Lords Sitting of 9 November 1992

Preamble
The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Lichfield.
Lord Ashburton Lord Ashburton —Took the Oath.

CFC Refrigerants
2.37 p.m.
Viscount Hanworth Viscount Hanworth asked Her Majesty's Government:
What steps they have taken safely to dispose of chlorofluorocarbon (CFC) refrigerants from government establishments, and whether they plan to use ammonia or other non-CFC refrigerants in future large refrigeration installations.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Strathclyde): My Lords, government departments are taking action to ensure the safe disposal of CFC refrigerants in equipment in their premises in accordance with current legislation, standards and best industrial practice.
Departments are also being encouraged to consider whether CFC-based refrigerant systems need to be retained. We will continue to examine the scope for using alternatives that are acceptable on health and environmental grounds.
Viscount Hanworth: My Lords, I thank the Government for that very encouraging reply. Can the Minister say whether we are pressing other EC countries to follow suit?
Lord Strathclyde: My Lords, I am delighted that the noble Viscount is encouraged by my first reply. Yes, we are encouraging other EC countries. The
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noble Lord may know that in Copenhagen this November we are reviewing the Montreal Protocol to try to bring forward the date for phasing out CFCs.
Baroness Nicol: My Lords, is the Minister aware that the accepted replacement for CFCs, which is HCFCs, is now recognised to be just as bad in environmental terms as the CFCs themselves? Can he say why it is that the Government are being so reluctant to look for yet another alternative? Is it because they are being advised solely by the chemical industry and are trying to recover that particular investment?
Lord Strathclyde: My Lords, the noble Baroness is right in saying that HCFCs may cause damage to the ozone layer. It is damage which is considerably less than that caused by CFCs. Therefore we recognise that it is an important transitional substance. I do not deny what the noble Baroness has said. We recognise the need to control the use of HCFCs. The United Kingdom is pushing for strict controls on their consumption to be included in the reviewed protocol.
Baroness Nicol: My Lords, perhaps I may pursue the matter a little further. Why are the Government refusing to accept the United Nations' suggestion that HCFCs should be phased out by the year 2005 and are insisting on 2020 instead?
Lord Strathclyde: My Lords, that is something that will be discussed in the run-up to the review of the protocol in Copenhagen. My understanding is that the United Nations is currently suggesting a phase-out of HCFCs by the year 2020. The Community has not yet decided whether a date should be accepted. I am sure that that will be decided before the meeting in Copenhagen.

Price Marking Order 1991: Consultation
2.41 p.m.
Lord Lucas of Chilworth Lord Lucas of Chilworth asked Her Majesty's Government:
What action they propose to take to amend the Price Marking Order 1991 (SI 1991/1382).
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Baroness Denton of Wakefield): My Lords, I am pleased to assure my noble friend that my department will be in a position to discuss the way forward with interested parties very shortly.
Lord Lucas of Chilworth: My Lords, is my noble friend aware that this order was declared defective by the Joint Committee on Statutory Affairs as long ago as July 1991? Is she further aware that the delay by the department in amending the order has resulted in two prosecutions; one resulting in a £5,000 fine and the other in a conviction which might cause the loss of a job? Does she not agree that it is time that the description "shortly" is put into effect immediately?
Baroness Denton of Wakefield: My Lords, I point out to my noble friend that the law must always be followed as it stands at present. Retailers are aware of that. Therefore, it is for the court to decide the outcome of prosecutions. I stress that I said "very shortly" and not "casually". I am also determined that, given the difficulties of dealing with the concerns within the terms of European Community directives, this time we shall get it right.
Lord Clinton-Davis: My Lords, will the Minister explain why, although in September 1991 the DTI agreed with the British Retail Consortium that the order was unreasonable and/or unclear in certain instances and undertook to produce a consultation document, it has not yet done so? Can the Minister say where the amending order is that was promised to enable sales by auction to be excluded from the pricing provisions as that was promised in July 1991? Why is there such an enormously long delay?
Baroness Denton of Wakefield: My Lords, we went out to consultation twice before the last legislation, and we assumed that that consultation would give us the answers from the party involved. On this occasion we have had to go back and look at it again. Although it is important that we do not overregulate, we must protect the consumer in these matters—and the protection of the consumer is best ensured by offering choice.
Lord Clinton-Davis: My Lords, but protecting the consumer when the Government undertook to produce a consultation document well over a year ago seems hardly to have been a priority on their part. Why the delay when they have made that promise?
Baroness Denton of Wakefield: My Lords, the promise that was made was to come forward with this. I can only repeat my initial statement—that this will come forward very shortly indeed.

Industrial Strategy: Policy
2.43 p.m.
Lord Benson Lord Benson asked Her Majesty's Government:
Whether they have formulated an industrial strategy and, if so, whether it has been recorded in any official publication which acquaints the public with the detailed proposals.
Baroness Denton of Wakefield: My Lords, the Government have a clear industrial strategy. Put simply, it is a long-term commitment to help British industry succeed in world markets. That means creating the climate within which industry can thrive and ensuring that the policies of both the DTI and the rest of government take the needs of business into account. No single publication spells this out in terms of detailed proposals. It is a deep-rooted concern which informs all our decision-making.
Lord Benson: My Lords, I am grateful for that Answer to my Question, but I am bound to say that it has confused me a little about what the situation is. I wonder whether the noble Baroness is aware that on 7th October the President of the Board of Trade is reported to have said that the Government should have an industrial strategy and gave some details of what he proposed. My question is: is that a private strategy of the President of the Board of Trade, is it one which the Government have discarded or is it one which they propose to adopt?
Baroness Denton of Wakefield: My Lords, obviously the strategy of the President of the Board of Trade is not a private strategy. At the Department of Trade and Industry we are responsible for the future of industry and I can assure your Lordships that that strategy is understood and endorsed by the Government.
Lord Bruce of Donington: My Lords, is it not a fact that the industrial strategy of the Government is not to have one?
Baroness Denton of Wakefield: My Lords, I said very clearly in my first Answer to this Question that we have a very clear industrial strategy: it is a long-term commitment to help British industry succeed in world markets. I note from previous debates that there has been some question about non-intervention in industry. We will intervene on behalf of industry and we have certainly improved our lines of communica-tion with industry.
Lord Peyton of Yeovil: My Lords, I am not quite sure to what extent my noble friend's colleagues in the Department of Trade and Industry are avid readers of your Lordships' proceedings. If they are not, I wonder whether my noble friend will do her utmost to persuade them to read and then to read again the very pointed but short speech that was made by the noble Lord, Lord Benson, in your Lordships' House last week.
Baroness Denton of Wakefield: My Lords, I am delighted to tell the noble Lord that that we have already done.
Lord Callaghan of Cardiff: My Lords, is the noble Baroness aware that the words that she read out sound more like a slogan than a strategy and it is a slogan that we have heard with every single change of government policy over the past 13 years? Could she please tell us what are the latest evidences of this "industrial strategy"?
Baroness Denton of Wakefield: My Lords, I am grateful to the noble Lord for giving me the opportunity to quote some of the evidence of the success of our past policy. Output has risen since the start of the year. In the 1980s, output growth was the same as that of Germany and faster than that of France or Italy, while productivity grew faster than in any other major industrial country. Since 1981, output is nearly one-quarter higher, investment is one-third higher and productivity is well over one-half higher. If it is a slogan, it must be a pretty effective slogan.
Lord Holme of Cheltenham: My Lords, does the commitment to which the noble Baroness has referred in her Answer extend to the question of training? Given the importance of training to British industry and to the refreshment of our skills base on which our competitiveness depends, may I ask the noble Baroness whether she and her colleagues—both the President of the Board of Trade and those at the Department of Employment—will intervene with the Treasury in the current spending round to make sure that training is not cut?
Baroness Denton of Wakefield: My Lords, the noble Lord knows better than I that we must wait for the Autumn Statement for that answer. Perhaps I may simply say that we at the Department of Trade and Industry work very closely with the Department of Employment and with the Department of Education, because that is where the whole issue starts.
Lord Dormand of Easington: My Lords, is the Minister aware that perhaps the greatest failure of this Government has been their inability to halt the decline in manufacturing industry? As the noble Baroness has mentioned the President of the Board of Trade, does she recall him saying in a speech that he would intervene before every meal every day? Can we not have something more specific about intervention in manufacturing industry as that will certainly be crucial over the next few years?
Baroness Denton of Wakefield: My Lords, I must, unfortunately, disagree with the noble Lord. The United Kingdom volume share of world trade in manufactures is estimated to have risen over the past three years. Perhaps best evidence of intervention is in his own part of the country where, by leading the fight for inward investment, we have returned to that area of manufacturing which will match the best in the world.
Lord Mackay of Ardbrecknish: My Lords, will my noble friend reflect on the history of the past 40 or 50 years in this country which is littered with industrial strategies which have gone quite wrong? Is it not the case that over the past 40 or 50 years governments of all parties have proved much more successful in
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identifying sunset industries and pouring billions of pounds of taxpayers' money into them than in identifying the sunrise industries which have proved the basis for our success in manufacturing output in this country?
Baroness Denton of Wakefield: My Lords, it gives me great pleasure to agree with my noble friend. It is important that we are at the beginning of the cycle, not at the end.
Lord Ezra: My Lords, does not the noble Baroness agree that the noble Lord, Lord Benson, has raised a crucial issue? There is a widening debate on the question of industrial strategy. Today in Harrogate the CBI is talking about this issue with four Ministers present. Would it not be desirable from the public's point of view if in due course the Government were to prepare a White Paper on all the issues which are now arising in connection with industrial strategy?
Baroness Denton of Wakefield: My Lords, the noble Lord raises a good point in that the CBI is indeed meeting today and will be addressed by my right honourable friend the President of the Board of Trade tomorrow. I shall certainly convey the noble Lord's remarks, but what is really important is that we keep working closely with industry to encourage growth.
Lord Mellish: My Lords, does not the noble Baroness understand that the nearly 3 million unemployed people in this country are not a bit impressed with what she has just said about there being an industrial strategy because they know it is not true? Can we expect therefore on Thursday, when the Chancellor speaks, to hear about an industrial strategy?
Baroness Denton of Wakefield: My Lords, I would simply repeat that I cannot go ahead of the Autumn Statement.
Lord Campbell of Alloway: My Lords, without anticipating the Autumn Statement, is my noble friend in a position to comment in any way on the speech of the noble Lord, Lord Benson, on 4th November, which commanded respect and attention from many noble Lords in the House?
Baroness Denton of Wakefield: My Lords, it gives me great pleasure to say that there was much in the speech of the noble Lord, Lord Benson, with which all of us at the DTI absolutely agreed.
Lord Stoddart of Swindon: My Lords, as the Government clearly—
The Earl of Halsbury: My Lords, surely the—
The Lord Privy Seal (Lord Wakeham): My Lords, I think that we have time for both noble Lords' questions.
Lord Stoddart of Swindon: My Lords, as the Government clearly do not have an industrial strategy, may I recommend that they now dust down the report of your Lordships' Select Committee on Overseas Trade of 1985 which proposed an industrial

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strategy which is just as relevant today as it was then? That would help the Government very much. May I recommend that the Government do that?
Baroness Denton of Wakefield: My Lords, I am grateful to the noble Lord for his recommendation but I would say that we in government firmly believe that the world has moved well forward since 1985.
The Earl of Halsbury: My Lords, surely the relevant question is not what is the Government's policy but what are they doing about implementing it?
Baroness Denton of Wakefield: My Lords, I shall restrict my answers to what the DTI is doing about implementing it, which includes opening up markets, removing barriers to trade, providing the best possible service to exporters, making constant efforts to attract inward investment, encouraging wealth-creating exploitation of publicly financed research and development, restructuring our department so that we are closer to industry and encouraging industrial secondees to join us so that the conversations are absolutely relevant.
Lord Mackie of Benshie: My Lords, I have been most impressed by the replies of the noble Baroness. We have made enormous advances in production, the economy is booming and the Government have done marvellous work. Can she explain why this has led to our being £15 billion in the red in the balance of payments?
Baroness Denton of Wakefield: My Lords, I do know always to be nervous when praised. We can still have growth in manufacturing industry. We can see enormous growth and improvement while still not having yet solved our balance of payments problems which must be high on our list of priorities.
Lord Clinton-Davis: My Lords, does the noble Baroness recognise that it is not enough just to read the speech of the noble Lord, Lord Benson? It is important to digest it, which clearly the department has not done. Is she not aware that what she has told the House today bears little relationship to the reality that surrounds the lives of some 3 million unemployed? Is she not aware that under her Government's tutelage we have lost 4 per cent. of our output, 7 per cent. of our manufacturing industry, 11 per cent. of our engineering industry and 30 per cent. of investment in manufacturing industry? Is that a record of which she can be seriously proud?
Baroness Denton of Wakefield: My Lords, had the noble Lord asked his question earlier I would have quoted some of the changes in Germany. There has been restructuring of industry throughout the world. Unemployment is a major issue. Productivity makes companies competitive. We have to live with that fact and we must make sure that it is dealt with. Perhaps I may say as a final remark on the speech of the noble Lord, Lord Benson, that we believe that his suggestion that we should behave like a football manager and manage from the side is something that we are already doing.

House of Lords: Members' Interests
2.58 p.m.
Lord Marlesford Lord Marlesford asked the Leader of the House:
Whether it would be desirable to introduce a register of Members' interests into the House of Lords, and if so, whether he will suggest this to the Procedure Committee.
Lord Wakeham: My Lords, the Procedure Committee has examined the issue of Lords' interests on a number of occasions in the past, most notably when a sub-committee looked at the whole matter of 1974. While successively clarifying the guidance in the Companion, the committee has concluded that a register of interests should not be established. Since the committee last considered the matter as recently as 1990, I am not myself sure that there would be much to be gained from returning to the subject at the moment.
Lord Marlesford: My Lords, does my noble friend agree that in the 18 years that have passed since this matter was last considered in detail a number of institutions in this country have been undermined by real misbehaviour and scandal in some cases and in other cases by mere innuendo, often falsely based and malicious? Are there not two alternative defences to innuendo? One is privacy and secrecy and the other is transparency. Is not transparency by far the better approach?
Lord Wakeham: My Lords, in his supplementary question my noble friend phrased some points with which I would not wish to disagree. However, I do not think that they address the Question on the Order Paper, which is whether or not we should have a register. The position in this House has been discussed many times before. It has always been accepted that noble Lords speak on their personal honour. It follows that a noble Lord should voluntarily declare any financial or other interest that he may have before speaking. As the House has no power to enforce compulsory declaration, I am unsure what a voluntary register would add to the current rules. However, I am sure that it is open to my noble friend to place the matter before the Procedure Committee. If he thinks that he ought to do so, I suggest that he sends the committee a memorandum.
Lord Cledwyn of Penrhos: My Lords, is it not the case that parliamentary colleagues in another place are in fact obliged to subscribe to a register of interests, whereas we, as the noble Lord has just said, are not so obliged and treat it as a matter of personal honour? Is there any significance in that, especially as this House deals with more or less the same subjects?
Lord Wakeham: My Lords, there is a significant difference but it is not as the noble Lord, Lord Cledwyn, suggested. The fundamental difference is that this House has none of the sanctions available in the other place to ensure compliance with a register. The powers of the other place include the expulsion of Members on the recommendation of the Select Committee on Members' Interests. In contrast, it has

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always been accepted that this House cannot override the right of your Lordships to speak and to vote provided by the Writ of Summons. That is the important difference in the procedures between the two Houses.
Of course, there are a number of other differences; for example, Members of your Lordships' House are not in the same position as Members of another place, or indeed as members of local authorities. The financial privileges of the other place mean that this House has few powers over the public purse and, unlike local authorities, it awards no contracts. It is the fundamental difference between the Writ of Summons and the powers of the House of Commons. If we wanted to change the position, it would require legislation and not a register.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that the matter has been exhaustively considered on quite a number of occasions and that no evidence of any kind has been produced of any abuse which would be remedied by a register? Therefore, I suggest to my noble friend that we should leave the matter alone.
Lord Wakeham: My Lords, my noble friend has infinitely longer experience on such matters than me. However, when I was preparing myself to answer the Question I recognised the fact that the matter has been looked into a great deal. I can see no argument for changing the present arrangements.
Lord Tordoff: My Lords, is the noble Lord aware that some of us wish that we had something to declare? Is he also aware that on these Benches some years ago (when I was the Liberal Party Chief Whip) we introduced a voluntary system for people wishing to make a declaration which was very much in line with the system in the House of Commons? A register was produced, but over a period of about four or five years no one ever came to look at it. So we stopped doing it.
Lord Wakeham: My Lords, I certainly agree with the noble Lord thus far. Certainly when I was in another place, I always found that if I had an interest to declare I was most anxious to do so because it seemed to me that, if I had some interest in the matter, I might be able to persuade the House that I knew something of what I was talking about. Of course, it is not correct for a Member of your Lordships' House to fail to declare before he speaks any financial or other interests that he has. That is the procedure. It is a voluntary procedure but it is still an important procedure and one to which I think the House would expect your Lordships to stick. It is the question of whether or not to make it compulsory. I am advised that that would require legislation.
Lord Jenkins of Putney: My Lords, does the noble Lord the Leader of the House agree that there has been some decline of public confidence in the probity of finance in this country over the past year or so, and that there may be a case for putting the matter to the House so that the House can decide on a free vote whether or not voluntarily to adopt a procedure which
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would give the public confidence in the transparent honesty of the House in which so many of your Lordships have been expressing their confidence?
Lord Wakeham: My Lords, the House is perfectly entitled to do so. However, I believe it is right that I should point out once again to your Lordships that it would not have any binding force upon Members of the House whose right to speak in the Chamber is as a result of the Writ of Summons. It would require legislation to change the position and not a resolution of the House.
Baroness Carnegy of Lour: My Lords, does my noble friend really think that having a voluntary register of Members' interests goes against the way that the House is set up and the legal position? It seems to me that the public will not think very well of a House which operates on its behalf and which has an arrangement that requires it by honour to say what are its interests and not to go any further. Sometimes we need to check up on our colleagues to see whether or not they have told us the whole story. I cannot see that there is anything wrong in your Lordships having a voluntary register.
Lord Wakeham: My Lords, the point that I was seeking to make is that a voluntary register does not, in my view, add anything to the present position. There is a voluntary code. It is expected that Members of this House will follow it. A person who wishes, so to speak, to cheat on that is just as likely not to put something in a voluntary register as not to declare it at the time of speaking.
Lord Mason of Barnsley: My Lords, contrary to what the noble Lord, Lord Boyd-Carpenter, said, the matter has not been "exhaustively" raised before the Procedure Committee; indeed, when I questioned the issue in June 1989, I discovered, as the noble Lord the Leader of the House said, that it was last properly examined in 1974. It has never been thoroughly examined since then. However, the noble Lord the Leader of the House has indicated that a memorandum could be submitted to the Procedure Committee. That was also suggested to me in June 1989. Do I take it that its feasibility will be examined?
Lord Wakeham: My Lords, I suggest that what is exhaustive is a subjective matter rather than an objective test of anything. It is possible that the powers of endurance of the noble Lord, Lord Mason, are greater than those of others and, therefore, he does not think that the matter has been fully exhausted. However, as regards putting the matter before the Procedure Committee, certainly any noble Lord who wishes may do so. In so far as I have any influence with that committee, I would expect it to look seriously at the matter. Of course, it is primarily a matter for the committee, but I would certainly encourage those concerned to do so.
Lord Marlesford: My Lords, on the question of voluntarism which seems to be worrying him, does my noble friend agree that the system has worked well in the other place, although in a sense it was voluntary because Mr. Enoch Powell always chose not to

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comply with it? However, he was an exception and an exception that was accepted. Would he further agree that the most effective pressure for compliance in such matters, and perhaps especially in this Chamber, is peer pressure?
Lord Wakeham: My Lords, I agree that that is an important pressure. However, I think that my noble friend overlooks the difference between this and another place. The other place has powers which include the expulsion of Members on the recommen-dation of the Select Committee on Members' Interests. That is a powerful sanction.

Business of the House
Lord Wakeham: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debates on the Motions in the names of the Viscount Caldecote and the Lord Elton set down for 11th November shall each be limited to two and a half hours. —(Lord Wakeham.)
On Question, Motion agreed to.

London Docklands Railway (Lewisham, etc.) (No. 2) Bill
Read a second time, and committed to an Unopposed Bill Committee.

Bankruptcy (Scotland) Bill
3.8 p.m.
The Minister of State, Scottish Office (Lord Fraser of Carmyllie): My Lords, I beg to move that this Bill be now read a second time.
The Bill before your Lordships' House is an important one and, as noble Lords who attend the proceedings will discover, a very technical measure, the purpose of which is to improve the administration of the law on bankruptcy in Scotland in a manner that secures greater value for money for the taxpayer.
It is an amending Bill. It proceeds by textual amendment to the Bankruptcy (Scotland) Act 1985. The 1985 Act, based on a report by the Scottish Law Commission, brought about much needed changes in the law of bankruptcy. It established some important principles which the Bill now seeks to build upon. The 1985 Act established for the first time an obligation on the state to finance the administration of sequestra-tions where there were insufficient assets in the sequestrated debtor's estate to cover the cost.
Another important reform introduced in the 1985 Act was the requirement that an interim trustee be appointed in every sequestration to investigate the debtor's affairs and protect his estate until such time as the creditors elect a permanent trustee, or the court appoints one, to realise the assets. These trustees are private sector insolvency practitioners whose services must be paid for. The remuneration and costs of the trustee have first call on the funds realised from the sale of the debtor's assets. However, where there is a
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shortfall between the costs and income, it is the taxpayer, through the office of the Accountant in Bankruptcy, who foots the bill.
Unfortunately the 1985 Act contained a flaw. It did not provide an adequate means for the control of the public expenditure involved and for ensuring that the service provided was cost effective and represented good value for money. It is an understandable omission when one considers that at the time the Act was passed it was anticipated by all concerned that the number of cases each year which would have to be funded by the state would only amount to some 200 or so.
However, since the 1985 Act was enacted the position has turned out to be substantially different from that originally anticipated. The cost to the taxpayer in paying the fees and outlays of the insolvency practitioners administering sequestrations has risen from £13,000 in 1986 to £18.5 million in 1991. If the historical trends in the volume of sequestrations continued, this cost could rise to £50 million by 1993–94. That is clearly an excessive amount of public money to spend on a system which does not at the end of the day provide creditors with any form of dividend for their debts. I believe it is widely recognised that the present system cannot be allowed to continue.
Lying behind the growth in expenditure has been a substantial growth in the number of sequestrations from 560 in 1986 to some 8,584 in 1991–92; on an annual basis, an average rate of growth of 74 per cent. In the great majority of these sequestrations—some 80 per cent. or so —the debtor has no realisable assets. The petition for the sequestration is not brought by any creditor—why should he when he has so little to gain? Rather it is brought by the trustee appointed under a voluntary trust deed signed by the debtor and entirely on the debtor's behalf. Such petitions accounted for 87 per cent. of all sequestrations last year. Sequestration, rather than being a process by which creditors can obtain access to the debtor's assets to recover the sums owed to them, has developed as a means of relieving debtors from the burden of their debts.
It is quite clear when one examines the report of the Scottish Law Commission and the 1985 Act that there was a clear intention to strike a balance in the law between the interests of creditors and debtors. To that end the procedures in the 1985 Act envisaged a closer involvement by creditors in the process, to the extent that the Act only allows a debtor to bring his own petition for sequestration with the agreement of a qualifying creditor.
There is a very real concern among creditor bodies that, in practice, the balance which the Law Commission sought to achieve has swung entirely over to the debtor. This gives rise to real anxiety and brings the operation of the present procedures into disrepute. The Bill before your Lordships' House attempts to deal with these concerns in a number of ways.
First, it extends the present role of the accountant in bankruptcy from supervising and paying the bills of insolvency practitioners to taking on a more active

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and direct responsibility for administering sequestra-tions where there is likely to be a call on public funds. Secondly, it introduces new summary procedures to simplify the administration of cases where there are few assets. Thirdly, it revises the rules on who may bring petitions for sequestration to restore some of the balance lost in the present system.
Turning first to the new role of the accountant in bankruptcy, in the future he will be appointed by my right honourable friend the Secretary of State. In addition to his present task of supervising the conduct of sequestrations, he will be appointed interim or permanent trustee in cases where no private sector insolvency practitioner has been nominated by the petitioner. In practice, this is likely to mean that the accountant will act as trustee in cases where there are insufficient assets to finance the administration of the sequestration. Clauses 1 and 2 of the Bill are relevant here. Where there are sufficient assets, then I believe the work should be done by the private sector as now. The Bill provides for this.
Where he is appointed trustee, the accountant in bankruptcy will have the option of either administer-ing the case in-house with his own staff, or by employing agents to undertake the work. Such agents would usually be qualified insolvency practitioners. As my ministerial colleagues have made clear during the debates on the Bill in another place, it is the Government's intention to subject the conduct of sequestrations to a process of market testing. In that way we can determine whether the service can be provided more cost effectively through the public sector or through the private sector.
Market testing will also allow us to introduce a much needed dose of competition into the process to ensure that the service operates efficiently and provides value for money to the taxpayer. The Government are at present engaged in a dialogue with the relevant professional bodies over how the market testing exercise should be organised.
Secondly, it is widely recognised that the present block fee paid to insolvency practitioners, at £2,147 per case, is too high. Even the Institute of Chartered Accountants of Scotland, which represents the majority of insolvency practitioners undertaking this work, acknowledges this fact and has been prepared to work with the Government and the accountant in bankruptcy to find ways to reduce the cost.
One of the most significant ways in which costs can be reduced is to introduce simpler procedures for cases where there are few assets and little likelihood that creditors will receive any dividend. The present 1985 Act in effect treats all sequestrations equally, irrespective of the assets involved. The Bill seeks to amend that by introducing a new summary procedure which provides the permanent trustee with the discretion to tailor the administration of the case to its specific circumstances.
Under the Bill the accountant in bankruptcy, or other interim trustee, may apply to the court for a certificate of what is described as summary administration where the assets involved are less than £2,000 and the liabilities below £20,000. The procedures and effects are set out in Clause 6 of the
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Bill. When such a certificate has been granted, the permanent trustee need only comply with certain of the requirements in the 1985 Act to the extent that he considers it would be to the financial benefit of the estate and in the interests of creditors. He retains all his powers, but may now choose to exercise them more selectively. This simplification, coupled with other procedural changes, such as allowing the accountant in bankruptcy the possibility of dispensing with the statutory meeting of creditors, will allow the cost of administering summary cases to be sharply reduced.
The accountant in bankruptcy estimates a cost of around £400 for a typical summary case. Following discussions with the Government over the summer, some insolvency practitioners, I understand, believe a summary case might be dealt with for around £550, plus outlays. Obviously more complex cases would cost proportionally more. In any event, these figures represent a great improvement on the present position. Taken together I believe these measures should enable the Government to achieve savings of around 75 per cent. of the costs which would otherwise arise in administering the present regime.
I also referred earlier to the Bill as introducing changes in the rules on who may bring a petition for sequestration. That is the third strand to which I now turn. The key provisions affecting these matters are set out in Clauses 3 and 4. At present, as I have said, the majority of petitions for sequestration of a debtor are brought by a trustee under a trust deed. The Scottish Law Commission saw value in encouraging the greater use of voluntary trust deeds whereby a debtor transfers his assets to a trustee for the benefit of his creditors. Trust deeds are both potentially more flexible and less formal than sequestration. To that end the 1985 Act contained a number of provisions relating to them.
The Commission also recognised that such trust deeds may not always work out in the way originally intended. For that reason the 1985 Act provides a right for the trustee to petition for the sequestration of the debtor's estate. It is clear from its report that the Commission envisaged such a right being exercised where the debtor was refusing to co-operate with the trustee or where there had been a change in circumstances which meant it was in the creditor's interests to move to sequestration.
However, that is not the way the law now operates in practice. Instead the present pattern is that a debtor is referred to an insolvency practitioner and signs a trust deed appointing the practitioner as trustee. The practitioner then moves immediately to petition for the debtor's sequestration and for his own appoint-ment as interim trustee, thus guaranteeing the trustee access to the block fee paid by the accountant in bankruptcy for administering the sequestration.
No attempt at all is made to administer the trust deed. It is merely a device to allow the debtor access to sequestration without the involvement of his creditors. Had it been Parliament's intention to have allowed debtors such access, then it would have been apparent on the face of the 1985 Act. That was clearly never the intention and the use of this device has meant that trust deeds have not developed in the way

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intended. It introduces a degree of confusion as to whether the trustee is acting in the interest of the creditors or of the debtors. It has also brought the sequestration process into disrepute among creditors.
The Bill deals with that problem by placing restrictions on a trustee's right to petition for sequestration. He now may only do so where the debtor is being unco-operative or where he can satisfy the court that sequestration is in the interest of creditors. At the same time the Government recognise that things have indeed moved on since the passage of the 1985 Act and that it is no longer sufficient to rely on the possibility of a creditor concurring with the debtor before a petition for sequestration may be brought. The Bill therefore provides a debtor with the right to bring his own petition but in certain prescribed circumstances thus providing a degree of protection for the creditors.
Before a debtor can bring his petition, he must have debts in excess of £1,500; he must not have been sequestrated in the past five years and either he must be apparently insolvent or have attempted to establish a protected trust deed which his creditors have rejected. These rules are set out in Clause 3 of the Bill.
Apparent insolvency is a concept well understood in the courts and is an objective and public demonstration of the debtor's financial difficulties. It is defined in Section 7 of the 1985 Act. It is also the basis upon which a creditor may bring a petition for sequestration. For the purpose of a debtor petition we have excluded the grounds that the debtor has signed a trust deed or a trade debtor has sent a notice to his creditors that he has ceased to pay his debts. To have retained these would have meant that a debtor could have simply declared himself insolvent without any requirement to prove his financial position and thereby gain access to sequestration. Thus where a creditor has taken action to enforce the payment of his debt or the debtor has tried to convert a voluntary arrangement into a protected trust deed which has been rejected by his creditors, then the debtor may have access to sequestration. I believe this arrangement strikes the right balance between the interests of debtor and creditors.
The remaining provisions in the Bill largely give effect to those policy requirements. At the same time we have taken the opportunity to introduce a number of technical amendments to the 1985 Act to reflect experience in operating its provisions. Many of these changes which are contained in Schedule 1 reflect suggestions put forward by the professional bodies most involved in this field. Certain of the provisions will come into force on Royal Assent as set out in Clause 12, primarily to allow a smoother transition from the present regime to the new arrangements. However, generally speaking, the provisions of the Bill will not apply to any sequestration where the petition is presented to the court before commencement of those provisions, apart from two technical provisions in paragraphs 22 and 30 of Schedule 1.
The Bill comes before your Lordships after full and detailed examination in another place. During its consideration there it was amended in a number of
16
important ways to reflect the comments which the Government have received since the Bill was first published. The Government have amply demonstrat-ed their willingness to listen to constructive criticism and the Bill is much improved as a result.
The need for change is self-evident. The present bankruptcy regime is incurring costs to the taxpayer of around £2 million each month to operate. Such expenditure cannot be justified particularly at a time when there is a paramount need to control public expenditure. The Government are therefore keen to see the reforms in the Bill brought in at the earliest opportunity. Subject to the approval of your Lordships to the Bill and with the co-operation of the professional bodies most concerned, I would hope that we could begin to see some of the benefits of the Bill flowing through from 1st April 1993. The Bill will achieve a useful and much needed reform of bankruptcy law in Scotland. I commend it to the House. I beg to move.
Moved, That the Bill be now read a second time. —(Lord Fraser of Carmyllie.)
3.25 p.m.
Lord Macaulay of Bragar: My Lords, I happened to read in a well-known organ of Conservative truth yesterday the following pronouncement.
"In Roman times a bankrupt's body was cut up and distributed in direct proportion to what he owed—the origins of the phrase 'a pound of flesh'. Today's creditors can be almost as unforgiving".
Having heard the noble and learned Lord speak today, I wonder whether in attempting to balance an imbalance he has created an imbalance on the other side in favour of creditors.
As the noble and learned Lord has said, this Bill comes before your Lordships' House having received considerable scrutiny and criticism in another place. However, the Bill is still in an unsatisfactory state. On this side of the House it is readily recognised that the working of the Bankruptcy (Scotland) Act 1985 was in need of revision as it had not achieved the aims of those who framed it. It is also recognised that there has to be a balancing act between all those with an interest in the bankruptcy law and proceedings.
It goes without saying that no one in his senses wishes to become involved in such proceedings. From the way that the Minister talked one had the impression that it was almost as if people wanted to get themselves sequestrated. No one wishes to become involved in such proceedings because by definition bankruptcy reflects failure in the financial field whether it be corporate or personal. Bankruptcy is also a miserable state of affairs for the debtor and the creditor. I accept that in most cases the creditor loses out. However, on the other hand, the debtor has the restricting label of "bankrupt" put upon him with the handicaps that flow from that which last for a period of three years.
It is plain that those responsible for the 1985 Act, particularly those responsible for forecasting the effects and costs of that Act, have been proved to be seriously wrong as regards their expectations on the cost to the taxpayer who has had to foot the bill for a very expensive exercise. However, to be fair, that is not

17
necessarily the fault of the forecasters. The economic thunderstorms which have covered this country over a long period of time during this Government's Administration have engulfed people in financial distress. The figures that were produced in support of the 1985 Act have become meaningless.
What has happened is that bankruptcy has become a growth industry for insolvency practitioners. That is not necessarily their fault either. Social and financial conditions must have contributed hugely to the rise in the number of bankruptcy proceedings. The easy acquisition of credit in the Government's so-called happy days of the 1980s, allied to the rising unemployment now being suffered under this Government and the tightening of credit by the banks have all contributed to the rise in sequestrations from 560 in 1986 to 8,584 in 1991–92.
The upward trend shows no sign of declining in the present economic climate in which the Chancellor of the Exchequer's famous green shoots are in danger of disappearing up their own terms of reference. The cost of bankruptcy to the taxpayer has risen with the number of bankruptcies from £13,000 in 1986 to £18.5 million in 1991. As the noble and learned Lord has said, if this trend continues, the cost is forecast to rise to over £80 million in 1994–95. There has, of course, as the noble and learned Lord has outlined, been a rush to appoint a trustee on the part of the debtor. I accept that in so doing in one sense the debtor is beating the creditor to the draw. That fact is reflected in the figures which the noble and learned Lord has given.
The millions of pounds expended at the cost of the taxpayer to date, and forecast for the future, clearly indicate that the Act needs to be reviewed and revised. When it is alleged that one firm in 1991 alone earned £3.427 million, another £2.2 million and yet another £1.9 million from these painful and wretched insolvency proceedings then clearly something has gone badly wrong. It is not in the public interest at times of stringency that such sums should be going from the taxpayer to swell the profits of such practitioners at such a level of remuneration.
As I have said, the blame does not lie entirely with the practitioners because they were awarded a negotiated block fee of £2,147 when it was never anticipated that the number of sequestrations would reach the present level. As I understand it, the Institute of Chartered Accountants has recognised that a reduction in the fees would be appropriate. It has suggested a scheme which would result in a 50 per cent. cut in costs, and for small asset cases has suggested that a fee of £800 might be appropriate.
The Government have been asked in another place what is the position in regard to those suggestions made by the institute. So far as I am aware the response has been negative, and the Bill has gone ahead. The Bill has all the hallmarks of creating a bureaucratic machine which, if it is not itself controlled, may be no better for the Exchequer and the taxpayer. I endorse the suggestion that there should be at least an experiment, with the co-operation of insolvency practitioners, to analyse the effect of applying the proposed fees over a six month period.
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A great deal of anxiety has been expressed about the Government's failure to consult with the appropriate parties before the Bill was produced out of the draftsman's hat. I should like the Minister to tell your Lordships' House what consultation took place, for example with the Institute of Chartered Accountants and the Law Society of Scotland, before the Bill was produced. Equally, what consultation has taken place since the Bill has been in another place? On the other hand, is it perhaps the Government's view that in this particular field consultation with interested and concerned parties was and still is inappropriate and that the Bill must go ahead without such consultation? It is recognised that the Government's efforts are designed to make some constructive changes which will, if operated properly, streamline some of the processes in the bankruptcy field. However, it is also asserted that the failure to consult has been a major omission on the part of the Government and that in the absence of such consultation there is no reason to assume that this Bill will be any more cost effective and will save costs any more than the 1985 Bill.
I do not pretend to be an expert, to any significant extent, on the law of bankruptcy, which has become a very specialised field. Nevertheless, I am able to conclude that the Bill has been rushed through, in the main to stop the number of applications being put through the trust deed process, to reduce the cost to the taxpayer and to cut down the profit to the insolvency practitioners. I suggest with respect to the Government that, in view of the constructive attitude which has been adopted by the Institute of Chartered Accountants, the Government should take time to consider whether the present system could not be operated reasonably now that it has been agreed that the old block payment will in effect be reduced.
If the objective of the Bill is to change the present legislation in order to reduce reasonable access to sequestration, does that mean that many people who would wish to be sequestrated will not achieve that objective because the Government are creating a creditor-led Bill? The debtor has a right to apply for his own sequestration, but it is ring fenced with all kinds of conditions and if he cannot get round those conditions he will never be sequestrated and will have to live in the misery which lack of finance produces.
The Government have indicated that the concept of the simple trust deed has now disappeared. One of the important aspects on which the Bill is silent is the question of to whom the person requiring financial advice should go. Once he is in the hands of the accountant in bankruptcy he is in a financial no man's land as it has been made clear in the other place that it is no part of the function of the accountant in bankruptcy to give advice nor is it the function, by definition, of his agents. It has been said on behalf of the Government in another place that the accountant, in employing agents in rural areas, will:
"appoint practitioners in the more remote rural areas and in many other parts of Scotland as his agent, in order to ensure that a good quality of service is provided to debtors". — [Official Report, Commons, 17/6/92; col. 946.]
That completely begs the question. The Minister who made that statement clearly did not understand

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what he was saying, because the agent is there to do the work of the accountant in bankruptcy and not to provide a good quality of service and advice to the person who is in financial trouble. I ask the Government what service they envisage the agent of the accountant in bankruptcy could give to a debtor who faces potential sequestration. Indeed, in the same debate the Secretary of State for Scotland stated that the accountant in bankruptcy did not have the role of tendering advice and had no right to do so. The burden for that operation falls on money advice centres, citizens' advice bureaux and solicitors, with legal aid.
The Bill is silent on the question of legal aid. Certainly, under the advice and assistance scheme limited access is made available to legal advice. However, the right to full legal aid depends upon a form of means test and will not necessarily be available to all persons contemplating sequestration because they may have substantial assets which are not yet realised. The granting of legal aid is not necessarily a swift process. In sequestrations time is often of the essence so far as concerns both the debtor and the creditor. The Government should look at the issue of structured advice being made available within the context of the Bill before the debtor resorts to the processes under the supervision of the accountant in bankruptcy.
In approaching this difficult field, the Government have said that it will be market tested, with the private sector having an opportunity to undertake the work, when it can be done, in a cost-effective manner. We are to have a stronger dose of competition, a contracting out to insolvency practitioners to ensure that value for money and quality of service are assured. Those words have the echo of the DTI behind them.
That may or may not be wishful thinking. What is to be the test of value for money? Is the contracting out to be a form of tender for individual cases, is it to be for an area or for a period of time? How is the quality of service to be tested? Who will monitor the testers? Is the cheapest offer to be accepted? That indicates that the Government have not paid any attention to the suggestion of the Institute of Chartered Accountants that it can put its house in order and give the same service, without the setting up of a unit of government the size and cost of which cannot be determined because the increase in bankruptcies cannot accurately be gauged on present information and as the 1985 situation has demonstrated. It also indicates once more why the Government should stand back.
The Government promised to publish a guide and to assist advice bureaux on alternatives to sequestra-tion. That is all very well, but why not go to the experts and consult them in a positive way? I do not suggest for one moment that experts always get it right, any more than governments and draftsmen, but it is folly not to take their views into account.
This is a Bill which on the one hand virtually nationalises the area of bankruptcy and on the other then puts it out to privatisation, with the farming out
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of work to insolvency practitioners who are already doing the work, albeit that they previously did so at a high rate of profit.
Before that step is taken talks should be held with all the agencies which have acquired expertise over the years since 1985. Accountants are not the only ones involved. Many other associations are involved, and my noble friend Lord Carmichael will speak on that aspect in his winding up speech.
Can the Government state whether the Scottish Law Commission and the Law Society of Scotland were ever consulted on the draft Bill, or at any time after it was contemplated that it was to be introduced? Can they say, if legal aid is to be made available, what effect the passing of the Bill will have on a legal aid fund which is already under scrutiny and strain and will increasingly be so as savings are made? The assumption that lawyers will undertake this type of work under the legal aid scheme must be looked at carefully in the light of the fact that more and more firms are no longer doing legal aid work. That is not because of greed or lack of interest but because it is no longer economically viable for them to do so and to run a firm, with all that that involves in terms of staff costs and so on. The burden will fall once more on the voluntary agencies, who will need support.
If saving money is the object of the exercise, along with more efficient procedures, then an attempt should be made to make the process simpler and cheaper for the debtor wishing to present a petition for sequestration. The creditor obviously has rights and is entitled to recover his debt. But that does not mean that he should be able to dictate what happens to the debtor. That is what this Bill does.
I suggest that consideration should be given within the Bill to the formation of debt arrangement schemes which would enable the debtor and the creditor to come to an arrangement, short of bankruptcy, satisfactory to both parties involved in the procedure. That has the advantage that the person is not declared bankrupt, can keep his job and obtain credit. It is not often that I quote twice from the Sunday Express. In an article yesterday it says—I have checked it in Part VIII of the Act:
"The 1986 Insolvency Act, applying in only England and Wales, redefined bankruptcy and provided a legal framework for voluntary arrangments".
The article continues:
"Creditors and debtors hold 'round table talks' to thrash out a repayment system. An insolvency practitioner—typically an accountant qualified in insolvency—acts as go-between … Individual Voluntary Arrangements (IVAs) provide the chance to reschedule debts, usually over three to five years".
They appear to be quite successful, although some people cannot cope with the conditions applied. It is however something worth thinking about.
It is important also to remember that in almost all cases where bankruptcy looms, the debt is already established and probably in most cases accepted. The process should be a supervisory one to encourage the settlement of the debt, assist the avoidance of bankruptcy and look after the interests of the debtor, creditor and taxpayer.
In closing, I emphasise that this is not a purely financial issue. It is a grave social issue involving many

21
people who set out with the best of intentions to make a success of their lives but who have been caught up in the recession. They over-committed themselves in the boom days and for them life in the economic sense has come to a juddering halt. Their misfortune is reflected in the situation of the creditor who was content to grant credit when the financial world seemed secure. The creditor who is chasing the debtor may well become the next debtor if proper arrangements are not made to ensure that he can be paid. The approach in this Bill will not do that.
The provisions in the Bill are completely lacking in a social approach to these difficult problems and have about them a clinical air. They are not conducive to solving the many problems which arise. As I said, the Government must not assume that solicitors and voluntary agencies will be either willing or able to cope with the situation. The Government must, even now, consider whether they have not gone too fast too soon and ignored advice given to them.
This is a difficult and complicated area of the law, which not many people understand. It was perhaps that monopoly of interest and experience of sequestrations on the part of certain firms which led to their being accused of "gravy train" practice. I am not aware of any evidence which suggests that insolvency practitioners in general took the easy way out with the minimum of effort and the maximum of financial return, as seems to be part of the reasoning behind the Bill.
The monitoring of conduct, as opposed to actual cost, is an entirely different matter. Monitoring cost is relatively easy. Anecdotal assassination of a profes-sion is easy to do but does not get to the heart of the problems. It is important that there should be a workable, efficient and cost-effective system of dealing with these matters. This Bill does not guarantee to achieve that aim.
3.45 p.m.
Lord Mackie of Benshie: My Lords, I am not a lawyer and not a bankrupt, although there have been times in my life in the bad years when bankruptcy has loomed over me. This Bill has perturbed that excellent body, the Citizens Advice Scotland, and also the Consumer Council. I should like to say a few words on their behalf.
I was struck by the figures produced by the citizens advice bureaux that in Scotland they dealt with 278,000 inquiries concerning money advice, 81,000 of which involved the negotiation of debt with creditors. The citizens advice bureaux do a tremendous job. They have 1,600 advice workers, only 11 of whom are full-time paid workers. One can imagine the amount of work they do.
Most people who come to them for advice have got themselves into such a mess that they are totally unable to think clearly. The advisers sit down and go through the debts one at a time and try to assess income. They have to deal with people who consider it necessary to spend £25 a week on cigarettes and who have all kinds of extraordinary spending habits. The advisers have to try to do an educational job. The Government might well consider their point of view.
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Of the 81,000 cases examined, eventually some 2,000 were sent to insolvency practitioners, who I understand charge a great deal of money. It costs the state, alas, a great deal of money. Of those cases, 75 per cent. were sequestrated. The bureaux are extremely worried that numbers will increase because unemployment is still increasing. The number of cases of personal insolvency will therefore increase. If there is nobody ultimately to judge on those cases they cannot possibly help, it becomes extremely worrying.
The Government could do everything they are setting out to do by the simple act of passing into law Clause 9, which empowers the Secretary of State to make regulations determining the remuneration paid to trustees. The noble and learned Lord has already said that there are indications that the amounts in simple bankruptcies could be reduced enormously and that there is no need for the very large statutory fee to be paid in those simple cases.
I have little more to say on this subject. Those good advisers are worried. I should like to know what the Government think of their complaint and why they should not simply leave matters as they stand and produce Clause 9 which enables them to fix the amount of money that the insolvency practitioners receive. That seems to me to be a solution about which the Government might well think.
3.48 p.m.
Baroness Carnegy of Lour: My Lords, the noble Lord, Lord Mackie, quite rightly drew attention to the point of view expressed by the citizens advice bureaux, which have great personal experience of the problems of individual people who get into debt. I am sure that we shall hear from my noble and learned friend Lord Fraser that he has been in touch with the citizens advice bureaux. I know that he and I attended the annual meeting of our local citizens advice bureau during the summer and this matter was discussed at that meeting. Now that the Bill has come to this House, I shall be interested to see how the bureaux view it.
I must say to the noble Lord, Lord Mackie, that I do not believe that this Bill should be seen simply as brought about by the pressures of recession. As we heard in the debate, the figures show that every year since 1985, when the previous legislation was introduced, when the economy in Scotland was growing and corporate bankruptcies were not increasing, the number of sequestrations as a whole increased rapidly and so did their cost. We have heard the figures. All the evidence indicates that if matters are left as they are that trend will continue into the future. Matters will become more and more out of hand.
Something must be done because of the way that the use of the 1895 legislation has developed. I remember its passage through the House. When it became law, Parliament saw the new sequestration procedures mainly as a way of helping creditors: a threat hanging over the heads of debtors which would help creditors to obtain their money. What has occurred is very different.

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The pressures seem to have come from two directions. First, the various agencies, such as the citizens advice bureaux, to which people go for advice when they get into debt have realised that for a growing number of individuals who have no assets, or very few assets apart from earned income, to opt out from bankruptcy can have positive advantages. Because it is often not easy to prove that a person has so-called "free" income that can be spared to pay creditors, and there is no simple cost-effective way for the court to require a reasonable sum to be handed over, the debtor can be, and often is, virtually untouched. No fee is payable to start the sequestration process; and the creditors simply lose out. The debt advice agencies have increasingly been advising that course. That is one reason for the massive increase in the number of sequestrations.
The other pressure is that the insolvency practitioners, the professionals, have found that there is good money to be made from helping people through the process. My noble friend has told us that the fee is over £2,000 a time. Therefore those professionals, not unnaturally, have taken to marketing their services. That too has increased the number of sequestrations.
The way in which the service has been marketed has reduced the sense of stigma attached to bankruptcy. I am not sure whether that is a good or bad thing. However, that has occurred. One advertisement financed by a firm of accountants refers to,
"Voluntary Bankruptcy. If you are in serious debt, going bankrupt may be the way out of trouble".
The noble Lord, Lord Macaulay, complained that it is a creditor-led Bill. However, the people who suffer as a result of the current pressures are the creditors, many of whom are people who run very small businesses and have difficulty in withstanding those pressures. They may well receive little or nothing because of the debtor opting for sequestration. There is no simple, inexpensive way for them to challenge the appropriateness of sequestration in a particular case. As has been mentioned, some debtors may lose out too by being persuaded that voluntary sequestration is the best way for them. They may not appreciate that as a result in future it might be harder for them to obtain credit.
The Bill attempts to streamline the procedure and so reduce the cost. It seeks to redress the balance of advantage somewhat in favour of those to whom money is owed. For that reason, the Consumer Credit Association of the United Kingdom, which represents almost 1,000 independent credit providers, and other similar organisations welcome the Bill. However, they have some anxieties. In another place, my own Member of Parliament, my honourable friend the Member for Tayside North, moved amendments in Committee on the advice of the Consumer Credit Association of the United Kingdom and others. Two matters on which he was unsuccessful are of concern to those associations. I shall be grateful if my noble friend will tell me whether he has given those matters further consideration.
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First, with regard to Clause 3(6) of the Bill, when a person opts for sequestration under the Bill, he has to provide a list of his assets and liabilities. Would it not be reasonable also to include on the face of the Bill the debtor's incomings and outgoings, his cash flow, so that some assessment of his so-called "free" income can be made?
Secondly, is it possible for a bankrupt person's creditors to be allowed to make representation to the permanent trustee when the bankrupt's assets other than income are small or non-existent? They might then receive some of the debtor's income. To prevent frivolous use of such a power there could be a condition that representations could be made only by creditors owed not less than perhaps 25 per cent. of the value of the debt. I hope that I shall receive answers to those two questions when my noble friend replies.
I read in today's press of the anxieties of the citizens advice bureaux. I hope that we shall discuss them in Committee because I believe that they are important. The noble Lord, Lord Macaulay, stated that there was no social content to the Bill; I am not sure how he put it. However, anything that seeks to help one person meet his obligation to another must be good for the social fabric of our country. To make it too easy to renege on one's responsibilities is bad for the social fabric and does not help the debtor because of the damage that it does to his creditworthiness.
Having asked those two questions, and having made those few remarks about the parts of the Bill which at this stage I understand, I look forward greatly to discussing those parts that I understand less well. I give broad support to the Bill.
3.56 p.m.
Lord Kirkhill: My Lords, much has already been said in your Lordships' House today about the position of the debtor, in particular the consumer debtor; and properly so. Much comment along those lines was made in another place when the Bill was debated at considerable length. However, we have to keep in mind that a declaration of bankruptcy is either on a voluntary or compulsory basis. The vast majority of individuals who proceed to voluntary bankruptcy are consumer debtors who have taken advantage of easy credit during the past 15 years or so. Those of your Lordships who received, as I did, communication from the Citizens Advice Scotland will have been made aware of the gaps in advice which will result in this area of the Bill if it is enacted in its present form.
I remind noble Lords that insolvency practitioners must also deal with clients in business who are due money from debtors and who from time to time pursue them to bankruptcy. In my view, bankruptcy legislation must balance the interests of the debtors and of the creditors. The Bill does not seem to me to hold such a balance.
Under legislation prior to the 1985 Act, a creditor who petitioned for sequestration could find himself liable for the entire costs (including the trustee's fees) where a debtor had little or no assets. As well as the large increase in consumer debt sequestrations over the past six years, there has been an increase in sequestrations at the instant of the creditors. I believe

25
that that factor is beyond dispute. Because the public purse meets the cost of a trustee in "small assets" cases, creditors' costs are limited to those of serving the petition.
While the measures proposed in the Bill will not alter the cost-exposure to the creditor, they will have a fundamental effect on the willingness of some creditors to petition if the interim trustee is to be the accountant in bankruptcy. Creditors have no knowledge of the accountant in bankruptcy, and for all I know may have little confidence in his ability or experience to handle the administration of the sequestration in an efficient and thorough manner, because I suppose that the practitioner in insolvency at this time would do just that.
Over the years creditors have found certain insolvency practitioners who are more able than others to conduct certain types of insolvencies—this is one of the facts of professional life in this area—or who are more thorough in carrying out initial investigatory work, which often uncovers assets for the general body of the creditors. If an insolvency practitioner is to act, the Bill requires a written undertaking that he will carry the case through to its conclusion. I submit that this undertaking is unlikely to be given if prior to sequestration the asset position of the debtor is unknown, and the trustee's costs may not be met.
The measures proposed in the Bill will deprive creditors from nominating the insolvency practitioner who may be most suited to act as trustee. Bankruptcy is not an area to be tackled by the untrained and the inexperienced. I accept that many sequestrations do not involve matters requiring a high technical knowledge. But I find it difficult to imagine the department of a civil servant based in, say, Leith being able to possess the understanding and sensitivity which is often shown at the present time by many insolvency practitioners throughout Scotland with regard to the social and medical problems that flow from uncontrolled indebtedness. It is not perceived by either the consumer advice bodies or the insolvency profession that the agency or market-testing scheme referred to in Clause 1B(2) will overcome this problem.
In England and Wales the official receivers are members of the insolvency service, an executive agency of the Department of Trade and Industry based at 33 locations. The official receivers are responsible for the administration of personal bankruptcies. I am advised by an accountancy firm which practises here in England and Wales that it is virtually impossible to obtain information from the official receiver on the assets and liabilities of a debtor, let alone the more detailed information that might he deemed to be necessary. I am told that the file is often placed on a shelf and gathers dust for the three years' duration of bankruptcy. I am fearful that this situation could spread into Scotland and that high standards of efficiency and thoroughness in handling bankruptcy work which presently exist will be lost with the overburdening of a poorly-trained and inexperienced department whose main priority will be, no doubt, to cut costs.
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Further, I understand that the accountant in bankruptcy has been in dialogue with the insolvency profession over a considerable time. The figure of block fee which was informally agreed in August 1990 has been mentioned once or twice this afternoon. The figure was £2,147. But this agreement was on an informal basis, and there was no reason why continued dialogue could not have produced a similar reduced block fee to take into account the modified duties of the now summary administration process envisaged in the terms of the Bill.
Many of your Lordships will have received the briefing from Citizens Advice Scotland and the Scottish Consumer Council and will have seen the numerous representations made by various consumer bodies while the Bill had its passage through the other place. It is clear that the Bill does little for both debtors and creditors alike, and we should understand that this is not merely a technical piece of legislation. The Government are suggesting to your Lordships this afternoon—and they certainly suggested in the other place—that it is a purely technical piece of legislation. It is nothing of the kind. It will have a serious effect on the man in the street. That was a point which was emphasised by my noble friend Lord Macaulay of Bragar.
The Government therefore should brace themselves for amendments submitted at the appropriate stages of the Bill, particularly at Committee stage, which will seek to rectify some of the points that I outlined in my earlier remarks. I hope that the Government will look at the amendments with a view to making a considerable improvement to a seriously flawed Bill.
4.7 p.m.
Lord Mackay of Ardbrecknish: My Lords, when I saw that we were to debate the Second Reading of this Bill I tried to recall whether I had taken part in any of the discussions on the Bill in 1985, and indeed whether I could remember any of the arguments. I was quite worried that perhaps my memory was beginning to fail me, because I could not recall any of the deliberations in 1985. However, I was relieved when I looked at Hansard to discover that it was taken through the other place by the then Solicitor General for Scotland, so I was, so to speak, starting off with a clean sheet.
As all noble Lords who have already spoken have indicated, this is a difficult field. In fact the whole field of bankruptcy is difficult. I am only sorry perhaps that the Government have not taken the opportunity of this small Bill to look at some of the problems that occur in the wider field of bankruptcy; for example, in the bankruptcy of companies. As many of your Lordships will have heard, small firms in particular complain about companies which have gone bankrupt, following which the creditors have gone to sales of the equipment of the bankrupt company only to discover that there are the people who are being made bankrupt buying the equipment and re-emerging in two or three weeks with a similar name and in exactly the same field of operation as the company that has gone bankrupt. The only person

27
who has lost out is in fact the creditor, who has found himself with either a small dividend or, in some cases, no dividend at all.
When I look at this Bill with your Lordships I want to think about the position of the creditor as well as the position of the debtor. A debt of any kind has two parties, and it would be unfortunate if we framed the law, or allowed the law to be framed, in such a way that the interests of one of the parties was simply subordinated to the interests of the other. I am convinced by all the arguments that I have heard and read in the other place that there is a need for a Bill of the kind that we have in front of us to prevent the abuse that has occurred since the passage of the 1985 Act. The position—and some of your Lordships have already mentioned it—is that in far-off 1986 there were something like 560 cases a year, costing the taxpayer the huge sum of about £13,000. By 1991 that had risen to something like 8,500 cases, costing the taxpayer £18.5 million.
This contrasts markedly with the suggestion of the Law Commission when it proposed these changes, which were eventually embodied in the 1985 Act. In 1982 it suggested that there would be between 120 and 150 new sequestrations at a cost of some £6,000 to £7,500. I am afraid that the Law Commission's crystal ball was a little misty when it looked at the consequences of its proposals. In 1986 three-quarters of all the awards for sequestration were granted on the petition of the creditor. The 1985 Act did not envisage the change which has since taken place. Last year only 13 per cent. were in petition of the creditor, the other 87 per cent. being what could be termed as "self-bankruptcies".
According to the debates, the original intention of the 1985 Act was to allow for a voluntary arrangement between the debtor and his creditors permitting him to order his affairs without recourse to sequestration. "Without recourse to sequestration" has become a pious hope. It was hoped that in time the creditor would receive his money, and the debtor's money problems would be resolved. The device of the debtor using a trust deed has frustrated those arrangements to the disadvantage of the creditor and at a cost to the taxpayer. Am I right that the Bill provides that the debtor, in consultation with the creditors and with their knowledge, is referred to an insolvency practitioner? He is then advised to sign a trust deed appointing the practitioner as trustee. In the case of small assets the petitioner claims his fee, petitions for sequestration and, as 80 per cent. of all sequestrations in 1991–92 had no assets, the creditors receive nothing. That is a fair amount of nothing. Many small companies—and no doubt large companies which people may believe can cope with the debts more easily —find a hole in their income which other customers of those companies must pay. The debtor may clear his liabilities, although not without personal damage. The accountant will collect his fee, the taxpayer will pay out the fee but the creditors will receive nothing.
According to the Bill and 1985 Act, the creditor knows what is happening. I am puzzled about a matter raised by my noble friend Lady Carnegy with regard
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to Clause 3(6) and wish to put down a marker. Is it right that the creditor and the court can deny an application for sequestration if they believe that the debtor can make repayment arrangements? In the same vein the noble Baroness mentioned that the Member for Tayside North raised another issue in Committee in another place. Can a creditor through the court, and indeed the court itself, ask about the debtor's income, and can the court have that investigated? While a trust deed in a sequestration may seem an "easy" way out of immediate financial problems, do many debtors realise what they are doing for their future? At a future date when their income has improved they may wish to take on credit but will discover that their past history prevents them from doing so.
Lastly I turn to the accountant. The fee is a block fee of £2,147. Many of the debts are small—they had to be not less than £750, but the figure is being raised to £1,500—and so they would be under £2,147. Therefore, the taxpayer will have to pay out £2,147 to an accountant and the creditors will receive nothing. One wonders idly whether it would not be better for the taxpayer to pay the poor creditors and not bother with the accountants in the middle. We must look at the logic of what has happened and make sure that we are not merely putting money into the accountants' pockets to the detriment of the taxpayer and at no advantage to the creditor.
I am a little ambivalent about whether the way to solve such a problem is to add to the public sector. It is certainly not consistent with the Government's general philosophy in other fields. I read in the Explanatory and Financial Memorandum that an additional 85 civil servants will be required next year, and that the figure will rise to 120 in the year after. I hope that the costs I read in the memorandum are correct.
The noble Lord, Lord Macaulay, mentioned the Institute of Chartered Accountants of Scotland. It has offered—and its offer underlines the generosity of the original fee to cut its fees from £2,147 to £800, plus about £200 for other outlays. That represents a considerable saving. I suspect that as £800 is the initial offer, it might be possible to beat it down a little lower. Have the Government considered whether at much lower fees it would be as cheap to proceed with the present situation than to undertake the costs of setting up a small department of the Accountant in Bankruptcy to carry out this work rather than the private sector?
I have spoken for long enough and have illustrated my slight unease with the Bill. I am sure that in his summing up or in Committee my noble friend will be able to assure me that this is the correct and only way to proceed.
4.15 p.m.
Lord Lyell: My Lords, I am sure that I shall please my noble friend and neighbour Lady Carnegy by first declaring an interest. I am a member of the Institute of Chartered Accountants of Scotland, so ably referred to by my noble friend Lord Mackay. It has been kind enough to have me on its records for 25 years. I do not

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practice. I pay a healthy subscription but I do not pay a practising fee nor do I attempt to pay a further fee as an insolvency practitioner. In the Glasgow branch of the firm with which I undertook my apprenticeship no such words are used; the department is known as corporate reconstruction. As we have heard, many of the problems which arise are small in financial terms but they are serious to the individual, the firms and the partnerships involved.
Your Lordships will not be surprised to hear that I have returned from a weekend in Yorkshire. My host's daughter—a young lady called Matilda—reminded me of a rhyme by Hilaire Belloc. He wrote:
"Matilda told such Dreadful Lies,
It made one Gasp and Stretch one's Eyes".
My noble and learned friend Lord Fraser and members of his esteemed profession would never dream of doing such a thing. However, my eyes were stretched and amazed when I consulted the financial and manpower effects of the Bill. The figures given in the paragraphs under that heading are astonishing. I wish to draw your Lordships' attention to the third paragraph. Perhaps my noble and learned friend on the Front Bench will pay particular attention to those words because they bear out what was said by my noble friend Lord Mackay about insolvency practitioners.
After looking at the list of speakers for today's debate, I was startled to see that four are from the county of Angus. Indeed, the county is also represented by my noble friend the Captain of the Yeoman of the Guard who sits on the Front Bench. I hope that that does not indicate that the county of Angus is somewhat more vigilant or interested in these than in any others which concern your Lordships' House.
Where does the worried citizen turn with regard to bankruptcy or financial difficulties? The first place to which any citizen of Kirriemuir might turn is to the citizens advice bureau or a professional adviser. In most cases the debt will be the result of existing low income, the worried person seeking advice having over-estimated his or her ability to cover the debt. Alternatively, the individual might have incurred debts, the reduced income resulting in financial difficulty.
The noble Lord, Lord Mackie of Benshie, referred to the figures provided by the citizens advice bureaux. I think that the final figure for referrals to insolvency practitioners was something over 2,200; and in a high percentage of those cases, insolvency practitioners thought it to be in the best interests of the debtor as well as, I suspect, the creditor, for the matter to proceed to sequestration. Also, insolvency practition-ers indicated that 50 per cent. of their cases came from referrals by the citizens advice bureaux. Therefore, over 2,000 cases had to be dealt with by the insolvency practitioners; but of those, only 60 per cent. proceeded to sequestration and the other 40 per cent. were dealt with in some other way. As was mentioned by my noble friend Lord Mackay, most of the cases coming from solicitors or other advisers would have been
30
those in which insolvency practitioners were consider-ing an average block fee of something in the region of £2,000.
Under the provisions of the Bill I hope that the debtor will be able to petition for sequestration. The word "insolvent" is used in Clause 3. I was rather at a loss to discover where that was defined but that information was quickly pointed out to me by my noble and learned friend and is now reasonably clear to me, a mere accountant rather than a lawyer. Clause 6, which deals with summary administration, goes some way towards defining the limits of sequestration and difficulties.
Clause 9 deals with the detailed remuneration of the permanent trustee. Some difficulties have been mentioned to me by chartered accountants, all of whom were not necessarily insolvency practitioners. Perhaps the Minister will consider whether Clause 9(3) (b) and (c) provides for some arm's length and reasonable discussions between the Scottish Office and the insolvency practitioners and any other bodies involved in the giving of advice so that the fees could be reduced, perhaps along the lines suggested by my noble friend Lord Mackay. Those paragraphs provide a basis for some ongoing discussions.
I am somewhat at a loss to understand why Clause 9 cannot achieve the objectives which are set out under the paragraphs headed "Financial and Manpower Effects of the Bill".
It will not surprise my noble and learned friend to learn, since he wrote the original letter to the insolvency practitioners, that I shall be raising the problem as regards conflict of interest. Clients of the citizens advice bureaux would only be too pleased to have the very best advice from the bureaux. However, as the noble Lord, Lord Mackie of Benshie, pointed out, there are only 11 specialists throughout Scotland. Therefore, is it not reasonable that in the first instance the advice should be given by the citizens advice bureaux? That may be in a small town like Kirriemuir. Is it not reasonable that in the first instance the citizens advice bureaux or the lawyers should have access to an insolvency practitioner? I hope that Clause 9, and further discussions on the Bill, will pave the way for a reasonable compromise so that the problems raised by my noble friend Lord Mackay to the Minister can be resolved.
I have been encouraged by much of what I have heard from my noble and learned friend, and I look forward to hearing more later this evening and during the passage of the Bill.
4.25 p.m.
Lord Carmichael of Kelvingrove: My Lords, first, I thank the noble and learned Lord, Lord Fraser of Carmyllie, for introducing the Bill as it was amended in another place. He helped the House this afternoon and that will be of assistance when we frame amendments to be discussed in Committee.
The Committee stage in another place was extremely long for such a Bill. However, the noble and learned Lord and other Members of your Lordships' House who have experience of the other place will know that if there is a vacuum in Scottish business, the

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Scots will always find a way to fill that vacuum; namely, by using the time in Committee. That may have been one reason.
The other reason is that many Members in the other place—and I experienced this when I was there —have drawn to their attention problems which are extremely distressing and cause a great deal of unhappiness for individuals. Therefore, there was a great deal of annoyance expressed on all sides of the Committee because it was felt that the Government had not consulted as widely as they should have done not only with the professional bodies but—and this is even more important—also with the voluntary bodies. Those voluntary bodies play a vital role in many ways but particularly as regards solving the problems of small debts which cause shame and anxiety to many people. It is not easy to discern that shame and anxiety, as it was referred to by the noble Lord, Lord Mackay of Ardbrecknish. He implied that there is less shame on the part of large companies, which do not seem to be quite as worried, as there is on the part of individuals who become terribly ashamed and worried about such matters. The local voluntary organisations do a wonderful job in that respect.
I wonder whether the noble and learned Lord, Lord Fraser of Carmyllie, has any idea of the average debt which is owed in all these cases. Perhaps it would be better if the figures were broken down so that we could see how many of the debts were at a relatively low and manageable level before somebody decided to be awkward and apply for sequestration.
An example has been given to me of someone who owed about £8,500 in credit card debts and various other debts. An arrangement was made whereby, with control and with a certain amount of discipline he could pay back the debt within two years. However, because one of the credit card companies decided that it did not want that to happen, the matter was referred to sequestration.
The money advice centre in Drumchapel, which is one of the voluntary bodies which has contacted me, is particularly annoyed by one of the omissions in the Bill. This matter has been raised by a number of noble Lords either specifically or in general; that is, that the Scottish Bill contains no debt arrangement scheme. That was not included in the Bill nor was it included in the Debtors (Scotland) Act 1987. I am informed that such a scheme has operated successfully in England since 1959 and has been of great help.
The lawyers know better than I do, but I understand that in Scotland several actions for debt can be raised against a debtor. He would thus be forced to make several applications for directions as to time to pay or for orders under the Debtors (Scotland) Act. In other cases, the inability to reach realistic informal debt arrangement schemes with creditors may result in bankruptcy. The absence of such a scheme available to the Scottish courts may result in bankruptcies, unlike the situation south of the Border.
Another matter that should be examined at Committee stage is the list of articles that are exempt from poinding in Section 16 of the Debtors (Scotland) Act 1987. The Minister may remember that the noble
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and learned Lord, Lord Morton of Shuna, expressed strong views on that matter when sitting on this side of the House. In view of the recent judgment in a sheriff's court in Glasgow, we feel that a list of exempt articles should be included. Section 16(2) (f) of the 1987 Act states that exempt articles are,
"articles reasonably required for the care and upbringing of a child".
The Glasgow sheriff's court decision has exempted from poinding a TV and video recorder owned by a lone parent on that ground. That may be thought to be a shocking situation but the sheriff took the definition,
"reasonably required for the care and upbringing of a child".
In the modern world that is something that is fairly important to a child. Can it be confirmed that the decision of the sheriff, which has not been appealed, will stand in the future?
I have received a suggestion from the Glasgow district council housing department. Obviously all local authority housing departments and housing associations have a great deal of experience in the problems of debt. It suggests that there could be a new clause, the object of which would be to relieve a district council housing department from being forced to take eviction proceedings before a tenant with arrears could become bankrupt. Local councils and housing associations in the vast majority of cases work out an arrangement between the tenant and the landlord and have a fairly good rate of success in resolving those problems. If the tenant is made bankrupt, all the other social services become involved, perhaps at great expense, in order to relieve the problem.
We have received help over many years from voluntary organisations, not only in relation to the Bill—for example, from Citizens Advice Scotland, consumer councils and some of the local authorities. They have experience in this field that has been invaluable to us. When one looks at the financial and manpower effects of the Bill one realises that something must be done.
One wonders how many sequestrations have been avoided by voluntary organisations, plus the not inconsiderable savings in personal humiliation and shame that people undoubtedly feel. If there was an assessment of the range of debts, perhaps part of the £18.5 million saving could be given to those organisations to set up small organisations of their own. Professional people could then give personal advice to those concerned before sequestration was considered.
I hope that the Minister will think about such matters. They will all be raised at the Committee stage of the Bill. I hope that it will be profitable and will not take anything like as long as it did in another place.
4.35 p.m.
Lord Fraser of Carmyllie: My Lords, with that reassurance from the noble Lord on the Opposition Front Bench, I shall be as brief as I can. This is a highly technical Bill in an area in which not everyone has a great deal of expertise, but it nevertheless

33
reveals, as we have explored the issues, that very important social problems underlie the difficulties that have emerged.
The noble Lord, Lord Kirkhill, indicated quite correctly that where there are interests of both debtor and creditor there should be a balance. I entirely agree with the noble Lord. The point of balance may require adjustment from time to time. If one thing is absolutely clear, it is that the balance that was sought to be struck in the 1985 Act has been seriously disturbed—and, as the noble Lord, Lord Mackay, unhelpfully recalled, I was the Minister who took the Bill through in another place.
One provision in the Act was an excellent one and a constructive social one—that opportunities should be given to a debtor to enter into arrangements for securing a trustee. It also allowed for further provisions to give a kind of protection to that trustee. I should have thought that both sides of the House would consider such arrangements to be desirable. They would allow for payment to be made and for the debtor to get back on a sensible path without attracting the stigma of a bankruptcy that I believe still attaches to that status.
However, that is not the situation. The trustee has simply been used as a device whereby a trustee is appointed and that trustee then applies for sequestration where there are no assets at all. That situation is of no interest to the creditor because no creditor will receive any money at all. The sequestration goes forward and the taxpayer picks up the bill. It was originally envisaged that the number would be very small, but it has been growing at the rate of approximately 75 per cent. per annum.
If, as I anticipate, it would cost anything up to £50 million in the next financial year, without adjustment, in some circumstances £50 million might be a price worth paying. However, there are very serious questions to be asked. Is it desirable or worth while that those who have no assets should rush into sequestration without the most careful regard to the possible consequences? Whether or not a social stigma still attaches to sequestration is an interesting question, but of this I have no doubt: if those who go to sequestration and obtain the status of a bankrupt, with no assets and with the creditors getting nothing, in the kind of circumstances adverted to by the noble Lord, Lord Mackie, subsequently find themselves back on the rails, there is a very real concern that in the future their opportunity of securing any degree of credit will be very restricted. For that reason, it is worth while to consider whether the balance that was disturbed in the 1985 Act ought to be brought back into a more sensible equilibrium by way of arrangements that have been introduced here.
I accept without hesitation that initially the Bill was introduced without a great degree of consultation. Subsequent to that time there has been consultation, not only with the Scottish Law Commission, which was consulted prior to introduction, but also with the Law Society of Scotland and the Institute of Chartered Accountants. They may not like all that we have introduced, but to my personal knowledge there has been considerable discussion with them.
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I have been asked a number of very interesting but technical questions. I do not propose to attempt to answer them all in winding up this debate. However, the noble Lord, Lord Mackie of Benshie, raised with me the briefing paper he has received from Citizens Advice Scotland. Perhaps I may make this point again in the context of what it has to say. In that briefing the CAB indicated that the Bankruptcy (Scotland) Act 1985 introduced three new main provisions, including,
"(b) the ability for a debtor to petition for his or her own sequestration indirectly, by granting a trust deed for creditors. The trustee appointed could then petition for the debtor's sequestration".
That may be in direct consequence of the introduction of the trust deed for creditors and the way in which it was spelt out in that Act. But it was never the intention of this House that it should be used as a device in that way. I am a little concerned that the CAB should now, in 1992, consider that that was indeed one of our original objectives.
The noble Lord, Lord Kirkhill, was concerned that sometimes the creditors did not get a look in. One of the difficulties about that device is that, where a debtor applies for a trust deed and gets a trustee appointed and he then applies for sequestration, the creditor may know nothing about what the trustee is doing.
Lord Kirkhill: My Lords, perhaps the noble and learned Lord would give way for one moment. I was very concerned about the Leith civil servant.
Lord Fraser of Carmyllie: My Lords, I was about to come to that. There is a different set of circumstances. I have been addressing myself specifically to the 80 per cent. of cases where there are no assets whatever.
Lord Kirkhill: My Lords, I can see that.
Lord Fraser of Carmyllie: My Lords, there has been a properly expressed concern which I recognise. We should not have the trustee accountable in bankruptcy intervening where there are those with expertise in the private sector on insolvency matters. He should not take over that work. I recognise that. A great deal of sequestration work is extremely technical. Where there are assets where individuals and trading have gone under it can be a very elaborate task sorting everything out.
In those circumstances, if the creditor has any reservations about the Accountant in Bankruptcy undertaking the work, then, as the Bill will provide, he has the right to nominate his own choice of interim trustee. However, if his view is that he would like X to take on the work because there are assets to be gathered in and distributed among the creditors and that is his assessment of the matter, we consider it right that he should be prepared to pay for the choice by underwriting the trustee's costs. These are technical points. I do not believe it right that he should expect the taxpayer to foot the bill if his calculation is wrong.
My noble friend Lord Lyell, the noble Lord, Lord Mackie, and the Opposition Front Bench were concerned as to why we did not just rely on Clause 9 alone to produce some savings from the figure of £2,147. Such a provision allows for a reduction in costs but it does not address the central problem which I have repeatedly mentioned. The use of a trustee on

35
a trust deed applying for sequestration is a device which we consider inappropriate. Simply going to Clause 9 does not address that problem.
I wish to make it clear that, while greater powers are given to the Accountant in Bankruptcy, I certainly intend that there should be market testing of the services delivered by the Accountant of Court and independent agents. I can see very easily that in a country the size of Scotland, and with its geographical spread, there may well be circumstances where he will wish to have agents carrying out the work on his behalf, be it in Aberdeen, the South West or in any one of the far-flung corners of Scotland.
A number of technical points have been raised with me. I hope that we can address these at Committee stage. My noble friend Lady Carnegy raised a number of issues which have been addressed by the Consumer Credit Association. I believe that those observations which have been made to me personally by the association are perfectly valid observations to be addressed. I am still considering them. As yet, I am not persuaded that they require to be addressed by amendment to the Bill itself, although both points are important ones. This matter requires to be emphasised —there is some misunderstanding of it in Scotland—that because someone has been sequestrated, it does not mean that, if they have sufficient income, that income should never be available to make some payment to creditors who have been left with considerable sums unpaid. I regret there is some misunderstanding at present that, once sequestrated, any income, however significant it may be, is never under attack.
I am grateful to all who have contributed to this debate. I wish to emphasise that, while I understand the concerns of such organisations as the citizens advice bureaux—I join the noble Lord, Lord Mackie, and others in paying tribute to them—what we require to establish is a proper basis for making sure that these matters, which are often very unhappy for those concerned, are resolved quickly and cleanly. We have to be careful that stigma should not be ignored. While the noble Lord, Lord Carmichael, is concerned that there should possibly be better arrangements for giving advice prior to sequestration, this Bill is essentially concerned with those circumstances which flow once the step to go forward to sequestration has occurred. I repeat my gratitude to those who have contributed. I hope that we shall have a fruitful and constructive discussion of this matter in Committee. I commend the Bill to the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Northern Ireland (Emergency Provisions) Act 1991 (Amendment) Order 1992
4.48 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (The Earl of Arran)The Parliamentary Under-Secretary of State, Northern Ireland Office (The Earl of Arran) rose to move, That the order laid before the House on 10th August be approved [7th Report from the Joint Committee].
The noble Earl said: My Lords, my right honourable friend the Secretary of State made this order proscribing the Ulster Defence Association on 10th August, it came into effect on 11th August and is subject to approval within 40 sitting days.
The Ulster Defence Association is the largest of the so-called Loyalist paramilitary organisations current-ly operating in Northern Ireland. It was originally formed in 1971 and during this period reputedly had a membership of about 20,000. Today, however, there are estimated to be around 1,000 members.
The decision to proscribe the UDA was not taken lightly. We had to judge carefully all the available information about this organisation against our well-publicised criterion for proscription; namely, that an organisation is actively and primarily engaged in the commission of criminal terrorist acts. That criterion has been used in all recent proscription decisions and was spelled out by the then Minister of State during the Committee stage of what is now the Northern Ireland (Emergency Provisions) Act 1991.
After careful consideration my right honourable friend concluded that the UDA is a body which is actively and primarily engaged in criminal terrorist acts. He also concluded that the self-styled Ulster Freedom Fighters, at whose door, on their own admission, lies the responsibility for many outrageous attacks on members of the minority community, and which is already proscribed, merely provides a cover for acts directed, organised and carried out by the Ulster Defence Association.
I would remind your Lordships in particular of the brutal killings in the betting shop in the Ormeau Road in January of this year and of Mrs. Philomena Hanna in April and of Leonard Fox and Gerard O'Hara in September. They were despicable, cowardly crimes which were rightly condemned throughout the community, and which we condemn again today.
Once a judgment had been made about the UDA my right honourable friend felt it right to take prompt action to proscribe the organisation because any organisation which is constituted primarily for the purpose of planning and carrying out terrorist acts has no legitimate place in our society. It would clearly have been wrong to delay acting to deprive the UDA of its cloak of legitimacy. My right honourable friend therefore made the necessary order using the urgency procedure.
As a result of the order, it is an offence to be a member of the UDA from the time it became a proscribed organisation. It is also an offence to solicit or invite financial or other support for the organisation, or knowingly to make or receive any financial contributions for it, or to solicit or invite any

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person to become a member of this organisation or to assist in the holding of a meeting to support or further its activities.
Proscription may not, in itself, directly prevent terrorist acts. But it will make life much harder for terrorists: for example, by preventing them openly recruiting members or raising funds. It makes a clear and unambiguous statement of the Government's and society's abhorrence of those whose primary aim is to terrorise others either under the mistaken belief that this serves to defend their own community, or for more cynical reasons. It will serve as a clear warning to those who might otherwise be seduced by the organisation's propaganda. The message of this order is, in short, to say to those who continue to be a part of the UDA or to support it, "You are involved with an organisation which is a conspiracy to perpetrate acts which are repugnant to society. You put yourselves beyond the law by having anything to do with it. You must take the consequences if you do not break with it."
The UDA has joined the IRA, the INLA, the UVF and the rest on the list of proscribed organisations. Like them, it will remain there until it ceases its barbarous crimes—crimes which only increase the Government's determination to heal the present tragic divisions within Northern Ireland, and to achieve a new beginning for relationships within Northern Ireland, within the island of Ireland and between the peoples of these islands; something which all of us in your Lordships' House support. I have no hesitation in commending this order to your Lordships' House.
Moved, That the order laid before the House on 10th August be approved [7th Report from the Joint Committee]. —(The Earl of Arran.)
Lord Prys-Davies: My Lords, this order is brief, precise and clear. Its effect has been fully explained to the House by the Minister. We on this side of the House fully support it.
The Minister has also assured the House that the decision to ban the UDA was not taken lightly. I do not question the validity of that statement at all. Indeed, the decision to ban an organisation should not be taken lightly. But for at least 18 months before August last the press reports and the appalling pictures coming out of Northern Ireland suggested very clearly the sinister role which the UDA was then playing in the affairs of Northern Ireland—whatever may have been its original role when it was founded. It appeared to many of us that the Government were not in need of further evidence that the Ulster Defence Association was actively and primarily engaged in terrorist activity. The case against it had become unanswerable.
As the Minister has explained, the Government made use of the urgency procedure. We believe that that was a perfectly proper use of that procedure. Perhaps I may take this opportunity to thank the Government for the prompt steps which they took on 10th August to inform the Northern Ireland spokesmen of the decision as soon as it was announced. That was appreciated.
Of course, difficulties remain. I believe that it is common ground that, in practice, the order will not
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deter those members of the former UDA with the will and the determination from going underground and from continuing to plan and execute further violence. Indeed, there are signs which suggest very strongly that the UDA may be continuing with its terrorist activities. The evidence since August seems to signal "business as usual" on the part of the UDA. I have also come across the name of another organisation which appears to be active in the Province. It calls itself the "Red Branch Knight". This organisation has claimed responsibility for a number of acts of violence since last August. To the best of my knowledge, this organisation was previously unheard of—at least by members of the general public. I wonder whether the Minister can say anything at all about this worrying, although foreseeable, development.
I conclude by confirming, if confirmation is required, that we fully support the order.
Lord Holme of Cheltenham: My Lords, from these Benches in August when the order was brought before us, I supported the order and I support it now. Last night a woman, Donna Wilson, in Annadale was murdered by 10 men with baseball bats and pickaxe handles in a way that the Royal Ulster Constabulary, which must in all conscience be hardened enough by now, described as "particularly brutal". It is said that this was a paramilitary, Protestant, loyalist killing. Such a horrible act defames the good name of Protestantism and the good name of loyalty. Thugs are thugs and killers of women are sadistic murderers who are outside the civil system whatever labels they may put on themselves.
Generally, the Government must be vigilant about the potential abuse of power, such as that embodied in the Northern Ireland (Emergency Provisions) Act. Therefore, the power to proscribe under that Act should never be treated lightly. It is an emergency provision and it inevitably raises questions about freedom of association and about the tendency to drive organisations underground. There is a potential attraction for ill-informed, young and impressionable people. Disturbingly, there is some evidence that paramilitary violence is now in the hands of young, impressionable people, motivated by ideas of glory. However, in this instance I am quite clear that it is time to remove the veneer of respectability which legality, as it were, confers on an organisation which has been responsible for such atrocities as the Ormeau Road betting shop murders to which the Minister referred.
In his annual report for 1991, the Chief Constable of the RUC wrote:
"Republican and loyalist gangs demonstrated that they can and do match each other in fanatical hate, blind bigotry and sectarian savagery".
It is therefore particularly important that the Government are not seen to differentiate between acts of this sort of violence whatever quarter they may come from. I was slightly concerned that in April the Minister of State, Mr. Mates, described IRA violence as "pro-active" and loyalist violence as "re-active". We need to move away from this division. Violence feeds upon violence in such a way that it is now

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impossible to detect the original source. It is all to be deplored and it is to be hoped that this order can help the security forces in that difficult role of curbing it.
Finally, perhaps I may advise the Minister and the Government that, as we take these onerous security measures, it is important to recognise that we need to maintain the Government's twin-track policy of political progress as well as intensified security. We must get the balance right. From outside it is difficult to tell what progress has been made in the talks, but they are still continuing and have obviously reached a critical juncture. I simply urge the Minister when he replies to tell us what he can about the progress of those talks because it is in that context that we on this side of the House are prepared to support necessary and rigorous action on proscription.
The Earl of Arran: My Lords, at the opening of this debate I described the UDA as having no legitimate place in our society. I am particularly grateful therefore to the noble Lords, Lord Prys-Davies and Lord Holme of Cheltenham, who have spoken so clearly and so thoughtfully on this subject. It is often difficult to believe that there are people who can carry out such atrocities on fellow human beings. The Ulster Defence Association consists of such people. I welcome the condemnation of the organisation in today's debate. It would be preferable if such orders were not necessary but until we can bring those who join such organisations to see the futility of their violence and so to renounce it, we have no alternative but to use all lawful means to disrupt and frustrate their efforts and eventually to defeat them.
The noble Lord, Lord Prys-Davies, questioned the effectiveness of such an order. I say to him, as I said at the beginning of the debate, that proscription cannot guarantee the prevention of terrorist acts but it does provide sanctions against terrorist organisations and their supporters and denies them any legitimacy under the law. It also sends a clear message to those involved in such organisations that they are putting themselves beyond the law and thus must take the consequences. The Government believe that proscrip-tion thereby has a useful deterrent role to play in the fight against terrorism. The noble Lord then mentioned the Red Branch Knights. This is a hitherto unknown Loyalist paramilitary group and is believed to be made up of elements of other Loyalist groups.
The noble Lord, Lord Holme of Cheltenham, mentioned the heinous and barbaric crime last night to Donna Wilson. It is as yet too early to make a definitive or authoritative statement on this matter. Of course the RUC will pursue the perpetrators in order to bring them to justice.
In conclusion, we believe there is ample justification for the decision to proscribe this organisation. Therefore I have no hesitation in commending the order to the House.
On Question, Motion agreed to.

National Health Service (District Health Authorities) (No. 3) Order 1992
5.2 p.m.
The Countess of Mar The Countess of Mar rose to move, That an humble Address be presented to Her Majesty praying that the orders be annulled.
The noble Countess said: My Lords, in view of the obscurity of meaning to the Motion on the Order Paper, I feel that I should explain that it relates to a merger which took place on 1st October 1992 between Kidderminster and District Health Authority and Bromsgrove and Redditch District Health Authority.
The Secretary of State for Health, in a statement quoted in the Health Service Journal of 18th June 1992, said about the future structure of the National Health Service:
"But I want to make clear that my general approach is that any further change should be with the grain".
Ministers were happy for health authorities to merge if they had local support. I believe that the noble Baroness the Minister is of the same mind.
Sir James Ackers, chairman of the West Midlands Regional Health Authority, and Mr. E. M. Nock, assistant managing director of that authority, in their minutes of 21st November 1991,
"stressed that the RHA were not seeking to instigate mergers. They were, however, happy to support them in circumstances where the districts concerned had themselves agreed that it would be in the best interests of both authorities and their respective populations".
In the next paragraph of those minutes Mr. Nock is reported to have said that,
"a year ago the two authorities had agreed to an integrated working relationship under which they had one chief executive and one director of purchasing. The benefits, including cost benefits, were felt to be such that both authorities had agreed that to achieve the full benefits a formal merger should now take place"
There is a great deal of evidence available which shows that neither the Kidderminster and District Health Authority nor the population of Kidderminster asked for or wanted that merger, and yet it took place on 1st October 1992.
The matter was first raised at a seminar on 1st November 1991 on an entirely different topic for members of the Kidderminster DHA, apparently without notice. Only 30 minutes were allocated for discussion. On 31st October 1991 a non-executive member of the authority wrote:
"I am concerned that we have not been presented with an appraisal of all the options which would enable the non-executive members to make a decision".
He went on to say:
"and in any case such information as we have received regarding this"—
the merger proposal—
"suggests that the principal objective is to reduce the number of bodies with which the regional health authority has to negotiate. I see no reason to move towards a merger for the administrative convenience of the RHA"—
and—

41
"it feels that the merger issue is being driven by other imperatives and imposed upon us rather than being our own initiative".
He went on to list a number of problems in formally merging with Bromsgrove and Redditch DHA. I have already made some of these known to the Minister in a letter I wrote to her early in July.
A consultation paper was issued to a number of interested bodies. Without exception all those consulted in the Kidderminster district objected to the proposals for the merger. These included all the local authorities, the district medical advisory committees, the local medical committee, the general practitioner associations, the community health councils, the district nursing advisory committee and the trade unions and staff associations. At a meeting of the Kidderminster DHA on 27th February 1992 it was resolved that,
"The authority's formal response to the West Midlands Regional Health Authority consultation document be as follows:
"In view of the current uncertainties, and the many views which have been expressed, the authority agrees that further consideration of a possible merger between Kidderminster and District Health Authority and Bromsgrove and Redditch Health Authority should be deferred".
And significantly:
"Kidderminster and District Health Authority indicates its preference for a local Kidderminster-based purchasing authority".
The report of the outcome of the consultation was produced in a document on 19th March 1992. Incredibly, the responses were described as showing a fairly even spread, when in fact nine out of 34 positive responses came from four MPs, one MEP, Bromsgrove and Redditch District Health Authority and five other unrelated health authorities, the Hereford and Worcester Family Health Service Authority and Bromsgrove and Redditch District Nursing Advisory Committee. Of five listed as being inconclusive four were definitely against the merger. As a result of this report the regional health authority was recommended to resolve:
"That the Secretary of State be requested to approve the merger of the existing Bromsgrove and Redditch and Kidderminster and District Health Authorities into a single health authority to be known as the North Worcestershire Health Authority with effect from 1st October 1992".
This resolution was passed on 21st May 1992.
I believe that the people of Kidderminster have had an extremely raw deal. They were consulted, but the outcome of that consultation has been totally ignored. They have bitter memories of the period prior to 1974 when Bromsgrove unilaterally decided that it would no longer take Kidderminster maternity cases. Relationships were bad then, and knowing both areas as well as I do, I can see no reason why they should be any different now or in the future. Kidderminster has a very small physical boundary with Bromsgrove and Redditch, transport facilities are very poor and there is no community of interest.
Kidderminster and District Health Authority is well managed. In fact it was described in another place as being one of the 30 best in the country. The parlous state of the finances of the Bromsgrove and Redditch Health Authority is no secret. It is not surprising that Kidderminster feels that it will not be treated fairly. This would seem to be demonstrated by the
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appointment of the non-executive members to the new North Worcestershire Health Authority. The two members for Bromsgrove and Redditch were members of the previous authority, while the two appointed for Kidderminster and District have no previous health service experience. The chairman of the new authority was chairman of the Kidderminster and District Health Authority. It was by his casting vote that an amendment completely to withdraw from the merger was defeated. Incidentally, two executive members voted against that amendment without declaring an interest.
Originally, the merger was expected to give financial savings of £250,000 a year. That sum was soon reduced to £100,000. In response to a letter from the GP adviser to the authority, on 15th June 1992 the chairman of Kidderminster and District Health Authority, wrote:
"However, I would not expect significant changes in the current level of costs because, as has often been said, the management arrangements of the two health authorities have already been merged".
Kidderminster and District Health Authority was never given the opportunity to discuss alternatives to the merger. There is considerably more community of interest between that health authority and those of Dudley, with which it was already working, and Worcester. The authority felt that it might have had a fairer deal if there had been a merger with Worcester, Bromsgrove and Redditch and itself; but, though the question of alternatives was raised at meetings, they were never allowed to be discussed.
Letters to the chairman of the Kidderminster and District Health Authority, the chairman and the assistant managing director of the West Midlands Regional Health Authority and the Secretary of State remain unanswered or have been ineffectively answered to this day. Some were not even acknowledged. Is that really the way the consultation process should be conducted?
I am praying that the orders be annulled because there is no indication whatever that the correct procedures have been followed. The words of the Secretary of State and the chairman of the West Midlands Regional Health Authority have a nasty hollow ring when they talk about the wishes of people in the locality. A director of public health for Stockport—incidentally, Kidderminster is to lose its public health director—Dr. Stephen Watkins is reported in the British Medical Journal of 17th October 1992 to have said:
"We are being intimidated into accepting proposals for merging district health authorities".
Is Kidderminster merely one of many? What is the policy of the Government? Why are they disregarding the wishes of the people directly concerned when they and their appointees have repeatedly said that those wishes would be paramount? The new arrangements are of no apparent benefit to the people of Kidderminster. The hospitals are so far apart that there is unlikely to be any joint use of them. We have already heard that there are unlikely to be any savings. The suspicion is that Bromsgrove and Redditch will be

43
the main beneficiaries and the suspicion has also been expressed to me that the managers and the chairman of the larger authority will not suffer either.
I am hoping that the noble Baroness will be able to explain the real reason for the merger, and that she will be able to assure me that no other mergers will take place in the face of such strong public opposition.
Moved, That an humble Address be presented to Her Majesty praying that the orders be annulled—(The Countess of Mar.)
5.12 p.m.
Lord Carter: My Lords, The House will be most grateful to the noble Countess, Lady Mar, for drawing our attention to the matter and for covering the ground so well. It means that I can be brief. I am afraid that this is much more of a post-mortem than a prayer to annul because, as we know, the merger has actually taken place. It seems to be a good example of how not to conduct such an operation. It seems to have happened extremely quickly and the consultation, or lack of it, is I believe the prime cause of the concern expressed by so many local people. It appears that the motion for the merger was moved at a seminar rather than in a properly constituted meeting. I shall be interested to hear the Minister's comment on that aspect. The main reason for the merger is not clear; it has never been properly explained. Was it cash savings? Was it administrative convenience for the regional health authority, or what? There have been conflicting answers as to the reason for the merger. So, again, it would be helpful if the Minister could clarify the matter.
As we have heard, it was strongly felt to be an imposed decision with very little account being taken of local feelings and responses. Can the Minister say what was the consultation process; for example, who was consulted, how were they consulted and have the responses been published? There is a peculiar matter upon which I should appreciate some enlightenment. Although the merger is to be effective from 1st October of this year, it is to be reviewed at the end of the year after three months. I find that hard to understand, but perhaps I misunderstood the point. It would be helpful if the Minister could explain the position. I understand that it may be that the intention is to see whether there have been any cash savings. Various figures have been quoted in this respect throughout the procedure starting, I believe, with a figure of £250,000, which was then reduced to £100,000 and now there is the hint that there will be no cash savings at all. Can the Minister say what will happen if no cash savings are apparent at the time of the review at the end of December as regards a merger which only took place on 1st October?
As we heard, there are some question-marks over the role of the executive members and the way that their votes are cast on matters affecting their jobs. Is there machinery in place to ensure that they always declare an interest? Again, we can all certainly agree with the noble Countess when she says that there should be a community of interest between merged
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districts; for example, that there should be good transport links together with natural community links.
The brief from the Department of Health on the prayer headed, "Merger of Bromsgrove & Redditch and Kidderminster Districts", says:
"The proposal to merge was the subject of local consultation".
That is a statement of fact. Can the Minister say whether it is correct that only nine out of the 34 organisations consulted actually supported the merger? In his 1991 annual report the chief medical officer of health of the department referred to the difficulties for public health doctors when health authorities merged to strengthen their purchasing function: they were less able to respond to the needs of small local populations. He also said that if all mergers were being pushed through with the minimum of opposition then the battle was lost. As I said earlier, there is something of a mystery about the reasons for the merger. I understand from the minutes of the West Midlands and Regional Health Authority on the matter that a,
"Mr. Nock reminded Members that financial savings of at least £100,000 would result from this".
That was in May and I understand from the latest round of discussion on the matter that there is now no hint of cash savings. But at that time Mr. Nock stressed that such a saving,
"was not the driving force for the proposals".
If the cash savings were not the driving force for the proposals, perhaps the Minister can tell us what was.
There was an excellent letter from a Dr. J. Adams, who is the GP adviser to the district health authority, to the Secretary of State on 22nd June. I understand that there has been no reply. It was pointed out to the Secretary of State that, following the decision to defer the merger on 27th February 1992, no further discussion took place at the Kidderminster and District Health Authority's meetings on the subject. In view of the stated intention of the regional health authority not to proceed with the merger without the agreement of the local authority and of the local population, it is inexplicable as to why the RHA decided to proceed with the proposal.
Dr. Adams continues in her letter to list a number of errors and misunderstandings that have arisen. She points out that the response to the 34 organisations has not been reported correctly. I referred earlier to the minutes on 21st May when financial savings of at least £100,000 were mentioned. In her letter, Dr. Adams points out that in a letter from the chairman of the Kidderminster and District Health Authority dated 15th June—that is less than a month after the minutes from the regional health authority —it is now stated that,
"significant changes in the level of costs are not expected".
So here we have the regional health authority of 21st May saying that it expects financial savings of £100,000 and we have the chairman of the district health authority in less than a month stating that significant changes in the level of costs are not expected. I hope that the Minister will agree that there has been some confusion in the matter. I believe that

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the people of the district, the doctors and others who have expressed their concern are entitled to an explanation.
In conclusion, the BMA points out that doctors,
"campaigned…to oppose the proposed merger but, despite the overwhelming opposition to the merger from the vast majority of the medical staff at the hospitals, the general practitioners and others locally, the decision was taken for the merger to go ahead".
The association expresses the concern that the projected savings—and we still do not know what they are; whether they are £250,000, £100,000 or nothing—which in fact are a very small proportion of the health authority's budget in any event,
"could easily be swallowed up by additional expenditure for higher graded managerial salaries and other administrative expenses".
Also, as their views are ignored in the consultation process, the doctors in the two health authorities which were merged are anxious to know how the medical representation is to be affected by the merger.
Uncertainty was expressed about the new health authority's ability to provide the services which are needed and whether those services will be responsive and accessible to patients.
To sum up, this has not been at all a happy scene. It seems that there has been crass mishandling of the whole subject by the RHA. There was a lack of consultation and it seems that what little consultation took place was ignored. We hope that the Minister can enlighten the House regarding this rather sorry affair.
5.20 p.m.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, the prayer against the order which brings into effect the merger between Bromsgrove and Redditch District Health Authority and Kidderminster District Health Authority provides me with a welcome opportunity to explain the Government's policy on health authority mergers and to state the reasons why we decided that this particular merger, to create the North Worcestershire District Health Authority, was in the interests of local people and their health services.
Since the introduction of the NHS reforms in 1990, 12 mergers have taken place in England involving 25 DHAs, bringing the total number of district health authorities to 177. Mergers between district health authorities are a natural and expected consequence of the NHS reforms which changed the role of DHAs and gave them an explicit responsibility for purchasing local health services. In the pre-reform days the focus of DHAs was very much on running and providing services. One of the key objectives of the new reforms was to make service management the clear responsibility of individual hospitals and community units or trusts, while at the same time giving DHAs the job of assessing the health needs of their population and purchasing appropriate health services to meet those needs.
For many DHAs the challenge of developing a new purchasing role and shedding responsibilities for service management has meant a re-assessment of resources and the way in which they do their job. Some have decided to set up purchasing consortia
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with neighbouring DHAs to make the best use of purchasing expertise. They recognise that two DHAs in partnership have a greater influence in commission-ing health services for their local populations than the two alone acting separately. Other DHAs have decided to go one step further and to seek approval for a formal merger on the basis that it would enable them to maximise their combined purchasing skills and contracting power. Such was the case with Bromsgrove and Redditch DHA and Kidderminster DHA, where both authorities recognised that the combination of two budgets and two sets of purchasing skills would make for more effective purchasing of health care for the people of North Worcestershire.
The Government do not have a blueprint for the number or shape of DHAs in England; our policy is to enable health authority mergers to take place where that is desired locally and where it can be shown to be the best way for those authorities to develop their role as purchasers. Although our approach to mergers is very much one of responding to changes generated by the service rather than one of pushing from the top, what is emerging from recent changes on the ground is the view that health authorities, to carry out effectively their new role as purchasers, need to be in the range of between a quarter and half a million in population size in order to be effective.
There are four main benefits to be realised from a merger: first, it can allow for a pooling of purchasing expertise and greater strength in the labour market in attracting high calibre staff. This is particularly important when it comes to attracting good public health physicians. Secondly, a merger brings economies of scale with regard to purchasing overheads and helps to save on administrative costs. Thirdly, by combining two budgets, a merger can bring considerable increased buying power and enhances the ability of a purchaser to get the best possible contracts from local providers. Fourthly, mergers can help towards better links and joint working with other agencies such as local authorities; indeed many of the mergers to date have resulted in co-terminous boundaries between health and local authorities which in turn bring benefits of a closer, more co-ordinated method of working.
Turning now to the merger of Bromsgrove and Redditch and Kidderminster Districts, I do of course recognise the natural anxieties and local loyalties which are aroused by proposals of this sort. Local commitment—"ownership", in the jargon—is vitally important in the management of the health service. The noble Countess, Lady Mar, has left us in no doubt of her strength of feeling on this aspect. But we must also consider how best to arrange provision of efficient, effective and responsive health care for local residents.
It is our judgment and that of the West Midlands Regional Health Authority that in North Worcestershire this is best achieved by bringing together these two districts and harnessing their combined strengths—a view shared by the officers of the two authorities and their chairmen. It is they who initiated a merger in order to maximise the benefits of

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joint working and to overcome the considerable degree of administrative and financial duplication associated with placing two sets of contracts for what had essentially become a single purchasing authority. I understand that the creation of a single authority would in this case save at least £100,000 a year from administration to be spent on direct patient care.
I was surprised that the noble Lord, Lord Carter, questioned that figure since only this afternoon it was confirmed to me yet again by the newly appointed chief executive. I think that some of the confusion may have arisen through the fact that, if the authorities had continued to operate separately and not used joint purchasing, savings would then have been made of £250,000.
Lord Carter: My Lords, I am sorry to intervene but I did not question it. It was the chairman of the Kidderminster District Health Authority—I do not have the quote with me—who said that significant cost savings were not now expected. It was not I who said it; it was the chairman.
Baroness Cumberlege: My Lords, I am assured by the chief executive, who has the day-to-day running of the organisation, that savings of £ 100,000 are expected to be made.
An essential feature of all health authority mergers is that they are subject to public consultation, and the merger between Bromsgrove and Redditch and Kidderminster DHAs generated, as we know and have heard this afternoon, a considerable debate locally and a fair degree of opposition. Most local concern focused on the perception that the merged authority would be remote and unresponsive to local needs and patients would have to travel long distances to receive hospital care.
There is no statutory requirement to consult but a reasonable expectation that there should be consultation. I understand that in the National Health Service and Community Care Act 1990 there is no statutory requirement, but in this case consultation was carried out over a period of three months between 1st December 1991 and the end of February 1992. Thirty-four organisations were invited to comment, of which 11 opposed and 23 supported, did not respond or gave an inconclusive reply. Eight others offered their views, six were against and two in favour. I can assure noble Lords that we did not ignore local views but weighed up the responses and balanced them against the need for better management arrangements in order to purchase the best possible health care for the people in the two districts.
There is no evidence to suggest that larger DHAs are less sensitive to the differing needs of people in various neighbourhoods; indeed a greater focus on purchasing based on small communities is entirely compatible with a larger district and can be achieved at the same time. In the cases of Bromsgrove and Redditch DHA and Kidderminster DHA, both districts had since the reforms were introduced taken a lead in setting up pilot systems to ensure that purchasing decisions were sensitive to local needs—usually by focusing decisions on areas covering groups
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of GP practices. It is the intention of the North Worcestershire authority to extend this work so that there is even greater locality-based purchasing than in the past. The Government attach great importance to sensitive purchasing, and in approving the merger the Secretary of State specifically requested that the newly merged DHA be encouraged to continue its work on this front. I also understand from the chief executive this afternoon that the authority plans to increase its use of local hospitals rather than the reverse. That intention is published in the authority's purchasing plan for next year.
I think it is fair to say that of the responses to the consultation on this merger the most vocal concerns that we heard were from people in Kidderminster who feared that they might be disadvantaged by the merger. I hope that what I have already said about the new authority's commitment to local communities will be a clear signal that this is by no means a retrograde step for Kidderminster; indeed, health care for the people of the former Kidderminster DHA will benefit from the merger, precisely because the new authority will be able to get better value for its contracts and its purchasing decisions will be based on more reliable public health data than could have been the case for an authority with so small a population base. The chairman of the new authority, Mr. Malcolm Cooper, was formerly chairman of Kidderminster DHA, and —I take up the points made by the noble Countess —I understand that three of the five non-executive directors live within the boundaries of the former Kidderminster district; that surely is a signal that the interests of the people of Kidderminster will be fairly served.
In its approval of the merger the West Midlands Regional Health Authority agreed that the two existing community health councils should continue in their respective roles. CHCs have a vital part to play in keeping local health authorities informed of consumer views and future aspirations and I know that the new North Worcestershire Health Authority places great store by its relationship with the Kidderminster and Bromsgrove CHCs.
The noble Lord, Lord Carter, asked what the benefits of mergers were. I mentioned earlier that DHA mergers can bring benefits in terms of closer working between health and other authorities, and this merger is no exception, for while it has not created entirely common boundaries it has enabled working relationships to be streamlined and for duplication to be minimised. The local family health services authority covers the whole of Hereford and Worcester and I know that the creation of a merged authority in North Worcestershire has considerably helped to improve working relationships. There is now a plan to set up a joint commissioning forum between the family health services authority and the district health authorities in the area. This will have obvious benefits for primary care and community health services.
The local county council embraces the whole of Hereford and Worcester and the new DHA of North Worcestershire will cover the same area as one of the intended new areas for the county's social services

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department. This should result in improved inter-agency working on community care which is especially important at this time when authorities have to work so closely together to ensure that elderly and vulnerable people get the health and social care most appropriate to their needs.
In conclusion I have outlined the benefits of a merger between Bromsgrove, and Redditch DHA and Kidderminster DHA in the context of government policy on the new and changing role of DHAs as purchasers. This merger is an essential response to the change which gives service management responsibility directly to hospitals and community units. Despite the current unease, it is a change which will, I feel, over time bring considerable benefits to the future health care of the people who live in the towns and villages of North Worcestershire.
Lord Carter: My Lords, I am not sure whether I missed the point I am about to refer to. Did the Minister explain the rather curious point about the merger on 1st October which is to be reviewed on 31st December? I am not sure that the Minister mentioned that point when she replied.
Baroness Cumberlege: My Lords, I understand that that was a decision reached in order to go out to consultation. The final decision was obviously reached after consultation when everybody's views had been taken into account. That was carried out in a formal meeting.
The Countess of Mar: My Lords, I am grateful to the Minister for her reply. But I am not entirely happy about this business of consultation. Why is it that Ministers and executives of the various authorities place so much importance on consulting with the local community and then take an "Auntie knows best" attitude? It is as if they are saying, "We might have asked your opinion, but I am sure that our opinion is better". Would it not be better to say, "We know anyway what we are going to do"? In fact this merger was reported to be on its way in the House of Commons Hansard of 15th June of this year. Obviously it was a fait accompli regardless of what anyone said.
The Kidderminster and District Health Authority merged its purchasing nearly two years ago, but the motion to defer the complete merger asked that its purchasing should be separated from that of Bromsgrove and Redditch. No account was taken of that request and no reply has ever been given to it. The district health authority is not happy about that. I have with me a letter from the chairman of the district health authority in which he says there are not expected to be any changes in the current costs. If the Minister wishes to see that letter after this debate I shall be happy to show it to her. Apparently no economies are to be made. As I have said, the buying power was already put in place by the merger of the two health authorities' purchasing facilities some two years ago. There is no community of interest between Bromsgrove and Redditch and Kidderminster. In all the social and charity work I have done I have never
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been able to get the two communities to work together. They have a far greater community of interest with Worcester and Dudley, as I have said.
As regards the newly appointed members of the newly formed North Worcestershire Health Authority, admittedly there are two from the Kidderminster and District Health Authority but they have no experience, whereas both the members of the Bromsgrove representation have previous experience as members of the authority.
I was pleased to hear what the noble Baroness said about community care as I am keenly concerned with that. I realise that the boundaries of the Hereford and Worcester Social Services Department will coincide with those of the new authority. That, as far as I can see, is the only benefit to be gained from the measure. In view of the fact that this measure is already a fait accompli, I have no intention of dividing the House. I beg leave to withdraw the Motion.
Motion, by leave, withdrawn.

Religious Broadcasting
5.35 p.m.
Lord Renton Lord Renton rose to ask Her Majesty's Government what action they will take to ensure that the provisions of the Broadcasting Act 1990 and codes made thereunder in relation to religious broadcasting are observed.
The noble Lord said: My Lords, I rise to ask the Unstarred Question standing in my name. I say straight away that my Question is not as well phrased as it might be because the relevant part of one of the codes is so confusing that it would be difficult to observe it.
The 1990 Act refers only to independent broadcasting. It does not apply to the BBC, which is advised on religious broadcasting by the right reverend Prelate the Bishop of Liverpool, whom I am so very glad to see in his place and who is to speak later in the debate. I assure him that I am not tonight going to quarrel with the BBC. I have admired and often watched "Songs of Praise" and have listened to the short morning service on the radio which I generally hear when motoring on Monday morning in my car. I only wish that "Songs of Praise" on Sunday evening were broadcast more often and at greater length. I think there is scope for more religious broadcasting by the BBC but I shall leave it at that, except just to say that I found the Festival of Remembrance on Saturday evening as moving as ever. It was beautifully done.
Before I go any further I should make my own confession. I am a middle of the road Anglican but I believe in a broader and more united Christian Church and I am very glad that Christians and Jews are getting closer together. I am deeply grateful to the Jewish community in this country for personal reasons, some of which may be known to some of your Lordships. The Jewish community has given wonderful financial and other support to MENCAP

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and my own severely handicapped daughter has been cared for by a Jewish foundation for over 20 years. I am deeply grateful for that.
In my opinion—which is shared by many others —there is a great need for religious revival in this country. It is mainly because I believe that broadcasting, which now plays such an important part in the lives of our people, has a part to play in such a revival that I have tabled this Unstarred Question this evening. Broadcasters should do nothing to impede, but do all that they can to encourage such a religious revival, not only of the Christian faith although this is a traditionally Christian country. Of course, other noble Lords may have other reasons for speaking in the debate.
Section 6(1) (d) of the 1990 Act lays the foundations. It states that the Independent Television Commission:
"shall do all that they can to secure that every licensed service complies with the requirements … that due responsibility is exercised with respect to the content of any of its programmes which are religious programmes, and that in particular any such programmes do not involve—

(i) any improper exploitation of any susceptibilities of those watching the programmes, or

(ii) any abusive treatment of religious views and beliefs of those belonging to a particular religion or religious denomination".

That is what Parliament said, and none of us would disagree with it.
The ITC is required by Section 6(1) of the Act to publish codes for broadcasters to observe. One of those is the Programmes Code, Section 10 of which deals at length with religion. It is not enforceable against the two main independent television com-panies—Channel 3 and Channel 4 —until 1st January. Meanwhile, it is merely a guideline. However, if it needs amendment—and I hope that your Lordships may feel that it does—there is time for it to be amended before it comes into force on 1st January. Today is only 9th November.
The relevant paragraphs of Section 10 are paragraphs 10.2, 10.5 and 10.7. They are quite brief and I shall inflict them upon your Lordships. Paragraph 10.2 reads:
"Religious belief and practice is central to many people's lives and is capable of evoking strong passions and emotions".
So far so good. Paragraph 10.5 reads:
"In general, religious programmes on Channel 3 and Channel 4 should reflect the worship, thought and action of the mainstream religious traditions present in the United Kingdom, recognising that these are mainly, though not exclusively, Christian. Religious programmes provided for a particular region or locality should take account of the religious make-up of the area served".
That is fair enough. However, the crucial part of the code is paragraph 10.7, which reads:
"Although religious programmes may quite properly be used to propound, propagate and proclaim religious belief, religious programmes on non-specialist channels may not be designed for the purpose of recruiting viewers to any particular religious faith or denomination".
I suggest that it would be difficult to propagate and proclaim religious belief without suggesting religious revival, even among non-practising Christians who have let their religion lapse. However, that may not be recruiting and there may be no difficulty there. But what about such an appeal to agnostics and atheists?
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It would be recruiting if there were an appeal to such people; but why should it be forbidden if all the other excellent practices which are to be allowed take place?
It seems to me that if St. Paul had appeared on television he would have been allowed to propagate and proclaim his religious belief, and in doing so he could describe his conversion. But he would not have been allowed to appeal for converts because that would have been recruiting. To me that does not seem to make sense.
It so happens that paragraph 10.7 is not only self-contradictory, as I tried to explain, but it does not fit in with what Sir George Russell, the chairman of the ITC, wrote in a letter to Mr. David Porter, Member of Parliament, on 8th October. I shall quote from that letter. It is not a long quotation, but it is relevant and encouraging:
"Although the Code does not become binding on Channel 3 (ITV) and Channel 4 until the beginning of next year, we are confident that it will, in fact, permit a far wider range of religious expression than some have feared. For example, it would allow: … appeals for recruits or for funds within material offered as follow-up to programmes; … programmes about or interviews with those who proclaim a particular faith or belief, including those who believe that they or their church/faith has a mission to convert".
Splendid! Lastly, the chairman says that it would allow:
"programmes or items which report recruitment campaigns".
I find it strange that that letter should give so much encouragement and be in contrast with what is written in paragraph 10.7 of the Programme Code.
The inconsistency goes further, because the ITC has also published a Code on Advertising Standards and Practice, appendix 5 of which deals with religious advertising. In paragraph 5 of that appendix, under the heading "Acceptable Categories" (of religious advertising), it is stated:
"Advertising is acceptable for any of the following purposes: (i) publicising events such as services, meetings or religious festivals, and for describing an organisation's activities and how to contact it".
My Lords, that comes awfully close to recruitment.
On 28th September my right honourable friend Mr. Alastair Goodlad wrote to the new Secretary of State for National Heritage about the problems I have mentioned to which the code gives rise. Perhaps I may say in passing how delighted I am at the appointment of Mr. Peter Brooke. It gives one great confidence because he has all the qualities needed for the wide responsibilities of that new department. I am sure that your Lordships will agree with me.
In his reply of 23rd October the Secretary of State said—and he was right to say it this:
"The codes are … the responsibility of the ITC. The Government does not have the power to alter [them]".
He adds that only the courts can decide whether a code complies with the Act. Perhaps noble Lords will take it from a rusty old lawyer like me that we could not get this matter into court, dealt with and an order made for amendment of the code before 1st January —not a hope! Indeed, it would be a long and costly business to get the matter reviewed by the courts. Surely it is better that this problem should be raised in Parliament and that the ITC, the broadcasting bodies and individual broadcasters should take note of views

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expressed in Parliament, especially if there is any doubt of the Act of Parliament not being observed by all concerned.
In that letter Mr. Brooke also said:
"There has never been any restriction on broadcasting evangelistic sermons"—
I wish we heard more of them incidentally—
"in the context of an act of worship".
He said something else which I must briefly read out. Your Lordships will be glad to know that this will be my last quotation. He said:
"Editorial responsibility for coverage of those events lies with the licensee who broadcasts the programme".
He added—I wonder whether he had been quite well advised —this:
"No new restrictions have been added by the new codes".
I should love to think that they had not. But if there is a contradiction and part of the material which gives rise to the contradiction is restrictive, as the expression of "no recruitment" must be regarded, I fear that we have to accept that a new restriction which was not there before has been added to the new codes.
Let me summarise. Section 10.7 of the programme code is not only self-contradictory but does not fit in with the letter from the ITC chairman, does not fit in with the Advertising Code and does not fit in with the letter from the Secretary of State. Section 10.7 should be amended so that it dovetails with the other provisions of both the Programme Code and the Advertising Code.
What can we do about this? The Government cannot compel the ITC. That is clear from the statute. Going to court could not get the matter resolved in time. I suggest that the Government could at least send to the ITC a copy of the Hansard report of your Lordships' debate this evening, in the hope that the inconsistencies can be resolved in time and perhaps with the expression of such a hope by the Secretary of State himself, although that would be for him to decide.
This is a big subject. Other noble Lords will be taking part in the debate and some of them know a great deal more about the matter than I do. I see in his place the noble Lord, Lord Annan, who has great experience as a broadcaster and great interest in this subject. I shall be interested to hear what he has to say as well as the contributions of the noble Earl, Lord Halsbury, and other noble Lords. I have merely tried to give chapter and verse of the relevant documents in order to lay the foundations of the debate.
In our mainly Christian country we have a tradition of religious freedom, a tradition of religious tolerance, a tradition of freedom of speech and a tradition of the rule of law as amended from time to time by Parliament. I hope that each of those great principles will in future be applied to religious broadcasting.
5.55 p.m.
Baroness Birk: My Lords, we are all grateful to the noble Lord, Lord Renton, for raising this very interesting but extremely difficult subject tonight by way of an Unstarred Question.
What immediately emerges is that the 1990 Broadcasting Act is different from all previous Acts and it changed the whole structure of the authority
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which is responsible. Until then, the IBA and before that the ITA were broadcasters. What that Act did was to turn the ITC, which succeeded the ITA as the Independent Television Commission, into a regulat-ory and licensing body, not a broadcasting body. But the Broadcasting Act lays certain requirements on the ITC, as the noble Lord pointed out, with regard to religious broadcasting. The ITC is required to do all it can to ensure that those requirements are met by its licensees.
Section 10.2 of the ITC code states that:
"Religious belief and practice is central to many people's lives and is capable of evoking strong passions and emotions".
Possibly that is not only true but almost an understatement, especially if one considers what history demonstrates. Many wonderful things have been done in the name of religion but so have many evil things, however sincerely based they have been.
The responsibility for compliance with the ITC code is on licensees, not individual religious groups. It is for the licensees that the various ITC codes, including the programme code, have been written. Moreover, Section 10 of the code, which was quoted by the noble Lord and which deals with religion, has been drawn up to attempt to ensure that licensees treat all religious groups fairly and to ensure that, as the Broadcasting Act requires, the audience is protected from the irresponsible exploitative or abusive treatment of religion, whatever its source.
I have a great deal of sympathy with the noble Lord when he refers to Section 10.7. I found myself puzzling over it. The fine line between propagation of ideas and recruiting is very difficult to draw, to define legally or even to put in legislation. It seems to me that that paragraph is something which the noble Lord might feel should be discussed at a meeting with the chairman of the ITC. I do not think it is quite clear. I am not at all sure whether it can be made any clearer. Nevertheless, I see the problem and had already queried it myself before I heard what the noble Lord had to say. I remind your Lordships that the audience for religious programmes may consist of those of all religious beliefs and none. Being Jewish, I was delighted to hear what the noble Lord said about the Jewish religion and how an organisation (which I think I know) helped his daughter.
A great deal of discussion took place on this subject —I am speaking of the part concerning religion in the Broadcasting Act—during the passage of the Broadcasting Bill through this House. The right reverend Prelate the Bishop of Liverpool is also the Chairman of CRAC. That body received a great deal of flak during the Bill. I was quite amazed at the strength of feeling. I may be wrong, but I believe that a certain amount of intolerance was shown.
Religious programmes should have a wide reach. As the right reverend Prelate pointed out, there should be broad-based representation of religious beliefs within religious broadcasting. The term "Christian" should not always replace "religious". It is important to stress that aspect. Although I did not participate to a great extent in the debate on that aspect of the Bill in this House, the legitimate and proper discussion about the nature of religious broadcasting in our

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society appeared in danger of being hijacked by a small group of Christians who believed that it was being discriminated against. If I am right, no doubt we shall hear more about that today. If that belief is not right, I shall be pleased to hear it.
The ITC has been at great pains to make sure that the rules of its codes are generally applicable. The only point in the code at which a particular group is singled out for special mention is Section 10.5 which requires religious programmes on the main channels to recognise that Christianity is the major religious tradition in this country; and that will continue while the state and Christianity are intertwined in our constitution.
My colleagues in the Labour Party support religious broadcasting but are also in favour of other cultures having the right to air time, as is provided for in the ITC code. In addition to the 200-plus hours per annum of religious broadcasting available on ITV and Channel 4, viewers of cable and satellite channels now have access to an increasing number of sponsored Christian programmes including Robert Schuller's "Hour of Power" on Sky and "Victory" with Morris Cerullo. The ITC has also licensed two specialist Christian channels: "Vision" in Swindon, and "The European Christian Family Network". That suggests an expansion of opportunity for Christian broad-casters rather than the reverse. At this point, however, I ask the Minister when he replies to assure the House that the Broadcasting Act will not be amended to allow tele-evangalists to fund-raise on screen on any channel. At present they cannot do so, but it is possible that under pressure the Bill might be amended. I believe that it would be a great relief to many of us to know that that will not occur.
Finally, the Broadcasting Act 1990 provides ample opportunity for the expansion of religious broadcast-ing. Indeed, that is already taking place. However, increased freedom brings with it the challenge of ensuring that sensitive topics—what could be more sensitive than some of the topics that are dealt with under the heading of religion?—are handled respon-sibly, so far as possible without prejudice and always with great tolerance.
6.6 p.m.
The Lord Bishop of Liverpool: My Lords, I thank the noble Lord, Lord Renton, for the kind remarks that he made personally to me in the speech with which he introduced the debate. When we put our names down on a list and then find what the order of events will be it is difficult to know what later speeches will include. Since I am the only speaker from this Bench, I believe that I am right to expect that other noble Lords who took part in debates on the Broadcasting Bill—I refer in particular to the noble Earl, Lord Halsbury, and the noble Lord, Lord Orr-Ewing—will raise matters which underlie what the noble Lord, Lord Renton, said. But it may be right for me to say a little on some of those points. The noble Baroness, Lady Birk, referred to a feeling that a
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group is being discriminated against. It was a point raised during the passage of the Bill. I believe it right for me to speak on that subject.
The noble Lord, Lord Renton, stated that it is difficult to make a distinction between the words "proclaim" and "recruit". During consultations I was told by the lobby that the key word that was wanted was "proclaim". I believe that everyone should be content that that is the word in the programme code. Noble Lords should have a great deal of sensitivity about the difficult course for the ITC to steer between a proper freedom for full-blooded proclamation of different faiths, as well as by different Christian Churches, and recruitment, which invites and presses people to come and join a particular body.
The Earl of Longford: My Lords, perhaps I may interrupt the right reverend Prelate. Surely one of the objectives of proclaiming the truth of something in which one believes is that one tries to persuade a person to join one's religion, group or whatever it is.
The Lord Bishop of Liverpool: My Lords, that is quite true. I doubt whether noble Lords would be eager for a Moslem to try to recruit viewers in a full-blooded and careful way. There is a complete distinction, as I shall try to indicate later, between the dedicated religious channel in which people know what they are buying into and understand that they may hear such a challenge (as it is open for viewers to hear) and a broadcast channel which millions of people may have been watching for other reasons but a religious programme may then be broadcast. I believe that all responsible noble Lords will wish to say, "Of course we must draw a careful line and distinction". It is easy to show that things are not totally logical in every way. However, many Members of Parliament, noble Lords and many others have told me how grateful they are that a stand has been made to try to prevent the high-pressure broadcasting with which the United States is familiar.
Underlying some of the arguments is a book called Hidden Agendas. It is based on a conspiracy theory. As always when conspiracies are believed, it is almost impossible to persuade people that they do not exist. The book puts forward the concept that the religious advisers, through the IBA and the ITC, conspired to keep full-blooded, evangelical Christianity from television and radio. I was chairman of the Central Religious Advisory Committee (CRAC) three-and-a-half years ago. I knew that some people believed that concept at the time. I believed that I was well placed to estimate the truth of such an allegation. The word "evangelical" means a great deal in positive and important ways to me. It is part of my roots. I do not believe that there is any such conspiracy, but all programmes which are submitted to mainline channels are subject to the judgment of programme controllers. Those controllers have built up large viewing audiences and believe that programmes must begin where that audience is and not where a church audience might be. But I am quite clear—I have watched an enormous amount of television during my years as chairman of CRAC—that I have seen a great deal of full-blooded evangelical Christianity. for

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example, in the last two or three weeks I watched the Wirral Christian Fellowship and the Elim church being given absolutely full and unfettered freedom to proclaim the gospel.
I should say a word about CRAC. In your Lordships' House it was greatly misunderstood at Second Reading. We were accused of being a censor that stopped things from going on the air. I explained that we never discussed programmes before they went on the air. In the Committee stage we were accused of being a toothless tiger that had no power to influence matters. People really cannot have it both ways. It is a vigorous body. Members are invited by the BBC and the ITC. We advise the BBC. We also advise the IBA, the ITC and the Radio Authority, and CRAC has now been invited after 1st January to continue to be an adviser to the ITC. Members are invited by the BBC and the ITC jointly, after careful consultation with the churches and the other faiths that they represent, for we represent all the mainline churches in the four countries of the United Kingdom and other faiths. We have Jewish, Moslem and Hindu membership.
I want to say firmly on the public record that at our meeting in September, when our committee had carefully considered the book Hidden Agendas with its allegations, it unanimously passed a vote of confidence in our religious advisers and in their integrity. I would want that to be heard and firmly held on the record.
The book purports to show that Section 10 of the ITC programme code was written by the then religious adviser to the IBA, the Reverend Eric Shegog, before the Broadcasting Bill had completed its passage. But the initial draft was quite properly made when the outline of the proposed new clauses on the content of religious programmes was known in June 1990. The programme code could not be finalised until the legislation had received Royal Assent in November 1990, and the draft code was sent out for wide consultation on 12th November 1990, some three months after Eric Shegog had left the IBA.
Among those consulted were members of the evangelical and traditionalist lobby, who are identified in the book. A number of changes were made to the code as a result of the consultation: for example, to allow recruitment on specialist channels and appeals for funds and for members within follow-up materials to programmes. Hidden Agendas makes no reference to the consultation process, stating only that the original draft ITC programme codes were issued on 12th November. Nor is there any reference to the important changes made to Section 10 following the consultation process.
Indeed, the book claims that when the code was finally published "there were no concessions". That is quite untrue. I am not sure what the noble Lord, Lord Renton, means when he says that a restriction was included which was not there before. The ITC drew up the codes following this wide and careful process of consultation.
I hope that noble Lords may understand the present situation. Specialist religious channels licensed under paragraph 2 of Schedule 2, Part II of the Act may recruit members by way of programmes designed
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for this purpose. They have won their own audience. Whatever channel they may be watching the audience knows what to expect. So far as mainline channels reaching very broad audiences is concerned, the ITC takes into account the need to ensure that the code can apply to all religious groups, all faiths.
The noble Earl, Lord Halsbury, was a governor of the BBC in Lord Reith's day. In the debates on the Broadcasting Bill I believe that he was trying to call us back to the Christian broadcasting heritage which Lord Reith gave us, and I have a warm sympathy for all that was positive that he wanted to say about that. It is certainly the case that Reith was moved by Christian conviction and made an important place for religious broadcasting within the BBC, which lasts to this day. But he wanted the broadcaster to hold the ring and to ensure fair representation of all the different Christian traditions. Reith never confused the BBC either with a church or with the Church. The BBC has never agreed to he a recruiting station for a particular tradition but a place where all voices can be heard.
I share with the noble Earl, Lord Halsbury, the firm wish that robust expressions of Christian life and preaching should be broadcast. I have watched and listened to a great amount of broadcasting in these last three-and-a-half years. I believe that much is sensitively done, beginning where people are and not where the church people might like them to be—audiences that channels have built up over years. Religious broadcasting rightly takes note of our living in a multi-faith society. Within that society I believe that religious broadcasting in Britain does a fine job, reaching far higher proportions of audiences than religious programmes in the United States.
I am informed that the "Everyman" programme on Sunday nights, for example, an extremely thoughtful programme, obtains 3½ million viewers if it comes on at the earlier time that it should and has in fact more listeners and viewers than all the tele-evangelists put together. The noble Lord, Lord Renton, hoped for a more united church. I indeed agree on that. I hope that we may meet gladly in saluting the best of religious broadcasting and leave aside unworthy attacks on religious advisers, who serve us very well. I believe that the provisions of the Act are being observed.
What do the churches think about it? Recently the Baptist Church, the Methodist Church, the United Reformed Church, the Roman Catholic Church and the Church of England have reaffirmed their support for the programme code as it stands. I firmly hope that the Minister will make it plain that Her Majesty's Government do too.
Lord Renton: My Lords, before the right reverend Prelate sits down could he help us on one point? We have all been very interested in what he has had to say. But the right reverend Prelate referred to the discussions and the codes that had gone before the one we are discussing. Can he point to any previous code or any previous Act of Parliament in which there has been an expressed prohibition on what is described as recruiting?
The Lord Bishop of Liverpool: My Lords, I am not sure that I can find the right references. I can say that the body that I chair has for many years—I think I am right in saying since 1975—said that religious broadcasting should reflect the composition and the membership of religious bodies in this country. Because of the guidance that CRAC had observed I was strongly pressed that the word "proclaim" should be included, as it was not. It seems to me that the movement is in that direction and not in the direction that the noble Lord suggested.
6.18 p.m.
Lord Annan: My Lords, as we can see this evening, religious broadcasting is a sensitive issue. The broadcasting authorities know that programmes can give offence to the faithful and indeed to those of no denomination at all. That is why they set up advisory bodies such as CRAC to draw up codes of practice which lay down what those who make, and take part in, religious programmes may or may not do. The trouble is that, when some issue arises, the authorities quickly pass the poisoned chalice on to their advisory boards. They then accept their advice, and if they are challenged reply that the Churches have always endorsed the composition and the rulings of the advisory board. The authorities take a similar line about the codes of practice. That is reasonable because why keep a dog and bark yourself? The result is that the advisory board comes to regard itself as all powerful and the Churches hesitate to challenge its rulings.
There can be no doubt that, as the Authority, the ITC is responsible for the content of religious programmes presented by the companies. If it accepts the codes drafted by the advisory boards they become official ITC practice½
The Lord Bishop of Liverpool: My Lords, I thank the noble Lord for giving way. If by "the advisory board" the noble Lord means CRAC, the body which I chair, I must point out that it did not draft any codes. The employees of the ITC drafted the code after careful and wide consultation, which included consultation with our body. I do not believe that our body has felt all powerful. I made the point that it never considers programmes before they are screened or broadcast.
Lord Annan: My Lords, I meant all powerful in presenting the codes, which the ITC is then of course at liberty to refuse. However, it is understandable that normally the ITC will accept the view of its advisory board. That does not mean that the Government can never express a view contrary to that of the authority. Indeed, governments do that all the time. The "Real Lives" controversy, which was handled so badly by the then Home Secretary and the Director-General of the BBC, is an example of how governments will raise an issue with an authority. However, no one denies that in the past Home Secretaries have, or today the Secretary of State for National Heritage has, every right to make their views known to the relevant authority and to ask for its comments.
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I understand that both Mr. Mellor and Mr. Brooke told the ITC and the radio authority that it is legitimate for a broadcaster specifically to recruit believers provided that it is done in an act of worship. Indeed, Mr. Mellor inserted a section in the Act which states that that may be done provided that it is responsible and not an exploitative programme. That was done to ensure that the Moonies could not recruit but that the door was left open to the Evangelicals. In other words, when in a studio in 1950 Dr. Billy Graham appealed direct to viewers to change their lives, he was entitled to do so.
Do the new codes prohibit such an appeal to listeners? On that point, which is the real point at issue, the ITC speaks with two voices. The ITV religious broadcasting officer, Ms. Rachel Viney, said:
"If Billy Graham addressed the viewers direct to camera that would contravene the programme code as drafted because the programme code says that religious programmes on non-specialist channels may not be designed for the purpose of recruiting viewers to any particular religious faith or denomination".
Even more to the point was the evidence of Mr. Shegog, who was the author of the draft of the ITC codes. In a taped interview he explained that the "no recruitment" restriction in the ITC codes would stop Dr. Graham making the kind of personal appeal to viewers and to listeners that he has made in the past. Again, in March 1991 Ms. Clare Mulholland said that if the speaker on camera did make a direct appeal to millions of viewers the ITC would intervene. Nor have those officials left the broadcasting companies in any doubt about what would happen if such an appeal were made. They have told the companies that they would be liable to be fined and their licence re-examined and perhaps not renewed. I am told that they have threatened sanctions on a number of occasions.
But now ITV has sent to noble Lords taking part in tonight's debate a brief dated 5th November. At first sight the brief appears to endorse the attitude of those officials. Paragraph 10 states:
"The ITC does not believe that general audience channels should broadcast religious programmes made with the express purpose of recruiting viewers to a particular faith or denomination".
Such a programme could be broadcast only on a specialised service under an ITV licence. But in paragraph 13 ITV appears to run counter to its officers. It states that paragraph 10.7 of the code would permit Dr. Graham seeking to convert viewers,
"in the context of a rally, church service or other religious event".
It then adds:
"This already happens".
What the code would not permit would be:
"a change of emphasis from an event taking place in its own right … to a coverage aimed specifically at recruiting viewers".
Alas, my mind has not had the legal training which the mind of the noble Lord, Lord Renton, has had. As I am not a lawyer I have difficulty in understanding the fine distinctions which are being made tonight. I am not at all sure where we are being led. I can imagine Mr. Graham saying that if his act of worship is not aimed specifically at recruiting viewers it is nothing. Indeed, I am reminded of a story about the visit to a seminary of a Cardinal. He said to one of the young

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seminarists, "M. l'Abbé, your superiors praise you for the great acuteness of the theological distinctions which you draw. Tell me, is it canonical to baptise an infant on point of death in soup?". The reply, which came back quick as a flash, was, "In your Eminence's soup, no; in the seminary's soup, yes".
The distinctions being drawn in this document are very fine indeed and they are extremely difficult to follow. I am worried further by the conclusion of the ITV briefing document. It stated that people imagined that the 1990 Act was deregulatory and that broadcasters would have greater freedom. With great satisfaction the document states that that view is mistaken and that the 1990 Act made changes which were re-regulatory and:
"necessitate a variety of rules and guidelines which were not required under the old system".
The ITV document added that:
"religious broadcasting will suffer as the result of too little regulation rather than too much".
There speaks the bureaucrat—we might be in Brussels!
I have often warned broadcasters about flouting the codes which prohibit excessive violence and ensure political impartiality. But I have always been in favour of giving broadcasters freedom unless it can be shown that grave damage will be done if some contentious programme is shown. Other speakers tonight have spoken, and will speak, from deep religious conviction. I speak in the cause of freedom. I have seen and still see the danger that what once was permitted will now be prohibited by the zealous efforts of officers whose sincerity and the difficulty of whose problems no one doubts. But a freedom is now being threatened with abolition and the ITC appears to be refusing to state its reasons for refusing to comply with what the Government were asking it to do. I hope that in reply the noble Viscount, Lord Astor, will give the noble Lord, Lord Renton, and his friends the unequivocal assurance that their fears are groundless.
6.30 p.m.
Lord Orr-Ewing: My Lords, first, I congratulate the noble Lord, Lord Annan, on his masterly speech. He always entertains us, whether or not we agree with him. On this occasion he was at his fizzing best.
The noble Lord mentioned Billy Graham. When I was looking through the records I was surprised to see that Billy Graham was allowed, generally in football grounds and other large stadia, to broadcast in 1950, 1960, 1970 and 1980. When he went on a mission to Scotland there was a hitch. I am not sure whether or not that was because of the new regulations. We always throw mud at tele-evangelists. Surely it would be wrong to include Billy Graham in that, and I am sure that the right reverend Prelate would not do so. Billy Graham may be a tele-evangelist but no one could say that he was anything other than extremely sincere and successful in his message.
I wish to speak on another subject. I welcome the publication of the book Hidden Agendas—much work has been done on it in the past three years by two professors—which is about religious bureaucracy trying, it seems, to outwit Parliament as regards the regulation of religious broadcasting.
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I welcome the introduction by the Government of a due responsibility and improper exploitation section —Section 6(1) (d), in the Broadcasting Act—to allow responsible evangelism, but not by the militant extremists or cults. I oppose the proposed restrictions in the ITC codes on recruitment and donations in order to make programmes. That represents a severe and unnecessarily restrictive interpretation of the Act.
I remind your Lordships of the argument that I used during our debates on that legislation. The spread of religious broadcasting in the United States did not really take off until it was permitted to raise money by sponsorship or advertising. It is very expensive to make television programmes. Without proper funding programmes must be televised at unsocial hours when nobody sees them. I believe that the right reverend Prelate the Bishop of Liverpool tabled an amendment, which was turned down by this House, to oppose advertising.
I oppose the proposed restrictions on recruitment and donations to make programmes in the ITC codes which represented, I thought, a severe and unneces-sary restriction. Such over-regulation kills creativity and innovation. Although ITC officials consulted some parliamentarians, I believe that the interview took only just over half an hour. The code was modified in some respects but it was felt necessary to reject other suggestions that we made.
I am informed by the National Council for Christian Standards in Society that last week a large number of Church denominations sent out letters asking to be consulted about the ITC codes. They include churches in Scotland, Wales and Northern Ireland, independent free churches, pentecostal, congregational and house churches, Afro-Caribbean churches, presbyterian churches, free methodist and baptist churches and the Salvation Army. They join dissent from the recruitment wings of the more traditional established Church. I should describe myself as a traditional established churchman. Those churches have all now said that they wish to be consulted. Therefore, the consultations which took place up to two years ago do not seem to have been thorough and perhaps it was not realised what was happening. The established Church has been caught out because those churches have not been invited to the recent cosy meetings held here in London by the advisory committees. The members of those different churches watch the same television as the rest of us and have every right to demand to be consulted as regards the ITC religious restrictions.
The ITC claimed that it consulted the churches before finalising its code at the beginning of 1991. Why is it that dozens of church denominations representing thousands of congregations and hun-dreds of thousands of people are asking to be consulted about the ITC religious codes?
The Lord Bishop of Liverpool: My Lords, is the noble Lord suggesting that none of those churches was consulted in that extremely wide consultation procedure? My understanding—because some of them have written to me—is that they objected because they were not invited to a private meeting with a private minute. I had nothing whatever to do

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with that but I am aware that there was a meeting to which they were not invited. Is the noble Lord suggesting that those churches were not consulted in those earlier wide-ranging consultations?
Lord Orr-Ewing: My Lords, I suggest that some of them were not consulted in the earlier consultation when their views should have been sought. As regards what happened at a meeting recently, it was a very small, unofficial committee and perhaps the people present were not representative of those churches.
The ITC claims to have consulted the churches. If that is so, why has it now finished consulting? I believe that something is wrong here and Her Majesty's Government cannot ignore it. The ITC—a public regulatory body and a creature of the Broadcasting Act—has slightly overplayed its hand at Church politics.
The book Hidden Agendas quotes from the November 1987 affidavit by the ITC controller of advertising. He won a judicial review in the High Court, which, as my noble friend said, was an extremely long and drawn out business. That was against advertising the children's Bible stories: Noah's Ark, Moses, David and Goliath and Daniel in the lion's den. That ITC controller of advertising then expressed his disapproval of religious advertising in his published article of spring 1990 entitled:
"Hell-fire and Credit Cards—Is religious advertising coming to British Television; Frank Willis anticipates the worst".
That controller was then made responsible in 1990 for the ITC's impartial consultations about their religious advertising and sponsorship codes. When the codes were published it was no surprise that they were bursting with restrictions. I believe that it was unwise and unfair to put that referee in charge of those subjects.
Like many other noble Lords, I sat through debate after debate on the Broadcasting Act. We persisted in trying to build more into the Bill because we could not help but feel that when the codes were published, they would raise issues which we thought Parliament had decided against. I came across one small but strange example. In the early days of the draft Bill, after taking a great deal of legal advice, the Minister took out the word "denigrate" and instead inserted the words "abusive treatment". Your Lordships will see from the much-quoted wording of the present code that the words "abusive treatment" have been taken out and in their place is the word "denigrate". That shows what a strange way the ITC has of irritating Parliament by sweeping away the decisions of the democrats and instead putting in its own version. Bureaucrats should not always be allowed to get the better of democrats.
Section 6(1) (d) (ii) states:
"any abusive treatment of the religious views and beliefs of those belonging to a particular religion or religious denomination",
should not be allowed. I am sure that we all say "hear, hear!" to that. However, only this month I came across the proposal to use a puppet of Jesus Christ in the "Spitting Image" programme. Those responsible had read neither the code nor the Act. I know that the ITC could argue that it has no responsibility until 1st
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January. However, along with some other parliamen-tarians I sent a letter to The Times. That raised an issue from a person much beloved and respected in this House, the Bishop of London, Graham Leonard. He said:
"I understand that the Church of England made no effective public protest following the guying of Christ in 'Spitting Image'. It was left to the Muslim community to do so, which it did with effect. Do we now have to depend upon it rather than the Established Church to stand up for our Blessed Lord?"
The Lord Bishop of Liverpool: My Lords, would the noble Lord give way? He has taken the opportunity of attacking what he calls Church bureaucrats. Was the noble Lord not aware that the Reverend Eric Shegog, who is the communications officer for the Church of England, made a statement that was broadcast on the Sunday programme the morning before that programme came out and that it was in all the major newspapers that day? There could be no clearer comment from the Church of England.
Lord Orr-Ewing: My Lords, if I was unaware of it, so was the former Bishop of London. He stated that no one else had spoken up.
The Lord Bishop of Liverpool: My Lords, I was hoping that the noble Lord would withdraw the point. I am stating what the communications officer of the Church of England did on that day.
Lord Orr-Ewing: My Lords, I was quoting the former Bishop of London, who I knew quite well. It was a very high Church view and if he had not heard of the statement of the Reverend Shegog, who was appointed as chief communicator for the Church of England, I had not either. I apologise from that point of view. Others are equally ignorant.
My noble friend started the debate very effectively and suggested a solution. We cannot wait for a judicial review. We know that they take up to two years to complete and that they cost hundreds of thousands of pounds. If the Act that was passed after a year and a half of consideration is not matched by the codes, some solution should be found. Is Parliament incapable of finding a solution to the problem and making minor corrections that will be widely supported in most parts of this House and in another place?
6.40 p.m.
The Earl of Longford: My Lords, the last speaker has contributed an enormous amount of devoted work on this subject over the years, as have other speakers. I cannot lay claim to such a distinction. I speak simply as a man in the pew—a man who was in the pew yesterday. I said my prayers yesterday, as usual; and today.
I rise therefore with a certain diffidence, real or assumed. I ask three questions. First, have I complete confidence in Christian leaders, who negotiate arrangements with the broadcasting authorities on our behalf? Secondly, are those arrangements, humanly speaking, perfect? Thirdly, does the man in

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the pew who is greatly privileged to be a Member of this House have a right and duty to offer a few humble suggestions of his own?
I can answer the first question easily. I have complete personal confidence in all of those who act for us in this matter—and most of all, because I know him best, in the right reverend Prelate, although later I may criticise one of his statements.
I remember fielding at long leg to the fast bowling of a previous cricket captain of England, the late G. O. Allen. He showed extraordinary tolerance when the ball trickled through my feet to the boundary, spoiling his average. I hope for a similar tolerance from the right reverend Prelate today.
In asking whether the arrangements are perfect, I do not begin with the spirit of someone who wants to disparage the statements in a general sense. I rang up my admired friend, Mary Whitehouse, last week and I received an answer which I did not expect. I asked about religious broadcasting and whether it was satisfactory. She said "It is a good deal better than it was". That was an answer that I should like to record. I did not say that the situation is all quite lamentable —not at all—but I do not think that it is perfect.
I am not sure whether Cardinal Newman had become a Roman Catholic when he stated:
"To live is to change and perfect is to have changed often"
I hope that the noble Lord will accept the possibility that change or improvement is necessary in the present arrangements.
What kind of general guidance do I offer today in my humble role? I begin by rejecting all the talk about a multi-faith society. I hope that it was my failing ears that told me that the noble Lord had used that expression. I know that in this House only parliamentary language is permitted; otherwise, I could say something which would certainly not be permitted here.
When noble Lords discussed the Education Bill in 1988, the heroic noble Baroness, Lady Cox, stated that 85 per cent. of the people of this country call themselves Christians, and only 5 per cent. owned up to, or took pride in, allegiance to some other religion. The figures do not appear to be very different today. With great respect to the noble Lord, it is my opinion that talk about a multi-faith society is fantastic. When other faiths represent between 3 per cent. and 5 per cent. of Christians, to say that it is a multi-faith society is misleading. I reject with equal disdain the same talk of pluralist society. That might be true of Bradford or one or two other places; but it is certainly not true of Britain as a whole.
If I am allowed to make a general remark, the trouble with Christians is that, collectively speaking, they suffer—if they suffer at all—from an excess of humility. I wrote myself a little book on humility; but I suppose that if I mention that it will be a sin against the virtue in question. It is something that can be overdone. Christians are leaders speaking collectively more than other denominations. They have a duty to speak up for themselves and not to be misled by our humanist friends into the idea that we are all a lot of different religions, as in the old days, and Christians might have a majority but only a bare majority.
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I hope that I do not appear to be a bigot. When I entered this House one of my sponsors was Jewish. I have introduced more than one Jewish friend. I have helped to introduce that tremendous rationalist, the late Baroness Wootton. I remember standing there while the alternative form of words was searched for, which was not so popular in those days.
I cannot accept the idea that I am ignoring the tremendous contribution made by Jewish friends, humanists and various religious minorities. Nevertheless, noble Lords surely have to take pleasure in the fact that we took the initiative in introducing the word "Christianity" into the Education Act. After almost half a century of religious education in the modern sense, it was finally included. It was not introduced through the initiative of the Churches, although I believe that they all welcomed it. The former Bishop of London welcomed it. It was introduced on the initiative of the noble Baroness, Lady Cox. She waited for other people to join and then it was introduced. The phrase in the Act states that religious education has to be wholly or mainly Christian. That does not sound like a multi-faith society. I view with horror the idea that all the religions, whatever their spiritual value in England, be treated as though they were on an equal footing.
I find some discussion among Christians—and here I shall place a strain on the almost infinite patience of the right reverend Prelate—on whether religious broadcasting, so far as it lies in the power of the Christian leaders, should reflect a state of opinion or should give a lead for that opinion. If it reflected opinion, then it would figure much more strongly in Christian education than it does now. Even so, how does one work out that equation? That is a very inadequate ambition.
It is up to the Christian leaders, in whom we have such great personal confidence, to give a lead and to do everything in their power (they are not dictators) to try to persuade other authorities. They should try to persuade and give a lead to Christians. If anyone says that that is proselytisation, then what is wrong with that? It is a Christian trying to persuade other people to become Christians. If Jesus Christ had not gone in for proselytisation, there would not be much Christianity. I do not shrink from these bad words. I testify in that sense in favour of the Motion. I do not want to seem to be crabbing the efforts which are being made by Christian leaders. I return to what I said. In the words of the schoolmaster, one is to be congratulated, but encouraged to do still better in future.
6.51 p.m.
Viscount Buckmaster: My Lords, I speak as a vice-president of the Christian Broadcasting Council. I welcome the opportunity for as many Christian Churches as possible to be consulted over the ITC restrictions. I support freedom for clergymen to express their views and directly to challenge television viewers about their spiritual needs in programmes recorded in the studios or on location.
If they are fit and proper persons and what they say is responsible but not exploitative, they fulfil the

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requirements of the Broadcasting Act 1990. These provisions, coupled with discretion for the regulators, were put there to allow people like Billy Graham and his evangelism, while keeping out groups publicly regarded as unacceptable and offensive.
The Lord Bishop of Liverpool: My Lords, will the noble Lord give way? Will he suggest to your Lordships how, without a code, we might find a way of describing who was not acceptable?
Viscount Buckmaster: My Lords, I agree that it is very difficult to see how any such way could be achieved. But that has always been an aim on the part of the people responsible for these regulations. During the passage of the Broadcasting Bill in 1990, the opposition of ITC officials and their advisers to the new opportunities in religious broadcasting was well known. But the Bill was changed by Parliament and those changes for removing the preponderance of religious restrictions are now law. This is an important point.
The regulatory codes are not the place to exact retaliation or punishment for those who lobby for greater freedom. The Government announced that the new Act would allow religious advertising and sponsorship. The ITC code distorts that to ban religious advertising and sponsorship directly towards people under 18 years of age. Surely that is totally unacceptable. Indeed, one might call it, in Shakespeare's words,
"the most unkindest cut of all".
The ITC advertising code also bans advertising of spiritual, moral or emotional counselling services, exhortations to change religious behaviour and any references to the benefits of religion for personal well being. I congratulate HMG for honouring their commitment to remove restrictions on religion in the Broadcasting Act, but, as it were, they have appointed vegetarians to run the meat counter.
This is an important point. The codes also ban appeals for donations to make programmes. That means that British Christian programmers are hamstrung if they try to compete with American groups which already have ample financial backing.
This issue is not a fitting matter for judicial review. Members of the public cannot be expected to fight court battles with public regulatory bodies to try to reinstate parliamentary authority. What is Her Majesty's Government going to do about all these unnecessary ITC code restrictions, which, taken together, are designed to throttle new and creative programmes coming from the evangelical and traditional heart of the Christian Church in our country?
6.58 p.m.
Viscount Brentford: My Lords, if this debate has done nothing else it has shown up the need for Section 10.7 to be clarified. I am not going to say what I originally intended to say because a great deal of clarification has already emerged in that direction. I should like to talk along the lines of what my noble friends were saying about that section.
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It seems that the ITC is saying loud and clear at the moment that matters like Billy Graham missions may be broadcast on independent television. The letter from Mr. David Glencross, the Chief Executive of the ITC, in reply to the letter from my noble friends Lord Orr-Ewing, Lord Ashbourne and others, has not yet been mentioned in this debate. In it, incidentally, Mr. Glencross made clear that he appears to have rebuked Central Television for using a "Spitting Image" illustration of our Saviour.
I was very glad to read in the letter to The Times that he states very categorically,
"As to religious broadcasting, the ITC's code does not, as the letter suggests"—
that is the letter of my noble friends Lord Ashbourne and others—
"prevent the televising of a church service, rally or meeting at which Dr Billy Graham or any other Christian preaches the Gospel".
That is excellent. The letter continues:
"The code's provisions are designed to implement the requirements of the Broadcasting Act 1990".
Section 6(1) (d) is then referred to.
What is written in that letter is perfectly clear and good. What he does not do in that letter is refer to Section 10.7, which is what my noble friend Lord Ashbourne had raised in the letter to which several Members of your Lordships' House contributed. They talk quite clearly about a code,
"which effectively prohibits an evangelist such as Billy Graham inviting viewers to make a commitment to Jesus Christ".
That has been denied in Mr. Glencross's letter and I believe it was also denied in the letter which my noble friend Lord Renton quoted from originally. Let us therefore look at Section 10.7. I was helped by what the noble Lord, Lord Annan, said. As I see it, he is saying that the section is dealing with a limited range of activities. It states,
"Although religious programmes may quite properly be used to propound, propagate and proclaim religious belief, religious programmes on non-specialist channels may not be designed for the purpose of recruiting viewers to any particular religious faith or denomination".
I had always read that as being what is commonly called a "no recruitment" policy and intended to prohibit the sort of appeal that Dr. Graham, whom I have had the privilege of knowing for some 35 years, normally makes in his evangelistic missions. This is backed by what Mr. Shegog has said—that the code was intended to prohibit that. Mr. Shegog has gone on record as saying that very clearly. I appreciate that he claimed to have drafted the code, but this has been denied by Mr. Glencross.
If I understood correctly what the noble Lord, Lord Annan, was saying, this does not refer to a public mission where the principal aim is to speak to those who are attending the mission, but exclusively to that sort of occasion which is geared only to recruiting on television. I am not clear whether that is what this means. Like my noble friend Lord Renton, I am a lawyer by training, and I consider that its wording is unsatisfactory in either of two sets of circumstances: either Mr. Shegog is right and it is intended to prohibit that sort of mission appeal or, if Mr. Glencross is right

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in saying that it does not prohibit that sort of appeal, the wording should be clarified in order to meet that. I submit that this position is totally unsatisfactory.
Historically, appeals by Dr. Graham have frequently been broadcast on the television by both the BBC and ITV. He has clearly been photographed while at Roker Park in the course of a local mission. He has been photographed (and that has been put out over television), making an appeal to both those who are sitting in their homes watching television and those in the football ground, urging them to commit themselves to Jesus Christ and become his disciples. That has always happened in the past. The question that we are asking now is: will that happen in the future? I submit that the wording of Section 10.7 is unsatisfactory and I should like my noble friend Lord Astor, who is to reply to the debate, to agree to write to the chairman of the ITC and to say that that section needs amending. If it is correct that it is not intended to prohibit a mission, I hope that that will be clarified and made crystal clear.
7.2 p.m.
The Earl of Halsbury: My Lords, in addressing your Lordships' House this evening, I must ask the Minister who is to reply to the Unstarred Question to accept that there is a syndrome of mistrust between what I may call the religious lobby in your Lordships' House and the ITC as established by the Broadcasting Act 1990. As to the religious lobby, it is in part represented by those who have put their names down to speak this evening; and as to the ITC, it is not represented here, so the noble Viscount, Lord Astor, must do his best with whatever brief it has presumed to provide him so that he can answer some 64,000 dollar questions. In pausing at this point, I appeal to the right reverend Prelate the Bishop of Liverpool to help me to resolve this spirit of distrust rather than taking sides and defending one party or another too exclusively.
Perhaps I may make it clear that there is no question in my mind of any sort of disingenuous behaviour by Ministers in this House or in another place. They and the religious lobby—and possibly the higher echelons of the ITC itself —have in my view been double-crossed by officials of what was once the IBA, and now the ITC. Let me also assure your Lordships that nothing I shall say in any way implicates the sound-broadcasting world.
Your Lordships may recall that when the printing press was first invented there was an immediate attempt by the religious authorities of the day to embargo the printing of canonical works—the Old and the New Testaments, the writings of the fathers of the Church and so on. That was futile as is every attempt to strangle and to stamp on something that is new and acceptable at large when people at large have got used to the idea. One might quote the advice that Gamaliel gave to the Sanhendrin over what was new in those days, "If this thing be of men it will fail, but if it is of God you cannot withstand it".
I want to be as clear as possible about why officials treat this whole matter as a hot potato. But my noble friend Lord Annan has done it so well that I shall not
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take up your Lordships' time in saying less effectively what he has already said so well. I can only speak with whatever residue of authority vests in me as an ex-governor of the BBC—albeit 30 years ago—and, as the right reverend Prelate remarked, as a friend of Lord Reith, a son of the manse, who had high hopes of the part that religious broadcasting could play in the life of the nation.
I know a lot about quangos, boards of governors and officials. I know that part-time governors, meeting for only half a day and only once a month, can only too easily have the wool pulled over their eyes by officials whose main concern is to combine doing the things that they want and keeping out of trouble. Ministers of the Crown are from time to time at hazard in this respect. This is what has led to the present syndrome of distrust—and only the ITC can resolve it. It must either live with mistrust or modify its code before 1st January. The onus is on that body to take action, as I was telling its chairman only last week.
I have in my hand and in particular a tape dated 29th March 1991. It is not my property and belongs to the author of the book which has been named, Hidden Agendas. I cannot therefore surrender it for inspection because it does not belong to me, but I spent an hour this morning making a faithful transcript in my own hand of some of the questions and answers at interviews with the ex-head of religious broadcasting of the former IBA, and in the interview with the current religious broadcasting officer of the ITC. I could name them, but I prefer to give them their official titles in order not to make it a personal matter.
I shall deal first with the ex-head of religious broadcasting at the former IBA. He left its employment in September 1990—that is to say, before the Broadcasting Bill came before your Lordships' House; before your Lordships amended it; before your Lordships' amendments were referred to the Commons; before the Commons returned them to your Lordships and before the Bill passed. He left as a legacy the draft of the code—the code as it now is —and recorded his reminiscences in March 1991. He had previously contributed to a book in which he expressed the view that evangelism had its place in church, at the street corner, in meetings or in schools, but no place in broadcasting. In the unpublished tape recording that I have just transcribed, he asserts:
"The grammar and syntax of Broadcasting does not lend itself to that sort of thing".
The phrase "that sort of thing" was a reference to Billy Graham. So here we have a code drafted by someone who, not being in any way hostile to religion, is apparently hostile to religious broadcasting.
There then follow questions and answers about the codes.
"Q. I wonder how you got them out so quickly.
A. I wrote them."
Then, in a later comment:
"I started my new job in September".
So they must have been written before they ever came to your Lordships' House. Asked why, he stated:
"There was nobody else to do it. There was nobody else with the requisite experience of legislation".

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One wonders what experience of legislation he may have had.
"Q. Watching the legislation you sat down and wrote the code. Was it modified?"
His answer was in the affirmative.
"Q. But its fundamentals are your code?
A. Yes, its fundamentals are the one I drafted."
So the fundamentals of this code were drafted in June 1990 —in the summer of 1990—by someone who left the employment of the IBA in September and was giving this interview in March of the following year. Is it any wonder that on finding this out a syndrome of mistrust arises?
Later on the tape he spoke of challenging the IBA for its implementation, if you please, of the spirit of the Act in its own code and he appeared disappointed when the IBA took legal advice as to whether its implementation was in conformity with the spirit of the Act. This disappointed him. I have also checked with the tape the comment of the ITC religious broadcasting officer quoted by my noble friend Lord Annan.
So we have a situation in which those basically hostile to religious broadcasting as such have drafted a code to make life as difficult as possible for those who wish to promote it, a code very far from expressing the views of this House or another place.
The Lord Bishop of Liverpool: My Lords, I apologise for rising to speak again, but no one else is here to speak for people who in my view are being denigrated in a disgraceful way. The noble Earl has said that those officers are opposed to religious broadcasting. Their whole life work is to promote religious broadcasting and they do it with great sensitivity. I remind your Lordships' House that the committee which I chair—noble Lords may see that its published membership is from all the major Churches in the four countries and from other religious bodies —passed a unanimous vote of confidence in their integrity. The committee has had a lot of time to debate and consider all the matters which your Lordships are asserting.
The Earl of Halsbury: My Lords, the committee would pass comment on the integrity of a colleague. One always would if challenged.
The Lord Bishop of Liverpool: My Lords, that is passing comment on a colleague. I am not a colleague. I am an independent member of a Church, as is every other member of CRAC. None of us is paid; none of us is an employee of the BBC or the ITC. We are members of an objective body who have had plenty of time to take the most careful look at these matters. On the basis of a full and thorough investigation—we have heard all the things that have been asserted today —we passed a unanimous vote of confidence in their integrity.
The Earl of Halsbury: My Lords, I regret to say it to the right reverend Prelate, but CRAC is another body which is subject to mistrust.
The ITC has asserted that the code in its final form results from widespread consultation. This is not accepted by those whose attitudes object to it most
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and who feel less than consulted. The National Council for Christian Standards in Society, of which I have the honour to be president, does not feel that it has been consulted. There has been selective consultation, or, if you like, bogus consultation. Write round and ask for everyone's views, acknowledge their reply, tick off their name as having been consulted on the consultation list—and lo! and behold they have been consulted.
What is to be done? First, the Government must recognise that this syndrome of distrust exists. It is no use trying to talk it away. It is there. Secondly, the ITC must recognise it and come under pressure from the Ministry, as has been recommended, to put it right before 1st January. As I told its chairman, only the ITC can do it, and only the Government can kick the ITC into doing it following the representations in your Lordships' House.
7.15 p.m.
Lord Bonham-Carter: My Lords, first, I should say that I shall not detain your Lordships for very long on this subject and, secondly, I should apologise that my noble friend Lord Thomson of Monifieth is not speaking in my place as he planned to do. Unfortunately, he was called away on an unavoidable engagement.
I must confess, as one who is not as expert in these matters as almost all the other noble Lords who spoke on the subject are, that I feel strong sympathy with the right reverend Prelate who has alone expressed the view in the exceedingly unbalanced debate that we have had today—in which the large majority of those who participated come from one particular branch of the Christian faith and have expressed one particular view. I find it especially unattractive when people focus their attack on officials—officials who cannot speak for themselves, officials whose job is not to pervert the course of justice or destroy religious broadcasting, which is their livelihood if nothing else.
The Earl of Halsbury: My Lords, I attacked offices, not officers.
Lord Bonham-Carter: My Lords, I stand corrected. Their job is first to carry out and interpret the wish of Parliament as expressed in legislation; and secondly, to carry out the instructions of boards of governors and advisory bodies which they serve. It is unwarranted to treat them as though they were the source of our problems in this matter. If there is a problem in dealing with religious broadcasting—it appears to be a specific one the responsibility must fall on boards of governors and senior officers in broadcasting bodies.
I have listened with great interest to what has been said. I take up the point made by the noble Baroness, Lady Birk, that the Broadcasting Act 1990 was a bid to change the broadcasting system in this country. It has done so and I believe that it will do so for the worse. But that is another matter. It has also changed the nature of religious broadcasting because it has changed the position of the ITC vis-à-vis broadcasters in a way which is fundamental and leads to the

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necessity of drawing up elaborate codes of practice as guidance to broadcasters who will be fined or punished if they disobey the spirit of the Act.
What has not been emphasised in the course of the debate is the fact that very shortly in this country we shall have broadcasting by satellite and cable on a large scale. The noble Lord, Lord Orr-Ewing, with anticipation and pleasure, never ceases to remind us of the fact that the whole of this country will be "Murdochised". But when that happens we shall have religious broadcasting of precisely the kind that the noble Earl, Lord Halsbury, and others who have spoken appear to look forward to. We shall have religious broadcasting which is allowed to recruit. We shall have religious broadcasting which is allowed to appeal for funds. I only hope that it will not imitate, as I suspect it may, the American type of TV evangelism the so-called electronic church.
Perhaps I may describe to the House what it is like or what it is thought to be like by one who has read the book Hidden Agendas and found it a somewhat suspect volume. The reviewer of the Catholic Herald writes:
"The writers are unduly scathing in their criticism of British religious programme makers, but do not apply their critical faculties with the same rigour to the American-style 'evangelists', and the so-called electronic Church they would advocate for Britain … They have failed to appreciate that the ethos of the electronic Church as developed in America is a distorted vision of the Christian faith, individualistic, cosy, comforting and unchallenging".
I hope we avoid that fate. But on the day when we are bombarded from satellite and cable and elsewhere with religious messages in that style, I suspect that we may look back with nostalgia and, perhaps, some gratitude to the era of self-restraint when religious broadcasting was conducted by the IBA and the BBC.
As many speakers have said, there is a central problem in the IBA code of practice. It is a verbal problem. It is the problem of how one distinguishes between proclaiming and recruiting. I think it should be admitted that it is a fudge. I believe that the noble Lord, Lord Annan, was right to ask what it is intended to do. It is intended to keep the Moonies off. That is an act of censorship and we must face that fact. But that is what Parliament suggested. Parliament cannot avoid responsibility: it willed the end and now it cannot deny the means. I do not think that it is particularly respectable and I have no solution to the problem. Nevertheless, I do not look forward to the day when the contrary takes place.
Those who have objected have not suggested anything very concrete as to what we should do. No one in this evening's debate has solved the verbal conundrum. They have said that the Government must do something about it. In point of fact, the people who are doing something about it are those who are in charge of broadcasting and those, like the right reverend Prelate, who deal with CRAC. The only suggestion I have heard as to how the matter should be dealt with is that the Government should say what must be done.
If there is one rule that I learnt in my experience as vice-chairman of the BBC it is that whenever the Government tell broadcasters to do something they get themselves into trouble and the advice is nearly
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always wrong. The noble Lord, Lord Annan, referred to the fiasco of "Real Lives". The only people he did not blame who should have been blamed in addition to the Director-General and the Home Secretary were the governors of the BBC for taking any notice of what the Government said. They should have said "Yes, we take your message; we will look at it". They should then have said, as they did after a fortnight's delay, "We will broadcast the programme". It was just a rather boring programme in point of fact. It did no harm, except to politicians, the Director-General and to the reputation of the governors of the BBC.
In the same connection, as regards the present issue, the last thing I would advocate is that the Government should ring up broadcasting authorities and tell them what to do about religious broadcasting. That would make me believe even more firmly than I do today in the necessity for separating Church from state. If there is one thing that governments in this country should not talk about, or try to organise, it is religion. I therefore believe that our present situation is infinitely preferable to one in which the Government intervened and told the broadcasting authorities what to do about—of all the things in the world—religious broadcasting.
Lord Annan: My Lords, I hope that the noble Lord will clarify a point before he sits down. Does he agree that it is perfectly all right for the Government to say, "We have heard this debate and are alarmed that something which has been allowed in the past may be in danger of being prohibited in the future"?
Lord Renton: My Lords, that is the whole point.
Lord Bonham-Carter: My Lords, I have not gained the impression that that will be the effect of the code. Of course, I may be wrong and such fears may be justified. However, I am prepared to take a big bet that the poor officials concerned will have enough sense to see that the code is interpreted sensibly.
7.24 p.m.
Viscount Astor: My Lords, we are all grateful to my noble friend Lord Renton for initiating tonight's debate on a subject which is clearly of considerable concern to your Lordships. I know that there were lengthy and thought-provoking debates on religious broadcasting when the Broadcasting Bill passed through the House. Of course, your Lordships have an advantage of me, as I did not take part in the proceedings on that legislation. There remains a feeling of unease among some noble Lords that the intentions of Parliament on religious broadcasting will not be achieved in practice; and that, in some way, the development of responsible religious broadcasting will be inhibited.
I hope to assure your Lordships this evening that that will not be the position. I therefore welcome the opportunity to restate the Government's intentions and commitment to the development of religious broadcasting and to explain the roles and responsibili-ties of the Independent Television Commission and the Radio Authority in licensing and regulating religious programming and advertising.

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We are all mindful of the powerful influence that television can have on the hearts and minds of its audiences, particularly, perhaps, on those who look to television for companionship and support. We therefore need to balance carefully the desire to allow greater freedom in religious broadcasting against the need to safeguard viewers' susceptibilities. We need also to give due consideration to the diversity of people living in this country. We have always applied the concept of religious broadcasting in a way which reflects the range of religious views in the United Kingdom. We intend to maintain that concept while giving proper weight to the traditions of Christian belief in our society.
Perhaps I may remind your Lordships of what we want to achieve. With the Broadcasting Act 1990, we set out to introduce a number of measures to liberalise the regulation of broadcasting. Moreover, the regulation would be achieved in a different way; namely, through licences and codes, rather than through previewing programmes or approving schedules. That type of regulation is no longer sensible when the number and choice of broadcasting services has increased so rapidly and will continue to do so in the future.
Under earlier legislation, the IBA had to give prior approval for the broadcast of any religious service or propaganda relating to matters of a religious nature. Under the 1990 Act, licensees will no longer be required to obtain approval from the ITC. The automatic ban on religious advertising has been removed. Religious groups will be allowed to own radio stations and some have already taken advantage of the new regime to operate stations. That never happened under the 1981 Act, when the expectation was that the IBA would not allow it. Most importantly, the 1990 Act opened up the possibility of new channels and stations, so allowing many new outlets for religious programmes.
I know that some noble Lords were concerned that those provisions did not go far enough and were still unduly restrictive. We were willing to listen and to think again. As a result, the Broadcasting Bill was amended in two important ways. First, Channel 3 and Channel 5 licensees will be required to give a sufficient amount of time to religious programmes. That guarantees that religious programmes will continue to be shown on the main independent terrestrial services, as they will be by the BBC. Secondly, the ITC was given discretion to allow religious groups to own cable and non-domestic satellite services, if it is satisfied that that is appropriate. One licence has already been issued for a non-domestic satellite service. Other religious groups are also showing interest in operating religious services on satellite or cable television channels.
Much has been achieved. But I return to my point about the influence of television on its audience. I am sure that your Lordships would agree that safeguards are necessary to avoid abuse of broadcasting by religious cults, extremists, fanatics or people who might be described as the wrong sort of "telly
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evangelists". The Act therefore requires that any treatment of religious matters must be responsible and not exploitative.
We expect the ITC and the Radio Authority to spell out that requirement in their codes on programming standards. Further, as with all broadcasting licensees, religious broadcasters have to be fit and proper persons and must abide by the codes covering advertising sponsorship and appeals for donations, comply with consumer protection requirements on taste, decency, offensiveness and on not encouraging crime or disorder, and avoid editorialising on religious as well as political matters.
The Act, therefore, allows responsible religious broadcasting to develop, but with safeguards. The ITC codes on programming and advertising are one such safeguard. I know that there is concern over their content and that some noble Lords fear that they are unduly restrictive. It has been suggested that Ministers should intervene. Indeed, during the Broadcasting Bill's passage through Parliament it was suggested that the religious programme code should be made subject to parliamentary approval.
This would not be right. The Act specifically established the ITC and the Radio Authority as the public bodies responsible for licensing and regulating all commercial radio and television services. They have a statutory responsibility to publish various codes relating to the standards and content of licensed services. The purpose of these published codes is to enable them to set out detailed rules for their licensees on aspects of broadcasting which Parliament wants to be regulated. Members of the commission and authority are advised on the content of the codes by a permanent staff, including specialists in programming and advertising regulation.
Parliamentary approval of the codes or government intervention of any kind is not only unnecessary but it has potential dangers. It would undermine the authority of the ITC and the Radio Authority. Moreover, if government or parliamentary approval were needed to some aspects of the codes, why not to others? The risks of political interference are obvious. The Government therefore have no power to alter the contents of the codes. It is finally for the courts to determine whether the codes comply with the Act. Having said that, I give my noble friend Lord Renton an assurance that I shall certainly draw to the attention of my right honourable friend the Secretary of State and the ITC what has been said this evening by your Lordships, including of course the view on the code, particularly paragraph 10.7, of my noble friend Lord Brentford.
However, the ITC and the Radio Authority did not formulate and publish the codes without consultation with CRAC and also many other religious bodies. The programme and advertising codes were published in draft form after the Act came into force. The ITC and Radio Authority consulted widely on their contents. Broadcasters, religious groups and individuals were invited to comment. As a result of the consultations the programme codes were amended.
The right reverend Prelate the Bishop of Liverpool, chairman of the Central Religious Advisory

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Committee, mentioned the book Hidden Agendas. It is a book written and published in support of a particular view; it marshals its arguments towards that end. I do not propose to answer the individual allegations which its authors make, but one of the themes in the book is that the Government in some way misled the House during the passage of the Bill and have not honoured undertakings that were given by them.
The Earl of Halsbury: My Lords, if the noble Viscount will give way, I specifically dissociated myself from that point. I said that I had no feeling whatever of disingenuousness by the Government.
Viscount Astor: My Lords, what I described was not what the noble Earl said this evening. It was one of the themes in the book. I do not associate the remark with the noble Earl.
I do not believe that a thorough analysis of the record would support that conclusion. As your Lordships know, there were many meetings in the course of the passage of the Broadcasting Bill and long debates. We have carefully examined our records of what was said and done. The allegation of misleading the House is not one which we took lightly.
From this assessment we take the view that three assurances were given by my noble friend Lord Ferrers and that all three were fulfilled. They were: that the ITC would in practice implement the policy described in the amendment to the Bill proposed by the noble Earl, Lord Halsbury, that religious programmes maintain the centrality of the Christian faith while still allowing opportunities for the views of other religious groups to be expressed; that the ITC draft guidelines would be subject to full and wide consultation; and that they would seek to reflect the words in the noble Earl's proposed amendment.
Paragraph 10.5 of the ITC's programme code reflects and gives effect to the assurance which my noble friend Lord Ferrers made without using the precise wording in the withdrawn amendment. It requires the ITV companies to recognise that the mainstream religious traditions in this country are mainly but not exclusively Christian.
As I have said, the ITC consulted widely about the programme code. I must tell my noble friend Lord Orr-Ewing that it consulted a wide range of religious bodies. The drafts were publicly available and discussed in the press. Everyone who took an interest could have commented if they chose and it was not empty consultation.
The ITC amended the programme code to allow specialist religious channels to recruit to a faith and to permit follow-up literature to include fund-raising provided that the tone and content of the literature was responsible; and lifted the prohibition on the proclamation of faith in programmes to allow religious groups to advocate their views provided the programmes do not prey on people's fears and susceptibilities. These are not the actions of a body trying to restrict or marginalise religious broadcast-ing. It is not the act of bogus consultation.
The right reverend Prelate the Bishop of Liverpool explained this to your Lordships, I thought, in the
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most useful, thoughtful and illuminating speech and his explanation of the use of the word "proclaim" as opposed to "recruit" was extremely useful for us all.
The Earl of Longford: My Lords, may I raise a question? I thought that no light at all was thrown on that distinction today. How the noble Viscount, whom I respect so highly, could possibly say that it was useful to us all passes belief.
Viscount Astor: My Lords, I am sorry that the noble Earl did not find it interesting. I thought that the word "proclaim" was interesting. My noble friend Lord Renton asked whether St. Paul would be able to preach. The answer is of course that St. Paul could recruit on a specialist religious channel and he could also recruit if it was within an act of worship that was being broadcast. The key is that it should be within that act of worship.
My right honourable friend the Secretary of State has agreed to meet the right reverend Prelate the Bishop of Liverpool before the end of the year to discuss the scheduling of religious programmes, the future of the BBC and some of the evangelical Christian groups' concerns. We look forward to that meeting.
My noble friend Lord Renton and the noble Baroness, Lady Birk, said that paragraphs 10.5 and 10.7 of the code are self-contradictory and inconsis-tent with Section 6(1) (d) of the 1990 Act. They said that the distinction in paragraph 10.7 of the code between "propounding", "propagating" and "pro-claiming" religious beliefs which allows recruitment and therefore is not allowed, is meaningless. It is not the Government's role to be drawn into this kind of detailed textual criticism. It is for the ITC to interpret the words of the Act and for the courts to test that interpretation if necessary. In its foreword to the code the ITC says that the code is subject to interpretation in the light of changing circumstances. No doubt the ITC will wait to see what happens in practice before considering changes.
Baroness Birk: My Lords, will the noble Viscount give way? I am afraid that all my notes are with Hansard, but I remember quite clearly raising the matter of paragraph 10.7 and the difficulties that could arise. I do not believe that I personally raised the question of Section 6 of the Act and said that it was contradictory to Section 10 of the code. However, I may be proved wrong.
Viscount Astor: My Lords, the noble Baroness raised the question on the two sections and I believe that my noble friend Lord Renton and another noble Lord compared the provision with Section 6. I apologise to the noble Baroness. I was answering more than one question at a time but on the same subject.
My noble friend Lord Renton asked about religious advertising. It is not permitted on ITV or Channel 4 until 1993. It has been permitted on the radio since 1991. The dioceses of Lichfield and Oxford have run generic campaigns at Christmas and Easter on behalf of all local churches and denominations to encourage people to go to church. St. Martin-in-the-Fields recently advertised some of its services on LBC.

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My noble friend Lord Renton and the noble Viscount, Lord Buckmaster, asked me about the code for advertising. As I have said, the former IBA prohibition continues; but from 1st January 1993 advertising and sponsorship by religious bodies will be broadcast on ITV and Channel 4 subject to the requirements of the ITC code on advertising and sponsorship. I understand that the ITC is considering some revisions to the sponsorship code for the future.
The noble Baroness, Lady Birk, talked about the religious stations currently running. I believe the noble Baroness referred to the cable only Christian TV channel in Swindon called "Vision". There are Christian radio stations. There is "Radio Cracker". United Christian Broadcasters has a temporary station in Stoke and has had one in Great Malvern. Several other Christian groups have been awarded temporary restrictive licences. Some of those groups have now applied for permanent local radio licences.
The noble Baroness also asked me about fund-raising. We have no plans to amend the Act. The provisions of the Act, which were discussed at great length and with much care during its passage, have not yet fully come into effect. We must give the new framework the opportunity to be tested before turning our minds to thinking of how to change it.
The noble Lord, Lord Annan, was the chairman of the committee on the future of broadcasting which reported to the Government in 1987. He gave us his views and, as usual, he entertained your Lordships. I notice that in a personal postscript to the book Hidden Agendas the noble Lord comments on CRAC's evidence to the committee and on the book's allegation of dissension within it. However, I noted he concluded that the broadcasters alone have the right to decide on programming and the ITC exists to ensure that what is broadcast in accordance with legislation is approved by Parliament. I do not think there is an inconsistency between that view and the view of other noble Lords. The ITC must, after due consultation, draw up its code under the Act.
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My noble friend Lord Orr-Ewing talked about "Spitting Image". I realise I must tread very carefully here. Perhaps this is a personal view, but I believe the Church and our Christian faith have the strength to ignore, be amused or be horrified by "Spitting Image" without considering that it damages either our faith or our Church. However, that is my personal view. Having said that, I appreciate my noble friend's concern but I must repeat that the code is the responsibility of the regulatory body and that editorial decisions are ones which broadcasters must first make for themselves.
In conclusion, the provisions of the 1990 Act will result in a liberalisation of broadcasting which will create, not restrict, opportunities. There are no new restrictions on religious broadcasting. Broadcasters are able to continue to show acts of worship and to report on religious recruitment crusades. As I am sure noble Lords will realise, television is a constantly evolving medium. People's views and standards also change, perhaps more slowly than technology and the means to express them. The ITC has said it intends to wait to see how the codes operate in practice. It would consider amending the codes if, for example, there were examples of perfectly acceptable religious programmes which could not be shown. It is open to any religious group to make its view known to the ITC on any subject at any time.
This has been a debate of the highest quality and I can assure your Lordships that the Government will keep the effect of the religious broadcasting provisions under review.

Civil Rights (Disabled Persons) Bill [H.L.]
A Message was sent to the Commons that they be pleased to return the Bill because Clause 14 was incorrect. Bill returned from the Commons pursuant to the Message of this day.
House adjourned at sixteen minutes before eight o'clock.