will be used and that in this way the debtor will be asked to provide details both of his income and outgoings. I repeat to the Committee the assurance that was given.

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The information which my noble friend seeks to elicit will be provided as a requirement of the statutory regulations prescribing the content and form of the list of assets and liabilities. While I understand my noble friend's argument and that advanced by my noble friend Lady Carnegy that there may be some attraction in those words being placed on the face of the Bill, nevertheless I believe that my noble friend will concede that to achieve the objective it is unnecessary to amend the Bill.
While I agree with my noble friend that such information should be provided, I am not at present persuaded that there will be a greater deterrent effect if the words "income and outgoings" appear on the face of the statute. It is certainly important that they should appear in regulations and on the list which the debtor will he asked to complete in the future. With that assurance to my noble friend as regards the Government's intention, I invite him to withdraw the amendment.
Lord Mackay of Ardbrecknish: I am grateful to my noble friend for underlining the assurance given in another place by the Parliamentary Under-Secretary of State, Scottish Office. While I am still less than convinced that the words could not appear on the face of the Bill, I am at least content that the assurance is on record that in the prescribed form the incomings and outgoings will be clearly stated. I therefore beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 agreed to.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 8:
After Clause 3, insert the following new clause:
("Debt arrangement scheme
.—(1) Prior to sequestration a debtor may apply to the Sheriff Court for the granting of an order to prescribe a debt arrangement scheme.
(2) The Secretary of State may make regulations providing—

(a) the prescribed form of application;

(b) the appointment of an administrator to administer the scheme;

(c) the circumstances in which a debt arrangement scheme may be granted;

(d) the powers and duties of an administrator.

(3) Where an order has been granted in terms of subsection (1) above—

(a) it shall not be competent to serve a charge for payment, nor

(b) to commence or execute any of the following diligences—

(i) an arrestment and action of furthcoming or sale;

(ii) a poinding and sale;

(iii) an earnings arrestment;

(iv) an adjudication for debt;

to enforce payment of the debt concerned; and

(c) any actions for payment in which the debt was admitted and will be sisted.").
The noble Lord said: The purpose of this new clause is to implement the proposals suggested by the Scottish Law Commission in Memorandum No. 50, the fourth memorandum on diligence debt arrangement schemes in October 1980 and to bring the laws of bankruptcy into line with the English system of debt and administration orders.
As the noble and learned Lord will be aware, at present England and Wales have a system which allows clients in multiple debt situations to apply to a court prior to sequestration for the award of an administration order. An administrative order allows a client to make one payment into court each month which is then distributed to the client's creditors on a pro rata basis. All creditors have the right to object to their inclusion in the order. However, the court makes the decision of whether or not they should be bound by the order.
Once the order has been made by the court no further interest in the debt can accrue. The court can decide that the client should only repay a proportion of the total debt and all other actions and diligences are stopped. On 2nd July in another place Mr. Allan Stewart, Parliamentary Under-Secretary of State, Scottish Office, stated that the complexity and likely administrative costs of introducing such a scheme as suggested by the Scottish Law Commission would outweigh the benefits of the few debtors who would be eligible.
The rationale behind the Bill is that the 1985 Act has not worked too well for Scottish debtors in that numbers have opted for sequestration far in excess of those anticipated and far in excess of comparable numbers in England. That has caused great demands to be made on public funds. Undoubtedly one of the reasons is that England and Wales have had a multiple debt scheme in operation since 1959. With no such similar scheme in Scotland for debtors to opt for, the difference between the two countries becomes extremely noticeable. Had such a scheme been introduced at the same time as the 1985 Act then the present Bill may not have been required at all.
The new clause introduces a way to assist citizens' advice bureaux advisers to deal with the 81,000 clients a year, reduce the amount of time spent on those clients and provide a way, short of sequestration, to assist them. The new clause has wide support in Scotland. I hope that the Minister will be able to look at it and consider whether or not he can implement the recommendation of the Law Commission, which is usually sober in its judgment in these matters. I beg to move.
5.45 p.m.
Lord Fraser of Carmyllie: Like the earlier group of amendments moved by the other noble Lord on the Opposition Front Bench, this is an important amendment in the context of the Bill we are considering. However, I remain of the view that any benefits which a debt arrangement scheme might achieve for debtors would be outweighed by the cost and additional workload it would place on the courts to administer. I note that the issue of administration is not addressed in the proposal; it is left for my right honourable friend to prescribe arrangements in regulations.
If one were to use the proposals of the Scottish Law Commission as the basis for the new procedure then the courts would be expected to undertake the task of operating any arrangements prescribed by the

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Secretary of State. Although that is not explicit, I understand that to be implicit in what the noble Lord said.
The Committee will be aware that in Scotland it has historically not been a role of the courts to act as a collector of debts. That would be a burdensome, additional obligation which would distract the courts and court staff from their other duties. I presume that the noble Lord envisages that it would be possible for the state to levy an administrative charge on debtors using those procedures. But I imagine that in order to protect the rights of access that would need to be small. We must therefore assume that it is the taxpayer who would be required to meet the additional costs such a procedure would produce. In the present public expenditure climate that is clearly not a reasonable option.
Such expense might be justified if it were expected to secure savings in other areas; for example, by reducing the volume of sequestrations. However, the Government would expect it to be a viable alternative to sequestration in only a small number of cases. We regretfully anticipate that the failure rate of individual debt arrangements under those proposals would be high, making the debt arrangement process simply an additional administrative burden which would ultimately offer no long-term comfort to the debtor.
In practice, the cases which are likely to operate successfully under a debt arrangement scheme are those which presently such organisations as the citizens' advice bureaux and others negotiate between creditors and debtors on a voluntary basis. We would simply be substituting a statutory framework for a voluntary one. Knowing some of the work of the citizens' advice bureaux, they arrange a considerable volume of such negotiations on an informal basis successfully. A statutory framework would require greater expense for the taxpayer.
As the noble Lord will appreciate, the cost of a debt arrangement scheme will not be a function in a number of cases where a debtor is presently sequestrated but rather the much larger number of cases presently dealt with by those voluntary citizens' advice and other money advice workers.
One of the reasons behind the Government's original decision not to introduce a debt arrangement scheme was its complexity. The draft Bill contained in the Scottish Law Commission's 1985 report contained no less than 29 clauses on the subject. I am minded to put the proposal to the noble and learned Lord, Lord Simon of Glaisdale. He may be horrified to discover that a single clause accompanied with regulation put forward a proposal consisting of something like 29 clauses in the report originally prepared by the Scottish Law Commission. The Bill avoids the immediate problem of complexity by taking the form of an enabling provision. That should not disguise the fact that the debt arrangement scheme would be extremely complicated and would need a considerable amount of detail fleshed out in regulation.
The noble Lord is effectively arguing that a scheme of this type is required because there is no alternative, short of sequestration, which would provide a debtor with protection from his creditors and an opportunity
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to reorganise his affairs. If the noble Lord were correct, I could see greater force in the argument that he is advancing. However, I disagree with his analysis. There are other remedies, quite apart from the arrangements to be found in the Debtors (Scotland) Act 1987, where there are time-to-pay orders and conjoined arrestments. There is also the possibility of making greater use of voluntary trust deeds.
The noble Lord said that there was no scheme similar to that which is to be found in England. That seems to me the greatest problem that we have experienced in Scotland since the 1985 Act. That Act sought to encourage, in the same way that this Bill does, the greater use of voluntary arrangements known as "protected trust deeds". Like the proposed debt arrangement scheme, a protected trust deed blocks the creditor's ability to undertake diligence so long as the debtor complies with its terms. If so drafted, trust deeds could provide a means of offering creditors a rescheduling of their debts which took account of the debtor's anticipated future income. It could also contain provisions for the discharge of the debtor possibly sooner than under a sequestration. Moreover, the protected trust deed is a voluntary agreement which does not place the same financial and administrative burden on the courts as would a debt arrangement scheme procedure.
As we discussed at Second Reading, a further important factor may be that, while bankruptcy does not carry with it the same social stigma that once attached to it, I have said —and I repeat—I remain concerned that we should not send people quickly towards bankruptcy if there is another way in which their affairs can be satisfactorily settled without putting them into that position. If there has been any matter of concern over the operation of the 1985 Act, it is because of the device of the trustee going straight towards sequestration and that in the time while the Act has been on the statutory book we have, regrettably, had little exploration of what might be some very constructive opportunities to develop the concept of the protected trust deed in Scotland.
I feel strongly that much more consideration needs to be given by those in the debt advice field as to how the present law on trust deeds and their particular protective status might be made to work for debtors and creditors. I believe that the proposed debt arrangement scheme is an expensive one and that greater emphasis should be placed on the development of voluntary arrangements.
I have again taken a little time to explain this matter. I am aware from discussions that I have had in Scotland that this alternative, which is already there in statute, has not been used at all. There are other provisions in a schedule to the Bill which the noble Lord will be aware of. They allow the establishment of a protected trust deed to be achieved rather more simply than was the case under the 1985 Act. That is what we should be most vigorously examining. It should be examined by those who do some very good work in the debt advice field in Scotland. With that rather longer explanation, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Taylor of Gryfe: Before my noble friend Lord Carmichael replies, perhaps I may say that, like many other noble Lords, I have received a great deal of material in connection with this Bill. Some of it I have failed to understand as I have no legal background. However, I read it through. The most persuasive submissions were from the citizens advice bureaux and there was also some reference to the Scottish Law Commission.
In reading the submissions and the case presented by my noble friend Lord Carmichael, there is some justice in the case. He said that this matter should not be written into statute, but that we should rely on the voluntary arrangements which are made. That is not the view of the Scottish Law Commission as it then was. The citizens advice bureaux advise about 81,220 clients. This is voluntary work. A good deal of the time is taken up with clients in finding a way short of sequestration to assist them.
Unless I am mistaken in this respect, the English law and its provisions have some justification for their application to Scotland. I did not hear the Minister reply to that particular point. We are very fond in Scotland of saying that Scottish law is much superior to English law. However, in this particular case it occurs to me that there is some justification for the claim to apply English law. Accordingly, I support the view that has just been expressed by my noble friend Lord Carmichael.
Lord Carmichael of Kelvingrove: I am very grateful to my noble friend for having gone through the cases that were raised with the citizens advice bureaux. I am also grateful to the Minister for his long explanation. It will be of considerable help. He suggested that no arrangements had been put on the face of the Bill. With his statement, perhaps we may make arrangements to be completed for the Report stage.
One of the difficulties is that the negotiations that take place with the citizens advice bureaux, social work departments and their clients (sometimes for not very large sums) fall down because one individual refuses to accept the arrangement. I believe that this matter comes up at a later stage in this Bill. If one creditor refuses to accept, a great deal of heartache could be saved if there were another way of dealing with the matter.
I know this matter is not in the same class, but I understand that criminal reparations are presently collected by the courts. Therefore, there is a precedent in this regard although it may be small beer compared with the 80,000 cases that we are talking about. The Minister said that it was very costly to use the procedure which is followed in England. We have been given figures by the voluntary organisations, and the scheme is extremely costly and time consuming to them. A volunteer has to work between 7½ to 11½ hours as a minimum. It will be interesting if at a later stage the Minister can find whether an actual comparison has been made between the cost in England and what would apply in Scotland. I am grateful to the Minister for the trouble he has taken. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Macaulay of Bragar Lord Macaulay of Bragar moved Amendment No. 9:
After Clause 3, insert the following new clause:
("Notices to creditors.
.After section 16(3) of the 1985 Act (petitions for recall of sequestration) there shall be inserted the following subsection—
"(3A) (a) At the same time as service is made under subsection (2) above, the petitioner shall send by first class post a notice in the prescribed form to all creditors known to the interim trustee or permanent trustee as the case may be and the recipient of the notice may lodge answers to the Petition within 14 days of the service of the notice.
(b) A certificate of postage signed by the petitioner or his agent shall be sufficient evidence of compliance with the requirements of paragraph (a) above.
(c) Where the petitioner is not the interim trustee or the permanent trustee, the interim trustee or the permanent trustee as the case may be shall forthwith upon a request made to him by the petitioner provide the petitioner with a list of the names and addresses of the creditors known to him." ").
The noble Lord said: I hope that this amendment will find some sympathy on the part of the Government. It relates to the procedure under which a petitioner applies for recall of his sequestration and sets out a requirement to advise all known creditors —that is a phrase which we have already heard referred to—of the presentation of the recall of the sequestration. Putting it briefly, at the moment all that has to be done by a debtor seeking to have his sequestration recalled is to put a notice in a journal known as the Edinburgh Gazette. This publication does not have any significant circulation. It prints statutory announcements and so on. I have never regarded anything in the Edinburgh Gazette as being a notice of any particular value apart from its content. There must be some other way of protecting creditors.
We have heard more than once today, and at Second Reading, that one of the main objectives of the Bill is to protect the creditor. If a debtor is able to recall his sequestration through the courts outwith the knowledge of the creditor, then the creditor will remain unpaid and will never know what the position is. I suggest that that is quite unjust to creditors who might have launched an objection to the recall of the sequestration unless they had been given some guarantee and an assurance of repayment.
It is considered by accountants involved in these matters that one of the major deficiencies of the 1985 Act was that the petition for recall could be granted by the court without a creditor having been notified of the petition unless he was a subscriber to the Edinburgh Gazette. It is to remedy that defect—while acknowledging at the same time that it will cause some expense to write to every creditor—and to assist the creditors that I beg leave to move this amendment.
Lord Fraser of Carmyllie: I have listened with interest to what the noble Lord said as he moves from taking up a position of protector of the debtor's interests. On this occasion he has moved around to look to the interests of a creditor. It is an interesting point that he makes. I am not entirely convinced that the additional procedural requirements that the amendment entails would be justified. When someone presents a petition for the recall of an award of

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sequestration, he will probably wish to see the matter resolved as quickly as possible. As the noble Lord emphasised, that should not be done without giving interested parties a right also to be heard on the issue.
Section 16 of the 1985 Act already goes to some lengths to protect the interests of all those who are most likely to wish to lodge answers to any petition for recall. In particular, Section 16(2) requires the petitioner to serve a copy of the petition and a notice stating that answers may be lodged within 14 days of such notice on the debtor, on any person who was a petitioner or who concurred in the petition for the sequestration, on the interim or permanent trustee, and on the accountant in bankruptcy. Those persons will already have been involved in the sequestration and are the ones who are most likely to have an interest in lodging answers.
However, as the noble Lord observed, Section 16(3) goes on to require the petitioner to publish a notice in the Edinburgh Gazette which will give information as to the existence of the petition for recall and of the right of any interested party to lodge answers. I accept the noble Lord's observation that that is not the first newspaper that people read every morning over their breakfast, but those who have an interest in matters relating to debt scrutinise it rather more carefully than the noble Lord suggested.
It may be noted that at present Section 16 of the 1985 Act envisages that both individual notices and the gazette notice should be given at the same time. The noble Lord's amendment would also require that additional individual notices to all creditors should be given at the same time as the notices currently required. Speed is important in this and, in practice, those provisions would require a further delay in the whole procedure. If the petitioner were not the interim or permanent trustee in the sequestration he would have to inquire of either such person, as appropriate, as to the names and addresses of all the creditors. An exchange between the petitioner and the trustee could take a week. Moreover, if the award of sequestration had just been made, following the petition of a creditor or trustee acting under a trust deed, the interim trustee would not have received from the debtor the list of his assets and liabilities which contains the names and addresses of his creditors. Under Section 19 of the 1985 Act, the debtor has seven days from the date of his notification of the interim trustee's appointment to provide such information.
It can be seen accordingly that the whole procedure for the recall of an award of sequestration could be held up by the additional notification requirements proposed in the noble Lord's amendment. It would also add to costs. I listened to what the noble Lord said and at some time he might like to elaborate for me on what observations have been made to him by practitioners on what he described as a "defect", but I am not as yet convinced that such procedural delay and additional expenditure can be justified in the circumstances. I invite the noble Lord to withdraw his amendment.
6 p.m.
Lord Macaulay of Bragar: I am grateful to the Minister for that explanation. It may be that the amendment is likely to create a degree of duplication, but those most closely involved with this type of practice will no doubt let us have their observations before Report stage. If there is anything further to be said on the matter, it can be said then. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Macaulay of Bragar Lord Macaulay of Bragar moved Amendment No. 10:
After Clause 3, insert the following new clause:
("Outstanding applications
.For subsection (1) (d) (ii) of section 7 of the 1985 Act, there shall be substituted the following sub-paragraph—
"(ii) there is no outstanding application to set aside the demand in accordance with the regulations" ").
The noble Lord said: Again, this new clause seeks to help the creditor. It sets out to prevent a debtor from invalidating a statutory demand by returning a denial slip when there may be no grounds for denying the debt. The consequence of that is that the creditor is prevented from taking the subsequent steps in the proceedings, such as presenting a petition for the sequestration of the debtor. The Act as it stands not only protects the debtor, but prejudices the creditor who has a valid unpaid debt. In England and Wales there is a system whereby the debtor may apply to the appropriate court for an order setting aside the statutory demand. The court either holds that that is not applicable and dismisses it or a hearing is fixed before the court to decide whether the denial is a proper one. There is apparently a strong view among creditors that the present procedure in Scotland requires amendment to protect the interests of creditors. It is suggested equally that, as there will have to be regulations to accompany the Bankruptcy (Scotland) Act 1992, these regulations can not only prescribe forms of application to set aside but can regulate the procedures for set-aside applications. I beg to move.
Lord Fraser of Carmyllie: I have to confess that I have some difficulty setting this amendment in the context of Section 7(1) (d) of the 1985 Act which allows a creditor to constitute a debtor's apparent insolvency, in that instance, without first having to establish the debt claimed by means of a court decree. All the creditor has to do is to make personal service on the debtor of a demand for a liquid debt of not less than £750. If the debtor does not comply with the demand or if he fails to reply to the creditor within a period of three weeks from the service of the demand, his apparent insolvency will be constituted.
But given that the creditor's claim need not have been formally established by means of a court decree, it is recognised as nothing more than that—a claim. The debtor should not be constituted apparently insolvent simply by reason of the fact that a creditor has made a demand on him which he disputes. Nor would it be fair to place the onus on the debtor to disprove by any court process the validity of the

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creditor's claim. That would be to reverse the normal rule that it should be for the creditor to establish formally any debt that is due to him.
Section 7(1) (d) gives creditors an additional facility to establish a debtor's apparent insolvency if the debtor fails to deny a debt claimed of him. But it does nothing more than that and I am bound to say that I am not persuaded that any additional burden should be placed on debtors in these circumstances. With that explanation, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Macaulay of Bragar: I am obliged once again for the Minister's interpretation of the amendment which, as I said, is trying to be helpful. I have looked again at Section 7(1) (d) and, with respect, I am not sure that I agree with the noble and learned Lord's interpretation of it. I shall, however, look at what he said in more detail, and in the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 [Award of sequestration]:
[Amendments Nos. 11 and 12 not moved.]
Clause 4 agreed to.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 13:
After Clause 4, insert the following new clause:
("Existing tenancy agreements
.—(1) Subject to subsection (2) below—

(a) the existing tenancy agreement shall terminate and the landlord shall grant a new tenancy to the debtor under the same conditions as existed in the previous tenancy agreement immediately prior to the relevant day;

(b) the landlord shall not make it a condition of the granting of a new tenancy or do anything which has the effect of making it a condition of the granting of a new tenancy, that any outstanding rent in respect of the previous tenancy agreement prior to the relevant day is paid.

(2) Subsection (1) above applies where on any day ("the relevant day") either—

(a) sequestration is awarded in a case where the petition was presented by the debtor; or

(b) a warrant is granted under section 12(2) of the 1985 Act in a case where the petition was presented by a creditor or a trustee acting under a trust deed; or

(c) the debtor grants a trust deed; and

(d) the debtor is a tenant of a public landlord.").

The noble Lord said: This new clause sets out to prevent a sequestrated debtor who is also a tenant becoming homeless due to eviction following non-payment of rent arrears. At present, the law is not clear on the issue of eviction due to non-payment of rent incurred prior to sequestration. With regard to public sector tenancies, rent arrears generally form an irritancy of the lease which permits the landlord to terminate the lease and to seek repossession of the property in terms of Part I of Schedule 3 of the Housing (Scotland) Act 1987. Following sequestration, the local authority cannot recover payment of the past rent arrears incurred. However, the local authority can still proceed with an eviction order on the grounds of non-payment of rent and either evicts the client or uses the order to insist on payment of past rent arrears before granting a new tenancy. These grounds and the question of repossession are
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discussed by Sheriff I.C. Simpson in the case of Monklands District Council v. Diane McAllister in the Airdrie Sheriff Court on 19th November 1991. Obviously, this denies the sequestrated client the benefit of a fresh start and, indeed, can add homelessness to the client's list of other probably quite horrendous problems.
The circumstances surrounding the sequestration of clients fall roughly into three categories: debt associated with poverty due to the pressure of living on benefit or low wages; debt following a reduction in income as a result of redundancy or the pregnancy of one partner; and acquisition debt, such as over-commitment to loan companies and credit agencies. The citizens advice bureaux deal mainly with the first two categories. For those clients sequestration is a last resort and the strain of living in debt may already have placed undue stress on the family unit.
The fresh start suggested here would allow these clients to enter into a new lease with the local authority with confidence as there will be no ongoing outstanding repayments to meet. Debtors will be able to meet the new rental payment without the added burden of trying to pay past arrears. The aim of the clause is to ensure that these clients and their families do not have to endure the further hardship of homelessness or alternatively have further to reduce their already very limited living expenses by paying back a debt that has already been dealt with by sequestration. The amendment has the support of a very large number of bodies in Scotland, including Age Concern, the Scottish Low Pay Unit and the single homeless in Edinburgh and Glasgow. I beg to move.
Lord Mackay of Ardbrecknish: When I received a note from Citizens Advice Scotland I was quite intrigued by the situation it conjured up. When my noble and learned friend replies I hope he can indicate whether the problem exists and whether Scottish local authorities are declaring people homeless and putting them out on the street after they have been sequestrated. If they are, they would in a way be acting as a preferred creditor in that they would be ignoring the situation in which other creditors find themselves. After the sequestration a creditor is not due any more money, although I assume that he can retrieve the object—whether a television or a video—on which he has given the loan. The hire purchase company can retrieve that piece of equipment.
I would not have expected Scottish local authorities, of all people, to be putting people out on the streets after they have been sequestrated. In particular, I see that Monklands District Council was named as one of the authorities which went to court on the matter. I take it that Mrs. McAllister did not have a green form, which would of been of great benefit to her in this case. Perhaps my noble and learned friend can help me. I cannot believe that Scottish local authorities take this very heartless view of people who have been declared bankrupt.
Lord Fraser of Carmyllie: I listened carefully to the noble Lord's arguments. I agree with him, as indeed I agree with my noble friend Lord Mackay, that it is

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highly undesirable for a public sector landlord to seek to use the threat of eviction to secure the payment of pre-sequestration rent arrears. However, I do not believe that the Bill is the right vehicle for amending housing law. Nor do I consider it appropriate to remove from public sector landlords their right to recover their property, as the amendment would allow.
Public sector landlords are no more entitled than any other ordinary creditor to receive preferential treatment after sequestration. They are not entitled to claim rent arrears incurred by the debtor before he or she was sequestrated other than by submitting a claim against the debtor's estate. For them to do otherwise runs the risk that the court might find that an unfair preference had been established in terms of Section 36 of the 1985 Act, the provision about which my noble friend Lord Mackay asked.
At the same time, while sequestration may provide debtors with the opportunity to make a fresh start, it does not oblige creditors to do business with the debtor on the same terms as prevailed before the sequestration. A creditor, including a public sector landlord, is entitled to consider whether the debtor is a sufficiently good risk for him to continue to do business. If a landlord has doubts about a tenant's ability to pay rent, it remains open to the landlord to seek to recover possession of the property. The amendment would remove that right.
Public sector landlords are not obliged to evict tenants for rent arrears. They have a discretion to do so if they believe the circumstances warrant it and may choose to write off rent arrears in some cases. In that sense the sequestrated debtor is no different from any other tenant with rent arrears. I see no reason why the sequestrated debtor should be placed in a more favourable position than other tenants who may have difficulty in paying the rent by being able to claim a new lease immediately without any regard to his past financial history.
I understand, nevertheless, the concerns which have prompted the noble Lord to raise the matter. As I have indicated, I do not believe that the amendment is the right way to deal with it. I am, however, happy to give an undertaking that the Scottish Office will bring to the attention of public sector landlords that they should not pursue the payment of pre-sequestration rent arrears other than through a claim in the sequestration. I think that my noble friend Lord Mackay expected that undertaking to be in place already. I repeat that it will be made clear to public sector landlords that they should not act in the way that I have identified.
6.15 p.m.
Lord Mackie of Benshie: I wonder whether the noble and learned Lord will give a view on a certain point which may not be entirely irrelevant. Local authorities are landlords. I sympathise with the point that if one has a bad tenant who has not paid his rent and who is then sequestrated he is hardly the most desirable of tenants to take on. But is it not true that if the local authority puts him out it again assumes responsibility for him as a homeless person and that it
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may cost the public purse one way or another more than it would if the authority had left him in as a doubtful payer of rent?
Lord Fraser of Carmyllie: The noble Lord may well be right. That is why I think it is appropriate that local authorities should have a discretion to operate in what is the most sensible way. It is not difficult to think of a number of circumstances. An individual tenant might be in a house which was too large for him and might be paying more rent than he needed to for accommodation that would be sufficient for him. That might be a circumstance where one would wish to evict. In the case of a tenant with a large family, to have the family broken up and distributed into residential homes and so on might be ultimately very much more expensive. The appropriate course is that local authorities should continue to have the discretion which is vested in them at the moment but they should be given the indication that they are not to set about using their right to evict as an indirect way of securing pre-sequestration rent.
Lord Carmichael of Kelvingrove: I am again grateful to the Minister for his explanation and also for his undertaking. I was going to make the same point as the noble Lord, Lord Mackie, made. The problems that may be placed on local authorities when people are thrown out of their homes can cause big trouble to social services departments generally. To them and to the citizens advice bureaux, which have been anxious that the new clause should be added to the Bill, a debt is a debt. If the noble Lord, Lord Mackay, had read further into the brief that he was sent he would see that there were two excellent examples. One came from Scottish Homes. I wonder whether it comes under the same category as local authorities. There was also a particularly tragic case of someone in central Scotland.
Until we have another housing Bill, the Minister's promise to inform Scottish local authorities and to bring them up to date on the thinking of the Government is as much as we can get. I am grateful to the noble and learned Lord for that. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 [Calling of statutory meeting]:
Lord Lyell Lord Lyell moved Amendment No. 14:
Page 8, line 4l after ("affairs") insert ("which will include the names and addresses of creditors and the amounts of their respective debts").
The noble Lord said: In seeking to move this amendment my noble and learned friend may wonder what on earth I am attempting to do getting involved with Clause 5—which seems a fairly simple clause about calling a statutory meeting—and particularly with this short amendment. Including the names and addresses of creditors, let alone the amounts of their respective debts, may seem to be bringing in a needless aspect of Big Brother. I understand that where the existing arrangements are carried out by insolvency practitioners they normally incorporate within their statement a list of the creditors, and against each creditor probably the relevant amount of what the creditor is owed. In addition, where it might be helpful

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in the overall situation for creditors to try to recover some of their outstanding debts, the address is given as well.
This is not a statutory requirement but I understand that it is common practice, and it has been accepted as such without needless intrusion. But I happen to have been given sight this morning of a guide from the accountant in bankruptcy setting out his views as to what should be the duties of insolvency practitioners where they would be acting as his agent in these matters of insolvency as well as minor sequestration. I understand that in the guide from the accountant in bankruptcy the term "level of assets and liabilities" is used.
I hope that it is not needless semantics to have "level of assets and liabilities" together with "statement of the debtor's affairs". I am given to understand that insolvency practitioners in England and Wales experience some difficulty in obtaining detailed information for the creditors from the Official Receiver, who may have been appointed the trustee in events on this side of the Border in England and Wales.
It is to try to assist these procedures in Scotland that I move this simple amendment. I stress that the names and addresses of creditors can be helpful, first, to the insolvency practitioner, and above all the insolvency practitioner when he is acting as the agent of the accountant in bankruptcy, but it is also of great assistance to other creditors and those interested in the particular state of affairs of the debtor.
May I briefly set out what I understand to be the statement of the debtor's affairs. Let us take, for instance, a builders merchant, which might be quite common in Kirriemuir, Arbroath, Brechin, or Forfar, and indeed the little towns in Angus known to many of the participants in today's debate. I am delighted to see my noble neighbour, Lord Mackie, in his place today and also my noble friend Lady Carnegy. In a builders merchant's assets one would find listed a van, some plant and equipment, perhaps some implements, a saw, and a saw bench. It would be helpful to the creditors to know how much of the assets would have to meet, for instance, income tax under the PAYE scheme, how much might be owed to the Customs and Excise under VAT, and how much might be owed to employees as wages; let alone how much might be available to other trade creditors. Possibly the creditors might want to ask for a meeting, or to press further on how much is owed to other trade creditors in the same line of business. I hope that that is not needless semantics.
I invite my noble friend to turn back to page seven. Subsection (6A) (a) states:
"as may be prescribed in such form as may be prescribed".
I just wonder whether "as may be prescribed" could include a statement of the debtor's affairs, as I have set out. I understand that, as in the guide, a "level of assets and liabilities" would not be entirely helpful, first, to the creditors and others who might be interested, and, secondly, to the insolvency practitioner. With that, I hope brief, explanation of this amendment, I beg to move.
Lord Fraser of Carmyllie: I sympathise with the aims behind this amendment, but I have doubts whether there is any need to amend the Bill to achieve the purpose that my noble friend has so clearly set out. As it presently stands Clause 5 of the Bill introduces a new Section 21A into the 1985 Act. This sets out the procedures which will apply whenever the accountant in bankruptcy is appointed interim trustee and he is considering calling a statutory meeting of creditors.
Under the 1985 Act the interim trustee has no choice and must always call a statutory meeting, even if the debtor's estate has too few assets to provide any prospect of a dividend to creditors. Not surprisingly, in only some 10 per cent. or so of cases do creditors attend the statutory meeting, since they realise that on most occasions it would serve no useful purpose to attend.
Rather than continuing with this waste of time and money the Bill proposes to grant the accountant in bankruptcy the discretion not to call a statutory meeting. He must still circulate a notice to creditors along with his statement of the debtor's affairs so that they have information on how the sequestration is proceeding, but he can dispense with the formality of the statutory meeting where he considers it would serve no useful purpose to call one.
However, in order to safeguard creditor interests, the Bill provides that any creditor may, within seven days of receiving the notice from the accountant, request that a meeting be held. Provided a request or requests are received from not less than one-quarter in value of creditors, then the accountant is obliged to call a creditors' meeting.
The effect of the amendment would be to require the accountant to circulate to all creditors details of the names and addresses of the creditors and the amounts owed to each. This would allow each creditor to contact other creditors to ensure that any request for a creditors' meeting is backed by a sufficient proportion of creditors to force the accountant to act.
I point out to my noble friend that the Bill does not actually require creditors to act together to submit a single request to the accountant. It is sufficient for each creditor individually to request a meeting. Provided the total of such requests meets the prescribed amount then a meeting must be held. Given the limited period allowed to them to act, each creditor who wants a statutory meeting called would be well advised to submit his request straight away rather than seek to elicit support from other creditors. I do not therefore see that it would serve any useful purpose to amend the Bill to require the accountant in bankruptcy to circulate details of all the creditors with a copy of his statement of the debtor's affairs.
I entirely accept, however, that the information required should be available to the accountant in bankruptcy to prepare such a list. I am happy to give my noble friend the reassurance that I will invite the accountant in bankruptcy to include such details of the creditors as is known to him in his statement of affairs. I believe this matter can best be dealt with administratively, allowing the accountant to use his professional judgment to determine what information is of greatest value to creditors, rather than by trying

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to prescribe the contents of the statement of affairs in the statute. With that explanation, coupled with the reassurance that I have given, I hope that on reflection my noble friend will withdraw his amendment.
Lord Lyell: I thank my noble and learned friend for the reassurance that he has given. It goes almost all the way that I seek. My noble and learned friend hinted that we might look at this on an administrative basis, and perhaps that can be done. Despite the kind reassurance given, I still think that information along the lines that I have set out would be more helpful to the accountant in bankruptcy than just the "level of assets and liabilities".
My noble friend hinted that we were speaking about 10 per cent. of the cases. Those 10 per cent. are important. The thrust of my argument was that the statement that I was seeking would be helpful to the creditors, not to overcome the barrier of 25 per cent. and to leap over the hurdle in order to gain a meeting. It would be helpful for the creditors and possibly the debtor in winding up the affairs.
I am grateful for the assurance given by my noble friend. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
6.30 p.m.
Clause 6 [Summary Administration]:
Lord Lyell Lord Lyell moved Amendment No. 15:
Page 10, leave out lines 13 to 19 and insert:
("(b) the aggregate amount of the debtor's assets under paragraph (b) of that subsection, no account shall be taken of any property of his which, under section 33(1) of this Act, does not vest in the permanent trustee.").
The noble Lord said: Amendment No. 15 deals with what is known as heritable property—at least, that is what it was called when I studied commercial law 30 years ago. I take the example of a debtor who possesses a house. The house may not be unencumbered or unmortgaged but in some cases a debtor may possess a house which he has not mortgaged or used to gain further security or further financial assistance, and when the permanent trustee looks at the state of affairs of the debtor he will find a reasonable equity. In other words, there will be an asset. It might be more than a house and it might be something else that the debtor has which would, after any outstanding security has been taken into account, leave a reasonable equity to cover the costs of the permanent trustee—not the accountant in bankruptcy —and it would be of significant advantage to the creditors.
The Government's Guide from the Accountant in Bankruptcy states:
"For the most part any heritable assets are secured to the extent that their disposal would generate little equity for distribution to non-secured creditors"—
That refers to most of the creditors that we are discussing
"and so they are excluded from the calculation. It is anticipated that in any case where there exists significant and unsecured heritable property, then the accountant would not apply for a certificate".
I hope that my noble friend can assure me that the last sentence of that paragraph in the guide would bite and would be effective in relation to the scenario that I have set out.
Amendment No. 15 would maximise the funds available for the creditors and it would ensure that costs are minimised, especially for the accountant in bankruptcy who would in most cases appoint an insolvency practitioner to act as his agent in the more remote areas of Scotland to realise the heritable property. I beg to move.
Lord Fraser of Carmyllie: At the present time some 20 per cent. of all sequestrations involve heritable property which, it will not surprise noble Lords to hear, is usually the debtor's home. One might assume that such sequestrations could proceed without being paid for by the taxpayer because there is clearly enough value in heritable property to cover the costs of both the interim and permanent trustee. However, the reality is that in many sequestrations any heritable property is fully secured. Any proceedings from the sale of the asset go automatically to the secured creditor and only after the sum owed to him has been fully satisfied will there be any remaining value or equity which can be set against the expenses of the sequestration. The taxpayer can therefore be faced with a substantial bill.
We do not believe that the existence of heritable property or the fact that it is subject to a substantial security should prevent the sequestration from being dealt with under a certificate of summary administration.
I understand the concerns that have been expressed by the noble Lord and others outside this House. I can assure him that the exclusion of heritable property from the calculation of a debtor's assets should be made to enable applications for summary administration to be made in practice.
In considering the amendment, your Lordships will wish to bear in mind that the granting of a certificate of summary administration does not reduce in any way the powers that are available to the permanent trustee. He can still take whatever steps he considers necessary to deal with the debtor's estate in the interests of the creditors. I emphasise that it does not affect the position of secured creditors who would still enjoy the rights and privileges accorded in the 1985 Act.
The granting of a certificate allows the permanent trustee a greater discretion in the administration of the sequestration, permitting him to tailor the conduct of the case to its specific circumstances. He must be guided at all times by his view of whether any action would be of financial benefit of the estate and in the interests of the creditors.
I do not believe that to disregard the existence of heritable property in determining whether a case meets the criteria for summary administration would be prejudicial to anyone's interests. I should like to stress that if a creditor believes that his interests are prejudiced, he has the independent right to apply to the court for withdrawal of the certificate. That is a sufficient safeguard.

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To the contrary, if the amendment were to be accepted, it might lead to additional costs being met by the taxpayer which could otherwise be avoided.
I hope that with that full explanation the noble Lord will appreciate what lies behind the structure of this part of the Bill and that he will withdraw the amendment.
Lord Lyell: I am more than happy to accept my noble friend's reassurance. I shall read what he says. At this stage, six minutes is quite enough time to take on the amendment. I beg leave to withdraw.
Amendment, by leave, withdrawn.
Lord Lyell Lord Lyell moved Amendment No. 16:
Page 11, leave out lines 14 to 21 and insert:
("(a) in any case where the application is made by the Accountant in Bankruptcy before the sequestration of the debtor's estate has been awarded and the court has previously appointed under section 2(5) of this Act, or if no such appointment has been made the petition for sequestration nominates by virtue of section 2(1) of this Act, as interim trustee a person who is not the Accountant in Bankruptcy; or").
The noble Lord said: In the case of a petition which is debtor driven it is considered inappropriate for the accountant in bankruptcy to submit an application within seven days for the grant of the certificate of summary administration, where an interim trustee has been nominated in the petition, and has presented to. the court a letter of undertaking agreeing that he will act as interim trustee and possibly as permanent trustee at a later stage.
Clause 9(a) of the Bill allows the accountant in bankruptcy, within seven days of the presentation of the petition from the debtor, to apply for a certificate of summary administration. That situation has the automatic consequence of the court granting such an application. A further consequence is that the accountant in bankruptcy immediately assumes the position of the permanent trustee, inadvertently—or perhaps advertently—by-passing the stage whereby an interim trustee would act in respect of both the debtor and the creditors.
I wonder whether or not clause 9(a) would prevent that situation occurring. It is not entirely clear. The amendment, by a more precise targeting, seeks to prevent that situation. I beg to move.
Lord Fraser of Carmyllie: The effect of the amendment would be that if the petitioner had nominated an interim trustee the court would be precluded from granting an application for summary administration made by the accountant prior to the award of sequestration. That presupposes that in every instance the court would be obliged to appoint the nominated interim trustee. That might be the most likely outcome in most circumstances, but I stress that the court is not necessarily obliged to appoint a nominated interim trustee. If for any good reason the court decides that a nominated interim trustee should not be appointed it is provided that the Accountant in Bankruptcy should be appointed interim trustee. But in such a case where the Accountant in Bankruptcy has also submitted an application for summary administration of the debtor's estate, and the criteria
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for that are satisfied, there is no reason why the court should not go on to grant the appropriate certificate and appoint the Accountant in Bankruptcy as permanent trustee on the award of sequestration.
Section 23A(9) is drafted in terms that are capable of taking into account that a nominated interim trustee need not necessarily be appointed by the court, albeit that in most cases it will make that appointment.
The point is a slightly complicated and technical one, but I hope that my noble friend, who has taken a great interest in the technical detail of the Bill, follows my explanation and on that basis will withdraw his amendment.
Lord Lyell: I am grateful to my noble friend. I will withdraw it, and beg leave so to do.
Amendment, by leave, withdrawn.
Clause 6 agreed to.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 17:
After Clause 6, insert the following new clause:
("Application to the Sheriff
. In section 33 of the 1985 Act (limitations on vesting) after subsection (1) there shall be inserted the following subsections—
"(1A) If on an application by the debtor made within 14 days after the date of notification to the debtor by the trustee that the property has vested in the trustee, the Sheriff is satisfied that the article is exempt from poinding in terms of section 16 of the Debtors (Scotland) Act 1987, he shall make an order that the article of property shall not vest in the trustee.
(1B) The Sheriff may, on an application made within 14 days after the date of notification to the debtor by the trustee, make an order that the article is one which would have been released from a poinding in terms of section 23(1) (release of poinded article on grounds of undue harshness) and that it should be exempt from vesting in the trustee." ").
The noble Lord said: Amendment No. 17 is intended to remind the House of and to get into the Bill something that I suggested at Second Reading. It seeks to ensure that debtors who have undergone sequestration have the same rights as those against whom a poinding has taken place. There is no definition of articles exempt from poinding in Section 33 of the Bankruptcy Act 1985. That predated Section 16 of the Debtors (Scotland) Act 1987, which did define articles that were exempt and gave debtors the right to apply to the Sheriff Court for the release of articles poinded that should have been exempted. There is no equivalent procedure in Section 33 of the Bankruptcy Act to allow for that. I propose a new clause which seeks to remedy that omission and afford to debtors who have been sequestrated the same protection as other debtors enjoy. I beg to move.
Lord Fraser of Carmyllie: I can answer the noble Lord shortly by saying that I consider that subsection (1A) would in reality provide no benefit to debtors. Under Section 33(1) of the 1985 Act, assets which are exempted from a poinding do not vest in the permanent trustee. That provision is not affected by the terms of the Bill. I believe the noble Lord's anxieties are misplaced, but if he wishes to return to the matter on a later occasion obviously I would be willing to deal with it.
Lord Carmichael of Kelvingrove: I am grateful to the Minister for pointing that out. It may have been taken up because of what I said in the Second Reading debate. The Minister may remember the example I gave of a sheriff insisting that things necessary for the family and for the education of children could be released from poinding. One of the questions concerned a television and video recorder. The Scottish Consumer Council is anxious that a quality of tolerance be shown, particularly when there are young children in the house. I will try to find a better place to put this, but I still believe the idea to be a rather important one. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.45 p.m.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 18:
After Clause 6, insert the following new clause:
("Financial circumstances of debtor
. In section 32 of the 1985 Act (vesting of estate, and dealings of debtor, after sequestration) after subsection (2) there shall be inserted—
"(2A) When determining a suitable amount to allow for aliment for the debtor in terms of subsection (2) above, the sheriff shall consider the particular financial circumstances of the debtor, including his income, outlays, his individual needs and the needs of any dependants." ").
The noble Lord said: The purpose of this amendment is to require a sheriff, in considering the amount that a debtor should pay to the permanent trustee, to consider in detail the debtor's ability to make that level of financial contribution. I understand there have been examples in which sheriffs have overdone repayments and left people in penury, though I have no exact examples. The Scottish Consumer Council would like something on the face of the Bill as a reminder to sheriffs that there are certain basics that people require and that those basics frequently change depending on the circumstances of the individual debtor. I beg to move.
Lord Mackay of Ardbrecknish: As my Amendment No. 19 is bracketed with No. 18, I presume that now may be an appropriate moment for me to speak to it. However, I should be content not to because I do not believe that the two are related. I shall come back to it after my noble friend has answered the points made on Amendment No. 18.
Lord Fraser of Carmyllie: I respectfully agree that the two amendments may be separated out.
I deal with Amendment No. 18 on its own. Subsection (2) of Section 32 already provides that before the sheriff makes any order fixing the amount of a debtor's excess income to be paid to the permanent trustee he may determine a suitable amount to allow for the debtor's aliment and to meet the debtor's relevant obligations. For this purpose "relevant obligations" means any obligation owed by the debtor to his family or any obligation to pay periodic allowances to a former spouse. In determining a suitable amount to allow for aliment, the sheriff is required to have "regard to all the circumstances".
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I would expect the sheriff on such occasions to have regard to a debtor's income and outlays and whatever other factors he considered relevant. The existing general requirement to have regard to all the circumstances would seem to me to he more appropriate than specifying the factors which the sheriff must consider, as the amendment seeks to do.
If the noble Lord wishes to require the sheriff to consider certain matters it is important to examine how those matters can be presented to the sheriff and how he is to be satisfied that he has taken them into account. Details of the debtor's income and outlays should be available to the permanent trustee making the application to the sheriff. I accept it would be relatively straightforward for the sheriff to assess these. But how would a permanent trustee provide information to the sheriff on what in the terms of the noble Lord's amendment would be the individual needs of the debtor and the needs of any dependants? Does the noble Lord envisage that the debtor and his family should be summoned to appear before the sheriff to make a case for any aliment to be allowed to them? I do not see how else the sheriff could be satisfied that he was aware of those needs. I do not believe that the amendment improves upon the present drafting of the Bill. I therefore invite the noble Lord to withdraw the amendment.
Lord Carmichael of Kelvingrove: I believe the Minister is absolutely correct. The amendment as drafted may perhaps reduce the scope that the sheriff has. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 agreed to.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 19:
After Clause 7, insert the following new clause:

Vesting of estate, and dealings of debtor after sequestration
. In section 32 of the 1985 Act, after subsection (1), there shall be inserted the following subsections—
"(1A) The permanent trustee shall on application being made in writing to him to that effect by a person representing not less in value than one quarter of the creditors make an application to the sheriff under subsection (2) below unless subsection (1B) applies.
(1B) This subsection applies when the permanent trustee determines that on the information available to him there is no reasonable prospect that the debtor's income will exceed the total amount likely to be allowed by the sheriff under subsection (2)." ").
The noble Lord said: I beg to move Amendment No. 19, standing in my name. After I spoke at Second Reading on the need to balance the rights of the debtor and the rights of the creditor I received a number of communications. I suppose that that is heartening because it means that somebody out there reads the words we speak here. One of the organisations which contacted me was the Consumer Credit Association. That body drew to my attention some amendments that had been tabled in another place and withdrawn after helpful suggestions by the Minister.
Amendment No. 19 is a second or third attempt at amendments which were put in the other place, with certain changes made to their appearance. It was the

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clear intention of Parliament in 1985 that under the 1985 Act if a bankrupt had free income out of which he could make a contribution towards the payment of his debts, then he should be prepared to make such a contribution. That intention was expressed clearly in Section 32 of the 1985 Act. In practice, the section has proved ineffective. In particular, creditors have no way in which they can trigger the operation of Section 32. Curiously, they are able to trigger a request to vary an existing contribution order.
Another factor that has operated to render Section 32 unworkable in practice is cost. The task of administering a contribution under the current law falls to the insolvency practitioner who must charge for the work he does. But in practice, the Accountant in Bankruptcy has been unwilling to make funds available for this purpose. It may be questionable whether the Accountant in Bankruptcy has been entitled to adopt that approach. The 1985 Act clearly envisages that an insolvency practitioner is entitled to seek reimbursement of his reasonable expenses from the state. Nowhere in the Act is it suggested that there should be an overall cost-benefit analysis of a particular function of the insolvency practitioner so that that dictates whether or not he should perform that function.
Perhaps I may illustrate what I mean by cost-benefit analysis. Let us assume for the sake of discussion that the Accountant in Bankruptcy could collect and distribute a payment from the debtor at an overall cost to the Accountant in Bankruptcy of, say, £10 a week. If an economic test is applied, the Accountant in Bankruptcy would only countenance a contribution from income if the bankrupt had free income in excess of £10 a week. These are not actual figures; they are examples that I am using to illustrate my argument.
Experience shows that the £10 a week as a threshold would rapidly become known to money advisers via their sophisticated publications and advice manuals. Money advisers are trained to capitalise on cost-benefit considerations impacting on the decision-making processes of creditor bodies. It would be relatively straightforward for money advisers to apply their discretion in calculating a debtor's income and outgoings so as to ensure that the £40 per month or £10 a week threshold that I have described is not exceeded. Therefore, there would be a severe risk that the process would rapidly be abused.
By contrast, the clear ability to require the payment over any free income would send an unequivocal sign to both debtors and money advisers that the process which I have described would not benefit the debtors. Any suggestion of a cost-benefit analysis calls into question the actual process of sequestration itself, since it is clear that no benefit accrues to the state from any publicly funded sequestration.
The function of my amendment is to give the creditors a clear right to trigger Section 32. This right is in addition to and not in substitution of the existing right of the permanent trustee to seek a contribution
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of his own volition. My amendment makes the right unqualified in the sense that there is no requirement for a cost-benefit hurdle first to be overcome.
There are two safeguards designed to prevent abuse by creditors. First, I have included a requirement that creditors to the value of 25 per cent. of the debtor's indebtedness must be involved. That would prevent applications under Section 32 being triggered by insignificant creditors.
Secondly, I have provided that the Accountant in Bankruptcy need not pursue a Section 32 application if it is clear, on the information that he has, that the debtor has no free income at all. I hope that I have laid out the arguments reasonably in order to ensure that the creditors have some rights in these matters. I look forward to my noble friend's response. I beg to move.
Baroness Carnegy of Lour: I have discussed this point as well with the Consumer Credit Association. I mentioned it on Second Reading. In reply to that debate, the Minister reminded the House that it was a misunderstanding to think that people who had been sequestrated and had sufficient free income never found their income under attack. That may well be a misunderstanding, but the point is that it frequently happens.
As my noble friend Lord Mackay said, people often escape making payments from an income that is adequate and others know that it happens. That fact is taken into account when deciding to take the power of sequestration. People decide that the risk is worth taking.
It would be a good idea if a major creditor or group of creditors could have the right to make representations that the debtor's income be used to repay some of his debts on the lines that my noble friend suggests. That would be a signal to all concerned and might well be a deterrent to irresponsible sequestration. I support the amendment.
Lord Fraser of Carmyllie: While I have considerable sympathy with the motives of the amendment I find myself unable to accept it. The amendment differs significantly from those on the same subject which were tabled in another place. I am afraid, however, that it appears to introduce a number of practical problems.
I agree with my noble friend that a debtor with sufficient means should make a contribution from his income to his estate to meet the cost of the sequestration and provide a dividend to his creditors. That was clearly the intention of the Scottish Law Commission in putting forward its recommendations which led to the 1985 Act. As both my noble friends Lord Mackay and Lady Carnegy have indiscated, there appears to be an erroneous belief in certain quarters in Scotland that somehow a debtor's income will not be affected by his sequestration. That is clearly not true, and I am glad to have the opportunity to emphasise it.
At the same time, the law should not create an incentive for the debtor not to work to earn his living. For that reason, the debtor's income does not automatically form part of his estate. It requires an application to be made to the sheriff who, before

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making an order under Section 32, needs to consider what sum the debtor needs to meet the living expenses of himself and his family.
The right of application under Section 32 was deliberately left solely to the permanent trustee because he is the person charged by law with the ingathering of the estate for the benefit of all creditors. It is only he who has sufficient information, with regard to all the circumstances, to judge whether an application could be justified.
Clearly, one would not wish to compel the trustee to make application if there was no reasonable prospect of obtaining anything or if there was no presumption that the debtor's income would exceed the total amount which the sheriff was likely to allow for the aliment of the debtor.
I see practical difficulties in applying the formula suggested to determine in which circumstances the permanent trustee may refuse a request by creditors to apply for a Section 32 order. The permanent trustee must make an assumption as to what amount the sheriff may be prepared to allow the debtor to retain for his own use. In practice, this would require consideration, not just of the debtor's income, but also of such factors as the nature of his income and the level and nature of his commitments. It also requires the permanent trustee to prejudge how the sheriff might exercise the discretion allowed to him by the 1985 Act.
I believe that there is machinery in place already to ensure that contributions from a debtor's income can be secured. I also accept that limited use has been made of this power in the past and during the past two years only 5 per cent. of debtors made any contribution. However, I think that there has now been a reassessment of the situation and, with the greater role played by the Accountant in Bankruptcy, one can anticipate a change.
However, I appreciate the strength of feeling among creditor bodies and in order to encourage greater use of the present law, I have asked my officials to invite the Sheriff Court Rules Council to examine the possibility of introducing rules of procedure for applications under Section 32. Such rules would lead to a greater degree of consistency in procedures between courts and would facilitate the making of applications. I also intend to invite the Accountant in Bankruptcy to examine carefully the potential for securing greater contributions from income than is the case at present.
Overall I believe that in general terms the present Section 32 strikes the right balance between the interests of debtors and creditors. I entirely agree that greater encouragement might be given to its use in the future but I do not see that the present procedures should be amended. However, with the assurances that I have given him following on the instructions of a revision of rules, I hope the noble Lord may now withdraw his amendment.
7 p.m.
Lord Mackay of Ardbrecknish: I am grateful to my noble and learned friend for that reply. I shall read the detail of it with great interest tomorrow. I certainly
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welcome his assurance that the sheriff court rules will be considered for change and also that the Accountant in Bankruptcy may take a more robust view—I am not sure "robust" is the right word—of the circumstances I outlined in my main speech. With the assurances I have received, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 8 [Fees for the Accountant in Bankruptcy]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 20:
Page 12, line 44, after ("Bankruptcy") insert ("out of the sequestrated estate").
The noble Lord said: This is the final amendment of this Committee stage and I am sure that the Committee will be sad about that. This amendment sets out to confirm that no party who petitions for sequestration, whether creditor, trustee under trust deed or debtor, will be found liable for the fees and outlays of the Accountant in Bankruptcy.
At present creditors who petition for sequestration are aware that their costs are limited to those of their law agent for presenting the petition to court. Any costs thereafter for conducting the sequestration are either met out of the debtor's estate or are met from the public purse. This amendment provides that the cost of administering the sequestration should not be an expense which should fall on the creditor, or indeed the trustee under a trust deed. As it stands, Section 69A(a) might suggest that a debtor has to meet the administration costs of a sequestration which might be at the debtor's own instance. This amendment seeks to confirm that this will not be the case. I beg to move.
Lord Fraser of Carmyllie: The noble Lord seeks to limit the obligation to pay such fees to the debtor's estate for the reasons he has explained. I do not believe it would be appropriate or practical to impose such a limitation, nor do I consider it necessary to do so. While most of the activities of the Accountant in Bankruptcy relate, as the noble Lord will appreciate, to the conduct of an individual sequestration, not all do. Some, such as maintaining a register of insolvencies and providing access to it, are of a more general nature. Any fee which is charged for these activities should be borne by the individual making the demand and not the estate of a particular debtor.
I suggest it is right and proper that such charges should be levied and paid for and that they should be paid for by others than simply the debtor. However, if the amendment were to be accepted that would be impossible. With that simple example of how the noble Lord's amendment would restrict matters I hope he will feel able to withdraw it.
Lord Carmichael of Kelvingrove: I thank the Minister for that reply. Obviously this is a matter I shall want to take advice on, but in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 8 agreed to.
Remaining clauses and schedules agreed to.
House resumed: Bill reported without amendment.

Immigration and Nationality: NACAB Report
7.5 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey rose to ask Her Majesty's Government what action they propose to take to implement the proposals contained in the National Association of Citizens Advice Bureaux report A Charter for All?
The noble Lord said: My Lords, this Question has two distinct strands. The first is the evidence from the National Association of Citizens Advice Bureaux on the work of the Immigration and Nationality Department which was published in July of this year. The second is The Citizen's Charter, which was also published this year, which described the Government's programme for improvement of the rights of citizens. It played a considerable part in the Government's election programme.
I wish to say a few words about the report of the National Association of Citizens Advice Bureaux. This was by no means a casual document. It was produced on the evidence of no fewer than 95 local offices of citizens advice bureaux which in 1991–92 received no fewer than 60,000 separate inquiries from citizens of this country about the work of the Immigration and Nationality Department of the Home Office. Indeed the report is not only about the work of the Home Office, because of course it is the Foreign and Commonwealth Office which is responsible for entry clearances in other countries.
The Citizen's Charter, which is the other part of my argument, was described by the Government when it was published as the most comprehensive programme ever to raise quality, increase choice, secure better value and extend accountability. How was that to be achieved according to the Government and according to The Citizen's Charter? First, it was to be achieved by more effective complaints procedures; secondly, it was to be achieved by improved procedures for redress for injustice or maladministration; and, thirdly, it was to involve the users more closely in the operation of the services and in the way in which they affect individual citizens.
How does that apply to the work of the Immigration and Nationality Department? Let me make it clear from the outset that it would never be our position from these Benches to attack civil servants as such. We are concerned with government policy and the way in which the Government administer departments and individual branches of departments.
The evidence from the citizens advice bureaux is unfortunately terribly clear. What we see in the work of the Immigration and Nationality Department is fundamentally enormous delays in dealing with individual cases. We see a position where in 1990, when the Home Office Select Committee of another place investigated the matter, the average delays were of the order of 27 months. The result of that of course is that, because there are such long delays, a large number of applications is always in the pipeline, giving rise to the quite false impression that there is a
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flood of people wishing to enter this country, whereas of course the problem is not the numbers wishing to enter the country but the delays in dealing with the applications. That is true both of applications for entry and of nationality applications from those already in this country.
The matter is more serious not only because of the delays which take place but also because these are, after all, matters—in particular the nationality applications—which attract fees. There is a fee of £170 for a nationality application. It is refunded, only in part, if the nationality application is successful. It is not refunded at all if the application is not successful. Therefore, this is a service which is paid for, and I suggest that there is an obligation that the service should be efficiently and promptly run. If there is no assurance that the service is to be run efficiently and promptly, the question of compensation arises.
We tried to bring the two aspects together. We looked at the issue of the performance of the Immigration and Nationality Department as evidenced by the report of the National Association of Citizens Advice Bureaux and we looked at The Citizen's Charter. The Minister responsible in the Home Office, Mr. Charles Wardle, has accepted that the general principles of The Citizen's Charter should apply to the work of the Immigration and Nationality Department. He has told the House of Commons Select Committee that the work of the department in relation to The Citizen's Charter will be under review. The question which we have to ask, and which I ask the Government today, is to what extent they accept that there should be an independent review, as will clearly be required by the conditions of The Citizen's Charter, of the work of the Immigration and Nationality Department.
It may be thought that this is a complaint about the department's past record. We know very well that the asylum Bill, to give it its even shorter title, is now progressing through another place and is due to come to your Lordships' House in the new year. The effect of the asylum Bill, quite contrary to the provisions of The Citizen's Charter, would be to reduce the provisions for redress which in other circumstances The Citizen's Charter would provide and to ignore, because there is no reference to it in the Bill, the procedure for complaints which is an essential part of The Citizen's Charter. We raise this Question today not only because we are profoundly dissatisfied with the resources and policy directives which have been given to the Immigration and Nationality Department in the past but because we envisage that the asylum Bill will make the situation even worse.
Nor is it simply a matter of delays and the lack of consultation, the lack of compensation and the lack of an effective complaints procedure. The suspicion must be that there is an element of racial discrimination in the way in which the department works.
Let us look at the figures. In the past year 19,000 applicants for entry to this country were refused permission to enter. The proportion of applicants from the United States refused entry was 0.04 per cent. The proportion of applicants from Jamaica who were refused entry was 1.9 per cent. In other words, more

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than 30 times as many applicants from Jamaica were refused entry as applicants from the United States. It cannot be doubted that our connections with Jamaica go back as far as our connections with the United States and our links with the citizens of Jamaica are as important to us in their way as our links with the citizens of the United States.
Let us also look at the figures for the Indian sub-continent. Here the proportion refused entry was 0.34 per cent., which is eight times the rate of refusal for applicants from the United States, despite the fact that applicants from the Indian sub-continent have to obtain clearance in advance from the Foreign and Commonwealth Office at their point of departure. That means that, despite the fact that they are in double jeopardy, in effect being required to satisfy the authorities twice, there is still eight times the rate of refusal for applications from the Indian sub-continent than from the United States.
Let us also consider the delivery of nationality applications. We can see from the citizens advice bureaux evidence an apparently unending string of examples of injustice. Applicants put in their applications, send in their passports and marriage certificates and all the evidence. Those are retained for many months. Applicants are advised that their case will be considered and the date is deferred almost for ever. I shall not bore the House with individual details, but if I say that in 1990 in its investigation of the work of the department at Lunar House the Home Affairs Select Committee in another place found no fewer than 250,000 unopened letters, including marriage certificates and passports, the point will have been made clearly.
Examples may not prove a case, but the implications of those manifest defects in the work of the department must be clear. Not only, at the very lowest level, are we creating extra work for our own civil servants, both in the Home Office and the Foreign and Commonwealth Office. If one has to deal over and over again with an application which has been delayed many times one increases the amount of work enormously. Not only, again at the lowest level, should there be greater compensation for those who have been the subject of maladministration. At the more serious level, the Immigration and Nationality Department is failing to present itself in the role in which it should present itself to the world at large—as the ambassador for British standards of justice and efficiency.
7.16 p.m.
Lord Meston: My Lords, we are truly grateful to the noble Lord, Lord McIntosh of Haringey, for asking this Question and drawing attention to this valuable report. As he pointed out, it does not simply make recommendations: it also presents evidence. The report makes depressing reading, not just because of the problems it describes, but because it describes problems which have been identified and emphasised in earlier reports, including that of the Home Affairs Select Committee of another place, and, despite those previous reports, the problems seem to have worsened.
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The report must surely challenge any government to give a firm response. The delays are clearly excessive and beyond anything that would be expected or tolerated in any other bureaucratic exercise. Yet those delays have to be tolerated by applicants seeking to enter this country who, not surprisingly, have no bargaining strength whatsoever. As the report says —and it is not the first to say it—delay has come to be seen as a method of control. Paragraph 4.7 of the report describes how the very existence of queues of applicants creates the impression of a clamour to enter this country which in turn reinforces the feeling that controls should be increasingly strict.
Some of the greatest delays involve applications which, if they were allowed, would unite or reunite families. The report describes evidence of lengthy failures to respond to applications and to other communications. It describes the piecemeal requests by the department for documentation. Obviously that causes uncertainty and anxiety to the families concerned. The report points to the irony of the delays and obstacles faced by people wishing to join or rejoin their families in a political climate in which family values and family responsibilities are regarded as so important as to require buttressing by central government.
One other aspect of the report to which I hope the Government will give serious attention is the treatment of temporary visitors. One cannot escape the disparity between the treatment of the affluent business visitor and the treatment of the visitor coming to stay with his or her family. Those are usually people who have planned long and saved hard to visit relatives in this country. The visit is usually the subject of happy expectation for all concerned, yet when they arrive the reality is that even those with evidence of return tickets, jobs and homes to go back to, are treated with suspicion and exposed to inconvenience and disappointment.
Surely it cannot be beyond the wit of man to improve the system as it presently operates so as to balance the need to scrutinise visitors in order to weed out at an early stage those who might abuse the permission to enter, with the desirability of sparing the great majority of bona fide visitors the indignity and inconvenience experienced by all too many.
Surely one mark of a civilised society must be the way it treats immigrants and potential immigrants. If the recommendations of this report are adopted by the Government, the result will he a system which is seen to be fair, consistent and quick. It will be a system which enjoys confidence. Although the recommendations in this report include proposals for a complaints procedure and for a compensation system in place of the existing ex gratia payments which I understand are made and for legal advice and representation, an improved system which is seen to be fair is in fact less likely to be challenged by such means. Unless standards are raised, the first impression of people entering this country will be of a discriminatory system, whether that impression be right or wrong. To fuel suspicion and discrimination in that way can only harm race relations at a time when I hope the

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Government are giving serious consideration to the second review of the Race Relations Act recently conducted by the Commission for Racial Equality.
I am sure the Minister and his department are not impervious or indifferent to the criticisms made in this sensitive area. I look forward to the Minister's response to the specific and reasonable recommendations of this report.
7.22 p.m.
Earl Ferrers: My Lords, just before he sat down the noble Lord, Lord Meston, said that he hoped that Ministers or the department were not immune to criticism about the way in which they operate. Indeed, we are not. Immigration and all that surrounds it is an enormously sensitive area. We all know that it is important that the standards should be as high as possible. Inevitably, there have been occasions when the standards have not been as high as we would wish.
I am grateful to the noble Lord, Lord McIntosh of Haringey, for at least giving me the opportunity of explaining to your Lordships the steps which are being taken to improve the standards of service in the Immigration and Nationality Department. He made a formidable speech, full of criticism. I do not blame him for that at all. We shall certainly take note of it. The noble Lord, Lord Meston, also expressed his concern.
I am grateful that the noble Lord, Lord McIntosh, said that he did not intend to attack civil servants, but he would attack the Government's policy. He was quite right to say that. What happens if there are shortcomings? The shortcomings are the result of government policy for which Ministers are responsible. They are not the shortcomings of those who work hard within the system to try to make the system work as well as possible.
I do not deny for one moment that there is scope for further improvement. But I do not think that the impression of the Immigration and Nationality Department which is painted in the report to which the noble Lord, Lord McIntosh, referred is accurate or even fair.
Your Lordships know of the importance which the Government attach to improving public services. The second Citizen's Charter White Paper was published only last month. It sets out a wide array of achievements and progress which have been made since the first White Paper was published two years ago. The Citizen's Charter represents the Government's desire to see a long-term programme of change and improvements in order to raise the standards of services, which are offered by public bodies to individual members of the general public.
Public services need to understand better and respond better to the needs and the requirements of their customers and their users. They also need to find better and more efficient ways of providing these services. The Immigration and Nationality Department at the Home Office will be as sensitive to this as will any other department. Inevitably, if you try to do this, there will be changes: changes in the way in which the services are run and organised. It will need
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constant attention to detail and constant application of effort. The Citizen's Charter, to which the noble Lord, Lord McIntosh, referred, is long-term stuff. It is not a short-term flight of fancy. It is something that we want to see happen in order that the services of which the general public are the recipients should be as high as possible and higher than they have been.
Immigration control is a very complex business. The public quite rightly expects that the Immigration Rules will be applied firmly and with care. This sometimes means asking probing questions, and it sometimes means taking decisions which are, quite understandably, unwelcome to the applicant.
The Immigration and Nationality Department is often not in the position of being able to grant to applicants that for which they are asking, and I am sure that your Lordships understand that this will always have to be the case. It is important that, despite that, decisions should be taken sensitively, and that applicants, whether they are satisfied or dissatisfied with the outcome of their case, can at least feel that they have been treated fairly. I can assure your Lordships that it is made absolutely clear to staff who work in the department that all those who pass through their hands should be dealt with courteously and without unnecessary procrastination. In that respect all managers within the Immigration and Nationality Department are expected to attend a training course which emphasises the importance of customer care.
It is simply not true, as it is claimed in the National Association of Citizens Advice Bureaux report, that The Citizen's Charter does not apply to the Immigration and Nationality Department. It does, it should and it will.
I hope that your Lordships will understand that it would not be right for me to comment on the individual cases which are cited in the national association's report. I could not in fact do so, as the report did not provide sufficient details to enable them to be identified. But I would like to deal with the main proposals which are made in the report.
The national association's report recommended that the Immigration and Nationality Department should publish standards of service and that it should keep them under review. Because this suggestion has been made, your Lordships might be forgiven for thinking that the Immigration and Nationality Department does not publish information about its performance. In fact it does—and has done so for several years—in its annual report.
The annual report provides a lot of information about the operation of the Immigration and Nationality Department, and it includes detailed information on its standards of service, how they have improved and what are the targets for the future.
This year we have gone one step further with the publication of what is called the Operating Plan for 1992–93 of the immigration service. The Immigration Service is part of the Immigration and Nationality Department. The plan covers the priorities, aims and objectives on which members of the immigration service who work at ports will concentrate over the next 12 months. It records a range of improvements

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which are designed to make the service better for the travelling public. Among the measures which feature in the plan are the new standards of service for non-European Community nationals who arrive at Heathrow and Gatwick airports. Other parts of the plan include reducing queueing times at ports. Some of your Lordships may know about the new procedures, which were introduced in the summer at Dover, which will allow cars to pass more quickly through the immigration control. We are now looking at ways of extending the new procedures to other ports.
Other objectives in the plan include a survey of the views of passengers, which is now taking place, and a broadening of the areas of service which ought to be subjected to the checking of standards—such as the response to telephone calls and correspondence.
I cannot abide slothful correspondence and I know that I am periodically guilty of it. In large departments though it is sometimes very difficult to get over to people the fact that letters matter. They may be a bore, but correspondence is often a department's main contact with the public and the way in which letters are dealt with often determines an individual's perception of the department. Of course in the field of immigration it is not just about correspondence; all kinds of questions have to be asked and details investigated—and that takes time.
I would not seek to defend the regrettable delays and backlogs of work which have occurred in some categories of work, including applications for citizenship. Delays built up following the receipt of about 300,000 applications in 1987. That was six times the usual number, which occurred under the transitional provisions of the British Nationality Act 1981. The position though is now improving.
The noble Lord, Lord McIntosh, referred to nationality fees. I accept that there is room for improvement in the time which is taken to deal with those applications. I must point out, however, that no financial profit is made out of those fees; they are set at a level which will recover the expected costs of processing the applications. There would be no question of altering that principle.
As a result of the deployment of extra staff and other resources, as well as of some improvements in the procedures which are used, the situation is now better. However, applicants still have to wait too long —longer than either my right honourable friend the Home Secretary or I would wish. A person who applies for citizenship can now expect a decision within 12 to 15 months. The situation will continue to improve during the coming months as the very last cases which are still outstanding from 1987, 1988 and 1989 are completed.
The noble Lord, Lord McIntosh, said that he profoundly disagreed with the resources that have been made available to the Immigration and Nationality Department. There has been a surge, too, in asylum applications during the past few years and that has led to delays in resolving those cases. I do not think that it would have been possible for any organisation to have dealt with such a rise in applications without acquiring a backlog. They have
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risen from 4,000 per year in the mid 1980s to 44,000 in 1991. That is a huge increase and all must be processed and dealt with. That puts a great strain on the resources of a department.
We took action to deal with that. The number of staff employed in the asylum division of the Immigration and Nationality Department has increased from around 100 in 1990 to more than 500 now. The backlog of cases is now being reduced. Your Lordships will also know that the Government recently introduced the Asylum and Immigration Appeals Bill which is going through another place. The noble Lord, Lord McIntosh, said that that would make the delay even longer. With respect, the Bill is designed to speed up the determination process as well as to strengthen the safeguards for genuine refugees.
I think that the general position is, therefore, one of improvement. It is not always realised that 85 per cent. of those people who personally visit the Public Enquiry Office in Croydon now have their cases resolved the same day. All those who arrive before 4 p.m. will be seen on that same day and, if necessary, staff will and do stay on to do that. So there has been a great change. The majority of routine applications which are sent by post are now dealt with in a matter of weeks. It is only where further inquiries are made or where asylum is claimed that cases take longer.
The noble Lords, Lord McIntosh and Lord Meston, referred to complaints. The arrangements for dealing with complaints are now under review in the light of the principles of the Citizen's Charter. As regards the arguments for introducing an independent element, to which the noble Lords referred, we have not hitherto found them particularly persuasive but they will certainly be considered during the course of the review.
There is much else which could be said on the points which were raised by the national association's report. It was, though, a matter for some sadness and regret that it should have been thought necessary to recommend that the Immigration and Nationality Department should make a clear and public commitment to providing a non-discriminatory service. The department is already fully committed to a policy of non-discrimation. There is no question about that. It has a published formal policy statement and the message is reinforced with staff through training so that the principle of non-discrimation is, in fact, a practice too.
My right honourable friends the Home Secretary and the Parliamentary Under-Secretary of State, who is responsible for immigration, are not sitting back in quiet contentment with the standards of service which are achieved by the Immigration and Nationality Department. There is room for improvement and I am the first to accept that. Improvements have nevertheless been made and I hope that tonight I have been able to show that there is a will to build on them.
The noble Lords, Lord McIntosh and Lord Meston, referred to discrimination. I do not believe that the statistics are inconsistent with individual countries being dealt with on their merits or on a non-discriminatory basis. Obviously the pressure on immigrants from some countries is greater than in

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others. I emphasise that there is no desire on the part of anyone—Ministers or officials—to impede genuine visitors and those exercising their rights under the immigration law.
Both noble Lords referred to the principle of compensation. Arrangements are already in place for making ex gratia compensation payments in certain circumstances. But the person must have suffered financial loss as a direct result of negligence or error, or of delay by an officer of the Home Office, in order to be able to receive such compensation.
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Immigration control is one of the most sensitive of all the functions with which the Home Office is involved. The maintenance of firm control of immigration is central to the Government's policy but that fact is not inconsistent with the setting, and with the achieving, of high standards of service. We want to see that happen and we intend to ensure that it does.
House adjourned at twenty-two minutes before eight o'clock.