Lords Sitting of 13 January 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 Chichester.

Gentleman Usher of the Black Rod
The Lord Privy Seal (Lord Waddington): My Lords, I have to acquaint the House that Her Majesty has appointed Admiral Sir Richard Thomas KCB, OBE, to be Gentleman Usher of the Black Rod, in succession to Air Chief Marshal Sir John Gingell GBE, KCB, KCVO, and that he is at the Door ready to receive your Lordships' commands.
Whereupon the House directed that he be called in. Accordingly he was called in and officiated in his place.

Tributes to Sir John Gingell
Lord Waddington: My Lords, I feel privileged that it falls to me as Leader of your Lordships' House to pay tribute to the outstanding service which Sir John Gingell has given during his seven years as Gentleman Usher of the Black Rod. He is held in great affection and we are sorry to see him go.
Sir John took up his post at the very moment when this House was first televised, January 1985. Through television Black Rod has become a well-known public figure because of the duty he holds of summoning the Members of another place to this House on the occasion of the State Opening. That is, however, a very small part of the duties attached to the post.
Black Rod holds office as Serjeant-at-Arms attending the Lord Chancellor, as Secretary to the Lord Great Chamberlain, and as Agent of the Administration and Works Sub-Committee. As a
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Gentleman Usher to Her Majesty The Queen, he is a member of the Royal Household, and of course has important duties towards the Order of the Garter.
Beyond all this, however, Black Rod is responsible for many mundane but crucial functions on our behalf: the regulation of visitors, the maintenance of order in the Chamber and within the precincts, and even ultimately the dusting and vacuuming of the House. What is more, Black Rod is responsible for our security and I do not need to remind your Lordships that that role has become more onerous in the past seven years.
I imagine that when Sir John arrived here seven years ago he found his new post somewhat different from the one that he had just left—which was Deputy Commander-in-Chief, Allied Forces Central Europe. He appeared to make the transition with effortless ease, although from the start there were big challenges to be faced. The televising of the House, which I have already mentioned, meant considerable extra work for the new Black Rod, negotiating with the broadcasters and ensuring that the presence of cameras in this Chamber made no difference to the atmosphere of the House. Seven years on, we all know that Sir John managed this brilliantly.
It has been a very busy seven years in your Lordships' House, and both the amount of work that we do and the number of your Lordships who are active in that work have increased. This has meant that Sir John has had to cope with an increasing demand for space and he has used great tact and diplomacy in meeting many of our new needs. During his period of office, No. 1, Abbey Gardens was acquired, and in the last few months—largely owing to an original initiative on his part—we have secured a floor in 7, Millbank. The Barry Room has been opened as an extra dining facility, and during the past two summer Recesses our kitchens have been entirely rebuilt. I am reminded also that when Sir John arrived he found the Peers' Lobby ceiling shrouded in scaffolding. All the difficulties of making progress with renovation were pressed upon him but progress was made and the scaffolding went.

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On a personal note, I should like to say how helpful and supportive Sir John has been to me as Leader of your Lordships' House. I think I am right in saying that there is no Black Rod in living memory who has been held in higher or warmer esteem by all of us, and by all the staff of the House. Sir John combines an entirely natural affability with a remarkable and compelling dignity.
I am sure that all your Lordships would wish to join me in offering Sir John congratulations on the KCVO which he received in the New Year's Honours List. We send both him and Lady Gingell our very best wishes for a long and happy retirement. I should also like to take this opportunity to welcome his successor, Admiral Sir Richard Thomas, and to wish him well. He takes over a ship in excellent order and I know that he will be able to count on the help and support of all your Lordships.
2.42 p.m.
Lord Cledwyn of Penrhos: My Lords, it is a very great pleasure to support the warm tribute paid by the noble Lord the Leader of the House to Sir John Gingell. We have been fortunate in those who have served the House as Gentlemen Ushers of the Black Rod. To be successful, they must balance the ceremonial aspects of their office against the very real responsibilities that they shoulder. The finery, although attractive, is only a small part of the job.
We have been very fortunate to have Sir John in the office of Black Rod over the past seven years and we shall miss him very much. His commitment to the interests of noble Lords has been noteworthy in the fields of security, accommodation, services generally and the other duties mentioned by the noble Lord, Lord Waddington.
Sir John has been assiduous and helpful at all times. People abseiling from the Gallery have always found him waiting for them! We shall above all remember Sir John for his kindness and good nature whenever we have approached him for help and guidance. He has assisted the noble Lord the Leader of the House over seven years. He has also been helpful and kind to me as Leader of the Opposition. Black Rod needs a sense of humour, and Sir John Gingell has that in abundance. In this office and throughout his distinguished career Sir John has been supported and sustained by Lady Gingell. We wish them both a long and happy retirement. We also wish Admiral Sir Richard Thomas every success during his tenure of office.
Lord Tordoff: My Lords, the Leader of my party, the noble Lord, Lord Jenkins of Hillhead, is unfortunately away from London this afternoon. Therefore it is my pleasant task to speak in his stead at this moment. During the adjournment debate before the Recess I made some reference to the fact that Black Rod was due to leave this House. I echo what has been said by the noble Lord the Leader of the House and the noble Lord the Leader of the Opposition. I have as a Whip received enormous assistance from Sir John. I am sure the other Chief
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Whips from the other parties echo that sentiment. I continue to seek accommodation here and Sir John has been of enormous assistance in that task. He reaches places in this Palace no one else reaches.
The noble Lord the Leader of the House has already referred to the honour that Sir John received in the New Year's Honours List. I was reminded of a perhaps apocryphal message that was passed by a flag captain to the Commander-in-Chief of the Mediterranean fleet on a similar occasion during the war. It read: "Twice a knight at your age—congratulations".
It may well be said that with all the difficulties that Black Rod has faced he has never been wrongfooted by any of your Lordships. There was, however, one occasion on which I thought he had been wrongfooted. That occurred during a prorogation of Parliament when he left your Lordships' Chamber doing a smart left-about turn. When I was doing my National Service I was always told that the worst thing one could ever do was anything other than a right-about turn. I mentioned that to one of the doorkeepers. I asked him whether that was the correct procedure. He replied that it was not correct but that Black Rod could not help it. When I asked him why that was he said, "Air Force, my Lord". With that single blemish Black Rod has served this House extremely well. I wish his successor the greatest good fortune. Our good wishes go to Sir John and Lady Gingell.
Baroness Hylton-Foster: My Lords, it is with the greatest pleasure that we on the Cross-Benches endorse the tributes to Black Rod's formal and administrative abilities. As he is not part of the usual channels not only the Convenor but also many of the Cross-Bench peers have taken unusual problems to him. All of us have been helped and advised with much patience, understanding, friendliness and, above all, lovely good humour. For all he has done for us and the House we thank him and wish him and Lady Gingell every happiness in their new life. We very much welcome Admiral Sir Richard Thomas and wish him well.
The Lord Bishop of Chichester: My Lords, it is truly a pleasure to associate my colleagues on these Benches and myself with the tributes that have been paid to Sir John. Sadly, Bishops are not able to attend the House as frequently as other noble Lords and therefore perhaps do not need quite as much care. However, we have been extremely grateful for the courtesy and help we have received from Sir John and we wish both him and Lady Gingell a happy, long and fruitful retirement. We extend our best wishes to his successor.

Soviet Union: Dissolution Developments
2.48 p.m.
Lord Juddasked Her Majesty's Government:
What is their policy towards the latest developments in what has been known as the Soviet Union.
Lord Cavendish of Furness: My Lords, following the dissolution of the Soviet Union, the Government have recognised as independent states eight former Soviet republics and are establishing full diplomatic relations with them. We consider Russia itself to be the continuation of the Soviet Union. We are intending to build up relations with these newly independent states in close consultation with our partners and allies with the aim of encouraging as orderly as possible a transition from central rule. We welcomed assurances given by the former republics on such key questions as control of nuclear weapons and human rights.
Lord Judd: My Lords, does the Minister agree that the volatile situation in the former Soviet Union calls for careful pragmatism in our response? Does he also accept that this is no time for insistence on dogmatic economic theory? Does he agree that more imaginative support should have been given to President Gorbachev last year? Will he explain to the House what effective measures are being taken to prevent the leakage of military nuclear technology, personnel, fuel and weapons into the adjacent Middle East, and what measures are being taken to safeguard the environment?
Lord Cavendish of Furness: My Lords, I agree that this is a time for pragmatism. I do not accept that our policy was wrong in respect of President Gorbachev. As regards arms, there is clearly a danger that disintegration of the former Soviet Union will lead to proliferation of weapons, weapons technology and materials and the movement of key scientists. Close Western co-ordination on recognition has taken place to help bring the republics to a responsible approach on those subjects. Given the unprecedented events which have taken place, Her Majesty's Government and the Western partners and allies are satisfied with the assurances given so far, but we need to keep up the pressure.
Lord Ennals: My Lords, the Minister has explained that the Security Council and Her Majesty's Government have decided to accept Russia as the natural successor to the Soviet Union. Does he consider that to be wise? The charter refers to the Soviet Union, which does not exist. In view of the uncertainty of the situation in what was the Soviet Union, about the new republics and even about Russia itself, does not the Minister think that it was a rash move to take a decision which pre-empts further debate? Will he also say why the Prime Minister has decided to preside at a special meeting of the Security Council before the end of this month?
Lord Cavendish of Furness: My Lords, I cannot answer the last question. It scarcely needs saying that the abrupt dissolution of the Soviet Union at the end of last year presents daunting and unprecedented problems, and risks may exist. As regards the status of Russia, Russia is assuming the former Soviet seat among the five permanent members of the Security Council. We felt that that was necessary to avoid an intolerable international legal vacuum, especially for the UN Security Council. The UN Security Council is
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working well at present and we do not want to see its work disrupted by squabbling over the former Soviet seat.
Lord Gridley: My Lords, is there not some difficulty in trying to arrive at a reasonable and sensible solution in dealing with Russia at present? Is it not a fact that that country having been served by Communism for many years it will be very difficult for its rulers to settle down under a form of democracy and that therefore we have to give them every sympathy? Noble Lords may not be aware that it has been my privilege to listen, in my home, to broadcasts direct from the Soviet Union at various times and that there appears to be considerable difficulty in coming to what appears to us to be a sensible decision. Does the Minister agree that Russia needs our sympathy and understanding?
Lord Cavendish of Furness: My Lords, I cannot but agree with my noble friend. I hope that it will interest your Lordships to know that my right honourable friend the Foreign Secretary will visit Alma-Ata, Kiev and Moscow at the end of next week and will use his discussions with the leadership in each capital to re-emphasise our anxieties on nuclear questions and to discuss a wide range of matters.
Lord Mason of Barnsley: My Lords, does the Minister recall that on 11th December last he explained to the House that Mr. Appleyard would be leading a mission to the capitals of the recognised new independent states? Will he now inform the House what were the major anxieties which Mr. Appleyard reported back to Her Majesty's Government?
Lord Cavendish of Furness: My Lords, Mr. Appleyard had a very testing and energetic trip. As a result, a basis was found for recognition of the states and matters relating to the various assurances we needed leading up to recognition were discussed.
Lord Jenkins of Putney: My Lords, the Question refers to the latest developments in the Soviet Union and I am sure that the Minister will agree that there is a great deal of uncertainty about those developments. For example, can he say who the British nuclear deterrent is supposed to deter?
Lord Cavendish of Furness: My Lords, in such a fast-moving situation it would not be wise to unscramble our nuclear deterrent this week in anticipation of a wholly different future state of affairs. Everything remains uncertain. I can see no reason for changing our policy on nuclear deterrence.
Lord Cledwyn of Penrhos: My Lords, will the noble Lord define Her Majesty's Government policy towards extending diplomatic recognition to the new republics beyond Russia and the Ukraine? Given the very grave events developing in Moscow and beyond in the economic field and in the form of serious shortages this winter, will he say whether Her Majesty's Government have any proposals to make in this week's meeting of the European Community's Foreign Ministers?
Lord Cavendish of Furness: My Lords, on 31st December we recognised the eight former Soviet

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republics as independent states. We did not recognise Russia as independent because we felt that there was no need to do so; Western governments are treating Russia as the continuation of the Soviet Union. Three republics were not recognised. Kirgizstan has transmitted its assurances to the EC presidency and those are still under consideration. We are still awaiting assurances from Tajikistan and expect them shortly. We have not recognised Georgia where the position is extremely confused following the overthrow of President Gamsakhurdia.
Lord Callaghan of Cardiff: My Lords, perhaps I may revert to the question of nuclear weapons. According to the information I have received the Russians are having difficulty, strange though it may seem, in finding the necessary financial resources to dispose of the nuclear weapons they have promised to destroy and also the technical capacity to destroy them. In particular, as the Foreign Secretary is visiting Russia in the near future would the West consider an initiative offering Russia not only sympathy and help but also financial assistance and, if necessary, technological assistance in order to destroy those weapons?
Lord Cavendish of Furness: My Lords, I believe that the noble Lord, Lord Callaghan, is entirely right about those problems. I believe that the matter is being addressed by Her Majesty's Government.
Lord Chalfont: My Lords, what is the attitude and policy of Her Majesty's Government towards three of the new republics—Kazakhstan, Byelorussia and the Ukraine—all of which have nuclear weapons on their territory and under their control? Is our recognition of those republics contingent in any way upon their accession to the nuclear non-proliferation treaty? Secondly, will the Minister confirm that there are still 27,000 nuclear weapons in the four republics of the Soviet Union—the three I have mentioned and the republic of Russia? Does he agree that that answers the question of the noble Lord, Lord Jenkins, as to why we are maintaining a credible nuclear deterrent?
Lord Cavendish of Furness: My Lords, that is why we wish to maintain a credible nuclear deterrent. I cannot confirm the numbers which the noble Lord mentioned. The assurances we have been given by those states which we have recognised have been contingent on their intention to join the NPT.
Lord Cheshire: My Lords, can the noble Lord tell the House whether the rumours are true that there are organised international criminal elements in the republics attempting to pass military expertise and unpleasant military weaponry to the Middle East? If that is so, will those republics collaborate with us in trying to identify those attempts so as to safeguard the world?
Lord Cavendish of Furness: My Lords, the same reports about which the noble and gallant Lord expressed anxiety have reached me. Every effort is being made with the republics and our allies to find ways of dealing with the problem.
Lord Judd: My Lords, does the Minister agree that in view of the acute instability in the Middle East and pending a peace settlement in the Middle East as a whole it is impossible to give too much priority to the control of nuclear weapons in the former Soviet Union and to their effective dismantling?
Lord Cavendish of Furness: My Lords, the Question on the Order Paper is extraordinarily broad but I hope that I have said nothing which would diminish the importance which Her Majesty's Government attach to the issue.

The Arts Council of Northern Ireland
2.59 p.m.
Lord Holme of Cheltenhamasked Her Majesty's Government:
Why the Northern Ireland Arts Council budget is not being increased pro rata to the increase announced for the funding of the Arts Council in Britain.
The Paymaster General (Lord Belstead): The funding for the Arts Council of Northern Ireland is not directly linked to that of the Arts Council in Britain, although in recent years we have been able to match per capita spending by government on the arts in Northern Ireland with that in Great Britain. This has not been possible for the 1992–93 financial year because of other pressures on the Northern Ireland budget.
Lord Holme of Cheltenham: My Lords, I thank the noble Lord for his Answer and for his reply to my earlier written Question on the same subject. Is he aware that to those who welcome, as we certainly do on these Benches, the substantial increase in the Arts Council budget of £27 million, or nearly 14 per cent., the fact that the increase in Northern Ireland is only half that level seems inexplicable? Is he further aware that the burgeoning arts scene in Northern Ireland is full of vitality and innovation and that it cuts across the sectarian divide? Does he agree that, in the tragically divided Province with which he and his colleagues have to grapple and about which we are all concerned in this House, anything that makes a positive contribution to the common life in Northern Ireland deserves the fullest possible support?
Lord Belstead: My Lords, the Government agree with a great deal that the noble Lord has said about the importance of encouraging the arts in Northern Ireland. The up-rating by almost 7.5 per cent. for next year with regard to Northern Ireland should allow the Arts Council there some development of its programmes. In his Question the noble Lord said that the difference between that figure and the figure for Great Britain was inexplicable. It is a result of pressures across the whole of the Northern Ireland bloc, including the payment of substantial sums for compensation for terrorist outrages. Tragically, those outrages include the arts area where at present there is

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extensive damage, and the rebuilding of the Opera House in Belfast. The Arts Council's gallery in central Belfast is also awaiting work.
Lord Jenkins of Putney: My Lords, will the noble Lord explain how the Arts Council in Northern Ireland has come off so much worse than the Arts Council in Great Britain? What is the arrangement between himself and the Treasury that has enabled that unsatisfactory position to be brought about?
Lord Belstead: My Lords, I said in my original Answer that there is no linkage between the two arts councils. Nonetheless, we achieved parity in per capita funding three years ago and have managed to maintain that until the last public expenditure round. I have already explained to the noble Lord, Lord Holme, why there has been a difference in this public expenditure round.
Lord Bonham-Carter: My Lords, does not the damage done to the Opera House and the art gallery to which the noble Lord referred provide an excellent reason for increasing, not decreasing, the grant to the Arts Council of Northern Ireland?
Lord Belstead: My Lords, support for the arts in Northern Ireland has continued to increase. Per capita funding has increased for the past three years and I am glad to say that, as a result of this year's public expenditure round, it will increase again next year.
Lord Donaldson of Kingsbridge: My Lords, I must briefly support my noble friend's Question because he pointed out that in Northern Ireland one of the few things that crosses party divergences and leads people to work together is the development of the arts. As an instance, the Ulster Orchestra, which appears almost weekly on the BBC, is excellent. Does the noble Lord agree that such things cannot be maintained unless they are given proper support and that anything less than that which is given in England and Scotland is certainly too little?
Lord Belstead: My Lords, the noble Lord speaks from firsthand experience, having had responsibility for those matters in Northern Ireland in the past. I accept the general thrust of what he says. I should like to give him an assurance that we shall consider the needs of the arts during the current financial year.
Lord Morris of Castle Morris: My Lords, will the noble Lord tell the House when he or any of his ministerial colleagues last formally met the Northern Ireland arts associations' client bodies or their representatives to discuss the problem of arts funding in Northern Ireland, and what other meetings are scheduled for the immediate future?
Lord Belstead: My Lords, I met the Arts Council of Northern Ireland only about two and a half months ago and we discussed a variety of matters.
Lord Holme of Cheltenham: My Lords, I thank the Minister for the careful and thoughtful way in which he has dealt with the Question. However, does he agree that, if his response is that the bombing of both the Opera House and the Arts Council building is a
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reason for not giving more adequate support to the arts in Northern Ireland, perversely and paradoxically that will have the effect of encouraging those thugs to think that they can cut down on the communal life by their activities?
Lord Belstead: My Lords, the noble Lord makes a fair point but, with respect, it is not an entirely accurate point. I said in my original reply and then in answer to the noble Lord's supplementary question that there are other pressures—and they are very great
pressures—on the Northern Ireland bloc as a whole. I simply gave as an example the fact that compensation for terrorist outrages is one of those pressures. Tragically, it so happens that compensation must be paid as regards the Opera House and, I suspect, as regards the Arts Council gallery.

Defamation Law: Reforming Measures
3.6 p.m.
Lord Lloyd of Hampsteadasked Her Majesty's Government:
What are their plans for the reform of the law of defamation.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, the Government have kept the law of defamation under review. In February 1990, in answer to a Question from my noble friend Lord Campbell of Alloway, I announced two reforms; namely, an enlargement of the Court of Appeal's power to substitute its own award of damages and the recent provision enabling a plaintiff to apply to a judge for approval of a proposed statement before accepting a payment in. I also announced my intention to invite the Supreme Court Procedure Committee to examine the rules and practice and to propose reforms, and I shall make an announcement about its recommendation in due course. Following two consultations, which I then likewise announced, I have made clear the Government's intention to provide for the defence of innocent dissemination to be made available to printers; but I have concluded that the death of a party, or potential party, should continue to extinguish a cause of action.
Lord Lloyd of Hampstead: My Lords, I am most grateful to the noble and learned Lord for his informative reply to my Question. However, does he agree that the value of the Neill Report—the excellent report that has been produced under the chairmanship of Lord Justice Neill—is substantially diminished by the fact that two crucial matters—namely, legal aid and the use of trial by jury—were excluded from the terms of reference? Does he agree that one of the features of defamation which adds overwhelmingly to the lengthening of those procedures and the increase in costs is the existence of a jury? Does he not think that the time has come to consider seriously whether the jury should be dispensed with in that type of proceeding as it has been dispensed with for some 50 years in all other types of civil proceedings?
The Lord Chancellor: My Lords, those two matters were excluded from the report that I requested from Lord Justice Neill because I did not consider that they were suitable for the type of work that he was to do. I should like to join with the noble Lord in saying how grateful I am for the excellent report that Lord Justice Neill and his group have prepared and which I am presently studying.
As regards jury trials, I have not been able to detect a sufficient consensus for doing away with jury trials in that type of proceedings. As the noble Lord will know, a recommendation generally along those lines was made by the Faulks Committee in 1975, but it has not been implemented. We have introduced a much wider power for the Court of Appeal to substitute its own award for that of the jury. I believe that that may well help to provide guidelines to juries in that area. As regards legal aid, no government have so far thought it wise to introduce legal aid in defamation proceedings, and I remain of that view.
Lord Renfrew of Kaimsthorn: My Lords, does the noble and learned Lord agree that one of the most disquieting practices in recent years has been the threat of action to intimidate booksellers and other distributors? He may be aware that when I tried a year or more ago to purchase the biography by Tom Bower of the late Robert Maxwell, I was told by a private bookseller that they were not able to stock it, not because they had been sued or even directly threatened with an action, but because the possibility had been mooted. Does he agree that there is a real need to restrict pre-emptive actions against distributors in that way?
The Lord Chancellor: My Lords, I agree that this is a difficult area. On the other hand, I believe that it is a matter best left to the court to decide on individual applications. The court will know the circumstances and will know what is required in the interests of justice.
Lord Irvine of Lairg: My Lords, in line with a principal recommendation of the Neill Committee, would the noble and learned Lord consider a short Bill conferring a quick and cheap remedy on victims of libel in cases where newspapers are willing to publish a prompt correction and apology and are also willing to pay damages to be assessed by a judge in streamlined procedures?
The Lord Chancellor: My Lords, that is one of the extremely valuable recommendations of the committee chaired by Lord Justice Neill. Certainly it is one that attracts me very much. I shall announce a final decision upon the matter in due course.
Lord Campbell of Alloway: My Lords, in view of the want of consensus as to whether there should be the abolition of trial by jury, can my noble and learned friend say whether the Court of Appeal has yet, or may soon have, sufficient power to substitute its own award for that of a jury, and make all requisite consequential directions to save costs?
The Lord Chancellor: My Lords, that is the power that was conferred under the Courts and Legal
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Services Act. I believe that would be a valuable addition to the Court of Appeal's powers, and it would greatly help in dealing with the present situation so long as we have jury trials in those proceedings.
Lord Donaldson of Kingsbridge: My Lords, I did not fully understand the noble and learned Lord's reference to the threat of a writ. I do not see how the court can have anything to do with the threat of a writ. It does not reach the court. I did not understand the answer. Would he expatiate upon it?
The Lord Chancellor: My Lords, my answer was directed to the situation in which the court may grant an injunction. The bookseller to whom my noble friend referred was anticipating the possibility that such an injunction might be taken. I believe that the matter of interim injunctions is best left to the court. I cannot think of a very obvious type of alteration to the present law in this area which would still enable justice to be done between the parties. I hope that that is a fuller explanation of what I had in mind in answering my noble friend.
Lord Richard: My Lords, the noble and learned Lord said that he would bring forward recommendations in due course. I am not so naive as to ask him when is "in due course", but can he tell us whether it is at least visible? Can we expect the recommendations within the reasonably foreseeable future?
The Lord Chancellor: My Lords, I would answer yes to that question.

Business of the House: Debates, 15th January
3.13 p.m.
The Lord Privy Seal (Lord Waddington): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debate on the Motion in the name of the Lord Dean of Beswick set down for Wednesday, 15th January shall be limited to three hours and that in the name of the Lord Clinton-Davis set down for the same day to two hours.—(Lord Waddington.)
On Question, Motion agreed to.

Further and Higher Education Bill [H.L.]
Lord Belstead: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the amendments for the Report stage be marshalled and considered in the following order—

Clauses 1 to 3,

Schedule 2,

Clauses 4 to 16,

Schedule 3,

Clauses 17 to 20,

Schedule 4,

Clauses 21 to 36,

Schedule 5,

Clauses 37 to 58,

Schedule 1,

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Clauses 59 to 67,

Schedule 6,

Clauses 68 to 83,

Schedule 7,

Clauses 84 to 90,

Schedules 8 and 9—(Lord Belstead.)

On Question, Motion agreed to.

Local Government Bill [H.L.]
3.14 p.m.
Lord Hesketh: My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Local Government Bill, has consented to place her 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.
Clause 4 [Application to parish and community councils and charter trustees]:
Lord Simon of Claisdale Lord Simon of Claisdale moved Amendment No. 1:
Page 4, line 41, leave out from ("expedient") to end of line 44.
The noble and learned Lord said: My Lords, this amendment deletes paragraph (b) from Clause 4(3). The ground for doing so is that the provision is unnecessary. Being unnecessary it is one of the many intrusions which go to swell the statute book. In 1975 the Renton Committee on the preparation of legislation remarked on the prolixity of legislation. In that year the statute book ran to three volumes. Notwithstanding the recommendations of the Renton Committee, 10 years later with fewer statutes it ran to five volumes. The format was then enlarged but within two years it still comprised five large volumes. These volumes are very expensive. They must now cost about £300. When I last inquired a few years ago, they were well over £200. Therefore, if only in the interests of the consumer, Parliament is under an obligation to scrutinise legislation carefully and to eliminate any provision which is unnecessary.
In Committee, paragraph (b) attracted a baleful glare from the noble Lord, Lord McIntosh, and the noble Lord, Lord Howie of Troon, also looked askance at it. But the noble Baroness hastened to point out that it was quite innocuous, that it did no more than it said and that local authorities vary very greatly in extent of jurisdiction. She mentioned the county council, which is obviously quite different from a parish council in jurisdiction and resources. She said that all that was done in the paragraph was to take account of those differences and to allow the Secretary of State to make different regulations to suit the different circumstances.
It seemed so reasonable that the amendment was not pressed. I ventured to try to assist the noble Baroness by pointing out that not only was the provision completely reasonable but quite innocuous because it was unnecessary. The powers that are given in this paragraph are well contained in the earlier part of the section.
The noble Baroness kindly said that she would consider the matter and if she were advised that it was unnecessary, the paragraph would be removed. I rather discouraged her from hoping that she would receive such advice. It is a formula which has got into the computer in the parliamentary draftsman's office and anything that gets into a Whitehall computer is akin to being engraved on tablets of stone brought down from the holy mountain, in this case the holy mountain of the Medes and the Persians. I did not encourage the noble Baroness to hope that she would receive any positive advice on the matter.
The noble Baroness kindly invited me to discuss with her later amendments to which we shall come in due course. Being anxious to compromise and indeed to settle for half, I identified four separate areas in which there had been disagreement in Committee. I offered to concede two and a half if she would meet me on one and a half. However, when I visited that noble building in Marsham Street the noble Baroness kindly raised two other matters. One was this immediate discussion; the other was the Henry VIII clause that your Lordships condignly and rightly removed from the Bill. I do not believe that the noble Baroness raised those two extra matters for the pure pleasure of saying "no" six times rather than four, but that is how it worked out.
Although the architecture of that building was impugned that day, I could not help remarking on the spirit that animated the Minister rather than the architecture that surrounded us. It seemed to be the spirit that Goethe ascribed to Mephistopheles: the spirit that always says "no". At any rate that was the answer that I received to each of my points.
The noble Baroness is right. One requires different regulations for different circumstances, different localities and different local authorities. I must concede that the law is an ass, because Mr. Bumble said so. However, the law is not so ignorant that it does not know that local authorities vary greatly in size and responsibility, that a county council is not the same as a parish council, and that different regulations will be needed for each. It is quite unnecessary to go out of one's way to obviate a far-fetched argument that if this provision were not included any such exercise of regulation-making power would be ultra vires the main provision of the section.
The trouble is that there is absolutely no limit to the silly arguments that can be advanced in a court of law. If we try to obviate and forestall every argument the statute book will continue to fill in the way that I described. The provision is entirely unnecessary. I put it down again on Third Reading—I did not raise it at Report—because the Bill will go to another place and two committees are now looking into the structure and content of the statute book. I beg to move.>
Lord McIntosh of Haringey: My Lords, I am sad to find myself to some extent at variance with the views of the noble and learned Lord on this matter. In an immensely valuable and entertaining speech he described the legal consequences of the provision in the Bill. However, he did not refer to the subject matter: the exclusion of parish and community councils from the Citizen's Charter provisions. It is

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well known that we on these Benches support the Citizen's Charter provisions; indeed, they were our idea in the first place. We believe that it is proper for them to apply to the larger parish and community councils; some are large and have substantial budgets. However, it would be quite improper to include the very small villages whose only concern may be street lighting or a parish hall.
Although I do not dare to disagree with the noble and learned Lord's legal interpretation, I hope that a degree of flexibility for the Secretary of State in this matter will be acceptable.
Lord Peyton of Yeovil: My Lords, before my noble friend replies, I should like to say that I support the noble and learned Lord who proposed the amendment. I should be grateful if my noble friend on the Front Bench would explain to me—it may be that I am short on understanding—exactly what will be provided by subsection (3) (b) which is not already provided by subsection (3) (a).
Perhaps I may comment on the characteristic generosity of the noble and learned Lord, Lord Simon of Glaisdale, in referring to a holy mountain as the source of our legislative supplies. I believe that he was carrying his generosity a little too far. Before the reconstruction of Richmond Terrace and the mews behind it, there used to be an archway leading off to the main thoroughfare of Whitehall. For the guidance of those who passed underneath the archway there was a terse and laconic instruction, "Commit no nuisance". I am now beginning to understand the nuisance to which that notice was directed. Unhappily, with the reconstruction the notice disappeared and its efficacy with it.
The noble and learned Lord generously referred to the "noble building" in Marsham Street which is the current home of my noble friend. I am sure that her recent experiences of that building will cause her to decline the compliment offered to it by my noble and learned friend. I hope that my noble friend will pause to consider whether this tedious, tiresome and unnecessary sentence is essential to her purposes.
The Minister of State, Department of the Environment (Baroness Blatch): My Lords, in the context of a different clause, the noble and learned Lord, Lord Simon, argued during Committee that the provisions that he seeks to remove by the amendment were unnecessary. As I explained at Report, I took advice on that and came to the conclusion that they were necessary. Nothing would have pleased me more than to have acceded to his wishes. Like him, I believe that we have an opportunity to take something out of the Bill if it is superfluous.
The order-making power in Clause 4 enables the Secretary of State to bring parish and community councils and charter trustees within the scope of the provisions in Clauses 1 to 3 on the publication of information as to standards of performance. Clause 4 achieves that by providing that Clauses 1 to 3 shall have effect as if the bodies defined in the order were relevant bodies for the purposes of Clauses 1 to 3.
16
What that does in practice is to give the Secretary of State discretion to limit the sheer numbers of bodies to which those clauses would apply.
I am advised—and in matters of legal importance I have to be advised—that the effect of the amendment would be that either all or no parish and community councils and charter trustees could be brought within the scope of the performance reporting provisions. As the noble Lord, Lord McIntosh, said, there are distinctions between some parish authorities and others. For example, there are some large ones to which specific instructions may well apply. The ability to be selective by, say, one of those types of authority, by expenditure, range of function, or other feature would be lost. Therefore something material would be lost by the removal of this part of the Bill.
Your Lordships will know that some parish and community councils spend only a few hundred pounds a year whereas others spend more than some full district councils. It would be a waste of public money to bring the smaller bodies into the net. Yet it may well be desirable in the longer term that the larger bodies should be brought within the discipline of providing information as to their performance. Again, the range of functions undertaken by the bodies affected by Clause 4 varies widely: some take responsibility for street lighting and others for district council services. Once it had been decided in principle to extend the application of Clauses 1 to 3 to parish and community councils and charter trustees, the effect of the Secretary of State exercising his discretion would be to reduce the number of bodies affected. Given the diversity of circumstances, I hope the noble and learned Lord will agree that it is necessary that the Secretary of State should have the discretion not to bring some of these bodies into the scope of Clauses 1 to 3 and that this discretion should be beyond doubt.
If the removal of the provision from the Bill had no effect whatever, I should have been the person to have acceded to the wishes of the noble and learned Lord. However, with that explanation—and the explanation that I gave to my noble friend Lord Peyton, with whose remarks I concur in relation to my home at Marsham Street—I invite the noble and learned Lord to withdraw the amendment.
Lord Simon of Glaisdale: My Lords, I cannot pretend that the Minister's reply was not what I had expected. Therefore, it would be quite ridiculous for me to wax indignant about it. The Minister received me most courteously in what the noble Lord, Lord Peyton, insisted I should call an ignoble building. She has replied courteously and carefully today and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
3.30 p.m.
Clause 8 [Procedure for competitive tendering]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 2:
Page 8, line 12, after ("may") insert ("after the report of an inquiry established in accordance with subsection (1A) below").
The noble Lord said: My Lords, in moving the amendment I shall speak also to Amendment No. 3. It

17
will not have escaped your Lordships' notice that the Opposition Front Bench has confined the amendments which it has tabled on Third Reading to Clauses 8 to 10. That is not only because we are in agreement with a great deal of the rest of the Bill but because we wish to concentrate as much as possible on the increasingly unsatisfactory story of the preparation and presentation of that part of the legislation.
Noble Lords will recall that we attempted to have Clauses 8 to 11 taken out of the normal consideration of the Bill in order that the result of the consultation on compulsory competitive tendering and the Government's response to it could be available to Parliament before decisions were taken on CCT. The House, and indeed the Whips, did not see fit to accede to that reasonable request. We then pointed out that the consultation document had a number of self-evident defects, as could be seen from published documents.
Having had access to the report of the PA Consulting Group, which formed the basis of the Government's deliberations on compulsory competitive tendering, we found that the group did not support the concept of CCT to anything like the extent suggested by Ministers nor to the extent suggested in the consultation document. Therefore, not only is there the impropriety that the House is being asked to consider this legislation without having seen the results of the consultation or the Government's response to it, but the fact that the consultation document itself is defective because it does not adequately take account of the views of the consultants.
I agree with Mr. Portillo's response to our publication of the document: that Ministers take the decisions and not consultants. That is entirely correct. However, when Ministers commission research it behoves them to pay at least some attention to the expert opinions that they are commissioning and for which they are paying. They should allow that to be reflected to a greater extent than has proved to be the case in the consultation work.
During the past few days we have pointed out to the press that there are many ways in which the consultants' report is not adequately reflected in the consultation document. Although a number of local authority services are ruled out by the consultants for consideration for CCT they still appear in the White Paper, Competing for Quality. There is little evidence in the consultants' report of the type of savings which Ministers claim for CCT. The report points out that as regards many services—notably legal services, public relations, secretarial and accountancy services—experience has shown that private sector provision is substantially more expensive than public sector provision.
The consultants are lukewarm even about the services which they identify as being good candidates. They state that they are based on merely preliminary judgments, which are in turn based on case studies rather than on a comprehensive analysis. The consultants give the lie completely to Ministers' claims that quality is inherent in the Government's proposals and has been so since and including the 1988 Act. The
18
consultants state specifically that quality is not an acceptable criterion under existing legislation except under the circumstances of double envelope tendering.
Although the consultants recommend that construction and related services are good candidates for CCT, they fail to point out that the savings from that are on capital account rather than on revenue account and therefore will take a number of years to be realised. Moreover, the consultants point out correctly that there will be a high cost of processing small contracts which could outweigh the savings to be made. They suggest that there should be a de minims rule about the size of the services to be contracted out. That suggestion is not taken up by the Government.
The most important single point is that in paragraph 4.1 the consultants describe the requirement for a true market as a "key" requirement. The Government have completely ignored that consideration. They have substituted to a lesser extent the idea of an internal market as opposed to the idea of a true market. They have failed to take on board the consultants' recommendation that, in order to achieve a true market, there should be the possibility of cross-boundary tendering by local authorities themselves.
The consultants point out that under certain circumstances CCT could constrain administrative reform and innovative ways of delivering local authority services. They believe that that should be avoided. Again, there is no reflection of that view in the Government's consultation document, nor in anything that Ministers have said. The consultants point out a number of potential conflicts between CCT and the programme of local government reform which will be established by Part II of the Bill. There is no reference to that in the consultation document. They point out the potential conflict between CCT and the process of local management of schools and colleges. Again, there is no reference to that in the consultation document.
The consultants point out the possibility of conflict between CCT and the Citizen's Charter, which refers boldly to total quality. However, as is made clear in amendments that we have tabled, there could easily be a conflict between total quality and the requirement to accept the lowest tender, which is the essence of the Government's legislation. They point out the potential for conflict between compulsory competitive tendering and the performance of statutory duties. Again, the Government do not recognise that, but it is referred to in later amendments.
I could go on about this matter but I shall not do so. It is clear that the intellectual and factual basis of the Government's arguments for CCT are inadequate. The way in which the House is being asked to consider the matter is also quite inadequate. That is not to say—and I make this clear—that the consultants do not recognise candidates for compulsory competitive tendering and recommend that there should be compulsory competitive tendering in some areas and that savings will be achieved. That is hardly surprising because that was the remit given to the consultants.
However, I believe that the way in which this House is being treated not only as regards timetable but also

19
as regards the arguments is entirely unsatisfactory. I urge the House to accept these amendments. They would secure that that most important aspect of the relationship between central and local government should not be altered without a proper inquiry into all the costs and benefits involved. That seems to me the minimum requirement of good behaviour by central government if they are to retain their credibility with local government and with the people of this country. I beg to move.
Baroness Hamwee: My Lords, I support the amendment. It is understood that every political party and grouping has its own principles and philosophy, but the question of compulsory competitive tendering seems to have become a dogma which threatens to overwhelm common sense.
Moreover, it shows a lack of trust in local government which lies ill with the words of praise which were spoken about local government in so many of our debates on the Bill. I shall not say a great deal about this matter and I shall not go into the detail of the report to which the noble Lord, Lord McIntosh, referred, save to say that so much of what we now discover in the report echoes so many of the things said and anxieties expressed in the course of our debates by noble Lords on all sides of the House.
Were it not for the refusal to extend the consultation, we might not feel so strongly about this amendment. Clause 8(2) is now as it started. It merely states that:
"the Secretary of State shall consult such representatives of local government as appear to him to be appropriate".
Obviously that immediately gives him such a discretion that the terms of the clause proposed by the noble Lord, Lord McIntosh, are desirable to rectify the faults and lacunas in that later clause. The amendment gives not only Members of this House and Parliament the opportunity to react to what may be about to happen, but it also it extends the debate and allows the input of all those who will be concerned. I support the amendment.
3.45 p.m.
Baroness Blatch: My Lords, it is interesting that the noble Lord, Lord McIntosh, chose to speak mostly about what he perceived to be the differences between the Government's consultation paper and the report and not so much about the proposed amendment.
From all that the noble Lord and the noble Baroness have said, it is clear that whatever report they have read, they have not read very closely the Government's consultation paper because many of the anxieties which they have expressed and to which the noble Lord referred in his press release have been addressed in the Government's consultation paper.
These amendments would set up a new level of bureaucracy as a hurdle to the use of the powers in Clause 8. However, they do not affect the Secretary of State's power under Section 2(3) of the Local Government Act 1988 to extend CCT to new activities.
I assure noble Lords that the Government would not propose to extend CCT to any new service or to
20
make use of the powers under Clause 8 if we thought that in doing so we should harm the efficiency and effectiveness of those services. I would not expect Parliament to approve the extension of CCT to any new service, or any use of the powers under Clause 8, if it considered that such harm would result. If Parliament disagreed with the Government on the use of those powers, it would have the opportunity to reject the orders concerned. Given that safeguard and the safeguard in this Bill and the 1988 Act that orders could not be laid before consultation on the detail had taken place with representatives of local government, a requirement to set up an inquiry is wholly unnecessary, extremely cumbersome and expensive.
Wide-scale market testing of those services has not yet occurred. Therefore, any comments can only be subjective at this stage. It takes time for markets to adapt to the knowledge that new opportunities exist and for potential suppliers of those services to gear themselves up to the challenge of competing with local authority workforces. We should wish the timetable for the introduction of CCT for new activities to allow for that. We look forward to receiving comments on the timetable which we have suggested in the consultation paper.
As I have repeatedly made clear, CCT has advantages other than cost savings. It gives councils the freedom to concentrate on their strategic responsibilities rather than the mechanics of service delivery. The opportunity for provision of services by dedicated providers—whether in house or external—assists in the search for quality. The need for clear specifications means more careful consideration of standards leading to an increased responsiveness to the needs of clients. Increased efficiency leads to lower costs, higher quality or both.
It is no secret that neither the noble Baroness nor the noble Lord, Lord McIntosh, approve of CCT. Almost any mechanism will be resorted to in order to ensure delay or that it should not happen at all. These two amendments are about delay and I hope that they will be withdrawn.
Baroness Hamwee: My Lords, before the Minister sits down, will she tell the House whether the description that she gave of compulsory competitive tendering was in fact a very good and entirely welcome and appropriate description of competitive tendering? When it is in the discretion of local authorities, we on these Benches and every good local authority would support competitive tendering. However, the element of compulsion seemed not to be part of the Minister's argument.
Baroness Blatch: My Lords, the noble Baroness almost makes my point for me. Before the element of compulsion there was little competitive tendering. As the noble Baroness pointed out, the better and more enlightened local authorities used competitive tendering, but all too many local authorities would never have market-tested their services. Moreover, many good and well-run local authorities perceived themselves to be doing a good job and perceived their

21
services to be cost effective. It was only after market testing that they found that that was not necessarily so.
Lord McIntosh of Haringey: My Lords, if the Minister thinks that she has responded effectively to the question of the noble Baroness, Lady Hamwee, then she cannot have read her own consultants' report. On page 42, when addressing the issue of feasibility of compulsory competitive tendering, the report talks about the more subjective aspects of quality, and it points out that
"whilst these more subjective factors (quality, demonstrated understanding, credentials) are perfectly valid in normal competition, they cause real problems in any compulsory environment".
It is the compulsory environment which is the clue to our opposition to the proposals.
We are not and have never been opposed to competitive tendering. I have no doubt that Labour and Liberal Democrat councils have taken part frequently in competitive tendering. We are opposed to the thoughtless, badly planned and badly argued extension of compulsory competitive tendering to a range of services which have already been subject to it under the 1988 Act but which have largely stayed in the hands of local authorities' own departments. The best that can be said is that the compulsory competitive tendering procedures under the 1988 Act are not proven. It certainly cannot be claimed that they are a success, nor that the results of the 1988 Act are an argument for the extension of compulsory competitive tendering in this way.
The Minister sought to give us her own personal assurances that the compulsory competitive tendering legislation, when finally implemented—in other words, when it is more than merely a series of regulation-making powers—will be applied sensitively, and that it will not be applied in cases where it will not work well. I am grateful for those assurances and, knowing her, I am inclined to accept their sincerity. But that is not what we are about. We are about legislation. We are dealing with provisions which may be implemented by any Secretary of State. Indeed, in one way or another they will need to be implemented by a Labour Secretary of State within a few months.
By those criteria the Bill as drafted does not stand up to the kind of scrutiny that we are attempting to give it. It does not stand up to scrutiny because all the attempts that we made to persuade the Government to come clean regarding their intentions, rather than simply issuing a consultation document, failed. It does not stand up to scrutiny because it gives the Secretary of State the power by order to extend compulsory competitive tendering to such services and in such a way as he thinks fit.
It is not good enough for the Minister to repeat that Parliament has the power to reject any orders made as a result of the proposed legislation. Even if there were no self-denying ordinance on orders in this House, in that we do not seek to overturn them when they are approved by another place, we all know the weakness of Parliament, which can approve or reject orders but cannot in any way amend them.
22
The provision is not a substitute for proper legislation; it is not proper legislation. We believe that the House should accept the amendment and provide this necessary additional safeguard to the proper control and management of local authorities. I shall therefore seek the opinion of the House.
3.53 p.m.
On Question, Whether the said amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 73; Not-Contents, 124.

Division No. 1

CONTENTS

Addington, L.

Jenkins of Putney, L.

Aylestone, L.

John-Mackie, L.

Birk, B.

Judd, L.

Blackstone, B.

Kennet, L.

Bonham-Carter, L.

Kilmarnock, L.

Boston of Faversham, L.

Listowel, E.

Bruce of Donington, L.

Lockwood, B.

Callaghan of Cardiff, L.

McIntosh of Haringey, L.

Carmichael of Kelvingrove, L.

Mackie of Benshie, L.

Cledwyn of Penrhos, L.

Mason of Barnsley, L.

Cocks of Hartcliffe, L.

Mayhew, L.

David, B.

Milner of Leeds, L.

Dean of Beswick, L.

Molloy, L.

Desai, L.

Monkswell, L.

Donaldson of Kingsbridge, L.

Morris of Castle Morris, L.

Donoughue, L.

Morris of Kenwood, L.

Dormand of Easington, L.

Nicol, B.

Ennals, L.

Ogmore, L.

Falkland, V.

Peston, L.

Fitt, L.

Phillips, B.

Gallacher, L. [Teller.]

Pitt of Hampstead, L.

Galpern, L.

Ritchie of Dundee, L.

Gladwyn, L.

Sainsbury, L.

Gregson, L.

Seear, B.

Grey, E.

Sefton of Garston, L.

Hampton, L.

Serota, B.

Hamwee, B.

Shackleton, L.

Hanworth, V.

Shepherd, L.

Harris of Greenwich, L.

Stedman, B.

Hilton of Eggardon, B.

Strabolgi, L.

Hirshfield, L.

Taylor of Gryfe, L.

Hollis of Heigham, B.

Tordoff, L. [Teller.]

Holme of Cheltenham, L.

Underhill, L.

Hooson, L.

Wallace of Campsie, L.

Houghton of Sowerby, L.

White, B.

Howie of Troon, L.

Williams of Elvel, L.

Hutchinson of Lullington, L.

NOT-CONTENTS

Aldington, L.

Constantine of Stanmore, L.

Alexander of Tunis, E.

Cottesloe, L.

Allenby of Megiddo, v.

Crathorne, L.

Ampthill, L.

Cullen of Ashbourne, L.

Arran, E.

De Freyne, L.

Astor, V.

Denham, L.

Balfour, E.

Denton of Wakefield, B.

Bauer, L.

Eccles of Moulton, B.

Belhaven and Stenton, L.

Effingham, E.

Beloff, L.

Elles,B.

Belstead, L.

Elliot of Harwood, B.

Bessborough, E.

Elliott of Morpeth, L.

Blatch, B.

Elton, L.

Blyth, L.

Erroll of Hale, L.

Brabazon of Tara, L.

Faithfull, B.

Brigstocke, B.

Ferrers, E.

Brougham and Vaux, L.

Flather, B.

Campbell of Alloway, L.

Forbes, L.

Carnarvon, E.

Fraser of Carmyllie, L.

Carnegy of Lour, B.

Gainford, L.

Carnock, L.

Gainsborough, E.

Cavendish of Furness, L.

Gardner of Parkes, B.

Clanwilliam, E.

Geddes, L.

Coleraine, L.

Gibson-Watt, L.

23

Gridley, L.

Norrie, L.

Halsbury, E.

Orkney, L.

Hayter, L.

Orr-Ewing, L.

Henley, L.

Oxfuird, V.

Hesketh, L. [Teller.]

Pender, L.

Hooper, B.

Perry of Southwark, B.

Howe, E.

Peyton of Yeovil, L.

Hylton-Foster, B.

Platt of Writtle, B.

Jeffreys, L.

Plummer of St. Marylebone, L.

Johnston of Rockport, L.

Reay, L.

Joseph, L.

Renton, L.

Kimball, L.

Romney, E.

Kinloss, Ly.

St. Davids, V.

Kitchener, E.

Saltoun of Abernethy, Ly.

Knollys, V.

Shannon, E.

Lane of Horsell, L.

Simon of Glaisdale, L.

Lauderdale, E.

Skelmersdale, L.

Lindsey and Abingdon, E.

Slim, V.

Lloyd of Hampstead, L.

Soulsby of Swaffham Prior, L.

Lloyd-George of Dwyfor, E.

Strange, B.

Lyell, L.

Strathclyde, L.

Mackay of Ardbrecknish, L.

Strathmore and Kinghorne, E.

Mackay of Clashfern, L.

[Teller]

Macleod of Borve, B.

Strathspey, L.

Malmesbury, E.

Sudeley, L.

Manton, L.

Terrington, L.

Marlesford, L.

Teviot, L.

Merrivale, L.

Thomas of Gwydir, L.

Mersey, V.

Thurlow, L.

Mills, V.

Trefgarne, L.

Milverton, L.

Trumpington, B.

Monk Bretton, L.

Ullswater, V.

Montgomery of Alamein, V.

Vaux of Harrowden, L.

Morris, L.

Vivian, L.

Mountgarret, V.

Waddington, L.

Mowbray and Stourton, L.

Wade of Chorlton, L.

Munster, E.

Westbury, L.

Nelson, E.

Wise, L.

Norfolk, D.

Resolved in the negative, and amendment disagreed to accordingly.
[Amendment No. 3 not moved.]
4.1 p.m.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 4:
Page 8, line 19, at end insert:
("( ) No order made in accordance with subsection (I) above shall be applicable to the following services—

(a) the development of corporate strategy;

(b) committee administration;

(c) services to elected members;

(d) electoral registration;

(e) financial planning and advice; or

(f) personnel recruitment other than for senior posts.").

The noble Baroness said: My Lords, the function of this amendment is to exclude from compulsory competitive tendering those services which the PA report deemed unsuitable and inappropriate. Crudely, as my noble friend Lord McIntosh said, the PA report recommends certain direct services, such as construction, as candidates for CCT, but says that most regulatory services such as planning or environmental health, are poor candidates for CCT; and that corporate services and those associated with the democratic process, should be excluded altogether. That is what this amendment seeks to secure.
The PA consultants' report looked first at the feasibility, benefits and risks attached to exposing the range of local authority professional services to CCT. When it came to feasibility the question was asked whether a core service exists that can be specified. The point raised by the noble Baroness, Lady Hamwee,
24
and my noble friend Lord McIntosh was also mentioned. The report made a critical distinction between the suitability of a function for competitive tendering and its suitability for such tendering within a compulsory framework. The test of distinction between the two was whether it was auditable. The word used is "auditability". The report says that within a compulsory framework it is critical to be able to define such activity. The PA report goes on to say that much of the professional work put out by authorities cannot be dealt with because it involves perfectly proper subjective factors which may come into play where competitive tendering is voluntary, but not where it is compulsory.
The second criterion brought into play by the PA report as to whether CCT is feasible is whether clear, client responsibilities can be established. The report says:
"Whilst some of the professional services under consideration provide a direct service to the public"
—that is to say, the ones considered appropriate for CCT—
"others are enforcing statutory requirements, and yet others provide an entirely internal service to their council's operations. In all cases it is necessary, if contracts are to be issued, to be able to identify one or more 'clients' who will have responsibility for the definition, contracting and control of the service or activities and are, or can be, organisationally distinct from potential in-house contractors".
The report goes on to argue that many of the activities currently carried out by professional departments within local government are a mixture of client and contractor. The report says that while such separation may be conceptually straightforward, it can present real practical problems when the activities come to be disentangled in practice, particularly in ensuring value for money in small authorities.
The third test as to whether CCT is feasible is whether there would be any compromise of statutory responsibilities; for example, in quasi-judicial or policing capacities. Development control work is also one such example. Fourthly, the report goes on to ask whether performance indicators can be used. It states that in many areas a professional body exists which assists in defining and underwriting professional standards, and goes on to say that the qualitative element is especially important in the managerial/ professional area: poor design and poor legal services are more dangerous and difficult to spot than poor street-sweeping.
The Report says that it would be unduly constraining to assume that only functional activities need to be monitored. Quality needs to be planned and controlled. Throughout all of these areas and these tests, the PA believes that many professional services are not appropriate candidates for CCT.
The report then looks at the benefits associated with CCT and asks whether market potential exists. It says that maximum benefit will only be obtained if there is real external competition for the tendered work. No doubt that may exist in certain areas, such as architectural design and printing; in other areas, such as committee administration, no obvious external market exists and therefore such services are poor candidates for CCT.
The report looks at the risks associated with CCT and states that many of the professional service areas under consideration are close to what has always been regarded as the corporate centre of local government, where there is often a complex web of interrelationships between the service areas and other direct service departments. The report states that many authorities would find the transition to competitive ways of operating in such professional services areas very difficult to manage, and that they would be likely to incur significant transitional costs. The risks and costs need to be assessed against the possible benefits, but it is doubted whether in these areas of service, professional benefits and other possible benefits would accrue.
In that context, using the criteria of feasibility, benefits and risk set out in the PA consultants' report, the services in that report—that is, corporate strategy, committee administration, services to elected members, electoral registration, financial planning and advice and personal recruitment other than for senior posts—are services which should be excluded from CCT.
The PA report then looks at those particular services in some detail. Under corporate strategy it states that it does not consider that the elements of corporate strategy are suitable because:
"many elements of the process are central to the corporate and democratic core of decision making;
defining the areas for competition in relation to the corporate core could not be achieved satisfactorily on a rational basis;
the introduction of clear performance indicators and standards would be very difficult and the competitive selection process accordingly difficult to audit".
The report adds that many trends in local government, such as the local management of schools, increasing customer expectations and budget restrictions, will have the same effect of heightening cost consciousness within local government without forcing it to go out to CCT, which will cause maximum disruption. As my noble friend Lord McIntosh said, the report also shows concern that applying CCT to the areas of corporate strategy would result in a real danger of constraining innovation and reversing highly desirable trends in devolution and decentralisation. It would also undermine the corporate networking that these services require.
In other words, by implication the report says—as we ourselves argued at the Report and Committee stages—that CCT is rigid, centralist, anti-corporate and undermines the democratic process within local government. The report emphasises that in these services there are no real external markets and that they generate real problems of probity.
When the PA report moves from corporate strategy to committee administration, it again makes the point that we tried to argue at Report stage; namely, that the democratic control of local authorities is currently exercised primarily through the committee system. Because the core service is problematic the committee service is seen as supporting members rather than chief officers. That is a key obstacle to the matter going out to CCT. Even if that problem were overcome, the PA report states that the benefits to be
26
obtained are unclear since there is no current market or knowledge of the nature of the client. The response and the role of the authority would be severely constrained.
Similarly, when the PA report considers the third of the services which should be exempt from CCT—member services—the same point is made. That service too is very close to the democratic core of local government and presents problems for the clarity of democratic accountability if undertaken by an external contractor. Accordingly, the PA report considers that member services are not a good candidate for compulsory competition. Likewise, when the report considers electoral registration, its feasibility is questioned because electoral registration is at the core of the democratic process and its potential privatisation could be extremely sensitive. It argues that this, too, is not a good candidate for CCT.
Similarly, when we come to financial planning and advice, with the setting of targets for the establishment of appropriate performance indicators, in the judgment of the PA report this, too, is not a good candidate for CCT.
A more fundamental anxiety was the possible compromise of statutory responsibilities as is also the case in legal services. The requirements under Sections 151, 113 and 114 of the 1988 Act, responsibilities of the city treasurers and chief executive officers, causes this uneasiness. The report goes on to suggest that even where it has been tried, the costs have increased by an order of magnitude, as in South Oxfordshire. Though it is clear that the P.A. report doubts it, we very much hope that the benefits will outweigh the risks and the problems. It is without doubt that the PA Consulting Group report suggests that this is inappropriate.
Therefore, all the services that we have identified in the amendment are precisely those which the PA report has argued line by line are not good candidates, and are unsuitable and inappropriate for compulsory competitive tendering as measured by the tests of feasibility of benefits and of risks. The report's argument is heightened in that it draws attention to the fact that these services, which are at the democratic core of local government operations, are precisely those services most vulnerable when local government moves into a period of major change associated with the Bill introducing the council tax.
It would clearly be absurd to ask for financial services to go out to CCT at a time when we are trying to hand over from the poll tax to the council tax; at a time when we are talking about the management of schools and about the introduction of community care and internal markets and social services; at a time when there are substantial changes in housing management; at a time when such services are increasingly being affected by changes in EC directives; and at a time, above all, when local government faces major upheaval in its management and structure. For all these reasons, the PA report—on which the Government were alleged to have drawn for their consultative document—recommended that these services in this amendment should not be put out to CCT.
We on these Benches attempted to argue this fully at Report stage. We little thought then that the PA report which the Government had commissioned should so fully endorse so many of our arguments. Now that we know what those arguments are in the PA report, and now that we see how fully they support the arguments we made at Report stage, we wish to move this amendment. I beg to move.
Lord Wade of Chorlton: My Lords, I understand that what the noble Baroness, Lady Hollis, enumerates can be considered to be different aspects from the more traditional services. My belief is that this is the one area that can have the greatest impact on the changes that are necessary within local government. They are the very services that will make people think afresh about how things should be done; the very ones that will bring in new ideas and innovations and enthusiasm into what is necessary to make changes. I resist very much the idea that this amendment should be agreed to because I believe that if we can move forward in the way that the Bill now suggests, we can make one of the greatest changes for the benefit of the customer that the Bill presents to us. I hope that the Government will not give way on this issue.
4.15 p.m.
Baroness Blatch: My Lords, the noble Lords opposite, and indeed the noble Baroness, Lady Hollis, in particular, regard the activities listed in the amendment as being particularly sensitive and not well suited to a direct requirement for CCT. They clearly also misunderstand Clause 8 as it now stands, despite having been very strong supporters of the amendment, for it is applicable only on a common basis to any defined activity. This amendment, which picks out particular activities, therefore is gobbledegook.
Furthermore, if the noble Baroness, Lady Hollis, and her colleagues had spent as much time and energy reading our proposals as they spent reading other documents, they would see that we broadly agree on the sensitivity of those areas. All the areas named by the noble Baroness, Lady Hollis, are properly addressed in our consultative document; and indeed the sensitivity of those areas has been very readily addressed.
Perhaps I may single out particularly the administrative and corporate services. The noble Baroness will notice the figure mentioned in our document is 15 per cent. On the preparation of—
Baroness Hollis of Heigham: My Lords, I thank the Minster for giving way. In that case, does it mean that the Minister is happy to accept our amendment?
Baroness Blatch: No, my Lords. I am saying that the amendment is entirely defective. As the Bill now stands, it is not possible to take out and to single out particular activities for different treatment. The noble Baroness was a main supporter of the amendment that brought that about.
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On the preparation of corporate strategies, committee administration and electoral registration, the consultation paper says:
"The closeness of these areas … to the democratic process and to the corporate core of an authority could … raise problems if they were substantially contracted out."
That can be found on page 27 at paragraph 2.5.5. On financial planning and advice, the paper notes that although it would be possible to draw up specifications for aspects of the work, at the same time it is recognised that:
"The location of this work at or near the corporate core of authorities … could make it necessary to limit the extent of this work offered for competition, and that such a limitation would in turn reduce the benefits likely to be derived."
That is from page 29, paragraph 2.5.14.
It is precisely because we are aware of the sensitivities surrounding these services that we have put forward in the consultation paper a flexible approach to CCT for corporate services. It is described by the consultation paper at page 31, paragraphs 2.5.27 to 2.5.36. In essence, we propose that following further legislation to require local authorities to set up internal trading accounts, either local authorities would be required to expose a limited number of appropriate specified elements of corporate services to competition or—and this is our preferred approach—we would require local authorities to tender at least a given proportion of each broad service category. Local authorities would be given a large measure of flexibility to choose which of their services they wished to put out to tender, and for which it would be more appropriate. We would expect authorities to be able to fulfil the proportion specified without prejudicing their statutory or democratic duties. In the light of what I have said, I hope the noble Baroness will feel that it is appropriate to withdraw the amendment.
Baroness Hollis of Heigham: My Lords, perhaps I may first comment on the contribution of the noble Lord, Lord Wade. I am sorry that we are so far apart on the significance of corporate activities and why they are so vulnerable should CCT be applied to them. That would turn the clock back more than 20 years. It would turn the clock back before Bains, when Bains taught local government not to think departmentally but corporately. It would turn it back over the past 10 years during which local government has been trying to devolve, decentralise and flatten the management pattern and tiers by out-posting professional services into service departments. If the remarks of the noble Lord, Lord Wade, were valid, then all the very healthy developments of local government which emulate best practice in business would now be reversed.
However, I was happy to see that the Minister did not agree with the remarks made by the noble Lord, Lord Wade, because the Minister's argument—
Baroness Blatch: My Lords, I take some objection to the way in which the noble Baroness, Lady Hollis, is interpreting my views of what my noble friend said. I did not specifically refer to my noble friend. But I have to say to him that I agree with him. We have said two things in our consultation document: one is that we have agreed with the noble Baroness and her

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colleagues opposite that there is a sensitivity about these services. But where that sensitivity does not exist, and where local authorities deem it appropriate, we believe that there will be opportunities to contract out, and we believe that that would be the right and proper thing to do.
Baroness Hollis of Heigham: My Lords, I was going to make a further two points, and I shall go back to the contribution made by the Minister. The Minister said that she shared the views of the noble Lord, Lord Wade; but her arguments in responding to this amendment suggested that the amendment on our side was largely unnecessary because the consultative document Competing for Quality embodied the very reservations made by the PA report.
Baroness Blatch: My Lords, with the leave of the House, I am not sure that I should say this at Third Reading, and think we are probably both breaking the rules. I have said to the noble Baroness that contracting-out will be a percentage. It will be for local authorities to determine that percentage and to decide how and which parts of those services it would be appropriate to contract out. The noble Baroness constantly puts words into my mouth. I hope that she will read what I have said. The amendment makes no sense in regard to the position she supported on Clause 8. The amendment is gobbledegook.
Baroness Hollis of Heigham: My Lords, the Minister established two points. She said that defined activities under the 1988 Act do not incorporate such activities and that therefore, in her phrase, the amendment is gobbledegook. Is the Minister saying that the situation will stay that way? In other words, as the Bill winds its way through Parliament, can we expect that the amendment will not be necessary by virtue of the defined activities under the 1988 Act?
The Minister also made much of the fact that the consultative document Competing for Quality embodies the reservations of the PA report. She said that the report states that these services are sensitive and so on. In that case, I repeat the question. Will the Minister give an assurance that the services which the PA report states are poor candidates for compulsory competitive tendering will be exempt from compulsion? Where a local authority believes that a particular aspect of a service should go out to tender, that is surely reasonable. However, the PA report unambiguously states that such services as I have cited are not suitable candidates for CCT. If the Minister is correct in saying that those reservations are picked up in Competing for Quality she should have no difficulty in accepting the spirit, if not the words, of the amendment.
Baroness Blatch: My Lords, perhaps I may respond to those two points. The document that I wish to be discussed here and now is the one that is in the public domain. I refer to the Government's consultative document. That is the document I stand by. It is the Government's view, having taken much advice into account, that there is some scope for percentages of those services to be contracted out. That is up for
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consultation, and only when that consultation period is at an end will the Government determine a way forward.
The noble Baroness asked whether the amendment to Clause 8 will be addressed. I can promise her that it will be addressed in another place. Only when it is addressed will these amendments make sense in the way in which the noble Baroness has put them forward.
Baroness Hollis of Heigham: My Lords, I thank the Minister for that response. She said that she stands by the consultative document because it embodies advice over and beyond what is in the PA report.
Perhaps I may refer to the comments made originally by my noble friend Lord McIntosh and the noble Baroness, Lady Hamwee. The Government failed to publish the PA report. When they produced the consultative document it did not fully embody the reservations of the PA report. Now that they have published that document we are being asked to consider legislation before the comments on that consultative document can be taken into account. We have not had time to receive them. I include the housing management report. On that basis we continue to press the Minister to see whether, following the guidance that is available—the only guidance we have—she will follow the recommendations of her own consultants. It is clear that this matter will have to be pursued in another place at another time and possibly when amendments made there come back to your Lordships' House. In that context, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 5:
Page 8, line 19, at end insert:
("( ) No order shall be made in respect of any individual service in accordance with subsection (1) above unless the Secretary of State is satisfied that the quality of provision in respect of that service made by local authorities will not deteriorate as a result of the effects of the order.").
The noble Lord said: My Lords, I was interested to hear the Minister say in response to the previous amendments that we should not be moving amendments to strengthen the position of rational control of competitive tendering because of the amendment that was passed in Committee. I have paid attention to the several ministerial press conferences that have taken place since that time. It was made clear, as the Minister has again made clear today, that the Government intend to overturn the amendment which we carried in Committee on 2nd December. We have always understood that to be the case and we have accepted that the Government have the right to attempt to do that. Under those circumstances we take the view that a series of probing amendments about the Government's intentions, which is what Amendments Nos. 4 to 9 are, is entirely appropriate. We are seeking to get the Government to be more precise than they have been so far about the way in which they see competitive tendering. I make no apology for continuing to put down amendments on the basis that the Government are not satisfied with their own legislation as amended and will be seeking to

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change it. There are particularly good reasons why Amendment No. 5 should be adopted even with subsection (1) of Clause 8 as drafted. After all, all we did was to take out some superfluous wording from subsection (1). We did not add very much new wording.
The point which concerns us is the quality threshold. The PA Consulting Group asserts on page 32 of its report that the clear thrust of current CCT legislation is to obtain competitive bids and be able to judge clearly competence to undertake work at the price specified. The competition of those clearly able to undertake the work specified is then primarily on the basis of cost. The report goes on to state that quality is not one of the criteria which could, within the professional services area, form an explicit part of the evaluation of tenders under current statutory requirements. That is exactly what we have sought to change by the amendment that was agreed in Committee and that is exactly what the Government now propose to take out. It is not a question of flexibility at all. It is a question of whether the Government understand the concept of quality in local authority services and whether they are determined to uphold the principles of quality.
As the matter stands there is a strong suspicion that the Government want to take minimum tests of basic competence—with no reference to real quality—and, having established those, go on to demand that local authorities should accept the lowest tender. All kinds of people can establish basic competence. On page 115 of the report the consultants spell out what the quality threshold of basic competence might be. They refer to specified levels of professional qualifications and the qualification mix of staff, a track record of relevant experience either by the firm or by the people concerned, a requirement to respond to requests for service within a defined timescale and evidence of quality assurance systems under BS5750 or IS09000 registration or equivalent.
All tendering bodies, whether public or private, will have a long list of procedures covering matters of that kind. No one will be allowed even to submit a tender unless he meets those measures of basic competence. But the issue of quality is on top of that. It is quality valued against price which is the true criterion—what the French call rapport qualité/prix. That is what is ruled out by the Government's legislative proposals. Indeed, the PA Consulting Group confirms that in its report. It is therefore especially important that we should insist, as we do in the amendment, that quality should be a prime consideration in the evaluation of tenders. I beg to move.
Lord Howie of Troon: My Lords, I shall be brief. The House knows that I am concerned about this part of the Bill. I am heartened by the fact that my noble friend Lord McIntosh has put down this amendment. I was greatly interested in what he had to say, especially about quality assurance. I mentioned quality assurance at Report stage. I did so only in passing, in reply to an intervention by the noble
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Baroness, Lady Carnegy of Lour. I mentioned it only briefly and it possibly passed unnoticed. However, quality assurance is important in this part of the Bill.
I have been looking at a report entitled Inspection and Other Strategies for Assuring Quality in Government Construction—and we could extend "Government" here to cover local government, and so on. It is published by the Building Research Board of the National Research Council in the United States, and has just been published. It is important to ensure that we recognise and obtain quality in two respects. I believe that my noble friend underlined both of them.
The first area of quality assurance—and the most important in the long-term—is quality in the construction itself so that the whole life cost of the construction, whether it is a building or a structure of some kind, is economical, effective and efficient. I am sure that those are all aims of which the Government would approve. But that is only one element. As I tried to show during the earlier stages of the Bill, there are occasions where fee competition has led to bad construction and to fee bids which would not ensure good design and construction. The Government have not replied to any of my specific points but I daresay that they will do so in due course.
The second area of quality assurance is where the bidders have passed through some sieve where they have received, so to speak, a "consultancy kite mark"; in other words, they have achieved a mark of competence which indicates that they will and can be expected to provide good design and hence lasting work. If fee competition goes ahead—and it looks as though the Government are determined that it should—it is absolutely essential that those who are invited to tender should themselves be quality assured. I believe that my noble friend made that point. I strongly support him.
In my view, the Government have not approached the matter in the right way. I certainly hope that the consultations that the Government are having with the professional bodies of the construction industry will make some sense of the Government's aim. I support the amendment. I hope that the House will do likewise.
4.30 p.m.
Baroness Blatch: My Lords, we have heard the noble Lord, Lord McIntosh, and indeed his noble friend, speaking as though the Labour Party was the sole defender of the concept of quality and provision of local services.
Lord Howie of Troon: My Lords, I must interrupt the noble Baroness to point out that I am not speaking now as a member of the Labour Party; I am speaking for myself.
Baroness Blatch: My Lords, I apologise most profusely to the noble Lord. However, my comments are very relevant to the noble Lord, Lord McIntosh.
Your Lordships will recall that the Labour Party has described its proposals for local government as "Quality Street". But, tell that to Camden, to Lambeth, to Southwark, to Liverpool, and indeed to

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the once Labour-controlled Brent council whose legacy to the newly Conservative-controlled Brent is a history of administrative chaos.
With compulsory competitive tendering, we in Government are looking not for something fanciful, but at practical experience gained as a result of implementation of the requirements of the Local Government, Planning and Land Act 1980 and the Local Government Act 1988. Before CCT was introduced, many local authorities were doing a good job in carrying out building work, refuse collection or grounds maintenance. But let us be under no illusions. Some local authorities believed that they were producing effective and efficient local services at an economic cost, only to find when they were market tested that that was not always the case. There were also too many authorities which were not doing such a good job and for which the need to ensure that local communities enjoyed the right standard of service provision was the last consideration, not the first.
CCT has certainly led to cost savings in carrying out this work. At the same time, however, it has significantly improved the management of the services concerned through the discipline of the detailed specification which all local authorities have to prepare as the basis for their tendering exercises. That specification provides local authorities with the opportunity to set the standard of provision at the level which seems right to them, in the interests of their communities, and to insist that they obtain the quality of service which the specification requires. Competition, properly carried out, means that they will get that quality of service at the best price that the market can offer. Good management and effective competition have come together so that the services subject to CCT are now being performed more efficiently than before and generally to the same standards or higher. CCT has given local authorities the opportunity to do something positive about quality in service provision. They have generally made the best of that opportunity.
We believe that the benefits that competition has brought to the services currently subject to CCT should also be applied to other activities, notably professional services. Of course we intend and expect to safeguard and improve quality in these new services. But we recognise that the assessment of quality for professional services is more complicated than the assessment for manual services, and may need to be handled differently. In our consultation paper we expressed our willingness to consider the need to modify existing CCT procedures to meet quality concerns for professional services. We see a need for the Secretary of State to have flexibility in the application of the CCT requirements of Part I of the Local Government Act 1988 to such services.
Clause 8 as amended in Committee has removed the flexibility that was provided in the clause as introduced. I have already made it clear that we intend to address this lack of flexibility before the Bill completes its passage through Parliament. I must re-emphasise, however, that the Government see CCT, in its existing application to manual services and in its proposed application to professional activities,
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as supportive of quality and that we intend to take the Bill forward, and to use the powers under it that Parliament may approve, in a way which will mean that the quality of service provision is properly safeguarded. I know that that is a point which the noble Lord, Lord Howie of Troon, has made on a number of occasions. I believe, just as strongly as he does, that quality has to be a material consideration at all times for competitive tendering. Therefore, I believe that the amendment is unnecessary. I hope that it will be withdrawn.
Lord Howie of Troon: My Lords, before the noble Baroness sits down, perhaps she would care to comment on the specific matters which I have raised from time to time during the passage of the Bill; namely, that a building might collapse and, on another occasion, I pointed out that certain fees were clearly not high enough to provide quality work. I do not necessarily ask her to do so now, but perhaps she would care to write to me on the matter.
Baroness Blatch: My Lords, there is nothing like the present time for answering such a question. I cited my own "home" building of Marsham Street as being an example of a building which could be built or designed in-house. However, it is not the best example. The important point which the noble Lord, Lord Howie of Troon, is making each time he speaks—and which I support—is that quality, whether it concerns an in-house workforce or a private company, must be a material consideration. The other point that I have always made when speaking from the Dispatch Box is that quality as regards some services is a more straightforward matter and can be dealt with in specification. Quality as regards professional services, as indeed the noble Lord has often said, is not that straightforward. We believe that it requires a different method of determination.
Lord McIntosh of Haringey: My Lords, that was a tired old brief. The Minister believes that if she quotes Camden and I reply Elmbridge, if she quotes Lambeth and I reply West Wiltshire, if she quotes Brent under Labour control and I quote Brent under Conservative control or even Westminster and its cemeteries, we shall have advanced the argument in some way. I do not think that we have made any advance.
In my view, neither the Minister nor the Government really want to address the issue of quality in an objective way. We shall see the proof of that when they seek to overturn our amendments in another place. We have been making the point, and we have not been doing so in an especially sanctimonious way, that quality is a consideration which has been given inadequate attention in the consultants' report, in the consultation document where really the main emphasis on quality is in the title rather than in the text, and particularly in the legislation. Until we amended it, the legislation had no adequate safeguards for quality other than for architectural and engineering services. We have made the point, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No.6:
Page 8, line 19, at end insert:
("( ) No order shall be made in accordance with subsection (1) above unless the Secretary of State is satisfied that the unit cost of any service to which the order will apply is not greater among providers of the service other than local authorities, than the unit cost measured in respect of equivalent provision by those authorities.").
The noble Lord said: My Lords, in moving this amendment, I wish also to speak to Amendment No. 7. We return here to a matter which causes the consultants considerable anguish of mind, as I read between the lines of the PA report. They point out on a number of occasions the difficulty of going for the lowest tender almost at all costs. They point out first that there are a number of occasions on which the total costs of carrying out the service under compulsory competitive tendering would be higher if it were privatised, even though the tender from the privatised contractors would in theory be lower than an internal tender.
The consultants also point out that there should be a de minimis rule which ensures that any financial benefits from compulsory competitive tendering should not be outweighed by the process costs, the costs of organising and controlling the outside tender.
These are consistent points made many times in the consultants' report and yet they find no reflection in the legislation and no adequate reflection in the Government's thinking. But the Government's thinking merely applies to local authorities. They do not apply it to the work of individual government departments. I have before me a tender letter from another government department, not this one—I shall not name it because we got the job—but after we had already been accepted on to a long list of contractors whose basic competence and suitability had been vetted and found adequate, we then received a letter from this department saying:
"The Department does not undertake to accept the lower or any tender and reserves the right to accept the whole or any part of any tender".
If local authorities were allowed to say what government departments are allowed to say, we might not be in the position in which we find ourselves.
To protect the interests of the poll tax payers and local authorities by ensuring that all the costs are taken into consideration, including the costs of controlling the tender, seems to us the minimum common sense. I beg to move.
Baroness Blatch: My Lords, clearly my right honourable friend would not bring forward proposals to extend CCT to new services unless he believed that greater efficiency would result. But it is self-evidently impossible for the Secretary of State to point to cost savings or quality improvements from CCT for a given service until CCT has applied to that service and widescale market testing has occurred. The only way to find out whether his view that efficiency savings will be made is correct is through giving the market a chance.
No doubt the likelihood of efficiency improvements will be one of the issues addressed in responses to the consultation paper Competing for Quality, and we
36
shall consider those responses carefully. But to fall back on the Opposition's view that because something has not yet happened, it cannot happen even if the right framework is put in place is a counsel of despair.
It takes time for markets to adapt to the knowledge that new opportunities exist, and for potential suppliers to gear themselves up. We should certainly wish the timetable for new activities to allow for that and we look forward to receiving comments on the timetable proposed in the consultation paper. It is quite clear that CCT has produced important savings in the cost of work exposed to competition so far. Research carried out by the Institute of Government Studies has demonstrated that on average the annual cost of contracts subject to CCT has been reduced by 6 per cent. after competition, a saving which is enjoyed year on year as the contracts progress.
As for administrative costs, the same research has shown that there have been costs incurred by authorities in preparing for CCT and that these have on average amounted to 11 per cent., but on a once-and-for-all basis at the start of the contracts.
CCT has meant that local authorities are getting work done to the same standard or even higher than before and at a lower cost. It is also clear, however, that the considerable financial benefits that have resulted have not been the only positive results of CCT. Local authorities have had to get a grip on the management of services both in order to prepare the specification for the CCT exercises and to monitor the subsequent performance of the work by the successful contractor, whether that is the direct service organisation or a private contractor. On both counts, cost and quality, local communities are generally getting a better deal as a result of CCT. We believe that the same will be true when we extend the discipline of CCT to other services, including those in the professional sphere.
It is ridiculous to suggest that local authorities can reasonably consider whether or not work being done in-house is giving them the best value for money. Those who assert that external provision is more expensive, without testing the market, are like medieval monks who never set foot outside their monasteries and yet were convinced that the world was flat.
Your Lordships will recall that our proposals to introduce and extend the CCT which were embodied in the 1980 and the 1988 Acts were initially greeted with similar claims. Experience has shown how ill-founded they were. I repeat that the benefits of CCT are not only those of financial savings. The pressure to review how a service is being provided and to check on whether the standard of provision is right is no less conducive to securing a good deal for local communities.
Of course, many local authorities do their best to manage their professional services properly, but CCT brings the pressure for good management to bear universally. Our proposals for corporate professional services acknowledge that not all elements of those services can or should be exposed to competition and allow flexibility of approach which will underpin the discipline of competition with that of rigorous

37
accounting. We did precisely that in response to advice that was received. I hope that the noble Lord will feel that these amendments are unnecessary and will withdraw them.
4.45 p.m.
Lord McIntosh of Haringey: My Lords, I like that brief much better, particularly the reference to the flat earth. I did not think it was those in monasteries who were particularly insistent that the earth was flat. I thought that any of us outside could see that the earth was flat. There is no doubt about it, is there? I am amazed that the Minister should question it.
That was a much more interesting brief. The only trouble is that it bore no relation either to the experience of compulsory competitive tendering under the 1988 Act or to the amendment. With the 1988 Act, the Minister gives figures—and there are plenty of figures around—for the savings which it is claimed came from compulsory competitive tendering. She does not say that the vast majority of compulsory competitive tendering processes resulted in the tender going to the internal contractor. Therefore, the savings—if they really exist—would have occurred anyway as local authorities have been under financial pressure and are gradually re-examining the cost and value of their services.
That does not relate to the amendment which refers to two specific requirements which we think should apply to compulsory competitive tendering. One is that the unit cost of services should not be greater than the unit cost of equivalent provision by the authorities. That seems to me to be the minimum common sense. Secondly, the cost of the savings should not be outweighed by the cost of undertaking tendering in respect of those services. Again, that seems to be minimum common sense.
Now we have assurances from the Minister that such considerations will be taken into account by the Secretary of State. We have received many of these assurances on many occasions. We had them when we were dealing with the 1988 Act. Unfortunately assurances do not make legislation. Until those assurances are put into statute, or at least required to be made in regulations by statute, they are not adequate and the Bill is still inadequate in that respect. I have made my point and there is no reason to delay the House any further. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 7 not moved.]
Lord McIntosh of Haringeymoved Amendment No. 8:
Page 8, line 19, at end insert:
("( ) No order shall be made in accordance with subsection (1) above in respect of the corporate services of local authorities before the Secretary of State has laid before Parliament a statement that he is satisfied that the introduction of compulsory competitive tendering in respect of any such service will not constrain—

(a) voluntary decentralisation of such services by local authorities;

(b) innovations undertaken voluntarily by local authorities in the organisation of such services.").

The noble Lord said: My Lords, I believe that on this amendment the Minister may be able to answer in a friendlier fashion even if she argues again that the amendment is not necessary because of the amendments that have already been made to Clause 8(1). As someone who is experienced in local government, I am sure the Minister is even more aware than I that substantial changes have been made in local government as regards the voluntary decentralisation of services, innovations in service delivery and changes in management structures, in trying to emerge from the rigidity which has all too often been a feature of local authority administration and service management.
The PA Consulting Group points out in its report that there is a risk that the compulsory competitive tendering process may obstruct those reforms which a local authority may wish to make, partly because of the sheer amount of time taken for senior officers of local authorities to prepare tender documents and partly because to prepare a tender document one almost inevitably freezes at that time the way in which a service will be delivered. Even if the Minister will not accept the amendment, I hope she will accept that I am discussing a real concern which her right honourable friend should take seriously when he is considering the regulations. I beg to move.
Baroness Blatch: My Lords, the noble Lord claims to have read the PA report and I make no comment on that. However, it is disappointing that he has paid so little attention to the consultative document. Paragraph 2.5.32 of that document states:
"the Government recognises that local authorities vary widely in their organisation of professional services, and that, unless the competition requirement was very limited, the specification of individual elements of these services for competition could cut across innovative organisation, such as dispersing financial or personnel work from the centre. It will be important to bear in mind the development of local management of schools (LMS) and the need for arrangements for compulsory competitive tendering for corporate services which complement the incentives to achieve service efficiency provided by the operation of LMS. An alternative approach [to requiring CCT for specified elements of corporate services] would be to require that a percentage of the total annual value of work carried out by a discrete professional service should be exposed to competition. This would allow local authorities considerable flexibility in deciding how to implement a requirement to go out to competition".
In the consultation paper we have made it quite clear that we favour this approach in order to give local authorities the flexibility spoken of. Respondents to our consultation document may press for a different approach and offer good reasons for doing so. I have no intention of pre-empting the consultation process and our consideration of responses by committing the Government firmly to one approach.
It seems to me, however, that the presentation of our proposals in the consultation paper shows that we are fully aware of the interesting and valuable organisational developments that have been introduced by a number of local authorities. These are matters that will be in the forefront of our minds as we take our proposals forward. I would hope, therefore, that the noble Lord, Lord McIntosh, will not feel it necessary to press the amendment.
Lord McIntosh of Haringey: My Lords, I have read the consultative document and I recognise the wisdom of some of its suggestions. I am neither saying that the consultation document is all defective nor that the consultants' report is all defective. Unfortunately we are considering neither the consultants' report nor the consultation document. We are considering the Bill. The Bill gives the Secretary of State powers to do what he likes in introducing compulsory competitive tendering. If we are to be persuaded on this matter—I do not think we shall ever be persuaded to allow this enabling legislation through—we seek some better indication of the Government's thinking than a consultative document which the Minister does not feel able to state represents the Government's view. I understand her reluctance to do so as consultative documents are designed to take the views of other people and then the Minister makes up his or her mind.
Unfortunately in this case the consultative document is issued at the same time as the legislation and Parliament is asked to make a decision on it before the consultation procedure is complete. Under those circumstances I must make it clear that it is the Bill we are unhappy with and not, in this respect, the consultative document. However, I see no point in prolonging this discussion. Our point has been adequately made. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 9 not moved.]
Clause 9 [Power to define conduct as competitive or anti-competitive]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 10:
Page 9, line 41, leave out paragraph (f).
The noble Lord said: My Lords, I understand that Amendment No. 10 is grouped with Amendment No. 11 standing in the name of the noble Lord, Lord Airedale. I am glad to see that the noble Lord is present in the Chamber. I am sorry if I caused him some alarm by not moving Amendment No. 9.
On this amendment we return to the question of the meaning of words. The noble Lord, Lord Airedale, and I consider we have received a thoroughly unsatisfactory answer from the Government on that matter. Despite a number of well meaning attempts at clarification, we still did not receive any reply to our fundamental proposition. That proposition was that guidance is issued and those to whom it is issued have a duty to have regard to guidance, whereas orders or instructions are issued and those orders have to be adhered to or obeyed. If that is not done, they would be contravened.
The Bill refers to a contravention of guidance. We suggest that is a misuse of the English language and a debasement of it because it makes guidance appear to be more authoritarian—if not more authoritative—than it is intended to be. It would be dangerous if the idea got around that guidance—guidance is a valuable procedure in the relations between central and local government—had to be adhered to and the alternative to adhering to it was to contravene it.
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There has to be something between an order or an instruction and something which is intended to be helpful. The idea of guidance that one must have regard to is a useful halfway house. It would be a shame to see it destroyed by this misuse of language as it exists in paragraph (f) of Clause 9(3). I have taken the wholehearted approach of seeking to remove the entire paragraph. The noble Lord, Lord Airedale, has sought to amend the detailed wording. However, I believe we are both trying to do the same thing. I beg to move.
Lord Airedale: My Lords, I am pleased to support this amendment with which my Amendment No. 11 is linked. On Report, I accused the Government of acting furtively in this matter. The Minister quite rightly took me up on that. I wish to withdraw the word "furtive". However, the effect of Amendment No. 10 cannot be more clearly stated than by the words used by the noble and learned Lord, Lord Simon of Glaisdale, in Committee. I hope I may be forgiven for repeating once more the words of the noble and learned Lord.
The noble and learned Lord said:
"Parliamentary democracy, like any human institution, is not perfect. But it is well tried. There is no reason why we should give up all the safeguards and all the value that it has shown over the centuries and submit to government by future letters of guidance. At this stage we do not know what the guidance will be; it is insufficiently defined. I therefore suggest to the noble Baroness, who has thus far conducted the Bill to general admiration, that she consider how far we are travelling down the road of bureaucratic rather than democratic government".—[Official Report, 3/12/91; col. 136.]
I turn to the words "contravention of guidance", which my amendment seeks to delete. If English is fast becoming the language of the world we owe a duty to see that our language is used properly. One of the bastions of correct use of the English language must be the statute book. The parliamentary draftsman is the guardian of the statute book. It does not behove governments to bully the draftsman into straining the English language in order that the Executive may seize further power at the expense of Parliament. The words "contravention of guidance" simply will not do. Failure to observe guidance is one thing; "contravention of guidance" is virtually meaningless.
5 p.m.
The Deputy Speaker (The Earl of Listowel): My Lords, if Amendment No. 10 is agreed to I cannot call Amendment No. 11.
Lord Monson: My Lords, I should like to support Amendment No. 11 in the name of the noble Lord, Lord Airedale. As always, the noble Lord is zealous in his concern for the protection of the English language. Rather sadly the Government, once again, are less zealous in their concern for the language. Your Lordships may recall the rather curious phrase which arose some months ago relating to a voluntary ban on the promotion of tourism to South Africa. A ban is by definition compulsory or it is nothing. One cannot have a voluntary ban; there can be a voluntary boycott or there can be discouragement. The wording

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in question falls within that category. Of the two amendments I prefer that of the noble Lord, Lord Airedale.
Lord Howie of Troon: My Lords, I have little to say on the subject except to recall that a number of years ago I visited an emerging country in Africa where I was introduced to a man who was the minister of education and guidance. He was the chief of police. I do not suggest that the Minister is anything like a chief of police, but that example indicates that the word "guidance" has a number of meanings. I should like to guide the Minister towards the comments made by my noble friend and by the noble Lord, Lord Airedale, and attempt to protect the English language, which is sorely in need of protection.
Baroness Blatch: My Lords, I trust that your Lordships are content that we should consider the amendment moved by the noble Lord, Lord McIntosh. He moved an amendment at Committee stage which sought to delete Clause 9(3) (f), as does Amendment No. 10, and Clause 9(3) (e). We debated that amendment and the noble Lord, Lord McIntosh, pressed matters to a Division in which the amendment was clearly rejected. Nonetheless, with the indulgence of the House I am happy to respond to the arguments which have been put to your Lordships for a second time today.
Lord McIntosh of Haringey: My Lords, will the Minister allow me to intervene? She has quite rightly corrected me regarding a breach of the rules of order in having put forward an amendment which is virtually identical to one which had been defeated. That was a mistake on our part for which I apologise. I shall be happy to withdraw my amendment in favour of that of the noble Lord, Lord Airedale. I hope that that helps the Minister when she replies.
Baroness Blatch: My Lords, I am grateful to the noble Lord for that intervention. Perhaps I may turn to the amendment in the name of the noble Lord, Lord Airedale. While the noble Lord did not formally move the amendment which he tabled at Report stage he nevertheless expressed his anxieties during the course of our debate. I listened carefully to his points and offered a response.
As I did on that occasion, I should like to draw your Lordships' attention to the provisions of subsections (3) (e) and (3) (f) of Clause 9. They make it clear that the regulations which the Secretary of State would be empowered to make under Clause 9 would provide for guidance to be issued and would require any contravention of that guidance to be taken into account in determining whether an authority had acted anti-competitively. That would mean that the guidance in question would be clearly underpinned in regulations and would be as objective as possible.
It would be reasonable and appropriate to expect local authorities generally to act in accordance with that guidance and for the Secretary of State to consider the extent to which they had acted in accordance with or had contravened that guidance if and when he had to take a view on whether or not they had acted anti-competitively, as he must when
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considering the possibility of the use of his sanction powers under the Local Government, Planning and Land Act 1980 and the Local Government Act 1988. It would also mean that there would be a test for the courts to apply if they were required to decide whether or not an authority had acted anti-competitively.
There has been considerable debate about the status of guidance. It is important that there should be clarification for all concerned, not just as to how local authorities should behave when implementing the measures but also as to how the Secretary of State should exercise his powers under the Act. Guidance, particularly in this specific sense, prescribes specifically the grounds for the Secretary of State to make a judgment as to whether or not a local authority has complied with the guidance. It improves certainty. It is for that reason that the word appears on the face of the Bill.
I hope that noble Lords will recognise that I have made those points previously, but they are the nub of the case for the provisions which have been brought forward in order to give a clear and objective basis for that guidance. I hope therefore that the noble Lord, Lord McIntosh—who I believe supports the noble Lord, Lord Airedale, in this matter—and other noble Lords who have spoken will see fit to withdraw the amendment.
Lord McIntosh of Haringey: My Lords, I must repeat my apologies for an inadvertent breach of the rules governing amendments which can be put down at Third Reading. As the Minister said, I support the amendment of the noble Lord, Lord Airedale, which was not put to a Division at an earlier stage.
With respect, I do not believe that the Minister has answered the point that was made. The noble Lord, Lord Airedale, would be fully justified in moving his amendment and pursuing it to a vote if he wanted to do so. I am sure that he will feel that attention will be paid to the case that he has made and that Ministers will see that this use of the word "contravention" in relation to guidance is entirely inappropriate. I beg leave to withdraw Amendment No. 10.
Amendment, by leave, withdrawn.
Lord Airedale Lord Airedale moved Amendment No. 11:
Page 9, line 41, leave out ("contravention of") and insert ("failure to have regard to").
The noble Lord said: My Lords, in moving Amendment No. 11 I am replying to what the Minister said just now in relation to that amendment. I should feel more comfortable about the matter if the noble Baroness had found a precedent for it. I expect that great searches of the statute book have been made to see whether there is any precedent for the extraordinary expression, "contravention of guidance". I do not think that the noble Baroness has found a precedent. She may say that she is not setting a precedent, but how does she know? In a few years' time, if it suits the government of the day to use those words as a precedent, you can bet your boots that they will do so. I listened very carefully to the speech of the noble Baroness. Every time she came to the word "contravention" it would have made just as good sense if she had used the word "disregard".
I do not think that it is right that the use of the English language should be strained in that way, the effect of which is, as I said earlier, to give power to the Executive at the expense of Parliament and to take control away from Parliament. We should test the opinion of the House on this matter. I beg to move.
Baroness Blatch: My Lords, before the noble Lord presses the amendment—
Lord McIntosh of Haringey: My Lords, the Minister is entitled to reply to the amendment which has been freshly moved.
Baroness Blatch: My Lords, I am grateful to the noble Lord. I do not wish to dissuade the noble Lord, Lord Airedale, from his intention, but perhaps I may make two points.
First, the effect of the clause as now drafted is not to oblige local authorities always to comply with guidance issued by the Secretary of State. Subsection 3(f) provides that the extent to which guidance has been contravened should be taken into account in any determination of anti-competitive behaviour. In other words, a contravention of guidance will not automatically lead to a determination that an authority has acted anti-competitively.
I understand the point being made by the noble Lords. The guidance will not be regulation by the back door. We intend a half-way house between regulation which must be complied with and circulars to which authorities must simply have regard, as the noble Lord, Lord McIntosh, said. The guidance envisaged under Clause 9 lies between the two. The extent to which an authority complies will be a matter which the Secretary of State must take into account, but that is not the same as regulation, as I have just explained. The degree to which it is taken into account must be the ground that he uses for determining whether he believes a local authority has acted anti-competitively.
Secondly, perhaps I may comment on the English language point. If the English language is the main concern, the Government might consider whether there was a better word for this purpose than guidance. I should be more than happy to send that as a message to my colleagues in another place.
Lord Airedale: My Lords, I am much encouraged by the final words that the Minister spoke. I was not expecting them after the earlier part of her speech. Of course, I shall be pleased if the Government will reconsider the matter and do everything in their power to persuade the draftsman not to strain the English language. I beg leave to withdrawn the amendment.
Amendment, by leave, withdrawn.
5.15 p.m.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 12:
After Clause 10, insert the following new clause:
("Public service contracts and E.C. legislation
. The exercise of the powers conferred on the Secretary of State by and under sections 8 and 9 above shall be without prejudice to the exercise by local authorities of discretion in the selection of contract award criteria within the framework
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of the rules laid down in European Community legislation relating to the coordination of procedures for the award of public service contracts.").
The noble Baroness said: My Lords, I make no apologies for coming back a third time to the issue of EC directives and within that the clauses of the Bill, especially in the light of the rather differing responses of the Government in Committee on the one hand and on Report on the other.
Perhaps I may refer to the Local Government International Bureau's occasional papers for local authorities on responding to the challenge of EC law. The bureau says that no one should be in any doubt about the importance of EC-derived law for local authorities. Nearly all our food law, animal feeding stuffs and fertilisers law and most of our weights and measures law is now effectively European law. It estimates that, within a few years, 80 per cent. of United Kingdom law will be EC-inspired. I need only remind your Lordships of previous debates within the framework of EC directives about bathing waters, drinking water and environmental protection for that point to be well established. Your Lordships may also be aware that there is at present a wide-ranging proposal for a Council directive on the liability of the suppliers of services which would render the supplier of a range of services liable for damage and financial loss directly resulting and would place the burden of proving an absence of fault on the supplier, a point to which I may wish to return.
In Committee and on Report, in the light of the Minister's response we established, first, that EC law takes precedence over British law and, secondly, that EC law provides that, where a public service contract passed through the equivalent of a quality threshold, EC law would permit a local authority a choice between the economically most advantageous tender on the one hand and the cheapest tender on the other. Thirdly, we established both in Committee and on Report that the intention of the EC directive was to enlarge local authority freedom, not to enable Ministers to limit it or to direct which of those two paths local authorities must follow; in other words, the cheaper one.
By definition, if national law was to have supremacy over that EC directive, there would be no point in having the EC directive at all. However, if, as the Minister said, the EC directive should reign supreme, Ministers surely cannot determine for local authorities that choice which the EC says belongs to local authorities. At the very least, in the light of the proposal for a Council directive making the supplier of services liable for financial loss directly resulting, it puts a question-mark over the right of a council taxpayer to pursue through the European Court of Justice his claim for any financial loss that may fall on the local authority, should it be required by the Minister to take the cheapest and not the economically most advantageous tender. I hope that the Minister will comment on that point.
The Minister's comments in Committee and on Report raise at least three questions. First, if she insists that local authorities should not have that choice, she is in effect saying that local authorities should not be able to choose the best value for money,

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but only the cheapest. What is the difference between the economically most advantageous tender and the cheapest? It is value for money. Value for money judges inputs and outputs. It sees the situation in the round. The cheapest does not. It measures only inputs cost without consideration necessarily of outputs.
By going for the cheapest when it is not the economically most advantageous, local authorities will pay less to get even less. For example, instead of paying £5 for £5 worth of service, or £7 for £7 worth of service, or £10 for £10 worth of service under the economically most advantageous, the cheapest would mean paying £4 for £3 worth of service. If the Minister meant what she said in the earlier debate on the Audit Commission, as I am sure that she did—namely, that local authorities should set standards and the Audit Commission should judge the performance in meeting those standards—that is the freedom to choose, which local authorities should have expressly empowered by the European directive.
In real life, no one would choose the cheapest when it did not represent the economically most advantageous. I am sure that the Minister would not do that in private life. The Government do not do that when it comes to public procurement, nor do they do it in the tender document to which my noble friend Lord McIntosh referred earlier. Why should local authorities be expected to use the cheapest when it is not the economically most advantageous in ways that would be regarded as profoundly stupid if carried out in private life or under Government policy? Yet local authorities will be required to apply that standard.
The second question that is raised is that of quality. The Minister said earlier today that quality should be a material consideration. However, with regard to architecture, for example, the two-envelope system proposed in the consultative document simply will not work. On the assumption that all architects are RIBA-qualified, going through that quality threshold means that thereby the local authority must accept the cheapest of all architects' tenders, irrespective of their quality of design as known to the local authority or the judgment that the local authority may wish to make about the sensitivity and appropriateness of an architect's track record for a particular site. As my noble friend Lord McIntosh said, given that architectural services are capitalised, when such savings would be minimal it is clear that going for the cheapest would be a foolish path to follow.
Thirdly, by Ministers insisting that local authorities must follow the path of the cheapest as opposed to the economically most advantageous, they are—I do not use these words lightly—showing yet again their contempt for the capacity of local authorities to make judgments in the interests of local taxpayers. We have seen that with regard to the poll tax Bill when two or three voices in central government knew better than thousands of officers and experienced councillors what was sensible. We have seen it with regard to capping and capital control rules where local authorities that bought land 400 years ago are not allowed to recycle it and use the proceeds in ways that would inhibit even the running of a whelk stall. We have seen it in the refusal of central government to
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sign the EC charter on local self-government at the same time as Members of this House and another place go to eastern European countries and persuade them to do precisely that. The irony is that the same central government that so vigorously defend parliamentary sovereignty from European interference have no respect at all for democratic local decision-making and seek to deny to local authorities what almost all EC member countries regard as appropriate.
Can it be sensible to require local authorities to take the cheapest when it is not the economically most advantageous course or path for their local taxpayers? Surely it is profoundly stupid to deny to local government that area of judgment. I beg to move.
Earl Howe: My Lords, we have discussed at some length in Committee and at Report stage whether our proposals for a double envelope tendering system are or are not consistent with the draft EC directive on public services contracts. I hope it is now accepted that they are consistent and that our proposals do nothing to damage the principle that inter-state competition for the provision of services should not be distorted, which is the principle that underlies the directive.
Moving to the context of the Bill, I hope that I can reassure the noble Baroness on all her areas of concern. The point now at issue goes to the root of many of our discussions on this part of the Bill. In our view it is necessary to introduce restrictions of various kinds on local authorities' discretion to conduct tender evaluations as they see fit. The regulations which we propose to issue under Clause 9 on the matters to be taken into account in tender evaluation are some examples of those restrictions. They are necessary to clarify the framework of CCT and to ensure fair competition. In some cases they require the Government to form a judgment about the right balance to be struck when evaluating short-term costs against long-term benefits. I know that noble Lords opposite disagree with us, but we are convinced that it is necessary to restrict authorities' freedom in this way, so as to ensure that they are not unduly biased in favour of their in-house teams.
Our proposal for a double envelope tendering procedure raises questions of the same kind. It amounts to a method of structuring decisions about which tender to accept. First, there will be a quality sift and then a choice based solely on price. As the noble Baroness pointed out, that is entirely consistent with what the draft directive refers to as the economically most advantageous tender. I am sorry if my remarks at Report stage may have led her to believe otherwise. I can see that they may have done.
Baroness Hollis of Heigham: My Lords, I am grateful to the noble Earl for giving way. Can he explain what he understands to be the difference between the economically most advantageous and the cheapest?
Earl Howe: My Lords, the difference is as I have just stated. It incorporates the idea of value for

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money, just as the noble Baroness made clear. It incorporates the idea of a quality sift, so to speak, in the context of the double envelope procedure.
We do not, as the noble Baroness suggested, insist that local authorities must adopt the second criterion, which is known as the "lowest price only", allowed by the draft directive. We have taken very much on board the spirit and substance of the EC directive and should like to apply them to these situations also.
We believe that the double envelope system will ensure quality, technical competence, technical assistance, service levels and other matters with which the noble Baroness is right to be concerned. It is not, therefore, simply the cheapest at the expense of quality, as she suggested. In addition, the procedure should ensure that these qualitative matters are dealt with separately, explicitly, in as objective a fashion as possible and in a way that can be seen to be fair by tenderers and clients alike.
In conclusion, it may assist the noble Baroness and the House if I summarise our position. First, we are satisfied that our proposals are consistent with the draft directive. We are also satisfied that it is justified to restrict local authorities' discretion in the choice of tendering regimes when their own in-house team is involved. We do not accept that adopting the double envelope procedure amounts to accepting the cheapest without regard to an authority's fiduciary duty—quite the contrary.
In the light of those remarks, I hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Hollis of Heigham: My Lords, I thank the noble Earl for his reply but I am baffled by it. I do not fully understand it. Clearly, I shall have to read it.
I realise that there will be no opportunity to return with this matter to your Lordships' House. On the one hand, the Minister seemed to argue that there was no difference between "economically most advantageous" and "cheapest"; on the other hand, he implied that the economically most advantageous had been protected through the quality threshold and thereafter one could go on to the cheapest. In bringing the double envelope together one has value for money.
Earl Howe: My Lords, perhaps I may just clarify that point. We regard the double envelope procedure as a single tendering process. It is one process with part one and part two as its stages. There are not two tendering procedures. It is simply one procedure.
Baroness Hollis of Heigham: My Lords, I hope that noble Lords will indulge me if I infringe the procedures of the House, but perhaps I may ask the noble Earl a direct question. Is he saying that local authorities need not take the cheapest tender or the lowest price if they regard that—and have good reason for believing it—as not the most economically advantageous route for their local taxpayers?
Earl Howe: Yes, my Lords.
Baroness Hollis of Heigham: My Lords, in the light of that assurance, I am happy to withdraw the amendment.
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Amendment, by leave, withdrawn.
Clause 13 [Duty to conduct reviews and make recommendations]:
Baroness Nicol Baroness Nicol moved Amendment No. 13:
Page 11, line 21, at end insert:
(" (iii) that he should make no structural, boundary or electoral changes, but that he should make arrangements for joint working among authorities in coastal or estuarine areas for the purposes of development planning functions as are specified in the recommendations.").
The noble Baroness said: My Lords, in moving this amendment, with the leave of the House I shall speak also to Amendment No. 20. These two amendments highlight the need for local authorities in coastal and estuarine areas to adopt joint working practices in respect of development planning in the coastal zone. We touched on this matter at Report stage but at that point the response from the Minister was not very satisfactory. The Minister appeared not to make a distinction between land and marine areas. Obviously many people feel that there is a distinction to be made between them and that special arrangements are necessary for marine areas.
Amendment No. 13 is an enabling provision which broadens the function of the Local Government Commission. As drafted, Clause 13 allows the commission to do one of two things: it can recommend either structural, boundary or electoral changes or that there should be no changes at all. The amendment creates a third option which would enable the commission to consider whether development planning functions may best be served under a joint working arrangement which does not require a boundary change. The amendment is constructed in relation to coastal and estuarine authorities only since, as I said, a special case can be made for joint arrangements in those areas.
The second amendment is also an enabling provision which would allow the Secretary of State to make an order which requires local authorities to work jointly with neighbouring authorities in carrying out development planning functions. Again, this provision relates only to coastal and estuarine authorities.
The two amendments do not seek to create joint authorities. The creation of joint authorities is already provided for in Clause 21. The purpose in promoting the new provisions is rather to encourage co-operation between coastal authorities and to establish joint working arrangements. As I said, we feel that there is a special need in marine areas. The amendments are supported by the RSPB which points to the value of our estuaries for wildlife and particularly bird life. I beg to move.
Viscount Mills: My Lords, I support the amendment. It seems sensible, at least to me, that our coasts should be managed rather differently from inland areas.
On Amendment No. 13, in many cases the coastal zone needs to be considered on a resource basis and not, as at present, on a sectoral basis. Such considerations are reflected more accurately by

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geography and economy than simply by administrative boundaries. Clearly a more holistic approach is needed for coastal planning. Development pressures and natural processes do not respect artificial boundaries made by man.
Those views are shared by the National Coast and Estuaries Advisory Group. In its recent memorandum of evidence to the House of Commons Select Committee on the Environment on Coastal Zone Protection and Planning, the group stressed,
"the urgency of providing a framework through which policies for the coastal zones can be integrated".
It also specifically identified,
"the lack of co-ordination between the various bodies with power and interests in the coast zone".
There is clearly a need for planning along our coasts and estuaries to take place in a cohesive and integrated manner, a need which is not satisfied by present legislation but which could be provided for within the Bill. Without requiring joint authorities or creating boundary changes, the amendment enables the Local Government Commission to consider whether development planning functions could best be served by joint working arrangements between local authorities. As such, it would improve the present planning arrangements and is therefore a measure that I support. If the amendment is not accepted, will the Minister confirm whether or not the Local Government Commission will have any powers to administer joint working arrangements between local authorities in coastal areas?
On Amendment No. 20, many local authorities in estuarine areas have one small part of an estuary's shoreline within its jurisdiction. That may well lead to a lack of co-ordination in development planning matters resulting in both the development of fragmented or even isolated policies and inconsistency and duplication of planning efforts along the estuary.
I accept that in some cases voluntary arrangements for coastal and estuarine areas have been created between local authorities—for example, the Ribble Estuary Liaison Group in Lancashire. The group discusses matters affecting the Ribble estuary which lies within a single county but has five district councils along its length.
However, such voluntary arrangements do not provide the necessary forum for specialised land use planning and lack the powers associated with formal development plans. Other areas of estuary and coast in the UK have no liaison arrangements. As a consequence, in those areas our estuaries are vulnerable to piecemeal development which, although it may affect only small areas of land, will eventually lead to habitat fragmentation and loss.
Our coastline and estuaries are vitally important areas and are used for a wide variety of activities of great economic value. However, many of those activities are potentially damaging not only to the environment but to each other. It is therefore essential to reconcile the diverse interests of those who need to exploit, construct, defend or dump with those whose objective is to conserve or recreate environmental harmony.
Such reconciliation can be made possible only if joint arrangements exist for proper strategic planning
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in coastal and estuarine areas—a measure which I believe this amendment would help to bring about. In its absence I should be grateful if the Minister would tell me what arrangements the Secretary of State will be able to make to ensure that co-operation and joint working takes place between local authorities in coastal and estuarine areas.
Perhaps I may make one final point that relates to the amendments but is not necessarily covered by them. It is the issue of seaward planning control. Local authority control extends only so far as the low water mark. Beyond that point the Government view procedure operates. Those two sets of planning controls need to be brought together if true integrated planning of the entire coastal zone is to be achieved. There is a real need to address that issue as well as those covered by Amendments Nos. 13 and 20.
The Earl of Balfour: My Lords, I am fascinated by this discussion. Many of the coastal functions are surely now managed by the river purification boards under the environmental protection legislation. In the old days many English local authorities were involved in tremendous expense with coastal defence and the problems of coastal protection and pollution. A vast amount of that responsibility has now been taken over by the National Rivers Authority.
Earl Howe: My Lords, many noble Lords will recall that we discussed this topic during the passage of the Planning and Compensation Bill. These amendments, as the noble Baroness explained, seek to amend this Bill to ensure that the Local Government Commission can make recommendations to the Secretary of State relating to the development planning functions of authorities in coastal or estuarine areas. Let me first confirm to your Lordships that, even without Amendment No. 13, the commission may do so. The geography of the coast or estuary will be one of the factors the commission will consider.
Amendment No. 20, however, goes on to suggest that the Secretary of State might have a power to impose joint arrangements on certain coastal or estuarine authorities to prepare development plans in respect of the coastal, or estuary parts of their areas. These amendments would reintroduce the concept of the subject plan for the coast.
We do not deny that in some areas coastal subject plans have served a useful purpose. But they have done so against the background of very patchy local plan coverage. Under the new system introduced by the 1991 Act, the situation will be quite different. All the planning authorities will have to prepare comprehensive, district-wide plans, setting out policies for the whole of their areas. Given such comprehensive coverage, the case for coastal subject plans is much less compelling.
We do not accept the need for separate coastal zone plans. Planning policies for the coast can and should be incorporated in structure and local plans. Separate plans would tend to destroy the clarity of the framework of development plans for which the 1991 Act provides. They would in effect reintroduce the notion of the "subject" plan dealing separately with a

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specific topic. There is in our view a great deal to be said for sticking to a clear and simple planning framework.
That is not to say that we do not expect local authorities to get together, as a means of achieving coherence and consistency in the treatment of a particular area. That is a subject that my noble friend Lord Mills raised. County and district authorities concerned might work together to produce a joint statement of planning policy for a coastal or estuarine area. Such a statement would itself be non-statutory, but would form the basis for policies in the relevant structure and local plans and would help to secure the consistency of those plans. Such joint working by agreement is a possibility which may deserve further consideration in particular areas. It is an approach which may need to be used sparingly, and would need to be supplementary to the statutory development plan framework. But that, we believe, is as far as we should go on the face of the legislation.
However, before closing today, perhaps I may lift the veil on our new planning policy guidance on development plans, PPG12, which is to be published on 10th February. That will contain two references of particular relevance to coastal planning. The first will encourage local authorities to consult other authorities which may be affected by development plan proposals, even though they are not directly adjacent to the authority producing the plan. In this way, where structure plan policies would affect an authority across an estuary, we would expect that authority to be consulted by the plan-making authority.
The second point is that we shall be making clear in the planning policy guidance that authorities should ensure that interactions between key policies to be included in structure plans are fully considered. Their policies need to form an integrated whole; for example, by forming an overall strategy for the coast. In this way each authority should consider the special development plan policies that its coastal area requires. It should prepare them only after consulting all those authorities with an interest.
I hope that at least the latter part of my remarks will have assured the noble Baroness, and that on the basis of my assurances she will be able to withdraw the amendment.
Baroness Nicol: My Lords, I am grateful to the noble Viscount, Lord Mills, for his support. I am also grateful to the Minister for his careful reply. Indeed, I found the second half of his reply most interesting. I should like time to study it, although there is no way in which we can discuss the matter again in this House in this context. However, I am sure that we shall return to the subject in the future.
I am grateful for the care with which the Minister replied. I am a little disappointed that I am still unable to persuade the Government that there is a special case to be made for marine areas. I shall read the Minister's remarks carefully and in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Morrismoved Amendment No. 14:
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Page 11, line 34, leave out from beginning to ("regard") in line 36 and insert ("In recommending any structural, boundary or electoral change the Local Government Commission shall have").
The noble Lord said: My Lords, the wording of the amendment is in precisely the same terms as that which appeared in Committee. I make no apology for raising the matter again. That is strictly within the rules of your Lordships' House because this is purely a drafting amendment.
I raise the matter again on Third Reading as a result of the way in which it was greeted on Report. My noble friend Lady Blatch then stated:
"the effect of the amendment will be to lay a duty on the commission to have regard to the terms of reference in recommending any structural boundary or electoral change".
That is absolutely correct and is precisely what I said in arguing for the amendment. My noble friend also stated:
"This change would make no practical difference to the way in which the commission goes about its work".
Again, that is precisely what I said in arguing for the amendment, although I put the matter in a different way. I said that I did not believe that it made a substantive change to the Bill. My noble friend further stated:
"I can assure the noble Earl that the commission will be required to have regard to the matters specified in Clause 13(5) (a) and (b) in carrying out its reviews".
That is absolutely right, and my amendment provides for that also. My noble friend went on to say:
"The drafting of the Bill does not leave that in doubt". -[Official Report, 19/12/91; col. 1483.]
It is on that point that we differ slightly. I believe that the drafting of the Bill leaves the matter in doubt. The virtue of my amendment is that it makes the matter a great deal clearer for the simple reason that it states in 17 words what the Bill states in 31 words. It makes no substantive change to the Bill. Because I am worshipping at the altar of brevity and clarity I commend the amendment to your Lordships. I am puzzled about the reason why it was not accepted in the first place.
If my noble friend Lady Blatch were to answer my amendment —but I know that she will not do so—I might have appealed to her ever kindly and gentle nature. I might have reminded her that there is nothing more hurtful to an ardent suitor than to have his gifts, however humble, spurned, however politely. As my noble friend will not be answering the amendment I shall not raise that fact. I beg to move.
5.45 p.m.
Earl Howe: My Lords, my noble friend Lord Morris has raised a principle about brevity and clarity in legal drafting with which all noble Lords will concur. He has drawn attention to an apparent growth of Plato's beard on the face of this part of the Bill to which he is inclined to apply Occam's razor.
We are sympathetic to the general point made by my noble friend in Amendment No. 14. However, we have not yet ascertained whether his suggested wording will make any substantive difference to the legal meaning or force of the clause. It may, but if we are advised by parliamentary counsel that it does not,

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I can give my noble friend an assurance that the points he has raised will be looked at again when the Bill reaches its Committee stage in another place.
I hope that my noble friend will understand that I can go no further today. I thank him for his remarks and assure him that the point is firmly lodged. I turn to his second amendment—
Lord Morris: My Lords, Amendment No. 15 presents a different point. It should not have been grouped with Amendment No. 14 as it deals with a totally different issue. I wish to deal with that amendment separately.
Earl Howe: My Lords, I am content.
Lord Morris: My Lords, I am grateful to my noble friend for the assurances that he has given. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Morris Lord Morris moved Amendment No. 15:
Page 11, line 38, leave out ("and convenient").
The noble Lord said: My Lords, I have tabled the second drafting amendment because I have considerable doubt about whether the inclusion of the words "and convenient" add anything to the clause. I am convinced that:
"to secure effective … local government",
if it were inconvenient, would not be effective local government.
Secondly, I have serious doubts about whether the word "convenient" is capable of juridcal test. For that reason I believe that my amendment is an improvement to the Bill. I beg to move.
Earl Howe: My Lords, I understand the point that my noble friend has made. Nevertheless, I believe that the inclusion of the word "convenient" is more than merely an adherence to a traditional form of words. The term "convenient" has a good pedigree. It formed part of the terms of reference of the Local Government Boundary Commission established by the Local Government Act 1972. It applied to the recommendations of the previous Local Government Commission under Part II of the Local Government Act 1958. In the light of that reason we see no reason why the term should be changed for the new commission—
Lord Peyton of Yeovil: My Lords, I thank my noble friend for giving way. Has the term "convenient" ever been applied to government? It appears to me to be almost a contradiction in terms.
Earl Howe: My Lords, not to my knowledge. A point of emphasis also arises. The terms of reference which the commission will be given will include a requirement to have regard to the interests and identities of local communities. The underlying aim in that requirement is to create local government that is both close at hand and accessible, without defining those terms too closely.
I believe that there is a value in having the word "convenient" alongside the word "effective". It draws
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the spirit of the aim clearly on the face of the Bill. I hope that with that explanation my noble friend will feel comfortable about withdrawing his amendment.
Lord Morris: My Lords, I am grateful to my noble friend for that full explanation. It is not an issue about which I would go to the wall, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 14 [Changes that may be recommended]:
Lord Norrie Lord Norrie moved Amendment No. 16:
Page 13, line 42, after ("plans") insert:
(" (ia) be required individually to prepare a separate structure plan and local plans;").
The noble Lord said: My Lords, Amendment No. 16 seeks to provide the Local Government Commission with greater flexibility in respect of land use planning. Clause 14 (5) (d) was introduced by the Government on Report in response to anxiety about the special implications of the Bill for planning. At that stage I expressed my anxieties about the extension of unitary development plans for shires. This is one of the options allowed for by the Government's amendment. The Government's amendment also allows for the continuance of structure and local plans. However, there are a number of ways in which that can he achieved with a new system of unitary authorities. In my view some of the options are likely to be more effective than others. My reason for moving this amendment is that I am not sure that the Government's amendment will allow the Local Government Commission the scope to address all available options and be sufficiently specific in its recommendations.
It seems to me there are two clear options for strategic planning within a unitary system of local authorities: structure plans prepared jointly by neighbouring authorities; and structure plans prepared individually without joint arrangements.
I shall not rehearse the arguments against the first option now, but I remain of the view that this would be an unsatisfactory outcome. Unitary authorities need to be large enough to carry out separate strategic planning effectively.
I believe the Local Government Commission should be able to distinguish between each of these approaches in making its recommendations. I am not sure, however, whether under the clause as it now stands it would be possible for the commission to recommend that unitary authorities should prepare their own separate structure plans.
I wrote to my noble friend the Minister on this matter before the Recess and I am grateful for her recent reply. She said:
"the powers in this Bill are sufficient to empower the Secretary of State to amend the planning Acts so that where a large unitary authority is responsible for both structure and local plan preparation, the local plans may be drawn up for areas within that of the unitary authority …"
That answers my questions in part. It does not, however, make it clear how far the Local Government Commission will be able to recommend that new unitary authorities should be responsible for preparing their own separate structure plan as

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opposed to being party to the preparation of joint structure plans. Perhaps the Minister can clarify that for me.
It is unclear also what procedure will be followed to help a unitary authority decide how to draw up local plans on an area-by-area basis. I should like to know also how the Government consider the planning Acts might need to be amended to allow for all options that I have mentioned.
I make no apology for pressing this issue. These are important questions which my amendment aims to clarify. I beg to move.
Baroness Faithfull: My Lords, my noble friend Lord Norrie has spoken of a structure plan in relation to planning. I support the amendment in relation to other services within the local authority. In particular I speak of social services, housing, and, in some cases, roads.
First, as one who has been a chief officer, I submit a view for the consideration of the commission; that is, that unitary authorities provide a more effective and less costly structure than is provided by any structure which has divided responsibility.
Secondly, I consider that a county structure supplies the most satisfactory and wisest structure. Within the local authority it is worrying for any chief officer to have to consult with an enormous number of other authorities whereas if all the services are within one authority covering one wide area—preferably a county area—much time is saved.
There is another point which is rarely considered; that is, the attitude of the authorities as regards services outside the local authority. If there are a large number of small district authorities, then each authority has to consult with, for example, the police and regional and district health boards. A county authority is able to formulate a policy to cover its area with the police and health authorities. I know that that makes for greater efficiency.
I believe that the noble Baroness, Lady Hollis, suggested that district authorities should be set up with an "overlord" of regional authorities. From a local point of view it is difficult to be loyal or to have a feeling for the regions. One has a feeling and a sense of loyalty for one's county but a region is quite a different matter.
Therefore, I support the idea of a county structure to be considered by the commission, taking into account the services within the authority and the services outside the authority with which it is necessary to work.
Earl Howe: My Lords, my noble friend Lord Norrie has once again returned to the subject of planning, after the long and detailed debates which we have had on this subject on Report and in Committee. I hope that what I have to say will be reassuring to him. He seeks clarification of the position in relation to the preparation of structure and local plans. As my noble friend Lady Blatch mentioned when we discussed our amendments to this clause at Report stage, the Local Government Commission will have the flexibility to recommend either that the present
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system of separate structure and local plans outside the metropolitan areas should continue, adjusted as appropriate to unitary authorities, or that the new unitary authorities should prepare unitary development plans, as the London borough and metropolitan district councils do at present. The power to recommend the transfer of functions of both county and district councils, including the preparation of structure and local plans, to a single authority is covered by Clause 14(2) (b). Where a large unitary authority is responsible for both structure and local plan preparation, the local plans may be drawn up for areas within that of a unitary authority, where to do otherwise would cause disproportionate administrative difficulties, due to the size of the plan or some other factor. Such provision would be made under Clause 17(4). We share the objective that development planning should be properly catered for by the commission in its recommendations.
My noble friend Lord Norrie asked how we intend to amend the planning Acts, for example, in the case of large unitary authorities. That will depend on the recommendations of the commission and the Secretary of State's response. We may also need to give guidance on how area-based plans should be drawn up, if they are justified, within a large unitary authority.
The commission will look at what should happen to particular functions including planning. It will be able to look at whether there should be joint arrangements under Clause 14(5) (c). I hope that, in the light of what I have said, my noble friend will withdraw the amendment.
Lord Norrie: My Lords, I am grateful to the Minister for his long and detailed reply. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 15 [Procedure on a review]:
Lord Norrie Lord Norrie moved Amendment No. 17:
Page 15, line 3, at end insert:
("(aa) submit to him a statement which shows that its recommendations do not prejudice the constitution of an authority independent of any other tier of local government in any National Park.").
The noble Lord said: My Lords, we were all hoping that the Government's response to the National Parks Review Panel would be known in time for this Third Reading debate. It is disappointing that that is not so.
As matters stand we have a Bill whose impact on national parks is not neutral. It risks undermining national parks' administration and it cannot fulfil the Government's intention that each national park should be administered by an authority independent of any other tier of local government.
I remind the House that on Report there was clear agreement that, if it were not possible to create independent authorities for parks in the Bill, then it was vital that the Local Government Commission should say nothing which might inadvertently disrupt the Government's wish to create independent authorities as soon as possible. There was a strong feeling that a safeguard to that effect should be secured on the face of the Bill.

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Amendment No. 17 seeks to achieve that. At the point of reporting to the Secretary of State, the Local Government Commission would be required to submit to him a statement showing that its recommendations for any area, including a national park, would not affect the creation of an independent authority for that park. I hope that the Government will consider introducing something along those lines. I beg to move.
6 p.m.
Baroness Nicol: My Lords, the reason we had to return once again with this amendment is that the promised response from the Government to the report, Fit for the Future, has not materialised. I do not know whether, when she replies, the Minister will be able to tell us that the response is imminent and, if so, what it contains. In the absence of that, our worries remain regarding the possible difficulties faced in the interim by the national parks.
We have gone over many times the chaos that may ensue if we are not clear about the Government's intentions and I do not wish to weary the House by doing so again. But if the Government are saying that there must be separate legislation and nothing can be done within the Bill, it is clear that there is obviously not time before the end of this Session of Parliament to bring in that separate legislation. If the Government do not intend to accept the amendment, the Minister must reassure us about what they intend to do to prevent the chaos occurring between now and the establishment of a new government. It is a serious matter. I support Amendment No. 17, moved by the noble Lord, Lord Norrie, and I hope that we obtain a positive response.
Baroness White: My Lords, I strongly support the noble Lord, Lord Norrie, and my noble friend Lady Nicol. This matter was discussed at some length at an earlier stage of the Bill. I was recently in communication with the chairman of the National Parks Review Panel, who is greatly disappointed at the delay in the publishing of the official response to what all those who are familiar with the matter considered to be a well thought out and valuable report. We do not know why the Government are taking such a long time to produce their official response. I hope that the noble Baroness will be able to give us some definite reassurance in that regard.
In the meantime, as my noble friend Lady Nicol pointed out, we have no confidence that there is likely to be other substantive legislation on the matter in the life of this Parliament. It is extremely important to have something on the face of the Bill which will secure the situation. I do not wish to elaborate further. At an earlier stage I mentioned that one of the problems is that three national parks are within the principality of Wales. Its arrangements for local government reform and the timetable are different. Unless we can obtain something in the nature of the amendment proposed by the noble Lord, Lord Norrie, we shall encounter further difficulties in regard to ensuring the compatibility of the position in the national parks.
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All those with any real knowledge of the situation in the national parks feel strongly that their administration in the two countries must remain compatible. Therefore I hope that the noble Baroness will be able to assure us that we shall receive that official response quickly—why it has not been secured already I do not understand—and that we are given the kind of safeguard covered by Amendment No. 17.
Baroness Blatch: My Lords, in response to my noble friend and the noble Baronesses, Lady Nicol and Lady White, and I am sure if he was in his place we would be joined by the noble Lord, Lord Hunt, I can say that I am told that the response to the report is imminent. I sympathise with much that has been said and I can promise that I shall continue to press for that response on behalf of the House.
Perhaps I may remind all those who have spoken so far, and indeed my noble friend Lord Norrie, that to take the road of the Local Government Commission in these matters would be a much slower track than it will be to acquire independent status for the national parks. It will not be possible simply to take national parks areas; if taken area by area one would need to wait bit by bit for that work to be completed. It is therefore important that, once the response is determined and the Government's public commitment to the independent status of national parks fulfilled, it should be fulfilled as quickly as possible.
The House will recall that in answer to earlier amendments during Report stage I said that there was no reason to believe that the work of the Local Government Commission will in any way affect the establishment of independent national park authorities. I went on to explain that the Government will be issuing guidance to the commission to make it clear that we are committed to the establishment of independent park authorities. A draft of that guidance is already out to consultation, but we shall amend the document before it is issued to the commission to ensure that the commission carries out its reviews with that commitment in mind.
I believe that that is the right way to proceed and that the future of the national parks will be fully secured by that means. The proposed amendment would require the commission to submit a statement to the Secretary of State to the effect that its recommendations do not prejudice the constitution of independent national parks.
Such an amendment is unnecessary. The first point to make is that the commission will be obliged to follow the Secretary of State's guidance, and it is quite simply inconceivable that the commission would ignore it on a matter of this kind. But if, for the sake of argument, we think the unthinkable and assume for a moment that the commission do make recommendations which conflict with the Government's policy towards national parks, the second point is that the Secretary of State will simply not implement them.
With that answer and my assurance that I shall do all I can to ensure that the response is put into the public arena as soon as possible, I hope that the amendment will be withdrawn.
Lord Norrie: My Lords, I am grateful to my noble friend for her reply. Perhaps I can say that the only way that this House will be satisfied is for the Government to introduce a national parks Bill at the earliest opportunity. However, at the moment I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Norrie Lord Norrie moved Amendment No. 18:
Page 15, line 9, at end insert:
(" (4A) When making recommendations under subsection (3) or (4) above the Local Government Commission shall prepare a statement which shows how its recommendations will secure the effective performance of strategic functions in the wider public interest.").
The noble Lord said: My Lords, Amendment No. 18 seeks to ensure that strategic services such as strategic planning, transport, waste disposal and mineral workings are properly addressed by the Local Government Commission. Rightly, I believe, we spent a considerable time on the issue of the strategic role of local government. That issue is intimately bound up with the issue of joint arrangements, many shortcomings of which have been referred to by noble Lords on both sides of the House.
I was reassured by the response to amendments I moved at earlier stages that the Government are in no doubt as to the importance of strategic functions and the need to avoid a proliferation of joint arrangements. At Report stage my noble friend the Minister said that it would be inconceivable that the Local Government Commission should ignore the effective and efficient delivery of strategic services. Prior to that, at Committee stage, she said that it would have to be shown that strategic planning issues are satisfactorily covered.
Given the degree of unanimity on the issue, it is remarkable that the Bill provides no safeguards. There is no mechanism on the face of the Bill which will ensure that the Government's intentions are fulfilled. Amendment No. 18 provides such a mechanism. It will require the commission to prepare a statement, both when preparing draft and final recommendations, which specifically addresses how the effective provision of those strategic services will be secured. I beg to move.
Lord Peyton of Yeovil: My Lords, perhaps I can say briefly that I applaud the Government's proposals to set up the Local Government Commission. I applaud also the contents of the clause which lays down how the review shall be conducted and the considerations that the commission shall have in mind. I share the view of my noble friend that a gap exists which his clear amendment reasonably sets out to fill. For the life of me I cannot see any reason why the Government should not welcome this addition to their thinking. It seems to me to be entirely complementary to the ideas contained in the clause.
The Earl of Carnarvon: My Lords, as chairman of a regional planning council I represent both counties and districts. I have toured the whole of my region and spoken to many county and district members. I am sure that the noble Baroness will agree that the Government appreciate the work of the regional
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councils as does, I believe, the Opposition. My worry is that the lack of understanding by some people of the amount of work done by specialist officers which is provided by the counties to the regional councils would make it extremely difficult for districts or small unitary authorities to be able to supply those very special services. I am sure that the noble Baroness is aware of the large airport study that is going on at the moment with very specialised staff involved.
That is a matter about which I am very worried. In my tour of the South East (I am meeting the other regional chairmen very shortly) the districts have been unable to satisfy me that they will be able to supply the kind of expertise and joint authority which will enable regional councils to carry out their duties. In addition to their duties as regards this country, I am sure that in future they will be responsible for regional liaison in Europe. That is another very important factor which must not be overlooked by the Local Government Commission when bringing forward its recommendations. I am pleased to support the amendment.
Baroness Blatch: My Lords, again this is a very important subject revisited in the course of this debate. I have assured the House that the Government fully recognise the importance of the strategic functions of local authorities. All that has been said here today and at all stages of this Bill cannot be overstated. I have made it clear that before any changes to local government structure can be made it must be shown that all strategic functions are satisfactorily covered.
The Local Government Commission will certainly be in no doubt about the importance of the strategic functions of local authorities. It will be well aware that recommendations which do not cover these functions properly will not be acceptable and will not be brought before Parliament for approval. This amendment would require the commission to prepare a statement showing how its recommendations would secure the effective performance of strategic functions in the wider public interest.
The need to secure the effective performance of strategic functions in the wider public interest will be an important factor which will be central to the commission's work. It is set out clearly in the guidance to which the commission will be required to have regard. Draft and final recommendations will be available for public scrutiny and there will be ample opportunity for comment on the crucial matter of strategic functions. We do not believe that it will be useful to require the commission to prepare a separate statement to demonstrate how its recommendations will secure the effective performance of strategic functions in the wider public interest.
That requirement will be an essential part—indeed, it will be a central part—of the recommendations themselves. The proper coverage of strategic functions should be an integral part of the recommendations not covered in a separate statement. Anyone who considered that strategic issues had not been properly covered in any particular recommendation would have the opportunity to say so.
My right honourable friend the Secretary of State will also need to be satisfied that strategic functions

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are properly covered before bringing before Parliament for approval an order to give effect to the commission's recommendations. I cannot emphasise too strongly just how important the strategic functions will be in this context. It will not be possible for the commission to dip into some functions and not others and to make recommendations to Parliament. In the first place it will have to convince the Secretary of State that all the functions will be properly delivered and that there will be proper arrangements for their efficient and effective delivery. It will be for Parliament itself to consider those matters.
I appreciate the concern of my noble friend Lord Norrie and that of all other noble Lords about the strategic functions, and my noble friend's intention in tabling this amendment. I do not believe the amendment to be appropriate. In view of the assurances that I have given about the central nature of strategic functions in the work of the Local Government Commission—
Lord Peyton of Yeovil: My Lords, if the commission is to be obliged, as I understand it will be, to give its reasons in its report to the Secretary of State, for the life of me I cannot understand why the reasons should not be published.
Baroness Blatch: My Lords, in the first instance the report to the Secretary of State will be considered by him. A draft report of the commission's work will have gone out for public consultation. The recommendations that come before Parliament will also be public documents. This amendment is asking for a separate report stating what will be a central and an essential part of the recommendations of the commission to the Secretary of State. There will be a gap of at least six weeks between the Secretary of State receiving the recommendations and them being presented before Parliament.
Lord Norrie: My Lords, I am very grateful for the Minister's reply. This is a matter that we should follow up either by a meeting or by letters. I hope that the commission's final guidance will be an improvement on the draft which I do not believe to be satisfactory at the moment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 17 [Implementation of recommendations by order]:
6.15 p.m.
Baroness Hamwee Baroness Hamwee moved Amendment No. 19:
Page 16, line 2, after ("report") insert ("or where modifications are proposed, before the Secretary of State has published his proposals and allowed sufficient time for interested persons to make representations and for him to take them into account").
The noble Baroness said: My Lords, this is an amendment in the context of the implementation of the commission's recommendations to allow for comment if the Secretary of State proposes to modify the commission's recommendations. The Bill gives the Secretary of State powers to ignore or to amend the recommendations of the Local Government Commission as he sees fit without, as it stands, an
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opportunity written into the legislation for public comment. That is a very considerable degree of discretion. It could mean that decisions may be taken which do not have widespread public support.
I am sure that the Minister will tell us that a Secretary of State would not do any such thing. Perhaps the way to counter that is to say that the Secretary of State concerned may not be a Secretary of State of the same political party as the present Minister. Sometimes that helps us to put these matters into context.
The amendment provides for statutory consultation on modifications, but still allows the Secretary of State the ability to exercise his judgment. At Committee stage the Minister assured us that if there were to be substantial modifications the Secretary of State could direct the commission to conduct a further review. That still leaves him or her with considerable discretion on various counts—that is to say, whether or not to pursue the original recommendations; to decide what is a substantial modification; and if he or she does not believe that the modification is substantial, the discretion not to direct the commission to conduct a further review.
This amendment is seeking to clarify those points and to allow for adequate publicity and the opportunity to comment. I also anticipate that the Minister may say that consultation can go on forever, but there are times when a decision has to be made. I suggest that this amendment strikes the right balance. I beg to move.
Earl Howe: My Lords, I understood the noble Baroness to accept that we have taken great care to build into the commission's review procedure substantial opportunities for public comment. The commission will be required to make available for public inspection copies of its final recommendations to the Secretary of State. It will be required to take such steps as it considers sufficient to secure that persons who may be interested in the recommendations are informed of them and of the period within which they may be inspected.
Further, the Secretary of State will be required to wait for at least six weeks after receiving the commission's final recommendations before making an order implementing them, to allow time for further representations to be made. Any modifications to the commission's recommendations which the Secretary of State recommends to Parliament will take account of views expressed during this period about the commission's recommendations. If the Secretary of State considers that the commission's recommendations need to be modified substantially, he will have the power to direct the commission to conduct a further review and to make further recommendations. The commission will be required to publish any revised recommendations and make them available for public comment following the procedures set out in Clause 15.
The noble Baroness, Lady Hamwee, anticipated that I would say—and I do indeed feel—that there comes a point where consultation must cease and decisions have to be made. In moving the amendment, the noble Baroness is not contesting the idea that the

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Secretary of State should exercise his judgment. His decisions will be made having full regard to both the commission's recommendations and to representations made to him by interested parties. I hope that with the substance as well as the tone of those remarks, she will feel able to withdraw her amendment.
Baroness Hamwee: My Lords, I entirely accept the tone. But I am afraid that I do not feel that the substance has taken us any further because we are told again that the opportunity for public comment is at the earlier stage. However, it would be churlish to press the amendment at this point. I hope it may be something that will be taken up at a later stage.
Amendment, by leave, withdrawn.
Clause 20 [Agreements as to incidental matters]:
[Amendment No. 20 not moved.]
Clause 26 [Orders, regulations and directions under Part II]:
Lord Simon of Glaisdale Lord Simon of Glaisdale moved Amendment No. 21:
Page 22, line 22, leave out from ("areas") to end of line 23.
The noble and learned Lord said: My Lords, this is a modification of an amendment which I moved at Committee stage. If your Lordships will look at the strange structure of Clause 26, subsection (1) provides that regulations shall be subject to the negative procedure with the three exceptions paragraphs (a), (b) and (c). Paragraphs (a) and (b) are picked up in subsection (2) and made subject to the affirmative resolution procedure. Paragraph (c) is not dealt with at all with the result that there is no parliamentary control over the regulation in question which relates to electoral changes and parishes—hardly matters to be dismissed as of absolute inconsequence.
At Committee stage, I moved that paragraph (c) should be subject to the affirmative resolution procedure. But in an attempt to come to a compromise with the noble Baroness, as I said earlier, I was prepared to concede two-and-a-half of the four points where we differed, in exchange for one-and-a-half points on which I wished her, if she could, to meet me. This is the half point. What I now propose is that paragraph (c) being deleted, regulations effecting electoral changes or relating to parishes, shall be subject to the negative procedure because they fall under subsection (1).
This is no time to deal with a matter, even of constitutional importance, at any great length. It was after half past eleven that I moved the amendments in Committee. I did not table them for Report stage because if I had done so, they would have been discussed at about five o'clock on the day that your Lordships rose before Christmas. I felt that such would be complicity in a devaluation of your Lordships' House. What I do now is to ask your Lordships to say that these regulations (which, as I say, are not to be dismissed as of no consequence) should be subject to the negative procedure.
This matter cannot be dealt with except in the context of the current surge in bureaucracy to the detriment of Parliament, to the detriment of the law
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and to the detriment, as we saw in the Child Support Act of the last session, of private individual rights and interests. I shall not enlarge on that, but that is the immediate context.
There is an historical context because the last time we had a bureaucratic surge of this sort, it culminated in the disaster of Crichel Down—a traumatic experience for the party to which the noble Baroness belongs. It ended with the resignation of an able, popular and competent Minister, Sir Thomas Dugdale, and the moving sideways of two senior civil servants—rightly a move seen only as sideways because although they had behaved badly, they had behaved no worse than many of their colleagues in similar situations in the previous five years. Therefore I ask the noble Baroness to take account of this, not only in its immediate context, but also lest she and the Government may be drifting into another Crichel Down situation.
When your Lordships considered this late at night in Committee, the noble Baroness advanced two arguments. The first was that most of the orders in question are of a local nature. But she said "most", not "all". Some will be of a greater importance if she puts it like that. The second was that the commission would consult widely.
However, consultation is not a substitute for parliamentary consideration. Wide consultation was consistently offered in the proceedings before Crichel Down. The consultation proved purely nugatory. Objections were dismissed. Anybody complaining was regarded as a trouble maker. It is all there in the report of Sir Andrew Clark.
So one comes back to the two arguments. The first is that most of them are of a trivial and local nature, but not all. The second is that even then all that is offered is consultation. The negative procedure is the minimum that can be considered here. In fact, the negative procedure in the other place is very rarely efficacious at all because the orders are not reached in time before time has effluxed.
In your Lordships' House, the great advantage to the Government of the negative procedure is that only those matters that are considered by your Lordships as of importance come before your Lordships at all. There is no question here, under the negative procedure, of Parliament being flooded with a whole number of trivialities under this provision. Nor would the department be harassed by having its orders discussed. One cannot avoid the general background that at the moment the department is understandably anxious to emancipate itself as far as possible from parliamentary and judicial control. I have been both sides of the baize curtain and I know how maddening it is to officials to have every word of a Bill scrutinised and every clause considered. The great advantage of regulations from their point of view is that there can be no amendment at all.
As the noble Lord, Lord McIntosh of Haringey, reminded us at an earlier stage, it is a convention, although I think a weak convention, that your Lordships do not vote against a body of regulations even under the affirmative regulation procedure. As

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this is a matter of constitutional moment—namely, parliamentary control over law-making powers—I beg to move.
6.30 p.m.
Lord McIntosh of Haringey: My Lords, as I missed the first half of the noble and learned Lord's speech I intervene only to say that, from what I heard, I agree very much with him. The noble and learned Lord described it as a weak convention that we do not divide against statutory instruments, even affirmative instruments. I suspect that what he means by a weak convention is that the Labour Party does not do it but the Conservative Party does so on occasion.
Lord Simon of Glaisdale: My Lords, I meant that it is the kind of convention that can be quite easily revoked on a change of circumstances.
Lord McIntosh of Haringey: My Lords, the reason that we do not divide against statutory instruments is clear. There is a permanent Conservative majority in this House. If we did so divide, it would be done to us all the time.
Baroness Blatch: My Lords, I feel at a distinct disadvantage when it comes to pitting my wits against the eloquence of the noble and learned Lord, Lord Simon of Glaisdale. The noble and learned Lord seeks to ensure that proper parliamentary scrutiny is exercised over the actions of the Executive. But these orders relate to very minor matters, and I do not believe that the noble and learned Lord can want Parliament to concern itself with every single executive action. My understanding is that virtually all the decisions that are subject to these orders are minor. If Parliament were to attempt to do so, I think your Lordships would find yourselves facing many more late nights. Effective parliamentary scrutiny is surely about concentrating on matters of more substance.
Your Lordships will appreciate that the orders which would be affected by this amendment are concerned with council electoral arrangements and parish councils. The electoral orders are virtually all about minor changes to the boundaries of council wards. Parish orders can establish new parish councils or they may alter the boundaries of a parish. For example, where a new housing estate was built which straddled an existing parish boundary, a typical order might move the boundary so that the whole of the estate was in one parish.
I should like to emphasise to the House that the Government are not proposing a change to the arrangements for the scrutiny of these orders. Such orders are currently made following recommendations by the Local Government Boundary Commission. That commission's responsibilities will pass, by virtue of provisions in the Bill, to the new Local Government Commission. Therefore it seems to me entirely reasonable for the Bill to repeat the arrangements for the making of the relevant orders. That is just what the Bill does. It repeats exactly the procedures that have been in operation since at least 1974. None of these orders has previously been subject to parliamentary scrutiny.
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I am not aware of any complaints or indeed any difficulties that have arisen by virtue of the fact that these orders have not in the past been subject to parliamentary scrutiny. I think it is worth noting that any decision that comes forward to the Secretary of State, and hence to Parliament, arising from the work of the Local Government Commission as it relates to the structural changes will be subject to the affirmative procedure. I am always diffident when appealing to the noble and learned Lord to withdraw his amendments but I hope that he will feel able to do so on this occasion.
Lord Simon of Glaisdale: My Lords, the noble Baroness will not expect me to be very happy with her reply. She yielded to the blandishments of the noble Lords, Lord Airedale and Lord Morris, so I cannot help asking what it is about myself that leads her to set her face so stonily against anything that I suggest. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Simon of Glaisdale Lord Simon of Glaisdale moved Amendment No. 22:
Page 22, line 27, leave out from ("Parliament") to end of line 31.
The noble and learned Lord said: My Lords, this amendment seeks to leave out the last three words of line 27 and the rest of the subsection. The words desired to be left out exclude the hybrid regulations procedure. As your Lordships are well aware, Bills coming before Parliament are public, private or hybrid. The public Bill is one introduced by a Member of Parliament and dealing with the public generally. A private Bill is introduced by someone outside Parliament seeking some advantage for himself. It is generally a local authority or a public undertaking. Individuals who are adversely affected, as they are probably likely to be when a particular petitioner is seeking an advantage for himself, can themselves petition against the private Bill. The hybrid Bill is a public Bill which adversely affects a private interest.
Your Lordships' House alone has a procedure whereby the private interest which is prejudiced is considered initially by the Hybrid Instruments Committee and possibly further. A Minister can avoid the nuisance of the hybrid investigation by merely taking a regulation-making power and can adversely affect the private interest in the regulations and not in the Bill. So Parliament stipulated a long time ago—more than 60 years ago—that where a regulation adversely affected a private interest, notwithstanding that it was under a public Bill, it should be subject to the scrutiny of the Hybrid Instruments Committee in exactly the same way as a hybrid Bill. In other words, it ensured that private interests were not overridden without being considered.
The procedure does not stipulate that the private interest must be vindicated in all circumstances. It is exactly the same as under a Private Bill; that is to say, Parliament will weigh the public good against the detriment of the private interest. That is an extremely important parliamentary safeguard of private rights and private interests: the liberty of the individual as

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against the omnipotent state. It was considered by the Joint Select Committee on Delegated Legislation of 1972–1973 and considered at very great length.
However, before I deal with that aspect, I hope that the noble Baroness will not state in her reply that there are precedents for what is proposed in the Bill. I know very well that there are such precedents, but in this matter a precedent from the past is not an excuse for supineness in the present; it is a call for vigilance in the future.
Having said that, I turn now to two short passages from the report of the Joint Select Committee. I should point out that the report was accepted by both Houses of Parliament. The first passage at page XXV reads:
"Your Committee conclude that this procedure has for nearly 50 years provided valuable safeguards for private interests affected by delegated legislation, and should be retained".
The other passage, which appears slightly later at page XXXI, says:
"Parliament should, however, be vigilant to ensure, in every case of exclusion from the hybrid procedure by statute or by Standing Order, that such exclusion is genuinely justified".
Further down on the same page, when studying the considerations which should be weighed by the Hybrid Instruments Committee, the report refers to,
"whether the matters complained of in the petition have already been adequately inquired into",
and states that that point must be covered.
When the noble Baroness dealt with the matter in Committee, she did not say for a moment that any of those matters had been inquired into adequately or otherwise; she merely said that the commission, and indeed the Minister, consults widely. That is by no means the same thing and by no means adequate. I beg to move.
6.45 p.m.
Baroness Blatch: My Lords, the noble and learned Lord implores me not to make references to other examples. However, I have to point out that the Local Government Act 1972 also disapplied the procedures relating to hybrid instruments in respect of orders which were not dissimilar to those covered by Clause 26(2) of the Bill. I refer the House to paragraph 1(3) of Schedule 3 to the Local Government Act 1972 under which the Secretary of State gave effect, by order, to the recommendations of the Local Government Boundary Commission for the creation of the non-metropolitan district councils. The words used in that provision are rather different from those used in this Bill, but I am advised that they have exactly the same effect. Under that provision, as here, the orders concerned were likely to be hybrid principally because they were essentially local in character.
The disapplication of the procedure is, therefore, well precedented. I am not aware of any claims that individuals have been disadvantaged as a result of the 1972 Act provisions. There is no evidence that it was wrong to disapply the hybridity procedures. The hybrid instruments procedures exist to ensure that the private interests of people affected by orders are taken
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into account. Your Lordships should have no fears that any interests will not be taken into account as a result of the disapplication of these procedures. Before the Secretary of State makes an order, the Local Government Commission will have conducted a review which will have involved extensive public consultation. Those whose interests will be affected as a result of structural changes or the establishment of joint authorities will have at least three opportunities to make their views known. There will be the initial period of the review, before the commission has published its draft recommendations. The commission will then invite comments on its draft recommendations. Thereafter, the commission will submit its recommendations to the Secretary of State who will wait at least six weeks before making an order.
In considering whether to accept the amendment, I have also had to take into account the view expressed by noble Lords on all sides of the House about the proposed timescale for making structural changes. The House has urged me to make changes to the Bill which would have required the changes to be implemented more speedily. Noble Lords were particularly concerned about the uncertainty that would be caused by prolonged delay. I had to resist those amendments on the grounds of practicability; indeed, on the grounds that the noble and learned Lord referred to today—namely, to give room for full and proper consultation. But I have to tell the House that the amendment would have the opposite effect. If the noble Lord the Chairman of Committees ruled that an order was hybrid—and my information is that this almost certainly would be the case—and subsequently the Hybrid Instruments Committee found that the petitioners had locus standi, the implementation of orders could be delayed by many months.
I do not believe that that potential delay would be justified, given that the disapplication of these procedures is well precedented. Moreover, given also that there will be ample other opportunity for views to be taken into account before orders are made, I hope that the noble and learned Lord, Lord Simon, will feel able to withdraw his amendment.
Lord Simon of Glaisdale: My Lords, whether I coo like a dove or roar like a lion, it seems to have no effect at all on the noble Baroness; indeed, she did what I begged her not to do and said that there was a precedent. Your Lordships all know by now that there is a precedent. However, what the noble Baroness did not do was to meet the criteria of the Joint Select Committee. For example, have the Government shown that the exclusion is really justified or merely convenient? Further, if the hybrid instruments procedure is denied to a private individual whose interests have been adversely affected, have the Government shown that his grievance has been "inquired into"? Neither of those criteria have been met. In conclusion I only desire to say that, in taking this bureaucratic line to try to exclude Parliament from normal traditional processes for the defence of the individual citizen, the Government are making a

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very hard rod for their own back should another party come to power. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
An amendment (privilege) made.
Baroness Blatch: My Lords, I beg to move that this Bill do now pass.
At the outset I should like to take this opportunity to place on record a formal apology to noble Lords opposite and in particular to the noble Baroness, Lady Hollis of Heigham. A straight question was put by the noble Baroness to my colleague and noble friend Lord Howe, as to whether it would be open to local authorities to reject the lowest tender following consideration of the second envelope in the double envelope tender procedures. The answer given to the noble Baroness was, yes. However, the answer that should have been given was, no. I have written to the noble Baroness offering profuse apologies for the wrong answer. I know that, while it is no excuse, my noble friend misheard the question and answered it incorrectly. I understand that he also has written to the noble Baroness.
The point that we sought to make at the time was that this approach was nevertheless consistent with the criteria in the European Community directive producing the economically most advantageous tender, rather than the alternative of lowest price only. That is so because the first stage of consideration of bids could incorporate quality, technical competence and the other matters noted in the directive under the economically most advantageous option. It would be for local authorities to set the threshold used in the first stage, subject to any regulations or guidance defining anti-competitive behaviour which the Government made or issued. However, under the proposal they would not have discretion to reject the lowest tender passing the quality threshold in favour of their own in-house teams.
I repeat our profuse apologies for what I believe was a difficulty for the noble Baroness. Had she been given the correct answer, it is just possible that she may well have pressed the amendment. For the record, I hope that that will be noted by another place along with the points made by the noble Baroness in the course of that debate as well as the answer given. I hope that the apology will also be noted and that there will be an opportunity for the debate to be continued in another place.
Nevertheless, I believe that the Bill promotes healthy competition and value for money in local government services. It will place the customer or citizen at the heart of local government activity and it provides for structural changes within local government which will command greater community support and will result in more effective and efficient local government service.
Clauses 1 to 7 of the Bill deal with performance standards of local authorities and other bodies, auditors' reports and recommendations and with publication of information by the Audit Commission and the Scottish Accounts Commission. There have been differences of opinion between us on such ideas as customer contracts but there has been general
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support for the roles of the commissions. The Bill sets a framework in which the commissions will operate; noble Lords have accepted that the commissions can be relied upon to get on with the job within that framework.
I am pleased that the provisions on auditors' reports and recommendations which require bodies to make a prompt, formal and public response and the provisions allowing publication of certain information relating to contraventions and public interest reports commended themselves to your Lordships.
Clauses 8 to 11 of the Bill dealt with compulsory competitive tendering and have given rise to the liveliest debate. Research indicates that savings of around 6 per cent. on average have been achieved. However, CCT is not just aimed at maximising value for money. Too often in the past local services were run by some authorities more on behalf of their workforce than on behalf of the local communities that they were supposed to serve. CCT has begun to change that. Local authorities are now able to take a clearer view of their proper role, and to think more carefully about the services provided for their communities. Many have responded to the challenge in a positive way. As the chief executive of a Labour-controlled authority put it:
"There is much greater information and knowledge of particular service areas. It exposes an awful lot of inefficiencies formerly taken for granted. We are a more efficient, slimmer organisation. It's had real and definite benefits".
Those benefits should not be confined to the existing services for which CCT is required. The Secretary of State already has the power, under the Local Government Act 1988, to extend CCT to new local authority activities. That power is not affected by this Bill. What the Bill, as originally drafted, would have done was to enable the Secretary of State to take account, in extending CCT to professional and technical services, of the particular demands of those services, where quality is more difficult to judge in a straightforward and demonstrably fair way. That flexibility has been removed by the amendment passed in Committee, and I should make it clear that the Government intend to return to this issue in another place.
The other provisions of this part of the Bill are aimed at following through the commitments in the Citizen's Charter to ensure that private firms have a fair chance to compete for local authority work, and to promote greater openness about the way in which local services are delivered. They provide for the Secretary of State to clarify in regulations the framework for CCT, and set down what is or is not to be considered anti-competitive. The greater clarity this will bring to the process will be widely welcomed.
As with the extension of CCT to new services, we shall be considering carefully the responses we receive to the consultation document Competing for Quality, and will bring forward our final proposals for the content of regulations when that consideration is complete. It is important, if CCT is to continue to be successful in ensuring greater efficiency in the delivery of local services, that private sector bidders should be able to feel confident that they will not be unfairly

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discriminated against. The powers under Clause 9 will be used to ensure that a clear and fair framework is put in place.
The second part of the Bill is concerned with the structure of local government in England. We are committed to an accountable and effective structure of local government based on authorities which reflect more closely the communities with which people identify. Local authorities based on real communities will be stronger local authorities, better able to voice local views, more accountable to local people, and better placed to respond sensitively to local needs and priorities. Part II of the Bill will provide the framework which will enable that commitment to be put into effect.
We are not prescribing what local government structure people should have. Instead, the new Local Government Commission for England will make recommendations, area by area, for improving the structure of local government in the shire counties, with a view to moving to unitary authorities.
We have discussed at some length the factors which the Local Government Commission will need to take into account, and the way it will carry out its review. The identities and interests of local communities will be central to the commission's reviews, as will the need to secure effective and convenient local government.
I have assured the House that nothing in this Bill will inhibit our plans to establish independent authorities for national parks. I have also assured the House that the commission's recommendations for changes to local government structure will take account of the need for effective delivery of local government services, including particularly strategic services. I have also made it clear that the commission will not recommend changes unless they are worthwhile and cost effective.
These issues will be covered in more detail in the guidance which my right honourable friend the Secretary of State intends to issue to the commission, and to which it will be required to have regard, about the factors it should take into account in carrying out reviews. We welcome comments on the draft of this guidance and we shall consider them carefully.
This House has also scrutinised the framework set out in the Bill for the procedures the commission will follow in conducting its reviews, including the arrangements for consultation with local authorities, local people and other interested organisations. We have promised to issue guidance on these procedures. There will be consultation about this guidance.
I must not let this opportunity pass without paying my own tribute to all who have contributed to the debate. The noble Lord, Lord McIntosh, and the noble Baroness, Lady Hollis, combine to bring an enormous wealth of experience to these debates. The work that I had to do in order to make sure that at least I understood what they were saying and was able to make an intelligent response is testimony to the skills that they have deployed, always courteously and to the point. They certainly make the presence of the
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Opposition felt in this House. They have been ably supported by the noble Lords, Lord Desai and Lord Stoddart, and the noble Baroness, Lady Nicol.
The noble Baroness, Lady Hamwee, and the noble Lord, Lord Ross, who is not in his place, again bring an expertise to the House which has been thoroughly welcomed. I believe that any government of any persuasion should be put on their mettle when producing legislation. Indeed the combination of the noble Lord, Lord McIntosh, the noble Baronesses, Lady Hamwee and Lady Hollis, and the noble Lord, Lord Ross, has certainly put me and my noble friend Lord Howe on our mettle as we have had to field a plethora of amendments. The noble Baroness, Lady Hamwee, has been supported by the noble Lords, Lord Hunt and Lord Airedale.
I must also refer to the right reverend Prelates the Bishops of Guildford and Exeter. They are not present in the Chamber but I must acknowledge that they not only spoke in general to the Bill but also in specific terms as regards their historic cities. Their points were well made and well taken.
My noble friends on these Benches who have contributed to our debates on this Bill are far too many to mention. However, I hope I may be forgiven for singling out a few of my noble friends as regards the subjects covered in the course of our debates. The strategic matters in the debate have been supported on all sides of the House. My noble friend Lady Cumberlege has made contributions. My noble friend Lady Carnegy has held the flag for Scotland but she has also represented her interests in the rest of the country in terms of ensuring that the part of the Bill referring to structure is correct and will stand the test of time.
I also pay tribute to the contributions of my noble friend Lord Skelmersdale. My noble friend Lady Faithfull could be relied upon to pick up important points as the Bill proceeded. I am grateful to her for her support. My noble friend Lord Norrie has contributed to a number of aspects of our debates. He has spoken particularly on all matters concerning the countryside and the national parks. He has tried to ensure that the planning aspects of local authorities are not neglected in the work of the Local Government Commission. My noble friend has been ably supported by noble Lords on all sides of the House. I thank him for his diligence. I hope I have been able to satisfy many of his concerns raised during the course of the Bill.
Finally I wish to pay the highest possible tribute to my Whip on this Bill, my noble friend Lord Howe. This has been his first parliamentary Bill and I have received the best possible service from him. It is a great relief to have someone on whom one can rely when one is in the front line. I believe all noble Lords will join with me in thanking him for his courtesy and for his skill at the Dispatch Box. His one slight indiscretion at the Dispatch Box was a result of a genuine misunderstanding on his part. I accept that we cannot excuse ourselves by saying that and we must all take responsibility for our remarks but, that incident

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apart, my noble friend has done a sterling job. He has faithfully served these Benches with his diligence, expertise and great courtesy.
Moved, That the Bill do now pass.—(Baroness Blatch.)
Lord McIntosh of Haringey: My Lords, when I introduced our contributions—
Baroness Blatch: My Lords, I am sure it is unforgiveable of me to speak again at this stage. However, I intended to refer especially to the noble and learned Lord, Lord Simon of Glaisdale. I hope the House will allow me to rectify that unpardonable omission. The noble and learned Lord, Lord Simon, has implored me and appealed to me on this Bill. He has visited me in my office and he has outwitted me and charmed me.
Noble Lords: That got him nowhere!
Baroness Blatch: My Lords, I claim no credit for his having got nowhere. At all times the noble and learned Lord has been most courteous and he has been extremely effective in pressing his points. Due to my ignorance and his expertise I have always been the subject of advice. I do not hide behind the advice. I hope I may say that in the back room I have been a good devil's advocate on his behalf. However, I have been defeated too. I am most grateful to noble Lords for allowing me to rectify a naughty omission.
Lord McIntosh of Haringey: My Lords, when we started our consideration of this Bill I said it was a Bill we would like to support. The best I can say now after lengthy consideration is this is a Bill we would have liked to support more of. As noble Lords will know, it is a Bill which contains much with which we agree. After all, the Citizen's Charter is not an invention of the present Prime Minister. The phrase was coined by Herbert Morrison in 1920 and it has been a theme of the socialist approach to local government for many years. The difference between us on the Citizen's Charter is not that we merely want to protect the interests of local electors and ratepayers, but that we believe that can best be done by collaboration between local authorities and their own people rather than by means of orders or instructions given from on high by central government. We think that the charter as envisaged by the Government as regards local authority services is misconceived. We are sorry that the Government have not recognised the doubts we have in their response to our amendments.
We also believe the Government seriously underestimate the complexity that will arise in setting standards for local authority services and ensuring that those standards are practicable. We believe there is far too great a tendency on the part of the Government, not just in this area but in education and other spheres, to rely on league tables as a substitute for judgment. We find that regrettable.
The worst part of the Bill, as we made clear from the outset, has been the compulsory competitive tendering provisions in Clauses 8 to 11. The amendment that was carried on 2nd December made these provisions a good deal less offensive than they
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would otherwise be. Nevertheless we believe that this part of the Bill was misconceived both in terms of procedure and respect to Parliament and in terms of the factual and intellectual argument behind it. It was misconceived with respect to procedure because, if it had been their intention, the Government should have issued consultation, allowed for a response to it and responded to the response to consultation before placing legislation before the House. The effect of the consideration in Parliament being concurrent with the consultation procedure means that in effect Clauses 8 to 11 do not mean much. They do not tell us much. They simply provide that the Secretary of State has the power to extend compulsory competitive tendering as he thinks fit. At least, that is presumably the power which the Government will restore when they seek to overturn our amendments in another place.
I hope when they seek to overturn our amendments, they will not seek to restore one of the most offensive aspects of the Bill which was corrected by our amendments. I refer to the Henry VIII procedures. I hope the Government will understand that they will face renewed opposition if the Bill returns from another place repeating the errors of the Henry VIII procedures and the error of insisting that the Secretary of State has the power by order to overturn primary legislation. I am sure they will face renewed opposition from the noble and learned Lord, Lord Simon of Glaisdale. I heartily echo the tributes that have been paid to the noble and learned Lord. The Government will also face renewed opposition from all sides of the House.
Even with the amendment, this part of the Bill is thoroughly unsatisfactory. We had to winkle out the consultants' report on which the consultation document was based. We found both the consultants' report and the connections between the consultants' report and the consultation document wanting. We shudder to think what will come out of the whole process. It certainly will not be a process that has been adequately scrutinised by Parliament.
On the issue of local government structural reform —that arises in Part II of the Bill—there has been a good deal of agreement. However, proper anxieties have been expressed in all parts of the House about some of the implications for the environment and for planning and structure plans. A number of noble Lords have effectively pleaded that case. I hope, but rather doubt, that they have been satisfied by the answers they have been given.
In principle, what the Government propose—broadly, a move towards unitary authorities on an area-by-area basis—is something we would support. However, we are still very concerned about the composition and powers of the Local Government Commission. We are very concerned about the lack of a firm timetable, and we are particularly concerned about the fact that the Government intend that the recommendations of the Local Government Commission shall be implemented piecemeal rather than all at one time. We very much fear that that is a recipe for continued disturbance, unrest and insecurity in local government.

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We wanted to support the Bill. We supported those parts of the Bill which we could support, but I am afraid that there is a great deal which we were unable to support. The noble Baroness spoke of there having been a "plethora" of amendments. My dictionary says that a plethora is:
"a morbid condition marked by an excess of red corpuscles in the blood; (fig.) over-supply, glut"
If it is a matter of red corpuscles in the blood we shall shortly see a few more red corpuscles in the House —both Houses, indeed—and we shall be able to deal with these matters more effectively.
The debates on the Bill have sometimes been difficult but the Bill has been conducted, without exception, with courtesy. I must express my gratitude to the noble Baroness, Lady Blatch, for the way in which she has conducted the Bill, even the less defensible parts of the Bill. She has always been courteous and considerate and she has always listened carefully to the arguments.
I should like also to echo what the noble Baroness said about the noble Earl, Lord Howe. It is the first major Bill which he has dealt with at the Dispatch Box. He comes to it as one who has been doing that for many years and as a real expert, or one who manages to suggest expertise even if he does not have it. His conduct of that part of the Bill for which he took control was impeccable. We are very appreciative of that.
Of my noble friend Lady Hollis I can hardly say less than the Minister. She has been a tower of strength and has taken enormous responsibility to very great effect. I am most grateful to her. The contributions of my other noble friends who have taken part in the debates on the Bill—Lady Nicol, Lord Stoddart of Swindon, Lord Desai and Lord Howie of Troon, in his own particular area—have been greatly valued. It would have been a more boring but perhaps a shorter Bill without their contributions.
It has been very enjoyable to work with the noble Baroness, Lady Hamwee. We have found ourselves very close in our thinking on many aspects of the Bill, even though we have sometimes called in aid different examples of local government. She has shown her command of the subject matter and it has been a pleasure to work with her. I shall not name other noble Lords who have taken part in the debates: there have been many.
I am sorry that the Bill goes forward with so little amendment. I am sure that with goodwill and with a new Secretary of State many of the provisions of the Bill could be made to work to the advantage of local democracy. I hope that some of the invitations to a denial of local democracy which remain in the Bill will not be implemented.
7.15 p.m.
Baroness Hamwee: My Lords, I echo the words of the noble Lord, Lord McIntosh, that I wish that I could support more of the Bill, although there is a great deal of it which we on these Benches support. The Bill would have been improved by many of the additions which were proposed during the various
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stages. On the whole the changes proposed were additions rather than deletions. So far as concerns the performance standards—the charter provisions—everyone must welcome improvements in local authority services.
We wish the Local Government Commission well. It has a hard task ahead of it, not just in reconciling strategic considerations with government at the lowest possible local level and all the matters which we discussed, but also the very local and parochial interests which we have quite rightly tried to steer clear of in debates in this House. The commission will have its work cut out, but I hope that it will be able to get on with its work speedily because of the uncertainties which have been mentioned.
I am particularly sad that the opportunity was not taken with this Bill to deal with the question of London and the metropolitan authorities. I see that the noble Lord, Lord McIntosh, nods in agreement. I hope that when the heat of the next few months has passed the subject can be considered more calmly and more productively.
It is no surprise that feelings have run so high on the question of compulsory competitive tendering. We feel that the idea of compulsion is distasteful. It is rather sad that it is to be found in a Bill which in many ways is so well designed to improve what happens in local authorities. I hope that by the time the Bill reaches the statute book it will be more acceptable.
For my part I should like to thank all noble Lords who have taken part in the debate, from all of whom I have learnt a great deal. In particular, I should like to thank the noble Lord, Lord McIntosh, and the noble Baroness, Lady Hollis, who have helped me find my way through the maze. I should also like to thank the noble Earl, Lord Howe, who I believe answered his first Question from the Despatch Box on the day when I made my maiden speech, so we have shared a number of stressful occasions, and the noble Baroness, Lady Blatch, who gave me a very warm welcome. She has set an awesomely high standard for newcomers to emulate. I hope that that does not sound patronising because it is not meant in that way. I hope that I can start on that path.
Lord Simon of Glaisdale: My Lords, I intruded on your Lordships' deliberations because I wanted to draw attention to some drafting points and some constitutional aspects of the Bill. However, I very soon realised how much I was learning about a very important part of the constitution in a debate by great experts. I should like to express my thanks for that.
It would be invidious to refer individually to those of your Lordships from whom I have learnt so much, but I should like to mention three, and I hope that I can do so without impertinence. My first point relates to something which was said by the noble Lord, Lord Stoddart of Swindon. He warned us against considering local government as inferior government. It is subordinate in the sense that it yields to the directions of Parliament, but it is in no other sense subordinate. On the contrary, it has its own independent part to play in the Constitution.
That brings me to another point which I wished to make, which was made constantly by the noble Lord,

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Lord McIntosh; namely that local government is very much closer to the citizen and that closeness should be fostered at all price. We gird understandably against the bureaucracy of Brussels; subsidiarity is made an empty term and a concern for a level playing field seems to give entitlement to give directions about every wormcast on it.
Applying that principle to our own case and taking up the constant theme that fell from the lips of the noble Lord, Lord McIntosh, nothing should be decided by a parish council that cannot reasonably be decided by the parishioner himself. After all, a society is democratic in so far as its members can influence the decisions that affect them and the best way to do that is to give the decision to the citizen himself. Next to that, we should give it to the authority which is nearest to him and which he can influence. So nothing should be decided by a district council that cannot be decided by a parish council; nothing by a county council that cannot reasonably be decided by a district council; and, above all, nothing by Whitehall that cannot reasonably be decided by any of the local authorities. Only when we have vindicated that are we entitled to go on and say that nothing shall be decided in Brussels that cannot be decided in Westminster.
I should like to pay a particular tribute to the Front Bench speakers on whom so great a burden has fallen. I refer to both the noble Lords and the noble Baronesses, but above all we owe a great deal to the way that the noble Baroness, Lady Blatch, has conducted the debate from her side. As the noble Lord, Lord McIntosh, pointed out, cogency of argument on this Bill has been perfectly compatible with courtesy and good humour. The noble Baroness obviously comes to this subject with a profound knowledge, but that does not mean that the conduct of a Bill such as this does not involve an enormous amount of work in mastering a brief.
When the ancestor of my noble friend Lord Lytton returned from his vice-regal duties in India, his grandchildren put on a play to welcome him back. It was very suitably concerned with the return of a crusader from the East. The small girl who played the crusader's wife pointed to the array of dolls around the stage and said to him, "I too, my Lord, have not been idle". So may the noble Baroness, Lady Blatch, say, and we are greatly in her debt.
7.23 p.m.
Baroness Hollis of Heigham: My Lords, I would not normally rise to speak, but in the light of the Minister's opening comments perhaps I should do so. Obviously, I do not want to be unreasonable. As I think President Reagan once said, we all occasionally mis-speak. I am happy to acknowledge the graceful letters from both the noble Earl, Lord Howe, and the noble Baroness, Lady Blatch, but we have now had four differing versions from the Government in Committee, on Report, on Third Reading and at the Bill do now pass stage on an issue that we on this side believe lies at the heart of some of the debates over CCT; namely, the questions of cheapness and of quality and value for money. Where, for a little extra cost, a tender offers considerable additional quality
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and value for money, on the last ruling of the Government, after three previous attempts, it looks as though local authorities will be obliged to refuse it at the cost of good housekeeping and perhaps at the risk of fiduciary duty.
I regret that the House has lost the last opportunity to explore the issue still further. However, as the Minister rightly said, the matter will no doubt be pursued in another place, perhaps with less confusion and, from our point of view, even greater success, although I doubt with as much courtesy as we on this side have received from both Ministers opposite.
On Question, Bill passed, and sent to the Commons.

Weapons of Mass Destruction: Non- Proliferation
7.25 p.m.
Lord Kennetrose to ask Her Majesty's Government whether they will review the roles of the non-proliferation treaty and the anti-ballistic missile treaty in the context of a non-proliferation regime.
The noble Lord said: My Lords, we can only hope to contain the proliferation of nuclear weapons if we look at reality without confusion or sentiment and, above all, without double standards.
In 1945 Mr. Attlee decided to start up the United Kingdom nuclear weapons programme because President Truman went back on the perfectly clear agreement about nuclear weapons between Churchill and Roosevelt. Attlee said later,
"We could not allow ourselves to be wholly in their hands, and their position wasn't awfully clear always."
The direct motive for nuclear proliferation is the fear of some other country's nuclear weapons—China, India, Pakistan, Israel, the whole Arab world and Iran. The indirect one is an unwillingness to depend on one's senior ally. The two are not mutually exclusive. The British and French learnt that in 1945. In the 1950s the Chinese learnt that they could not rely on the Soviet Union. Israel is now surrounded by unfriendly countries, some far richer, on which the United States depends for oil. Unless those motivations are understood and respected, there can be no hope of curbing proliferation, and that is why we still have proliferation.
The partial test ban of 1963 did not succeed. Massive testing continued underground. The nonproliferation treaty of 1966–68 did not succeed because, as the non-aligned countries put it at the time, it was a case of,
"the drunken pastor preaching abstinence".
They had been arguing for the control of vertical proliferation as well as horizontal. The French Foreign Minister called it a treaty to castrate the impotent. Few of the nuclear weapon-capable powers signed. Canada and Sweden did. Most notably, the United States' client state, Israel, was not required to sign. A large number of the truly impotent did sign, hoping to see their security increased.
However, many of those optimistic signatories are now objecting to the nuclear threats that they perceive

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and have been refusing inspection rights to the International Atomic Energy Authority. Syria seeks a small reactor without safeguards until Israel accepts safeguards too. Iran states that it has a right to develop nuclear weapons if it wishes. Algeria is suspected. I shall deal with North Korea later. That Argentina and Brazil have agreed to reciprocal inspections under IAEA auspices is a rare instance of statesmanlike foresight.
A web of mutual fear suffocates the world and smaller things get caught in it. One of those is President Reagan's strange and silly dream of an ABM deployment, perhaps by many countries, which would have broken the anti-ballistic missile treaty of 1972 and introduced a general hair-trigger threat to the whole world. The United States was still proposing to what remained of the Soviet Union only last autumn that the treaty should be replaced so as to allow deployment. Still to this day, the United States is paying already nuclear Israel to work on a miniature version called Arrow. Britain has been tagging along in the hope of financial crumbs. If Arrow ever is deployed, it will destabilise the Middle East just as the full Reagan pipedream would have destabilised the whole world. But perhaps after three test failures it will not be deployed.
In 1991 the START agreement reduced the former super-powers' strategic missiles, but at United States insistence it did not reduce their warheads, any more than the earlier INF agreement had done. Last year the five permanent members of the Security Council discussed arms transfers and non-proliferation and made some worthy joint statements. Our Government say that they:
"have no reason to doubt that all five governments intend to observe the spirit of these agreements".
But those governments are still arranging the shipment of arms to the Middle East for many billions of dollars. The Gulf states want 25 billion dollars' worth; Saudi Arabia wants 18 billion dollars' worth and Syria wants Scuds. In truth the big five have learnt nothing and are still acting as though the economic health of their arms industries was their principal concern.
The problem of controlling and perhaps eliminating the former Soviet Union's possible 30,000 nuclear warheads is horrendous, and concerns the whole international community. The Minister may tell us what monitoring of the destruction of tactical nuclear weapons is taking place. Several of the republics will not allow the residual Commonwealth military authorities to take charge, let alone the Russian Republic. The very temporary commander-in-chief of the Commonwealth of Independent States, Colonel-General Shaposhnikov, suspects that the new republics' governments want to gain control over the former Soviet armed forces in their territories in order to sell the weapons.
Certainly they need the money. Meanwhile, our Government have decided that Russia is the legally valid successor state to the Soviet Union. Mr. Yeltsin, who was elected president and also declared himself prime minister and unlawfully took over all the Soviet
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KGB and interior ministry files, now sits in Moscow issuing decrees like a thistle shedding its down. They are not effective even within the Russian Republic. He is less effective this year in Russia than was Gorbachev last year in the whole Union. Why did our Government jump so eagerly to recognise his Russia as the heir of the Soviet Union? If it is true that it was to avoid triggering wider changes in the Security Council, it is something that they may live to regret.
Elsewhere, there are a few good signs. They are principally in Korea. The British Government and others have long been protesting to North Korea about its refusal to allow the IAEA to inspect its nuclear facilities, as it should have done since it signed the non-proliferation treaty. Those protests were part of the bad old world of humbug and double standards. What did we expect? The United States silently but conspicuously kept nuclear weapons in South Korea and was proposing to conduct the annual Team Spirit exercise even this year. Consequently, and because its vulnerability was increased by the collapse of the Soviet nuclear umbrella, a North Korean nuclear programme was only to be expected. American talk of "taking out" the North Korean programme was smartly and correctly rejected by both China and South Korea.
But all that hypocrisy was unnecessary. The United States has now unilaterally decided to withdraw its nuclear weapons from South Korea, and indeed elsewhere. Just as Western negotiators have always rightly insisted on foolproof verification of arms control agreements, so North Korea has been promised verification of the US withdrawal in return for inspection of its own nuclear facilities. It would be renewed humbug if the Americans were now to try to insist on North Korea dismantling enrichment facilities which they appear content to see Japan possess on a far greater scale.
What are the chances that an equal realism might be displayed in the Middle East? Israel has had a nuclear weapons programme for several decades, and now holds probably well over a hundred. It also has long-distance missiles which it claims can reach southern Russia. The United States has always tolerated and sometimes assisted that programme. It still does so. The British Government, at least since 1979, have feigned ignorance. For those reasons Arab countries have taken trouble to acquire nuclear weaponry and delivery systems. Iraq has done so more than most.
In 1981 Israel bombed and destroyed the Osiris nuclear establishment in Iraq. The attack went unpunished. That no doubt finally convinced Iraq and other countries that the United States did not intend to abide by either the spirit of the non-proliferation treaty or the letter of its own anti-proliferation laws, in so far as those affected its assistance to Israel. From that there followed the hidden Iraqi programme that the United Nations is now uncovering and destroying. The threat which Israel's neighbours see in the Israeli programme is now exacerbated by the Arrow programme: ABMs are an adjunct to a first strike

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posture, as well as having a defensive use. The Israelis think they need Arrow because of the Iraqi Scuds. This is a nuclear arms race in operation.
Unless the international community is wiser than usual, Iraq's motives for developing nuclear weapons will be inherited by Iran. With the scattering of Soviet nuclear and other weapons scientists, it will probably be easy for oil-rich governments to buy expertise. The United States nuclear weapons programme is also shedding experts.
The non-proliferation treaty itself comes to a kind of end in 1993. What then? Neither the treaty nor the general regime are self-sustaining. Three things are necessary for a state to live in virtue: to sign this treaty, to ratify it, and to admit International Atomic Energy Authority inspections. The Arab countries score low in all three. Israel scores nil in all of them.
I turn now to the totality of the regime of which the non-proliferation treaty is part. Is the anti-ballistic missile treaty a central part of it? Our Government say that they are fully convinced that the treaty has been a valuable source of stability. I think we would all agree with that. But the Bush Administration apparently still want to renegotiate it. What is the Government's view? Do they favour cancelling the treaty (which is what it amounts to) and, along with the remains of the Soviet Union, deploying a global protection against limited strikes—GPALS for short—which would presumably be built by the United States and paid for by the rest of us?
Does our Government intend to go along with the desire of the United States for its allies to extend their co-operation on theatre missile defence work? The noble Earl, Lord Arran, referred to it on 14th November in those terms; he said that we must "extend our co-operation on theatre missile defence". That presumably means collaboration with the Israeli-Arab programme. Or do they think that ABM technology should be included in the Missile Technology Control Regime, which would be an opposite and beneficial action? That regime, together with COCOM and the Nuclear Suppliers Group, constitute supply side anti-proliferation. But what we need now is action to remove the demand.
The proposal of the Prime Minister and now the United Nations for an arms export register is good. May we take it that Britain's arms exports will now be published and that Ministers will answer questions on them?
On a global scale, the International Atomic Energy Agency must now be shoved swiftly right into the forefront of world affairs. Clearly it cannot continue as before. It has been alleged that its two roles—to encourage the availability and safety of civil nuclear power, and to establish that neither technologies nor materials spread from the civil side to the military—are incompatible. There has to be an early UN inquiry into that question and early action on its findings. Either way, the duties of the IAEA are now closer to the heart of world security than they have ever been. Perhaps there will be jobs for unemployed American and former Soviet weapon makers.
The IAEA needs its own sources of information. Proposals for an international monitoring agency
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have long been on the table. Now is the time for it. The still partial test ban has to be completed. The United States opposes it on increasingly implausible grounds: the wish to produce a third generation of nuclear weapons, to make nuclear weapons "cleaner" and smaller, to improve reliability upwards from 75 per cent., and so on.
Now that the Soviet Union is out of the race, many governments see the completion of the partial test ban as the test of US bona fides; and they are right. In the interests of obtaining an effective non-proliferation regime, our Government should now slide away from their automatic support of this and other unjustifiable US positions. Minimum nuclear deterrence does not require more sophisticated weapons.
Last Thursday the noble Lord, Lord Cavendish, made an important statement in this House. He said that the Government have suggested to the Secretary General of the UN that a consultative committee of some of the signatories to the Fourth Geneva Convention should be called. That is the 1949 convention concerning belligerent occupation of territory. It would examine ways "to ensure Israeli respect" for that convention. [Official Report, 9/1/92; col. 1677.]
I congratulate the Government on deciding to do that. The Government are now calling not just for the specific Security Council resolutions to be applied to the Arab/Israeli conflict, but for one of the general laws of civilisation to be applied. That is good. But will they go further and make it a point of British foreign policy—an identifying point—that all the laws of civilisation must apply in the Arab/Israeli conflict? They include the non-proliferation treaty. That is why I ask my question today.
7.41 p.m.
Lord Wade of Chorlton: My Lords, I thank the noble Lord, Lord Kennet, for bringing the matter before us to debate today. As he so rightly said, it could turn out to be one of the most vital matters for the world. With the changes that are taking place, this issue could affect the lives of everyone.
Since the end of the Gulf War, the nuclear non-proliferation treaty and the regime of which it is part has been closely scrutinised and heavy criticisms such as those of the noble Lord, Lord Kennet, have been levelled against it. The inability of the international community to prevent Saddam Hussein from attempting to achieve a nuclear weapons capability has been held up as an example of the failure of the non-proliferation treaty and the threat of proliferation by other states such as North Korea. It has also been held to demonstrate the redundancy of the NPT.
However, it is my belief that the NPT continues to play an important role in preventing the spread of nuclear weapons. Undoubtedly the proliferation of nuclear weapons is the primary concern in relation to our security. Undoubtedly proliferation threats exist and are growing ever greater. However, in criticising the NPT I believe that there has been too much discussion about what the non-proliferation treaty does not do: I suggest that there has not been enough

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emphasis on what it achieves. There is a danger that, in criticising the NPT for not preventing certain states from attempting to obtain a nuclear capability, the baby may be thrown out with the bath water. I suggest that the NPT is the linchpin of the non-proliferation regime without which the other elements of the regime cannot prove effective.
I wish to emphasise the importance of the non-proliferation regime for our security. Let us be clear what it is. The NPT is a political vehicle which enables the international community to identify nuclear proliferators as acting outside the accepted international norms of behaviour. It identifies what is legal and illegal within the nuclear industry. It legitimizes action by the international community against states such as Iraq which renege on their agreement not to manufacture nuclear weapons. It identifies those states which have not signed the NPT and which have a nuclear weapons programme as acting outside those accepted international norms of behaviour.
Some people appear to believe that the NPT, together with the International Atomic Energy Agency, should act as a world policeman, scouring the globe for fissile material and the non-nuclear components of nuclear weapons. That is simply not acceptable or feasible in the world of independent nation states in which we live. It would be impossible to enforce. The NPT should be accepted and applauded for what it is—the means through which a line can be drawn on the sand beyond which potential proliferators know that it is unacceptable for them to take further steps to acquire a nuclear weapons capability.
Of course the NPT is not the only element of the non-proliferation regime. There are the export control groups for the non-nuclear components of nuclear weapons and the control of missile technology—the missile technology control regime. The International Atomic Energy Agency can and should be strengthened to enhance the non-proliferation regime. However, without the treaty itself the nonproliferation regime is in danger of appearing to be a suppliers' cartel, and, moreover, a cartel that is rapidly losing its control of the marketplace to new and perhaps less particular suppliers. The treaty represents the international political consensus against the proliferation of nuclear weapons. If this consensus is destroyed, it will be impossible to contain potential proliferators.
The treaty holds a review conference every five years. It is right and proper that Her Majesty's Government too should review the contribution that the NPT makes to our security. However, I believe that it would be extremely inadvisable to attempt any amendment of the NPT as part of this review process, since the fragility of the consensus that the treaty represents could be destroyed by such a move. The numerous contentious issues between the 140 and more signatories that would be opened up in the amendment process would make it practically impossible to achieve a new consensus.
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However, in such an area as this, where technical developments lead to new areas of concern and provide new avenues for circumventing present surveillance and controls, it is appropriate that the methods and procedures of the International Atomic Energy Agency should be improved and updated and that other elements of the regime such as the monitoring and control of exports and technology should be continually reassessed. I therefore ask Her Majesty's Government to reiterate their commitment to the nuclear non-proliferation treaty as the linchpin of the non-proliferation regime.
Further, the nuclear non-proliferation treaty is to be considered for extension in 1995. In order to reach agreement on its extension, it is important that consensus between the states parties to the treaty is maintained. Many developing states resent the perceived inequalities inherent in the treaty and are seeking concessions from the nuclear weapon states and other developed states to redress this perceived imbalance. In conjunction with that, many have severe reservations over the value of the nuclear nonproliferation treaty to their own security. Will the Government let us know what steps have been taken to ensure that the necessary consensus is being achieved and that the nuclear non-proliferation treaty will be extended in 1995?
The noble Lord, Lord Kennet, also referred to the anti-ballistic missile treaty. I am sure that the noble Lord understands that it is a treaty only between the United States and the Soviet Union and that the United Kingdom Government were never a signatory to the treaty but lent their support to it because of the contribution it has made to preventing vertical proliferation.
In the post-cold war, post-Gulf War era, that contribution must now be reviewed. The fear of vertical proliferation is past. Fear of a massive nuclear exchange between the super powers is also fading. The deployment of an ABM system on the scale envisaged by the Strategic Defence Initiative project is therefore no longer contemplated. The primary concern of the United States and Europe is now the existence of rogue undeclared nuclear weapon states and the presence of perhaps loosely controlled nuclear weapons in the states of the former Soviet Union. Europeans—in particular Southern and Eastern Europeans—may be tempted to consider the utility of a limited ABM system to counter the threat of limited nuclear weapon strikes by developing countries. Since the rationale behind the ABM treaty depended on the bipolar global political structure, such contravention of the treaty does not raise the same fears of vertical proliferation as it did in the past.
However, the debate surrounding the ABM treaty raises a number of questions about ABMs in a broader context; that is, it raises fears related to horizontal proliferation. If the developed states acquire ABM systems while the developing world does not obtain them, suspicions and resentments are likely to be raised which may damage the non-proliferation consensus.
My anxiety relates to the dissemination of the ABM systems to the developing world, a point raised by the

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noble Lord, Lord Kennet. The perceived success of the Patriot system during the Gulf War and fear of the proliferation of ballistic missiles both conventional and nuclear at a reasonable level has encouraged developing states to seek ABM systems off the shelf. Others such as Israel are being helped to develop their own systems. Many developing states are thus now eager to obtain anti-ballistic missile systems or anti-tactical ballistic missile systems.
I believe that the dissemination of the ABM systems to the developing world may have severe consequences for the non-proliferation regime. There is a danger that the dissemination of anti-ballistic missiles and anti-tactical ballistic missiles will lead to the dissemination of technology required to build offensive ballistic missiles. The publicity surrounding the illicit production of nuclear weapons often ignores the fact that a significant nuclear capability does not exist without the capability to deliver the weapons.
Thus the transfer of such technology is a danger to the non-proliferation regime. For example, Taiwan is believed to have constructed a surface-to-surface ballistic missile from ABM technology supplied to it by the United States of America. The missile technology control regime prohibits the transfer of key ballistic missile components. The transfer of a complete ABM or anti-tactical ballistic missile system would provide a potential proliferator with a substantial amount of the know-how required for a delivery system for nuclear weapons.
Furthermore, that technology, once outside the control of states dedicated to preventing nuclear proliferation or with less strict security and controls, could more easily transfer to third countries which are potential proliferators. I should be most grateful if Her Majesty's Government would express their views on that matter.
The noble Lord, Lord Kennet, also referred to the breakdown of control in what was formerly the USSR. Quite clearly that will have enormous implications for the non-proliferation regime. I understand that Byelorussia, Kazakhstan, the Russian Federation and the Ukraine have reaffirmed their intention to observe the provisions of the NPT and their intention to support the non-proliferation regime. However, we must accept that a number of redundant nuclear aeroplanes and facilities are already available in the world markets. I understand that last year it was possible to buy plutonium from certain sources in Switzerland and that clearly it was coming out of the Soviet Union. There are some 3,000 to 5,000 people in the former Soviet Union who hold sensitive information on the design and operation of installations for plutonium production and uranium enrichment. What will they do now that their jobs and opportunities are at stake?
I believe that this issue must be tackled with the utmost urgency by the British Government, the American Government —which have already indicated that they will do so—and by NATO. I welcome the recent comments made by my right honourable friend the Prime Minister on this issue. We must consider what, if suddenly we were to wind up our own industry, or if the Americans were suddenly to have no
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further armies or centralisation, the people employed in them would do. I hope that, as a result of the debate, the Government will form a more serious view of how Western nations can take a grip on the issue, build upon existing non-proliferation and aim to take more control of what might be a serious and dangerous situation for us all.
7.54 p.m.
Lord Chalfont: My Lords, the noble Lord, Lord Kennet, has rightly identified one of the major international political problems that faces this and many governments in the world. In this context I concentrate mainly on what the noble Lord has called horizontal proliferation; that is, the spread of nuclear weapons to those countries which do not at present have a nuclear weapons capability from those which do. In this post cold war period I regard that as being by far the greatest threat to international security and stability.
Furthermore, several matters germane to the issue were raised by the noble Lord, Lord Kennet. I must take issue with him or at least put a slightly different emphasis on some of the points that he made. The noble Lord mentioned the arguments that have circulated for more than 20 years about vertical and horizontal proliferation. He mentioned the derision with which some smaller non-aligned and non-nuclear countries refer to the non-proliferation treaty as being in a sense the preaching of total abstinence by drunkards. I recognise that argument; it was familiar in Geneva in the 1960s and remains familiar today. However, I must point out that the object of Article 6 of the nuclear non-proliferation treaty, which was deliberately inserted in the treaty to try to meet some of those worries—the article refers to the control of the nuclear arms race and the requirement upon the nuclear powers to reduce their own nuclear capability —is to some extent under way.
Before the current events in the Soviet Union it and the United States—the two major nuclear weapons powers—were reaching a whole series of agreements to reduce their own nuclear capabilities. They did so perhaps in response to enlightened self interest rather than in response to Article 6 of the treaty. Nonetheless, some of the worries of the non-aligned and non-nuclear powers at the time of the signing of the non-proliferation treaty were being addressed.
I know that the noble Lord, Lord Kennet, has always had a special and somewhat hostile view of the concept of the strategic defence initiative. In its earlier manifestations I could understand a good deal of his feelings. The original concept of creating some kind of nuclear carapace over the Western alliance in such a way that it became invulnerable to an enemy nuclear strike, always seemed to me to be somewhat ambitious. However, I am not entirely sure that I should regard it as being totally destabilising. Indeed, I should advance a view perhaps somewhat diametrically opposed to the noble Lord's: it may well be argued that the strategic defence initiative and the reaction to it by the Soviet Union was the beginning of the developments which have lead to the disintegration of the Soviet Union. It would not be too

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extreme to say that the SDI, which postulated the use of the enormous technological skills and industrial base of the United States of America, was the first time that the Soviet Union began to realise that it could not win the arms race against the United States of America. It is not too extreme to argue, therefore, that it was then that the Soviet Union began to realise that the future of the USSR, apart from the rest of the world, relied not upon an arms race with the United States of America, but upon some kind of accommodation with the West.
In any event, whether or not that is true, the idea of the space-based, four-phase nuclear system, which was at the heart of President Reagan's strategic defence initiative, has now lost any relevance or validity, as was said by the noble Lord, Lord Wade. It was intended as a means, by defensive instead of retaliatory methods, of deterring the Soviet Union from attack on the West. I think that everyone will agree that the likelihood of a first strike by the Soviet Union is now extremely remote.
However, we are now entitled to look at what one might call the relevant spin-off from the strategic defence initiative in the form of point defences and theatre defences. Surely if we can, within reasonable limits of expense and resources, construct defensive systems against nuclear attack, it would be foolish in the extreme not to do so especially, as the noble Lord, Lord Wade, said, if we are to be faced with innumerable, perhaps maverick, nuclear powers which would not even be as responsible in their use of nuclear blackmail as was the Soviet Union.
I suspect that the United States has now realised that the useful spin-off from the SDI will be a form of limited ballistic missile defence. I hope that Her Majesty's Government will go along with that if it appears to offer a successful defensive system as a result of further United States development.
The noble Lord mentioned the 27,000 or 30,000 nuclear weapons still existing in the commonwealth of independent states—the former Soviet Union. That is where a great deal of the problem lies. It is not simply that those states still pose a potential threat. It would be unwise to forget that. As I have said on many occasions in your Lordships' House, when assessing the future actions of a potential enemy, one must consider both their intentions and their capabilities. The intentions of the Soviet Union as it used to be —the intentions of Russia—may now be pacific in the extreme. However, intentions can change overnight.
Capabilities are a different matter. A country which still has on the soil of four of its republics 27,000 to 30,000 nuclear warheads and which are continuing to produce nuclear weapons daily and the missile systems to deliver them cannot be considered by any prudent military and political planner as anything but a potential threat. We must regard it as such until it disappears.
Also, I refer briefly to the comments made by the noble Lord, Lord Kennet, on the dangers of proliferation in the Middle East. Those are very grave dangers. In the debate which we had a few days ago in
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your Lordships' House some noble Lords concentrated on that aspect of the Middle Eastern problem. I suggest with all diffidence to the noble Lord that it is rather perverse to expect Israel to take a lead in that by some form of unilateral renunciation of a nuclear capability. We are all aware of the general belief that Israel already has a nuclear capability but I do not believe that we can argue from that that the reasons which led President Saddam Hussein to attempt to construct his own nuclear capability was entirely in response to that. Nor do I suppose that the clandestine enrichment operations which are going on in Iran at present are entirely a reaction to the Israeli nuclear capability. If that were so, it is not applicable to countries like Pakistan which, according to Benazir Bhutto, has a nuclear capability, nor to India, and is hardly applicable to other countries in the world which are regarded as near nuclear powers.
Lord Kennet: My Lords, before the noble Lord leaves the Middle East, I hope that he understands that I was not calling for Israel to engage in unilateral nuclear disarmament. That was not what I was saying. But would he not recognise that in any given part of the world the first country to obtain nuclear weapons bears a special duty to take a lead in getting rid of them in that part of the world?
Lord Chalfont: My Lords, within limits, yes. Perhaps I should preface my response to the noble Lord by saying that I have never been a great believer in regional arms control. I do not believe that that is the correct approach to any form of arms control although he may point to the Treaty of Tlatelolco which has created a nuclear free zone, so far at any rate, in Latin America. However, if one is aiming at a nuclear free zone in the Middle East, it is indeed true that Israel has a very special responsibility, but the noble Lord will know that the Israeli Government have already offered to participate fully in a regional nuclear free zone. One hopes that that may have some effect on the rate of proliferation in that area.
However, the point that I wish to make is that the real danger of proliferation in the Middle East lies in the fact that a number of countries, many of them hostile to Israel, are and have been developing for some time a nuclear capability. The proliferation process cannot be halted by Israel. There must be a broader and more universal approach to the problem of arms control, especially in the Middle East.
Lord Kennet: My Lords, I do not wish to continue to interrupt the noble Lord, but does he recognise that Israel is not alone in saying that it would be willing to see a denuclearised zone? That has been proposed by Egypt on many occasions over many years and it was also proposed by Iraq long before the beginning of the recent war.
Lord Chalfont: My Lords, it was indeed proposed by Iraq at the very moment that it was attempting to construct an advanced nuclear capability.
I point out also to your Lordships, in the context of what the noble Lord has just said, that in the Middle

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East there is the greatest concentration of countries which have either not signed or not ratified the nuclear non-proliferation treaty.
Leaving the Middle East for a moment, for the sake of clarity I revert to one point made by the noble Lords, Lord Kennet and Lord Wade. Unless I am much mistaken the noble Lord, Lord Kennet, referred to the NPT ending in 1993. In fact it ends in 1995, the year of the review treaty. The reason for that is that although the treaty was signed in the late 1960s, it did not come into force until 1970. Therefore, the review treaty, as provided for in the NPT, will take place in 1995 and not 1993.
In that context, I agree wholeheartedly with the noble Lord, Lord Wade, about the folly of attempting at that time to engage in any piecemeal amendments to the non-proliferation treaty. It took many years and many long and weary hours of negotiation to complete. I believe that it was Ernest Bevin, when Foreign Secretary, who once said of an international issue, "If you open that Pandora's Box, you never know what Trojan Horse will jump out". I believe that that is particularly true of the non-proliferation treaty.
As I understand it, the options open to the review conference are to terminate the treaty, to extend it for an indefinite period—in other words, for ever—or to extend it for a prescribed period. I hope that those three options will be concentrated upon and that there will be no attempt, as the noble Lord said, to meddle with the details of the treaty.
I conclude by saying that I believe that a number of steps can be taken to enhance the effectiveness of the non-proliferation regime and to underpin its impact. The first concerns the increased use of intelligence systems to detect proliferation. It is now time that much of the highly sophisticated intelligence effort that was in the past devoted to attempting to detect the military developments and intentions of the Soviet Union should now be released to try to find out precisely what is happening at any given time in any of the near nuclear powers or any power suspected of engaging in clandestine programmes. New methods of intelligence gathering are so sophisticated and effective that if they were to be properly put into effect it would be difficult for any non-nuclear or near-nuclear power to achieve a nuclear weapons capability without the knowledge of the Western and for that matter Soviet or Russian intelligence systems.
I can go further than that. I hope that Her Majesty's Government, in concert with other friendly and allied powers, will seriously consider the possibility of releasing intelligence gathered on these subjects, suitably sanitised, to the International Atomic Energy Agency. The one thing that that body needs if it is to be properly effective—here I agree with the noble Lord, Lord Kennet—is access to the kind of intelligence that sophisticated modern intelligence-gathering agencies can provide.
Finally, perhaps I can take this opportunity to congratulate the Government—when I say, "the Government", I mean not only this Government, but British governments for some considerable time past —on the efforts made in the field of non-proliferation. It is no exaggeration to say that much of the
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intellectual stimulus for arms control and disarmament for the past 20 years or more has to some extent had its seed in the British Foreign Office. A great deal of serious and profound thought on this subject goes on there. Noble Lords may be surprised, on examining the various arms control treaties signed since the 1960s, to find how many of them contain clauses and concepts which had their origin in our own government and Foreign Office. In saying that I pay tribute not only to this Government, but to all British governments which have been engaged in this process in recent years.
As the noble Lord, Lord Kennet, said and the noble Lord, Lord Wade, repeated, the major problem threatening international security and stability is the spread of nuclear weapons. Within that general proposition is another problem. But the major problem about proliferation of nuclear weapons now comes from the instability of what used to be the Soviet Union—the Commonwealth of Independent States. There are 27,000 to 30,000 nuclear warheads; there are technicians of enormous skill and subtlety, many badly in need of food and money. It is not beyond the bounds of possibility that nuclear weapons, warheads and certainly nuclear technology and know-how may be sold out of a disintegrating Soviet Union into areas of the Middle East which are especially sensitive and explosive.
In that context I hope that Her Majesty's Government will confirm that they regard proliferation as one of the most serious problems on the international horizon and that if there is serious disintegration in the Commonwealth of Independent States—as I said in the debate in your Lordships' House last week, I confidently forecast that there will be a cataclysmic upheaval in those countries before long—Her Majesty's Government will confirm that they recognise the threat to international security and stability which springs from that.
8.14 p.m.
Lord Kagan: My Lords, we are not dealing with a non-proliferation regime; we are dealing with non-proliferation anarchy. I do not believe that even the Soviet military know how many weapons it possesses. I returned from Lithuania last week. I am told that there have been active sales of T.72 tanks for the price of £30,000 which previously sold for £1 million.
I am sure that there is no difficulty in negotiating with either Yeltsin or Kravchuk, or any other leaders. The problem is whether or not they can deliver. With regard to intercontinental ballistic missiles, before anybody can press the button the chief of staff must be consulted and so on. But with regard to the small atomic weapons—land mines and artillery shells—some of them weigh less than 40 kilos each. Two of those can be transported in a mini-van. Above all, they are mostly operated by mechanical locks by the local commander and soldiers.
When I was there a few months ago I was told that some of the Lithuanian people who deal with Kazakhstan, Byelorussia and the Ukraine, found that they could not obtain accommodation in hotels in

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Minsk, Kiev and Kazakhstan. The reason was that the place was full of Pakistanis, Libyans and Iranians all shopping around for what the noble Lords, Lord Chalfont and Lord Wade, described as skilled people who can be seduced or induced to come down.
In Kazakhstan, which is a Moslem country where fundamentalist Moslems are active, it may be not only a matter of simple bribery or commercial considerations; they may think that it is fair to allow a fellow Moslem country such as Iran to have the benefit of atomic weapons. I am told that shells can be fired from any standard Soviet artillery piece. They will probably not be aiming for the United States right across the Atlantic, but any threat may arise from a quarrel between two generals.
The likelihood of Yeltsin or Kravchuk eventually staying in power is at best a moderate one. Eventually it will be a showdown between military men who believe that they are able to impose order where at the moment anarchy rules. Therefore, first, no treaty can be negotiated with people who cannot deliver. We are looking at a shifting situation. How does one counteract it? As the noble Lord, Lord Chalfont, pointed out and as the noble Lord, Lord Cheshire, mentioned in his memorable maiden speech, the best way is active intelligence on the spot. It is not difficult. At one time one did not even know where the atomic weapons were constructed. Now, if one goes to Vilnius in Lithuania, they will tell you where the plutonium is made, where the steel cases are made and so on. It is all quite open. What is required is the monitoring of precisely what is happening.
Perhaps I may tell your Lordships a joke that I was told in Vilnius. Two chaps were in the market place selling brooms. One said to the other, "I steal the stems; I steal the string; I steal the bristle and you undercut me". The other chap said, "Yes, because I steal complete brooms". Unlike Saddam Hussein, one no longer needs large amounts of capital to build up atomic capability; one can find the ready made articles and hire the total team. It only requires nine men to handle one of those units.
What might deter is stabilisation of the country. At the moment there is one thing on which the Baltic countries and Ukraine are agreed, and that is anti-sovietism and anti-bolshevism which changed into anti-Russianism. When one is in Lithuania one has the feeling that it is not a country with one president and 3.5 million people, but a country with 3.5 million presidents trying to run the country in different ways.
One factor becomes very clear even when one is in the country for only a very few days. There is the feeling that things will not stay the same. When things move, the situation will go to extremes and become neo-fascist. Some of your Lordships may remember the days of the Weimar Republic. What is happening now in the East is inflation, anarchy, total disbelief that a government can deliver and total cynicism against any ruler or politician. People in the queues now refer not to the bad old days, but to the good old
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days because now they queue in bitter frost for three hours to buy bread. They say "at one time at least we used to have our ration and now we do not have that".
Stability is very fragile. Any change will be inevitably a change to the extremes. The only factor that could prevent that and allow the present governments which were democratically elected, especially in the Baltic states, to continue is if they could show a visible sign of improvement. I do not mean an improvement in terms of having the British standard of living, but an improvement in terms of having soap, razor blades and things of that kind.
The experience of Gorbachev has not been lost on everybody else. He relied on the West. Democracy is not now considered to be the panacea by the broad masses. If one took a conscious decision to show positive steps in helping the people to raise their standards of living and to alleviate their shortages, that could save the present situation, otherwise it will deteriorate.
The interesting point is that the Germans and the Japanese are the only countries which have moved in in force. The German Government are not necessarily sending food, but they are buying up complete plants and joint ventures. The Japanese are doing the same thing in the Far East on the Siberian side. If the West wants to give positive signs—taking an example from our way of life—if we were to deliver some signal, the situation might improve and the present rulers who are in charge now may have a chance to survive. If that does not happen then we can discuss from now until Doomsday what treaties should be made, but there will be no one to treat with. The failure to support Gorbachev when there was still a chance may be deemed by history to be the biggest mistake that the West has made. Now is possibly the last chance to do something about that.
8.25 p.m.
Lord Mayhew: My Lords, I believe that we are all agreed that the problem of nuclear proliferation has become vastly more urgent and disturbing. We are grateful to the noble Lord, Lord Kennet, for raising the subject. We are probably also agreed that the major cause is the break-up of the Soviet Union closely followed by the related problem of the nuclear arms race in the Middle East. We are also worried because of the revelations, as a result of the Gulf War, of the limitations on the traditional methods of inspection and control of the IAEA.
I believe it was the noble Lord, Lord Chalfont, who said that there are now four republics with nuclear weapons in the former Soviet Union. I believe that he was referring to strategic nuclear weapons.
Lord Chalfont: My Lords, that is right.
Lord Mayhew: My Lords, if we take tactical nuclear weapons into account I believe it is true to say that they are in at least seven of the new republics and it may be more. It may be that 11 of the new republics have them. It is a nightmarish situation. There are more than 25,000 nuclear warheads spread over at least seven, possibly 11, new republics. Some of the republics are very small and very unstable. Until quite

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recently there were hundreds of tactical nuclear weapons located in Georgia. Perhaps the Minister can reassure us about that because as far as I know they are still there, but under whose control? It seems doubtful that they are under the control of the Russians if they are in Georgia.
What about the Georgian Government and which Georgian Government? It is a nightmarish situation. Are these weapons beyond the reach of terrorists and of corrupt politicians? Are they beyond the reach of the agents of Libya and Iran? Perhaps I may ask a specific question of the Minister: can he confirm or deny that three tactical nuclear weapons have been sold to Iran for 150 million dollars? I very much hope that the Minister can deny that, but there is no reason to disbelieve it because it seems all too possible in the existing situation.
One begins to feel nostalgia for the old East-West balance of terror. How simple, effective and successful it was! It produced the splendid START agreement which is now falling apart as a result of the new developments in what was the Soviet Union. We have all been exchanging views on the nightmarish situation, but what can we recommend the Government to do? It is very difficult to say. I believe I heard someone say that the new republics should accede to the non-proliferation treaty. To do that while they still have nuclear weapons would result in the worst solution of all. That would mean seven or 11 new nuclear countries which would be proliferation on a gigantic scale. It would set an example to other countries, such as India or the Middle East countries, to do the same. The worst solution of all is to have the republics accede to the non-proliferation treaty while still keeping their nuclear weapons.
Lord Chalfont: My Lords, I believe that there is a slight intellectual dichotomy or confusion here. The point of requiring the new republics to accede to the non-proliferation treaty is that they will become non-nuclear powers.
Lord Mayhew: My Lords, of course the noble Lord meant that. In fact, I do not believe that he said it. If they accede to the treaty as non-nuclear powers, that is what needs to be done. But that means that they must get rid of their nuclear weapons first. First, catch your hen and then enjoy your egg. The difficult problem is what to do with the nuclear weapons which they now have. If they are yielded to the Russians, for instance, in the absence of an effective commonwealth, if, as they should be, these weapons are yielded wholly to Russian control, that is probably the safest thing. That is what the Government should go for. The weapons should be located and listed. There should be insistence upon complete Russian control of the nuclear weapons. It does not mean that the Russians have to withdraw them from the territories of the republics. The republics can still be non-nuclear members of the non-proliferation treaty and keep Russian nuclear weapons on their soil just as the Americans, for a long time, kept their nuclear weapons on German soil.
However, the essential thing that the Government should go for is Russian control over all these nuclear
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weapons, and no recognition either of Russia or any of the other republics until this is done in the nuclear field. That is vital and it is the best action I can think of to recommend the Government to take.
Before turning to the Middle East, perhaps I may pick up a remark from the very interesting speech of the noble Lord, Lord Chalfont. He said, in opposition to the noble Lord, Lord Kennet, that the old argument against vertical proliferation—indeed, about the whole system—that the nuclear powers were keeping their weapons and stopping the others getting them, was like a drunkard preaching temperance. I side here with the noble Lord, Lord Kennet, because the reply of the noble Lord, Lord Chalfont, that the nuclear powers were reducing their nuclear weapons, is not true of this country.
It gives me an opportunity to remind the Government that so far from helping in this process with their nuclear policy, they are increasing enormously the nuclear capability of the United Kingdom. Not only is Trident a vastly more powerful system under their arrangements than Polaris, but they are adding an entirely new tactical air-to-surface nuclear missile system. What kind of a contribution to non-proliferation is that? That is vertical proliferation of the worst and least necessary kind.
Lord Chalfont: My Lords, I am sorry to interrupt the noble Lord again, but this is a very interesting debate and for once a real debate. The point about Article 6 of the non-proliferation treaty is that it requires the nuclear powers to begin the process of nuclear disarmament. My point was that that has begun. I fully accept that neither the French nor the British—nor, as far as I know, the Chinese—have any intention at the moment of reducing the level of their nuclear striking forces. But I make the point that the nuclear powers have begun this process in strategic arms negotiations between the United States and the Soviet Union. I do not want to go any further and become involved in the question of Trident.
Lord Mayhew: My Lords, two of the nuclear countries have started the process of disarmament. But my point is a fair one that the others have not begun the process of disarmament, and the British have begun the process of increasing our nuclear capability in the ways that I have suggested. However, this is by the way.
I want to say a word about the nuclear arms race in the Middle East, which was well described by the noble Lord, Lord Kennet. Here one has to avoid double standards. One has to begin by noting that there is at present an Israeli nuclear monopoly in the Middle East achieved with French and American assistance at a time when the United States was most emphatically insisting on non-proliferation all over the world; penalising the Pakistanis unless they agreed, and so on. It was turning a blind eye to the nuclearisation of Israel's defence forces.
I believe that a speaker said in this debate that Israel cannot be expected to achieve non-proliferation in the Middle East. However, it is the fault of Israel that she started the process of proliferation. But it has done no good to her. It may be that it can be argued

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that it backed up her territorial expansion. However, the weapons are, in practice, unusable except as suicide weapons. Yet inevitably—predictably—the Arab neighbours and Iran have responded and have searched for their own nuclear capability. They can hardly be blamed for that.
The great problem is how on earth to avoid a major nuclear arms race in the Middle East. It has to involve all the countries in the Middle East, including Israel. Any idea that one can ban Moslem atomic bombs and permit Jewish atomic bombs is so impracticable and unprincipled as to be not worth discussing. It has to be all countries. All the countries of the region have to be organised into a non-nuclear region. It is not impossible. It has been done before, but it requires statesmanship from Israel.
Here I come on to the next point that I want to make. It requires a very great strengthening of IAEA. I think here I parted company from the noble Lord, Lord Wade. Surely the experience in Iraq shows that vastly stronger powers need to be given to the IAEA. That must be so. If in the Middle East we are to have a non-nuclear zone, we are not going to get Israel to dispense with its nuclear weapons unless it is 100 per cent. certain that the new non-proliferation regime, that the powers of the IAEA are sufficient to make certain that her neighbours and Iran and Pakistan do not have these weapons.
Lord Wade of Chorlton: My Lords, surely that is the whole point. How can one strengthen the atomic energy regime without giving it such power that it itself has to have force? The purpose of having the treaty is to be able to isolate those countries that are not conforming to the treaty. Then there can be international activity against them. That I think is accepted and understood. However, when it is said that we must give the Atomic Energy Commission more authority, from where will that authority come? Who is going to give it the power to force the point? That is the difficulty.
Lord Mayhew: My Lords, the authority will be the Security Council: the same body that has given the IAEA authority to take the most drastic measures against Iraq. It might be worth my reading out Security Council Resolution No. 687 laying down the powers of the IAEA in relation to Iraq. The Security Council granted the agency:
"inspection rights such as unlimited movement of inspectors within Iraq, full access at any time to all locations, persons and information as deemed necessary by the IAEA for verification purposes, including unannounced inspections, ongoing notification of inventories of nuclear materials and installations and of the changes therein; the right to restrict or bar movement of suspected material or equipment; and submission of information on planned installations six months before starting construction".
That is draconian. I do not deny that that is interventionist.
However, I ask: is it not worth paying the price to have something on these lines applicable universally? We are not going to get nuclear-free zones in the Middle East unless people can rely on the observance
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of IAEA's restrictions by other countries. It can be done. The noble Lord, Lord Kennet, mentioned Korea. That is a very good example.
However, considering the outlook for nonproliferation and for this agency, I feel that apart from the Middle East and apart from the break up of the Soviet Union, in recent years, there has been a success story. Korea was a success story. The South Africans have agreed to accede to the treaty; and there is a prospect now of the whole continent of Africa being nuclear-free. The Argentines and the Brazilians have agreed to accede and to exchange mutual information. That opens the prospect of an entirely nuclear-free Latin America and Caribbean. Those are achievements. The French have recently agreed to accede. The Chinese are about to accede to the NPT and thus end their wicked career of supplying nuclear technology to Algeria, Iran, Iraq and Pakistan. These successes can be built on. Perhaps I may say at this point how glad I am to see that the noble Earl, Lord Arran, is taking a keen interest in this debate. It shows an appreciation of the topicality and importance of this subject.
Good guidelines on the powers needed in Iraq are necessary for an effective, universal, non-proliferation regime. I am glad to know that the board of governors and the director general of the agency are to discuss next month just this question of strengthening those powers in that way. I note that the director general said recently that the world could have an effective, universal, non-proliferation regime in place by 1995. He may be optimistic but it is the duty of all of us to do all we can to see that he succeeds.
8.41 p.m.
Lord Williams of Elvel: My Lords, the House is grateful to my noble friend, Lord Kennet, for asking this Unstarred Question. I say without qualification that it is the most important question facing the international community today. As the noble Lord, Lord Wade of Chorlton, said, we have to recognise that there is a serious danger of nuclear proliferation and we have to try to do what we can to stop it. Even though the attendance has been small and the attention from the Press Gallery has been limited on this important topic, this has been one of the most constructive and interesting debates that I have attended in the House. I believe that the Government will read with enormous interest what has been said by noble Lords.
The main question which arises from the debate is to what extent the treaties cited by my noble friend in his Unstarred Question have relevance today in the light of the disintegration of the Soviet Union. The noble Lord, Lord Mayhew, rightly pointed out that the non-proliferation treaty has had many successes. The noble Lord and my noble friend Lord Kennet pointed to Korea and South Africa. They pointed also to France and China. We must welcome those developments. Nevertheless, my noble friend Lord Kagan put his finger on the point when he said that the old Soviet Union, which is disintegrating into anarchy, and the successor republics cannot be relied upon to observe any of the treaties signed by previous

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administrations of the Soviet Union or indeed previous administrations of the republics themselves. That is the point we must consider today.
Where exactly are we in this connection? There are 3,000 to 5,000 Soviet scientists with direct experience of nuclear technology, the production of plutonium and uranium enrichment. A further 2,000 are experts in weapons design. As my noble friend Lord Kagan pointed out, the head-hunters are already in place. Iraq, Libya, Syria and possibly Algeria—and even Israel, I understand—are head-hunting in the former Soviet Union. What do we do about the Soviet nuclear brain-drain? If we can do nothing about it—it is difficult to see what we can do about it—what do we do about the outright sale of nuclear materials? As the noble Lord, Lord Mayhew, said, what do we do about the sale of tactical nuclear weapons out of the Soviet Union? I am sure that the noble Lord, Lord Cavendish, will be able to reply.
Even if we can answer those questions, what do we do about the problem of the delivery systems that are not ABMs or anything of that kind but are simply housed in suitcases? What do we do about a terrorist who appears in Whitehall or in the Champs-Elysées with a suitcase which happens to contain a newly-constructed nuclear device? These questions will have to be answered within the next decade or else the whole world will be blown up.
Like the noble Lord, Lord Mayhew, I confess that I have no specific answers. The noble Lord, Lord Chalfont, made the same point. We must rely on what we have. We have the non-proliferation treaty. It has been to a certain extent a success, but to make it a greater success we have, as other noble Lords have argued, to make sure that the enforcement procedures are much stricter than they are at present. I do not object to the idea put forward by the noble Lord, Lord Mayhew, that the IAEA should have the power of inspection by challenge. It should be able to go in at any point, use the authority of the United Nations Security Council and say, "We believe that you are doing something against the NPT and we want to know about it. We have the right to do so". I do not believe that we can operate any system other than severely controlled satellite-based intelligence techniques, maintained and developed under the IAEA. Certainly suitable information—I believe that the noble Lord, Lord Chalfont, used the word "sanitised" —should be made available to the public.
I do not believe that we can operate a system to control what is an enormously difficult situation—that is especially so in the Middle East—unless we accept that we ourselves in the United Kingdom must stop nuclear testing. We have to make a gesture. The gesture that I suggest is that we should stop testing and invite everyone else to do the same.
The post-Gulf War investigation in Iraq showed that the existing techniques of monitoring who is developing a nuclear weapon capability are sadly deficient. The noble Lord, Lord Chalfont, argued that we should not muck about with the nuclear non-proliferation treaty in the 1995 revision.
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Nevertheless, I believe that the rules of the nuclear suppliers' club, known as the London Club, should be included in any revision of the treaty.
My noble friend has raised an extremely complex and important problem. Most noble Lords have said what I intended to say. I thought that the noble Lord, Lord Wade, made a very impressive contribution. I believed half of what the noble Lord, Lord Chalfont, said, although I would differ with him on the role of the SDI as a mechanism for ensuring that the Soviet Union broke up and finally disappeared. I agreed almost entirely, unusually so, with the remarks made by the noble Lord, Lord Mayhew. His were words of very great wisdom and great persuasiveness.
I very much hope that we shall have another debate on the matter. I also hope that such a debate will be one of the full House at a proper time and in a manner which is dignified for this House. I return to what I said at the beginning. In my view, this is the most important issue facing this country and our world at this time. I think that it is a shame and a disgrace that we should be having a debate in this House at this time of night on a matter which is of such great importance.
Nevertheless, having said that, I must again express my gratitude to my noble friend Lord Kennet for raising the issue. It is to be hoped that the noble Earl, Lord Arran, who is sitting courteously on the Front Bench will take the matter away for the Government and will stimulate from that side of the House a further debate in the not too distant future.
8.52 p.m.
Lord Cavendish of Furness: My Lords, I am grateful to the noble Lord, Lord Kennet, for bringing this extremely important issue of non-proliferation before the House tonight. Indeed, as the noble Lord, Lord Williams, said, it has been an excellent debate. My colleagues will read what has been said with the greatest possible care. The Gulf War has brought home to all of us the importance of non-proliferation of all forms of weapons of mass destruction and has highlighted the need for the international community to redouble its efforts to achieve this objective.
Iraq's billion dollar endeavours to try to build an arsenal of weapons of mass destruction are a sobering reminder of what a ruthless and dedicated proliferator can do.
Further, the implications for the non-proliferation regime of the disintegration of the Soviet Union are still far from clear. There is plainly a danger that it will lead to a proliferation of weapons, weapons technology and, as has been said, the movement of key scientists. We and our NATO allies have impressed upon the newly independent republics our concerns. My right honourable friend the Foreign Secretary will be reinforcing that when he visits Russia, the Ukraine and Kazakhstan later this week. I accept that there are few issues which rank as important as the one which we are debating tonight.
The House will need no reminding of the uniquely destructive nature of nuclear weapons in particular. The prospect of such instruments in the hands of irresponsible and irrational men is a very frightening one. It was with the purpose of trying to avoid just

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such an eventuality that the Treaty on the Non-Proliferation of Nuclear Weapons was concluded in 1968, entering into force in 1970.
The NPT has since become the cornerstone of the nuclear non-proliferation regime. As a depositary state for the treaty we have a special interest in it and we attach the greatest importance to our responsibilities in this field.
We should recognise the great success of the NPT. Here I take issue a little with the noble Lord, Lord Kennet. It remains the most successful arms control treaty in existence. Well over 140 countries are now states parties to the NPT. The NPT has established nuclear non-proliferation as the norm and ensured that proliferators cannot claim respectability.
Since it is germane to this debate, I should like to take this opportunity to correct a few points of detail raised in the comments made by the noble Lord, Lord Chalfont, in the House last Thursday when he talked about those states which have not signed or ratified the treaty. I hope that he will not mind me pointing out that, contrary to what is in the Official Report, Saudi Arabia, Kuwait, Bahrain and Qatar are already parties to the non-proliferation treaty. The noble Lord also raised the question of Algeria. Although that country is not a party to the NPT, it has stated clearly that the reactor which China is supplying will be placed under IAEA safeguards. We understand that the agreement will be put to the board this February. We hope that the IAEA will be able to visit the site in the very near future.
The noble Lord, Lord Williams, asked as a sort of broad question, reflecting what I believe he felt to be the whole tenure of the debate, whether any of these treaties were still relevant. After reading the background to the debate and listening to what has been said, I am struck by the fact that, even if we cannot look for guarantees or even if I cannot stand here and say that we can attach this or that amount of weight to any particular guarantee, it is significant when a new nation seeking the respectability about which I was talking is asked to address a problem and says that it will do so. It is trying to make its way in the new world in which it finds itself.
I continue now to talk about the success of the treaty. There are still only five states which have declared that they have nuclear weapons—the same number as when the treaty was opened for signature over 20 years ago. We should not forget that the prospect of 20 or 30 states equipped with nuclear weapons, which so many people foresaw in the 1960s, has not come to pass. We should be grateful for that fact.
Further, the significant accessions to the treaty since the Gulf War, including that of South Africa, as well as the decisions of China, as has been mentioned, and France in principle to accede, are eloquent testimony in themselves of the international community's continuing faith in the NPT.
As a depositary state for the treaty, the United Kingdom has worked hard to encourage such accessions and will continue to work for others. The NPT remains the only global instrument through
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which states can make a formal commitment to nuclear non-proliferation. It provides a framework for stability and it remains an indispensable feature of regional and global security.
Nevertheless, the experience with Iraq has highlighted certain shortcomings in the workings of the regime. These need to be addressed urgently if international confidence is to be maintained. Those issues are being tackled and the United Kingdom is playing an active role in the process. Work is going on in the International Atomic Energy Agency on the strengthening of safeguards. Together with our European Community partners and other like-minded states, we have given strong support for this process, and put forward our own specific proposals. These include the greater use of special inspections, as mentioned by the noble Lord, Lord Williams of Elvel. Such inspections can provide a mechanism whereby undeclared but suspect nuclear sites can be visited.
The problem of undeclared sites is fundamental and limits the effectiveness of the present safeguards system. Special inspections can help to ensure that other states parties to the NPT do not follow Iraq's example and pursue an entirely covert nuclear weapons programme. The UK has long advocated greater use of such inspections and stands ready to provide whatever help it can to the IAEA to make sure that such a system will work.
Other things are also being done to buttress the non-proliferation regime. Supplier controls play a vital role in restraining the transfer of equipment for use in a covert weapons programme. Again, I believe that the noble Lord, Lord Williams, mentioned that point.
The UK has always been a strong advocate of strict controls and we have been active in promoting them. We therefore welcomed the reactivation in 1991 of the Nuclear Suppliers' Group and strongly supported work to draw up a regime to control nuclear dual-use items. The use of such items seems to have been key to Iraq's programme. We have played our part in this work and hope that it can be finished before the full NSG meets again next spring.
In this context I should like to draw to your Lordships' attention the fact that, in an effort to strengthen the barriers against nuclear proliferation, the UK decided on 24th September last year to adopt a policy of full-scope safeguards as a condition of nuclear supply. This means that Britain will not allow the export of any significant new supplies of nuclear materials to any country, other than the nuclear weapons states, where there are any nuclear installations not subject to IAEA safeguards.
We are not complacent. There will no doubt be other challenges. As I have said, the implications for the non-proliferation regime of the disintegration of the Soviet Union are still anything but clear. In the face of such challenges the proposed improvements I have described obviously cannot guarantee that the non-proliferation regime will be watertight. The UK cannot solve the problems unilaterally, but, with vital international co-operation between supplier countries to stem the kind of procurement activity carried out by Iraq and others, we are optimistic that the

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improvements will make a significant contribution to such an objective. We believe that it is by seeking to strengthen the existing instruments of the nuclear non-proliferation regime, not by seeking to create new ones, that we can best pursue our objectives. I sense that that was the mood of the debate tonight. In the final analysis our best hopes lie in universal adherence to the NPT and full compliance with its provisions. It is because of our faith in the treaty that we shall work for its indefinite extension in 1995. We call upon all like-minded nations to join us in this endeavour.
The noble Lord, Lord Kennet, has also raised the question of the anti-ballistic missile treaty. Before I address that question specifically, I should like to say something about the missile technology control regime. We and our G7 partners established the missile technology control regime in April 1987. The regime is designed to prevent the proliferation of missiles capable of delivering nuclear weapons. The use by Saddam Hussein during the Gulf War of missiles against civilian targets has further underlined the need to prevent the spread of these uniquely destabilising systems. The MTCR has an important role to play in countering that threat.
The regime has had significant successes. The efforts of MTCR members have led to some missile programmes being stalled or even abandoned. But there is clearly much more which can be done to reduce this threat and we and our partners are seeking every opportunity to improve the regime yet further.
As a result of the drive to expand the regime, launched in London in 1989, membership has grown to 18 countries, thereby bringing into the regime a number of key suppliers of missile technology. We hope to see further expansion, and continue to urge all states to abide by the MTCR guidelines. We are also looking at how to involve the other major suppliers and emerging suppliers of missile technology, who are not currently members.
There is also concern about missiles with payloads below the current MTCR parameters, which could be used to deliver chemical and biological weapons. While we and our partners agree that it would be desirable to cover these, it may be that changes to the scope of the regime would create practical difficulties and undermine the present effectiveness of the regime. In consequence, we are urgently examining these issues with our partners.
We continue to look at ways to toughen implementation. We have recently adopted a revised and updated list of the technology covered by the regime, and are looking at ways to improve harmonisation of implementation by all the member countries.
As far as the ABM treaty is concerned, US activity on ballistic missile defence was centred originally on the concept of a strategic layered defensive system against attack from long-range missiles. We know that Soviet research was focused on similar areas.
In response to the much reduced threat of an all-out Soviet nuclear attack, President Bush announced in January 1991 the refocusing of the SDI programme as Global Protection Against Limited Strikes (GPALS). The more modest objectives of GPALS are to protect
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against accidental, unauthorised or limited ballistic missile attacks against the US and its allies, and threats of the sort which the world faced in Iraq 12 months ago.
The development and deployment of anti-ballistic missile systems by the US and the Soviet Union is governed by the ABM treaty and its 1974 protocol which, among other things, prohibits the testing or deployment of space-based ABM interceptors and limits the permitted numbers of fixed ground-based launchers. By maintaining confidence in the deterrent capability of strategic nuclear arsenals, the ABM treaty has made an important contribution to stability and to the reduction of tension and prevention of large-scale war.
However, given developments in technology and the threat presented by the wider proliferation of ballistic missile capabilities, the US has frequently spoken of the need to re-examine the treaty in its existing form and has on occasion discussed this with the Soviet Union, without result. For instance, the US Congress has urged the President to begin negotiation of some amendments to the treaty provisions in order to accommodate defences against new potential threats. The US has also indicated its intention to deploy an ABM treaty-compliant system for defence of the US before the end of the century.
Although the ABM treaty's interpretation and future is a matter for the two signatories, we do of course have a strong interest in the treaty in so far as it affects the effectiveness of our own deterrent. We and our NATO partners have been kept closely in touch with the re-orientation of SDI towards GPALS, and would be consulted about any review of the treaty which the US was considering.
The United Kingdom continues its full support for the SDI programme and has, along with other US allies, participated in SDI-related research. UK participation is intended to enhance our research capability in areas of high technology relevant to both defence and civil programmes. It has resulted in awards of research contracts to British companies.
At present GPALS remains a research initiative. Deployment of space-based elements would be a matter for negotiation. We hope that the dialogue which the United States has established hitherto with the authorities in the Soviet Union—that is the old Soviet Union—will lead to improved understanding on strategic defences.
Lord Williams of Elvel: My Lords, I am sorry to interrupt, but could the noble Lord please explain what he means by "the old Soviet Union"? Which authorities are being engaged in discussion?
Lord Cavendish of Furness: My Lords, we are talking with everyone. As the noble Lord may have heard me say, we are dealing with Russia as the continuation of the Soviet Union. We are also dealing with the various republics. We have given recognition to the republics in some cases but in other cases, for reasons which I have given, we have not yet done so. We still feel dialogue is relevant and will make a contribution to overall strategic stability.

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The noble Lord, Lord Kennet, asked me to comment on what might be done in respect of nuclear weapons situated in the old Soviet Union—I hope that I may use that term again. We and our allies have made clear to the leaders of the former Soviet republics the importance we attach to ensuring safe, responsible and reliable control of nuclear weapons and to preventing their proliferation. At the North Atlantic Council Meeting on 19th December, NATO foreign ministers announced that the Alliance was ready to respond as fully as possible to requests for practical assistance in achieving those objectives. The President of the United States has already offered to discuss the safe transportation, storage and dismantling of nuclear weapons with the relevant authorities. The US Congress has voted 400 million dollars for practical assistance with that task.
Lord Kennet: My Lords, why is this being done through NATO and not through the United Nations?
Lord Cavendish of Furness: No, my Lords, I cannot answer that at present. I should be able to answer the noble Lord, but I shall certainly inquire about the matter and write to him. Reference has also been made to the proposals between Mr. Bush and Mr. Gorbachev. We welcome the far-reaching proposals of Mr. Bush and the positive response made by President Gorbachev which together will mean the global elimination of nuclear artillery shells and nuclear warheads for short range missiles, the withdrawal of maritime tactical nuclear weapons and the standing down from alert status of strategic bombers.
Those proposals mark a potential turning point and fully accord with our own policy of working for secure defence at a lower level of armaments. I particularly wish to emphasise that point as leaders of the new Commonwealth have undertaken to honour Gorbachev's proposals to eliminate tactical nuclear weapons. The commitment made at Alma-Ata to withdraw tactical nuclear weapons by July 1992 for dismantling under joint supervision is a positive step forward in this objective.
Lord Mayhew: My Lords, what the Minister is saying surely is a little outdated. I am afraid that the agreement on tactical nuclear weapons with Mr. Gorbachev is meaningless. There is no one now to carry it out.
Lord Cavendish of Furness: My Lords, I made the point that nothing is certain any longer in that part of the world. I cannot say the news is all good news, but I am saying that the people who even for the time being are taking responsibility have at least made the gesture of accepting the responsibilities of the former leaders. To that extent I believe that the commitment I have mentioned must be described as encouraging news. It is for the noble Lord, Lord Mayhew, to decide how much weight he wishes to attach to it. I cannot guide him on that.
Lord Chalfont: My Lords, I apologise for again intervening, but this has been such a good debate that
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it would be a shame if anything confusing were left in the air. Perhaps I may approach the matter in another way. Have Her Majesty's Government any reason to believe that the Republic of Russia under Mr. Yeltsin will honour any of the agreements arrived at between the United States and the Soviet Union? If they have information to that effect, it is of course encouraging.
Lord Cavendish of Furness: My Lords, I can go no further than say that I think the indications are that the new leaders wish to take that responsibility. That is what we, our allies and partners are working for. To that extent we can feel encouraged. The noble Lord, Lord Kennet, asked about our involvement with Arrow. The co-operation between the United States and Israel on the Arrow programme is carried out under the terms of a bilateral memorandum of understanding between those two countries. Interpretation of the ABM treaty is not in this context a matter for the UK. I hope the optimism—
Lord Kennet: My Lords, we know that. The point is we want to know what the British Government's policy is towards the action of the United States in helping Israel to develop a medium range ABM system. Are we helping that development? If we are not helping it physically or financially, do we think the policy of the United States is correct or incorrect? I asked that question in my speech and I also asked it in a letter that I wrote to the Minister in advance of this debate.
Lord Cavendish of Furness: My Lords, the noble Lord has asked the question on a number of occasions. As I said, the matter is subject to the memorandum between the United States and Israel, and from our point of view it is a defensive development so far as concerns Israel. I am afraid that I cannot be drawn further on that matter.
Lord Kennet: My Lords, can the noble Lord help me once more? Does he know whether we are helping physically or financially in the Arrow development? If he does not know, will he find out and let the House know in due course? If he does know, will he tell us fairly and squarely whether or not it is confidential?
Lord Cavendish of Furness: My Lords, it is a bilateral agreement. That has been made perfectly clear to the noble Lord on a number of occasions. I am sorry that we cannot go further.
The noble Lord also asked me about North Korea. I hope that the optimism which has been expressed about North Korea is well founded. We understand that North Korea is about to sign a safeguard agreement with the IAEA. We welcome that news. We look forward to the agreement's speedy ratification and implementation.
My noble friend Lord Wade spoke of the danger of proliferation of ABM technology. I can assure him that ABM technology is closely held between the United States and the signatories to the bilateral memoranda.
Several questions were asked and there was some speculation about how the NPT will be taken forward, renewed or brought to an end. It is my understanding

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that it does not end but is extended in phases. The next extension conference will be in 1995. My noble friend Lord Wade raised the question of proliferation resulting from the exodus of Soviet nuclear scientists. Naturally that is a matter giving rise to great anxiety. The UK is consulting closely with the United States and our other NATO partners on ways to prevent proliferation. We have made our anxieties known. the possible effects of Soviet scientists selling their expertise is one of the major problems which is receiving attention. We have made it clear to the individual republics that their approach to nonproliferation will be crucial in developing our bilateral relations with them.
I noted with interest the suggestion of the noble Lord, Lord Chalfont, that advanced intelligence currently targeted on immediate defence should be switched to give additional strength to the nonproliferation effort. I should be very pleased to investigate that matter and see whether any further thought has been given to it.
The noble Lord, Lord Mayhew, spoke of an alleged sale of tactical nuclear weapons from the Soviet Union to Iran. I can say that I am aware only of the press reports and have no confirmation of the matter. Having been alerted to the possibility we shall continue to monitor the situation.
I agree with the noble Lords, Lord Mayhew and Lord Chalfont, that all republics except Russia should fulfil the commitment which most have already made to accede to the NPT as non-nuclear weapon states, leaving Russia as the continuing nuclear weapon state. That is what we are urging them to do.
I hope that I have dealt with the questions which have been raised. These are vital issues. They touch on the security of this country and on the security of the whole world. I can assure your Lordships that the Government will continue to place the highest possible priority on meeting the challenges which the non-proliferation regime will undoubtedly face in the years to come.

Croydon Tramlink Bill [H.L.] Durham Markets Company Bill [H.L.] Humber Bridge Bill [H.L.] Llanelli Borough Council (River Lliedi) Bill [H.L.] London Local Authorities Bill [H.L.] Price's Patent Candle Company Limited Bill [H.L.] River Humber (Upper Burcom Cooling Works) Bill [H.L.] River Humber (Upper Pyewipe Outfall) Bill [H.L.] River Usk Barrage Bill [H.L.] South West Water (St. Ives) Bill [H.L.] South Yorkshire Light Rail Transit Bill [H.L.] Ulster Bank Bill [H.L.]
Presented and read a first time.
House adjourned at seventeen minutes past nine o'clock.