Lords Sitting of 17 November 1992

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chester.
Viscount Addison Viscount Addison—Sat first in Parliament after the death of his father.

Angola
2.37 p.m.
Lord Judd Lord Judd asked Her Majesty's Government:
What is their policy towards the political situation in Angola.
Baroness Trumpington: My Lords, we remain committed to the implementation of the peace agreement embodied in the Bicesse Accords and have been working closely with our partners in the EC and the UN Security Council to that end. We have also been active in support of efforts by the UN to consolidate the present ceasefire in Angola.
Lord Judd: My Lords, will the noble Baroness agree that in view of the Government's deep commitment to advancing the cause of democracy in Africa and elsewhere, this setback is grave? Can she assure us that there will be no prevarication on the part of the Government in making it absolutely clear to all the parties that they must accept the outcome of a democratic election as held?
Baroness Trumpington: My Lords, I can do no more than agree with the noble Lord.

Croatia: "Ethnic Cleansing"
2.39 p.m.
Lord Monson Lord Monson asked Her Majesty's Government:
Whether they can confirm reports that Croatian forces are joining the Serbs in the persecution and "ethnic cleansing" of Bosnian Moslems and, if so, whether they believe that sanctions should be imposed upon Croatia.
Baroness Trumpington: My Lords, these will be among the issues which my noble friend Lady Chalker of Wallasey will be discussing with the UN Secretary-General later this week.
I have just received the text of UN Security Council Resolution 787 which was signed last night. In order to cut the Question short, I should say that it contains all the information which your Lordships may want. Ten nations were in favour of the resolution, there were two abstentions (China and Zimbabwe) and none against. The resolution contains the following elements: support for the Owen/Vance constitutional proposals for Bosnia; condemnation of violations of humanitarian law, including the deliberate impeding of humanitarian supplies; further measures to tighten
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existing sanctions, including authority to stop and search suspect shipping; a ban on transhipment of strategic goods (oil etc.) across Serbia and Montenegro, except with specific UN permission; a warning to the Croats that their policies in Bosnia are under close international scrutiny; and implementa-tion of a decision at the London Conference on Yugoslavia to deploy monitors along the Bosnian borders.
Lord Monson: My Lords, I am grateful to the noble Baroness for that most helpful reply. Given that the Serbian forces have enough arms and ammunition to last them for perhaps 20 years and the Croatians enough for perhaps 10 years, will the noble Baroness agree that it is high time that the iniquitous and indefensible arms embargo against the legitimate government of Bosnia was lifted? Otherwise, the ill-armed Moslems will be virtually eliminated within 12 months, with the apparent connivance of the West. Will the Minister agree that, quite apart from the humanitarian aspects, this would poison relations between Islam and the West for generations to come?
Baroness Trumpington: My Lords, we are not in the business of providing arms to Bosnia. We think that that would be totally counter-productive.
Lord Renfrew of Kaimsthorn: My Lords, will my noble friend agree that there is a considerable risk of the spread of conflict? Will she indicate what measures are contemplated if the policy of ethnic cleansing is extended to Kosovo? Can she brief us as to what progress the European Community has made with Greece towards the recognition of the province of Skopje, Macedonia?
Baroness Trumpington: My Lords, in answer to my noble friend, we deplore and condemn ethnic cleansing and all atrocities. All parties, but primarily the Bosnian Serbs, are to blame. United Nations Security Council Resolution 780 provides for the creation of an impartial commission of experts to assist the UN Secretary-General in the collation and analysis of evidence of war crimes in the former Yugoslavia and report to the UN Secretary-General. The UN Secretary-General has appointed commission members from the Netherlands, Egypt, Canada, Senegal and Norway and the commission will be based in Geneva. Quite honestly, I think that the second part of my noble friend's question is wide of that on the Order Paper.
Lord Judd: My Lords, will the noble Baroness give the Government's latest estimate of the total number of people currently detained in Bosnia-Herzegovina by the different sides? Will she outline what specific measures the Government are taking through the UN and through their presidency of the European Community to secure the release and resettlement of those people?
Baroness Trumpington: My Lords, as noble Lords will know, my noble, and unfortunate, friend Lord Ferrers will make a Statement later which is relevant to the question asked by the noble Lord.
Lord Monson: My Lords, does not the noble Baroness agree that the argument that one should not allow people who are defending themselves from aggression to have access to arms is an excellent pacifist argument but that it is a rotten argument for anyone who is not a pacifist?
Lord Elton: My Lords, if my noble friend will not reply to that question —it appears she will not—does she not agree that the term "ethnic cleansing" is rather misleading as it sounds as if it might have some virtue? It is actually used to describe the process followed by Hitler and Stalin; it is a mixture of genocide and mass transportation of populations. That process is not restricted to Yugoslavia but is also occurring in Nagorno-Karabakh at this moment. This House is deeply disturbed that no one has yet found any effective way of impeding it.
Baroness Trumpington: My Lords, the Foreign Affairs Council declaration of 5th October makes clear that the perpetrators of mass killings and other grave breaches of international law will be held individually responsible for their actions. I have already said that we deplore and condemn all atrocities.
Lord Tordoff: My Lords, is it not the case that sanctions on Serbia are conspicuously failing at the moment? We read daily in the press of vast quantities of petroleum products being shipped up the Danube and being shipped through Greece and Bulgaria. What are the Government doing to ensure that the United Nations sanctions are made effective?
Baroness Trumpington: My Lords, sanctions are having a marked effect on the Serbian and Montenegran economies. It is important to maintain the pressure and to tighten implementation. EC/CSCE sanctions assistance missions under way in Hungary, Romania and Bulgaria have the aim of assisting local authorities to enforce UN sanctions more efficiently. Plans to extend these to Macedonia and other states, including neighbouring Serbia and Montenegro, are under way.
Lord Judd: My Lords, with the greatest possible respect, does the noble Baroness accept that there is no confusion between this Question and the Statement to be dealt with later this afternoon? What we are seeking is information about the total number of people detained and what is being done to seek their release from detention. The issue of visas is quite another matter.
Baroness Trumpington: My Lords, I have found the passage I was looking for. There are over 3 million displaced people within the former Yugoslavia, of whom 1,640,000 are in Bosnia, and there are approximately 566,000 refugees or displaced people in other countries.
Baroness Seear: My Lords, following the question asked by my noble friend Lord Tordoff and the answer we received, is the noble Baroness really telling
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the House that the press is inaccurate in saying that there is now no shortage of petroleum in these countries?
Baroness Trumpington: My Lords, as I said in my original reply, the matter of tightening existing sanctions was accepted in the United Nations resolution passed last night. Everyone is aware of what is going on and steps are being taken to close any holes.

Rented Housing: Funding
2.47 p.m.
Lord Jay Lord Jay asked Her Majesty's Government:
Whether, in view of their policy for growth, they will ease the restrictions on the use of capital receipts by local authorities for the building of new homes to let.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Strathclyde): Yes, my Lords. As from 13th November 1992 to 31st December 1993 local authorities will be able to spend 100 per cent. of their receipts on most capital receipts programmes.
Lord Jay: My Lords, will the Minister assure me that the Government will give an equally prompt response to any further suggestions I may make regarding changes in government policy? In this case, however, is it not rather a pity that this concession has been hedged around with so many absurd restrictions as greatly to reduce its practical value?
Lord Strathclyde: My Lords, I think the noble Lord is being less than charitable to the announcement that my right honourable friend the Chancellor of the Exchequer made last week. We believe that the announcement will have a substantial effect on the building and construction industry and that it will be worth some £1.85 billion during the course of the next 14 months.
Lord Dean of Beswick: My Lords, is the Minister not aware that the Chancellor, in the way he has jigged this so-called benefit, has been less than charitable to those trying to build houses for people who are endeavouring to leave the homeless queues? Is the Minister aware that at the present cost of building a house, and with a 60 per cent. discount, for example, on the sale of each council house, five or six council houses will have to be sold to build one new property? Why is the Chancellor being so mulish and obstinate in not unlocking immediately some of the substantial sums of money held by local authorities? It amounts, I believe, to £5 billion. There is no guarantee whatever that the sum of money that the Minister has just indicated should be available will be available. The Government should unlock the money local authori-ties now have and let houses be built straight away. Let us stop messing about and playing with words.
Lord Strathclyde: My Lords, there is no reason why local authorities should build houses themselves. They can support housing associations that can build

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houses far more quickly than local government. Local authorities can, of course, spend the money on renovating and improving their housing stock which they have always maintained is a priority. The reason we are not releasing the money held by local authorities is because some local authorities have used that money to pay off debt. It would discriminate against those who have paid off debt to allow others who have not done so to spend that money now.
Lord Skelmersdale: My Lords, is it not a fact that for many years local authorities have been able to spend 100 per cent. of their capital receipts on building for re-sale? If they really want to help the construction industry in their areas why do they not do just that?
Lord Strathclyde: My Lords, that is correct. We want to see the money used as quickly as possible, which is why we consider that renovation will help the construction industry and further our plans for growth more rapidly than if local authorities were to build new houses.
Lord Dean of Beswick: My Lords, does the Minister not understand that, although many people consider it desirable, the policy of the sale of council houses has contributed adversely to the number of homeless people? Will the Minister stop talking about the rapidity with which housing associations can build properties? During the period of a Conservative Government, local authorities employing private sector companies and their own building departments were building 300,000 houses a year while the target for housing associations is, I believe, 68,000 properties a year. Will the Minister please listen to some sense and unlock some of the £5 million which local authorities have? There are builders in the private sector who have package deals ready and who are able to start building tomorrow. Let us get on with it.
Lord Strathclyde: My Lords, local authorities will now have that money. They can put plans which are on the table into effect immediately with the resources that they will be able to release.
Lord Swinfen: My Lords, will my noble friend confirm that even when council houses are sold that does not change the total number of houses in the country which are available for occupation? Does he agree that it does not really matter whether houses are in private or local authority ownership and that it is highly misleading to suggest that when council houses are sold they go out of the housing stock?
Lord Strathclyde: My Lords, my noble friend is quite correct.
Lord Dean of Beswick: My Lords, perhaps the noble Lord inferred that I meant that the sale of council houses was the reason why there are no houses available for rent. I said that that was a contributory factor. That was all that I said; I did not say that it was the only cause of the problem.
Lord Ezra: My Lords, in connection with the refurbishment and renovation of houses for which the noble Lord has indicated some of the funds could be used, does he agree that the need goes way beyond the
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sums we are now discussing? Will he indicate whether, once those resources have been exhausted, other measures will be introduced to make more funds available?
Lord Strathclyde: My Lords, we obviously keep under review the resources available for the improvement of housing. This is a once-and-for-all injection to be made available over the next few months to help local authorities release their receipts and spend 100 per cent. of those receipts on capital projects which they regard as most suitable.
Lord Gisborough: My Lords, in view of the large numbers of people who are homeless and on very low incomes, can my noble friend say what provision there is for providing houses for the lower paid who cannot afford the high prices?
Lord Strathclyde: My Lords, this will be a tremendous opportunity for the Housing Corporation to enter into partnership with central government and local authorities to provide more low-cost social housing.
Lord Brabazon of Tara: My Lords, does my noble friend agree that the sale of council houses is not the only means by which local authorities can obtain capital receipts to spend on new housing? Does he agree that they could consider selling some of their other assets, such as local authority airports? Does my noble friend agree that if they are serious about finding money to help solve the housing situation local authorities should consider doing that?
Lord Strathclyde: My Lords, my noble friend is very wise to bring to the attention of the House the fact that local authorities have huge resources in assets other than housing.
The Countess of Mar: My Lords, does the noble Lord agree that in order to produce income there have to be buyers who are ready to purchase what people are willing to sell? Is he not over-estimating the capital assets which councils will accumulate in view of the present state of the market? Does he not agree that many people have had their fingers burnt with mortgages and will not take them on lightly?
Lord Strathclyde: My Lords, we believe that there is money in the economy. With the reduction in interest rates and the renewal of confidence following last week's announcement, I think that it is very likely that local authorities will be able to divest themselves of their assets.
The Viscount of Oxfuird: My Lords, can my noble friend tell the House the amount of additional resources which it is estimated will be available in 1992–93?
Lord Strathclyde: My Lords, we expect more than £1 billion of additional expenditure in 1992–93.

Wansbeck: Assited Areas Review
2.54 p.m.
Lord Peyton of Yeovil Lord Peyton of Yeovil asked Her Majesty's Government:
Whether, in considering the request of the Wansbeck initiative for restoration of development area status, they will bear in mind the need to reach a decision before the conclusion of the current inquiry.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Baroness Denton of Wakefield): My Lords, we are well aware of the very serious problems facing the Wansbeck area. Those problems are being carefully considered in the assisted areas review. Our aim is to implement a revised map early in 1993. We appreciate the need for speed in this matter.
Lord Peyton of Yeovil: My Lords, I am grateful to my noble friend, particularly for her appreciation that speed is required. Will she keep in the forefront of her mind the eagerness with which an early and affirmative decision will be awaited?
Baroness Denton of Wakefield: My Lords, I can assure my noble friend that we are doing that. My honourable friends and I have met many delegations. The revised map will be submitted to Europe as soon as possible.
Lord Glenamara: My Lords, can the noble Baroness give an assurance that in the review the number of assisted areas and intermediate areas in Northumberland will not be reduced in view of the fact that that is the area of the greatest unemployment in mainland Britain?
Baroness Denton of Wakefield: My Lords, I cannot give a decision ahead of the outcome of the review, but I stress that it is not an automatic review. We are looking at the areas which are among the worst off one third in the country in terms of unemployment and other criteria. We are well aware of the difficulties faced in the North East.
Lord Barnett: My Lords, is it not a fact that the criteria may well result in one half of the country, or more, requiring development area status?
Baroness Denton of Wakefield: My Lords, I repeat that we are seeking to identify the worst off third of the country.
Lord Williams of Elvel: My Lords, is the noble Baroness aware that in the Wansbeck District Council area there is currently 15 per cent. unemployment, and 20 per cent. male unemployment, which in turn is higher than in the rest of the North East which, as my noble friend Lord Glenamara said, is the highest in the mainland United Kingdom? Does she further accept that the industrial base in Wansbeck is very narrow and that such employment as there is is dependent on the Alcan smelter, the Alcan power station and the Ellington colliery? Will she further accept that the position in Wansbeck is already worse than the
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position will be in seven of the 10 areas where pits are virtually certain to close and yet those areas are to be targeted for special help in diversification and job creation while Wansbeck is not? Is not that a scandalous state of affairs?
Baroness Denton of Wakefield: My Lords, I am pleased to reassure my noble friend Lord Williams—I am sorry, that mistake must be due to the courteous way in which the question was put!—that my honourable friend the Minister for Industry met with a delegation from Wansbeck District Council. They put the matters raised by the noble Lord eloquently and fully.

Business
2.58 p.m.
Lord Hesketh: My Lords, at a convenient moment after 3.30 p.m. this afternoon, my noble friend Lord Ferrers will, with the leave of the House, repeat in the form of a Statement an Answer to a Private Notice Question in another place on visas for Bosnian refugees.

Housing (Fitness Standard) (Amendment) Bill [H.L.]
Lord Merlyn-Rees: My Lords, I beg to introduce a Bill to amend the Housing Act 1985 so as to add the criteria of internal arrangement and thermal efficiency to the fitness standard; to provide for the enforcement of the fitness standard where only part of a unit of accommodation fails that standard; and for connected purposes. I beg to move that the Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Merlyn-Rees.)
On Question, Bill read a first time, and to be printed.

Select Committees: Appointments
The Chairman of Committees (Lord Ampthill): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, on behalf of the Committee of Selection, That the Lord Richard be appointed to the Select Committees on House of Lords' Offices, Liaison, Privileges, Procedure of the House and Selection in the place of the Lord Cledwyn of Penrhos; and that the Lord McIntosh of Haringey be appointed to the Select Committees on House of Lords' Offices and Procedure of the House in the place of the Lord Williams of Elvel.—(The Chairman of Committees.)
Lord Glenamara: My Lords, before this Motion is voted upon, I hope that it will be in order for me to express the hope that, if elected, the noble Lords will ensure that never again is any broadcasting authority permitted to make the kind of misleading programme which we saw last evening and which was a travesty of the House of Lords.
The Chairman of Committees: My Lords, it is not for me to answer for the two noble Lords in question; but I feel sure that the sense of the House is entirely with what the noble Lord, Lord Glenamara, has just said.
On Question, Motion agreed to.

European Economic Area Bill [H.L.]
3 p.m.
Baroness Denton of Wakefield: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Baroness Denton of Wakefield.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clauses 1 to 4 agreed to.
Clause 5 [Regulations]:
On Question, Whether Clause 5 shall stand part of the Bill?
Lord Bruce of Donington: I hope not to detain the Committee very long in dealing with this Motion. I simply want an explanation in regard to Clause 5. The Committee will remember that Clause 5 reads:
"The power to make regulations under section 2(2) or section 3(2) above shall be exercisable by statutory instrument; and any statutory instrument containing such regulations, if made without a draft having been approved by resolution of each House of Parliament, shall be subject to annulment in pursuance of a resolution of either House".
Under what circumstances is a draft made without having been approved by resolution of each House of Parliament? In other words, can the Minister tell the Committee the circumstances under which she envisages that this clause will be brought into operation within the context of her very comprehen-sive speech at Second Reading?
Baroness Denton of Wakefield: Perhaps I could explain the background to Clause 5 and the effect of omitting it from the Bill. The powers to make the regulations in Clause 2(2) and Clause 3(2) of the Bill would be subject to no parliamentary procedure. It is clearly necessary to retain the clause, or something like it, if Parliament is to have control over the use of those powers.
Let me explain to the Committee the purpose and effect of Clause 5. Clause 5 provides that the powers to make regulations under Clauses 2(2) and 3(2) are exercisable by statutory instrument. The instrument may be subject to either negative or affirmative resolution procedure in the same manner as instruments made under Section 2(2) of the European Communities Act 1972. The clause follows, therefore, the formula in paragraph 2(2) of Schedule 2 in the 1972 Act.
The fact is that the 1972 Act allows either negative or affirmative procedure to be adopted so that regulations under Section 2(2) of that Act may be combined with regulations made under powers in other Acts. Those Acts may provide for either negative or affirmative procedure but not for both.
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The flexibility provided in the 1972 Act allows Section 2(2) regulations to be made, using whichever procedure applies under the other Act.
Having given the background, perhaps I may explain why we believe that the clause is necessary. The same consideration applies to regulations under Clauses 2(2) or 3(2) of the Bill. If Clause 5 provided only for either negative or affirmative procedures—I believe that is the question of the noble Lord, Lord Bruce—there would be occasions when regulations made both under other enactments and under the Bill on the same matter would have to be subject to different procedures and, as a consequence, be in different instruments. That would mean unnecessary confusion. It would be a waste of time and resources to make two instruments. It would be unhelpful to readers of the measures to have to try to understand the relationship between them.
We are trying with this clause to ensure that the two sets of regulations are made in the same instrument and are subject to the same procedure to ease all future activity on these Bills in this House. I hope that that is helpful to the noble Lord and that he will not press the matter.
Lord Bruce of Donington: I am most grateful to the noble Baroness. I am still not clear about the circumstances when a draft is not available for consideration in advance. Is it because there is some hurry over something? Why should a draft not he made available? The clause states:
"if made without a draft having been approved".
In other circumstances in which drafts are not available it becomes necessary to apply the affirmative procedure. I should have thought that it would be for everybody's convenience for drafts to be made available in advance in any event.
Baroness Denton of Wakefield: In this clause we are trying to protect the necessity for providing dual instruments in this area. When making regulations under these powers we would normally use the negative procedure.
Lord Bruce of Donington: I have listened to the noble Baroness and will further study her remarks when they appear in the Official Report. In reserving the right to raise the matter at some later stage, I shall withdraw my objection.
Clause 5 agreed to.
Lord Bruce of Donington Lord Bruce of Donington moved an amendment:
After Clause 5 insert the following new clause:—
ANNUAL REPORTS
(" .A Minister of the Crown shall lay before each House of Parliament annually a report on the operation of the agreement and the development of the European Economic Area.").
The noble Lord said: This amendment is to add a new clause which reads as follows:
"A Minister of the Crown shall lay before each House of Parliament annually a report on the operation of the Agreement and the development of the European Economic Area".
I trust the Committee will appreciate that I seek to inject an element of transparency into the activities of government and officials in this particular field. Under

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Article 94 of the agreement to which the Bill applies there is provision for an annual report to be made. It states that:
"The EEA Joint Committee shall issue an annual report on the functioning and the development of this Agreement".
I am anxious that that should be supplemented for the following reasons. Under Article 93 of the agreement:
"The EEA Joint Committee shall consist of representatives of the Contracting Parties".
Under paragraph 2 of that same article:
"The EEA Joint Committee shall take decisions by agreement between the Community, on the one hand, and the EFTA States speaking with one voice, on the other".
It is clear that the annual report, which ought to cover a wide field, is not submitted on the authority of Ministers; it is not even issued under the authority of the EEA council. It is submitted solely on behalf of unelected and, so far as one can see, unknown officials who are to operate in this field.
Perhaps I may quote from the excellent publication issued in October 1992 by the noble Baroness's department. At page 25 The Single Market—The European Economic Area states:
"Composed of EC and EFTA officials, the EEA Joint Committee will be the main EEA forum, charged with the responsibility for the day-to-day operation of the Agreement. In particular, it will be responsible for: ensuring that both the EC and EFTA comply with the obligations of the Agreement; ensuring that the two areas adopt a common approach to implementation and interpretation of the Agreement".
As will be seen from the following pages, which I shall not read to your Lordships for reasons of time, the officials occupy an extremely important position. However, they appear to be responsible to no one in terms of accountability.
When today we are dealing with international organisations—whether they be the European Community, the new organisation which will deal with the EC and EFTA moving towards a situation in which new countries can make application for admission to the EC, and a whole series of other international and European organisations—we find that Ministers of the Crown in this country are becoming more remote from the activities which those organisations cover. That applies also to other countries but I am more particularly concerned with the United Kingdom whose Ministers are becoming more remote from the activities which are carried out in the name of this country.
I consider that to be undesirable. The annual report will be submitted by officials whom we do not know, whose decisions and functions have not been described anywhere, apart from in the most general terms, and who may vary from time to time throughout the years. We shall have a report from those officials and no one will be accountable for what they say.
It is up to other countries in the EC, and to other countries which will be party to the agreement, to do what they wish. However, as regards the United Kingdom, I am sure that it is proper that a Minister of the Crown should have an obligation and responsibility to report what is happening to Parliament. Anyone who has perused the Bill will know that from time to time legislation passed at this level will be incorporated automatically into British
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law by virtue of Section 2 of the 1972 Act. It will also be transmitted to the UK in a form in which the UK has the option of bringing certain legislation into operation.
The agreement is full of references to variations which may take place in Customs duties. As the agreement is supposed to come into operation in 1993 questions arise about the extent to which the Customs duties are capable of identification and levying when Customs posts are to be drastically decreased in number and in function. There is a whole series of matters on which other countries should be informed. For example, let us suppose that certain legislation prepared at this level and transmitted by officials is varied by one of the countries concerned exercising the option under Article 127 of giving a year's notice and leaving the agreement altogether. What retrospective action will be taken in order to ensure that Customs duties which have been paid may have to be refunded or additional Customs duties may have to be levied?
All those are matters of some concern. It may well be that during the passage of time Parliament has become so used to paying no attention to such matters, regarding them somehow as beneath parliamentary attention. However, often they go to the very root of government. There will be extra expenditure in terms of the agreement because on its coming into operation the United Kingdom will be required to pay sums out of the Consolidated Fund in order to subsidise some of the less advantaged countries within the area. It will be proper and indeed necessary for a British Minister to report those matters to Parliament. Surely any significant expenditure out of the Consolidated Fund is a matter in which Parliament should be interested at the time and not merely retrospectively when there is a detailed examination of the out-turn of Treasury accounts.
There are other matters which are capable of being reported. For instance, the explanatory note to the Bill mentions certain circumstances in which extra moneys may have to be paid out of the Treasury in connection with a whole series of matters. One cannot expect a broad general report, which deals with the agreement as a whole and which is made by officials outside this country who are not accountable to it, to refer to those matters that are of some domestic interest to people in the United Kingdom. I would expect a Minister to be able to deal with them. Indeed, the people in the country as a whole may be interested—and if not, their elected representatives should be interested—in the advantages which are likely to accrue, if one is to believe, as one obviously does, the remarks of the noble Baroness, Lady Denton of Wakefield, on Second Reading. She said that there would be certain advantages as regards the fisheries of this country and the total allowable catches available to the UK. Surely it would be in order for an annual progress report to be given on those matters.
I do not wish to detain the Committee any longer by discussing the details. It is necessary that a Minister of the Government should be made responsible for an oversight of the whole operation, not merely for the information of Parliament but for the discipline of Ministers. The best way to secure that is by imposing

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a responsibility that there should be a report on the matters which I have already discussed. I hope that the Government will agree to that.
It may he possible at the same time for the annual report made to Parliament to identify, in accordance with the Prime Minister's advocacy of more transparency, which Cabinet committee or sub-committee has dealt with the matter during the course of the year.
I hope that I have said sufficient for the noble Baroness to apprehend the anxiety which lies behind the proposed insertion of this clause. Although the Government may find it difficult to believe, this is an endeavour to be helpful to them. It is to ensure that the growing rule and unaccountability of international civil servants throughout the Community gives way progressively to a far greater sense of responsibility by Ministers. Therefore, I hope that the noble Baroness may feel constrained, in the interests of transparency and good democracy, to accept the amendment. I beg to move.
Lord Boyd-Carpenter: Not for the first time the noble Lord, Lord Bruce of Donington, has done us a good service by raising this not unimportant issue. I find—as, I dare say, do many Members of the Committee—that one of the problems in performing our duties in connection with the whole European system is following exactly what is happening from time to time. It is practically a full-time job to do that.
Therefore, on the face of it, the suggestion of the noble Lord, Lord Bruce of Donington, seems to be extremely useful. He suggests that there should be an annual report prepared by Ministers. As I understand it, it should not be a report calling for approval but simply a report for the information of Parliament and, therefore, of the country. It may be that there is some great difficulty in that regard to which the noble Baroness on the Front Bench will invite our attention. I keep an open mind on that until she has spoken. However, prima facie the noble Lord, Lord Bruce of Donington, seems to have raised an interesting point to which the Committee would like to hear an answer, if there is one.
Lord Beloff: I support the initiative of the noble Lord, Lord Bruce of Donington, in part for the reasons given by my noble friend Lord Boyd-Carpenter. There is a good deal of anxiety and confusion in the country about the working of the increasingly complicated set of European institutions in which we are involved. The only way in which those anxieties can be allayed in our parliamentary system is by frequent reports—perhaps annual reports—to Parliament. One hopes that those reports would give rise to debate and would not merely be something lost in the Printed Paper Office for the few who take a detailed interest in those matters.
I am particularly worried because when the Government come round to feeling that the country needs more information, they do not always perform that task in a way which commands general assent. The recent pamphlet sponsored by the Foreign and Commonwealth Office called Britain in Europe, which many Members of the Committee will have received,
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purports to be an explanation of the Treaty of Maastricht. On Sunday the Sunday Times managed to find at least a dozen instances where the interpretation was, to say the least, questionable. In my view, it was moderate in its criticism of that document. It is not an explanation of the Treaty of Maastricht but a defence by those who believe that it should be ratified, putting aside the anxieties which have been widely expressed in another place, in this Chamber and more importantly, in the country at large.
Had that been a document presented as a report to Parliament, which Parliament had the right to question, rather than being issued in the manner of tablets from on high, people's worries might or might not have been allayed. In any event, in order to avoid that happening again it seems to me a very good idea to accept the amendment moved by the noble Lord, Lord Bruce of Donington.
Lord Harmar-Nicholls: I support the amendment moved by the noble Lord, Lord Bruce of Donington. It is essential to have such a provision if the dual procedure is to be allowed to work at all. As a Member of the European Parliament for five years, I know that it is no good relying upon European Parliament Members to carry out that task. The European Parliament is submerged with too many items which make it impossible to get a coherent view as to what affects one's own country.
The reason that I support the amendment in particular is that if a Minister of the Crown must lay before Parliament an annual report, we shall be more certain that the Minister of the Crown knows what is happening. We know that there are too many instances of Ministers making recommendations to Parliament which have merely been put in front of them by their departments. They do not always think it right to give time to understanding all the implications of those recommendations.
If a Minister must prepare a report and submit it to Parliament, he is more likely to know what is involved. Therefore, it will not be possible to hide matters with only interested parties questioning the possible results. The preparation of a report by a Minister may ensure that some of the quirks which seem to get through would be eliminated because the Minister preparing that report would have seen it in good time and would know what was involved.
I believe that Community matters should be more democratic than they are at present. A report from an elected Government Minister means that he would know what is involved. Therefore, we should accept the amendment.
Baroness Elles: I support the amendment tabled by the noble Lord, Lord Bruce of Donington, although I do not know whether it is in proper form. As a Member of the European Parliament I was extremely disturbed by the lack of what is known as a democratic deficit. In the parliament we were able to table questions and ask for reports to be laid before the parliament but, of course, the reply came from a member of the Commission or from somebody who had no power to act on what the parliament then said.

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It is for that reason that I welcome the possibility of a report on a major issue to the United Kingdom which will come before the British Parliament and where questions can be asked by British parliamentarians on matters which affect British interests. I therefore strongly support the principle of the amendment.
3.30 p.m.
Lord Peston: I do not believe that we should stray into the delicate area of what Ministers of the Crown know or knew of this or any other topic. Will the noble Baroness confirm that we are in the Committee stage of the European Economic Area Bill regarding the extending of the Community's single market to member countries of EFTA? I do not understand how we have strayed into the general issues of Maastricht and other matters.
Much as I am sympathetic to the idea of giving reports to Parliament, I was under the impression that the Government were already on record as committing themselves to doing precisely what my noble friend requires. Perhaps the Minister will confirm what I understand to be the case; that is, that the Government are already committed to doing what is being requested.
Baroness Denton of Wakefield: I am grateful to the noble Lord, Lord Bruce of Donington, for his explanation of the new clause. I share his anxiety and that of my noble friends that Parliament should be properly informed of developments in the European Economic Area and that there should be transparency of action. I was delighted when the noble Lord drew the attention of the Chamber to the fact that my right honourable friend the Prime Minister is committed to transparency of action. I can reassure him by pointing out that the EEA Council, under Article 89, will assess the overall functioning and development of the agreement. It will therefore assess and effectively oversee actions of the joint committee about which the noble Lord expressed nervousness.
I should like to confirm the view of the noble Lord, Lord Peston, that it is indeed something to which the Government are already committed. I hope that I can assure the noble Lord and my noble friends that the agreements already made will ensure that Ministers accept their responsibilities and that parliamentarians in this country will have the chance to examine the matters in hand.
Perhaps I can say first that once the agreement comes into force the Government will report twice a year to Parliament on the operation of the European Economic Area in the six-monthly White Paper, Developments in the European Community. There will be a new section in the White Paper exclusively for the European Economic Area following a recommenda-tion of the House of Commons Trade and Industry Select Committee in its report of 25th July 1990 on trade with EFTA.
I turn to the issue raised by the noble Lord. The second report indeed arises from Article 94 of the agreement. That requires the EEA joint committee to
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issue an annual report on the functioning and development of the agreement. The noble Lord expressed doubts in that regard because it would be a report issued by officials. I reassure him that to ensure Parliament is able to consider the report it is the intention of the Government that it should be treated as a European Community document for the purposes of parliamentary scrutiny. It will be deposited in Parliament accompanied by an explanatory memorandum from DTI Ministers, which will be subject to exactly the same scrutiny as any other report made under the terms of the new clause.
The memorandum will address specific aspects of the operation and development of the agreement that affect UK legislation and policy. For example, as the noble Lord suggests it could include statistics on recent trends in trade between the United Kingdom and EFTA. That procedure will allow your Lordships' committee on European Communities to consider developments in the European Economic Area. I agree with my noble friend Lord Beloff that there is no closer scrutiny than a committee of your Lordships' House. I hope that Members will agree that those procedures will ensure adequate reporting to Parliament.
We are saying that three pieces of paper will be introduced. The new clause will simply add a fourth produced by the same people. I hope that the noble Lord, Lord Bruce, will accept that the spirit of my comments is not to conceal information but to avoid unnecessary duplication. At Second Reading of the Bill the noble Lord said that anything that can simplify matters will be a great advantage. In particular, he identified the workload of Ministers in staying on top of European matters. I hope that in this instance he will not increase our paperwork.
Baroness Carnegy of Lour: Before my noble friend sits down perhaps I can ask about the report of which she spoke so interestingly and which she said would be open to parliamentary scrutiny. Have the Government considered whether the European Communities Committee of the House of Lords will have a role in scrutinising that report from time to time? Does my noble friend know whether that has been considered? If she does not, perhaps she will undertake to look at the possibility.
Baroness Denton of Wakefield: I am pleased to be able to reassure my noble friend Lady Carnegy that the procedure will allow your Lordships' European Communities Committee to consider the develop-ments.
Lord Harmar-Nicholls: My noble friend said that the Government are already doing what the clause asks for, but in another form. In order to avoid the extra paperwork to which she quite rightly objects, is there no way of making that which is being done a statutory requirement instead of a voluntary undertaking? That would make a great difference and give satisfaction to those of us with doubts.
Baroness Denton of Wakefield: I hope that my noble friend Lord Harmar-Nicholls and the noble

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Lord, Lord Bruce of Donington, will accept that by putting our intention on record today we are indicating that that is indeed our intention.
Lord Bruce of Donington: I am grateful to the noble Baroness for giving us that explanation in answer to the few remarks that I ventured to mention to the Committee on this subject. It occurs to me that she has given the Committee so many assurances that it may have been simpler and taken far less time for the Government to have accepted the insertion of the clause which puts the matter quite simply.
I did not expect to receive the support of my noble friend Lord Peston. I do not accept his view that the position is already covered in the agreement. I presume he has read the agreement; if so, he will know that that is not the case.
I am grateful for the assurances given by the noble Baroness and unhesitatingly accept them. In the interests of good government, public accountability and transparency I should have preferred specific responsibility to be laid upon a Minister. As the noble Lords, Lord Boyd-Carpenter, Lord Harmar-Nicholls and Lord Beloff pointed out, it would concentrate the minds of Ministers and possibly of the Cabinet Committee and may be welcomed by them.
I am aware that should I press the matter to a Division this afternoon, it would be impossible for the Report stage to be taken today. It has never been part of my policy to obstruct the wishes of the Chamber and the Government in proceeding with the business of the day. After giving good notice, which I trust the noble Baroness, the Government and my own Front Bench will take into account, I shall return to the question of public accountability and ministerial responsibility as regards EC affairs time and time again as long as I am able. Therefore, as long as these considerations are borne in mind, and after thanking the Members of the Committee and the noble Baroness for participating in this debate, I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clauses 6 and 7 agreed to.
Schedule agreed to.
House resumed, Bill reported without amendment.
Report received.

Bosnian Refugees: Visas
3.41 p.m.
The Minister of State, Home Office (Earl Ferrers): My Lords, it may be for the convenience of your Lordships if I repeat a Statement which is being made in another place by my right honourable friend the Home Secretary in reply to a Private Notice Question about the grant of visas to Bosnian nationals. The reply is as follows:
"On 5th November I made a Statement to the House about the offer we were making to the International Committee of the Red Cross and the United Nations High Commissioner for Refugees to receive from Bosnia people with special humanitarian needs who the international organisations judged should be evacuated from
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detention camps and elsewhere. I said that we would be discussing numbers and timing with the UNHCR and the International Committee of the Red Cross. We have informed the UNHCR that we are ready to receive in the first instance 150 former detainees and their dependants, probably making 600 in all. At the same time I announced the imposition of visas on certain nationals of the former Yugoslavia, making it clear that this action was needed to enable us to target our humanitarian assistance where it was most needed.
"The Leeds European Refugee Trust, which is commonly known as ALERT, was advised on 6th November by my officials that the group it intended to bring to the United Kingdom could not be exempted from the visa regime to be imposed from midnight on that day. This information was repeatedly given to ALERT before its coaches left the United Kingdom on 9th November. Despite this clear advice it proceeded with its plans and then used its coaches to move the group from the more comfortable conditions in the safe city of Ljubljana to the equally peaceful but colder mountainous region on the Austrian border.
"The ALERT group then lodged applications at the British Embassy in Vienna which were referred to the Home Office asylum division on 13th November.
"I decided yesterday that visas may be authorised for six members of the group who have existing close family ties with the United Kingdom. They will be free to travel here to lodge applications for asylum, in accordance with normal policy, as the United Kingdom is the most suitable country of refuge in their cases.
"I also decided that another 180 members of the group should be refused visas because they have insubstantial or no links to the United Kingdom. Their cases are indistinguishable from the plight of about 2 million people displaced in former Yugoslavia. They are more fortunate than those likely to be referred to the government by the UNHCR and the International Committee of the Red Cross in that the ALERT group is housed in hotels and hospitals far away from the fighting.
"Eight other cases—two with medical conditions and their relatives—remain under active consideration and are the subject of further enquiries. These enquiries include the need to establish that it is necessary for them to have medical treatment in the United Kingdom rather than in the hospitals where they are at present in Slovenia. It would also be necessary to ensure that the National Health Service could provide treatment for the patients if that case could be made.
"The Government have repeatedly made clear their willingness to make a humanitarian contribution to the problems in the former Yugoslavia by helping to take the cases which the United Nations High Commissioner for Refugees and the International Committee for the Red Cross judge to be the most needy. As I have already stated, we have agreed to accept an initial group of about 600 people in all. Numbers and timing are being

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urgently discussed with the UNHCR and ICRC, and of course we stand ready to consider numbers beyond the 600 I have mentioned.
"My department did not implement the new visa regime without thought for transitional cases. Groups similar to ALERT who were caught by my Statement on 5th November and had already then commenced their journeys were, in fact, exempted from visa requirements. On 7th and 8th November 187 individuals were admitted to the United Kingdom without visas on that basis. ALERT, however, was fully warned of the position before starting its journey and at no time did it have basis for raising the hopes of the unfortunate people concerned".
My Lords, that concludes the Statement.
3.46 p.m.
Lord Judd: My Lords, I am sure that we are all very grateful to the noble Earl for this Statement. The noble Earl is a man of considerable sensitivity and concern. Does he not agree that this whole sorry saga has been extraordinarily ineptly and insensitively handled? At the very least, is it not possible that there was a failure on the Government's part to give a clear indication to those concerned as to the implications of policy? For those of us who have worked in humanitarian organisations it is a very real experience for us that it is easy in the context of this country to understand the administrative decisions made by the Government of this country. But it is quite another matter for the fieldworkers caught up in the actual activity in the field to be able to absorb that information, make use of it and change their plans and operations in time.
Furthermore, is it not a fact that the decision on visas was made at short notice and that that had profound implications for everyone who was concerned about the position of the refugees? Has the noble Earl been made aware of the letter sent by the Red Cross in Ljubljana to Sir Giles Shaw, a Member of another place, which stated:
"I would like to confirm the contents of the letter and certify that 200 refugees with the Leeds European Refugee Trust will meet the United Kingdom criteria for asylum seekers who can be given entry visas as victims of war with desperate need.
"They are coming from the war area of Bosnia-Herzegovina, some having been released from concentration camps, some are in need of urgent medical attention and others already having close relatives in England.
"I understand these people are already in transit to England. These people comply with the new visa legislation issued by the British Government".
Was the noble Earl aware of that statement by the Red Cross? Furthermore, is he aware of the way in which the decision on visas was introduced? In much of the world it was regarded as extraordinarily cynical in effect. What was said was that we did not have the facilities on the spot to deal with the applications for visas as we would like to be able to deal with them, and therefore people must set out on the journey to another country to find the visas in the embassies in other countries. What an extraordinary way of administering a policy. In effect, is this not simply to
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pass the buck to the other countries in which the embassies are located because once people have made the journey to those other countries, they become the responsibility of those other countries?
Is the noble Earl also aware that, when referring to the humanitarian and generous decision by the Swiss Government to take 1,500 people in this kind of plight, the Deputy High Commissioner for Refugees said:
"We are extremely grateful to Switzerland for its help…But the fact remains that we still have to find safe haven for thousands of prisoners who continue to languish in these camps—camps that have been condemned by the international community as an outrage to humanity. If a few more countries followed the example of Switzerland…we could end this sad chapter in a very tragic conflict"?
Does the noble Earl not agree that the sane, sensible and humane way to have handled the matter would have been to say, in commonsense terms, that the refugees assembled by ALERT would be allowed in but that this was the absolute point at which the new policy would become operative and, from then on, there would be no further extensions of this kind? Why could we not envisage some humanitarian gesture of that sort? Does the noble Earl feel no shame that these refugees are now going to Spain and countries of that kind because Britain cannot take them? How does he feel about comparing our position—our hard and unyielding line—in the face of the most appalling experiences of the people in Yugoslavia with the position of the Government in Switzerland, a smaller country, which has taken yet again the steps which it has taken?
It is impossible to over-emphasise the sense of bitter frustration among the humanitarian aid workers in many organisations throughout the country at what the Government have done. The Government have thrown back those people's commitment in their faces. It is also impossible to imagine the sense of bewilderment and agony felt by the refugees who have been caught up in a situation over which they have no control. I hope that, even at this late stage, the Government will think again. It is one thing to talk about humanitarian commitment, but the whole of Britain's real reputation for humanitarian commit-ment stands on what it does about these people in this appalling plight.
Lord Bonham-Carter: My Lords, I should like to associate myself with what the noble Lord, Lord Judd, said about this particularly unfortunate case which has been handled in a particularly unfortunate and ham-fisted fashion. Is the noble Earl aware that of those 200 people waiting on the border 100 are children? Perhaps some special account might be taken of their needs.
Is the noble Earl further aware that, although he has assured us about the course of events, the story that I have is a rather different one? Like that of the noble Lord, Lord Judd, my information is that ALERT did what it could to go through the procedures that it was told to go through—that is to say, it sought the guidance of the Home Office. It received the support of the International Red Cross via the Ljubljana Red Cross and thought that it had satisfied the requirements of the new ruling. As the

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noble Lord, Lord Judd, said, the new ruling was introduced at ludicrously short notice and in such a fashion that it was impossible for people to get the visas that they had been told to get. The noble Lord said that that was cynical. I would simply say that it was savagely inhumane. If voluntary agencies follow the course of instructions that they have been told to follow, it seems hard if they should then be told that that is not good enough and that six or seven out of 100 people will be accepted by this country.
Perhaps I may add that I thought that the Government had recently said that they had made it clear to UNHCR and ICRC that,
"we are ready to receive from Bosnia and from other parts of the former Yugoslavia, people with special humanitarian needs who the international organisations judge should be evacuated, including those released from detention camps".
It seems to me that a large number of those in the convoy of 200 people fall precisely into that category. Therefore, I wonder why the Government have gone back on the undertaking which I understand they gave.
Speaking on this subject yesterday in another place, the Minister of State for the Armed Forces said:
"The House is well aware of the continuing work of the international conference on the former Yugoslavia in Geneva, which is continuing to draw together the efforts of the European Community and the United Nations in close liaison". —[Official Report, Commons, 16/11/92; col. 76.]
Perhaps I may suggest that that conference should take into account the refugees as well as other matters because if one thing is absolutely essential it is that the European Community co-ordinates its policy towards the reception of refugees. If each country pursues a "beggar-my-neighbour" policy, not merely will it be an unsavoury spectacle, but it will do nothing to help the refugees or to solve the very real problem which confronts us all, and particularly those countries closest to the former Yugoslavia. I urge the noble Earl not only to take these suggestions seriously, but also to take seriously the condition of these people to whom we have a humane obligation.
Earl Ferrers: My Lords, I can understand both the noble Lord, Lord Judd, and the noble Lord, Lord Bonham-Carter, being concerned about those people who are caught in this predicament. The noble Lord, Lord Judd, said that this was a matter of great sensitivity and he is, of course, right. He said that it had been ineptly and insensitively handled by Her Majesty's Government and added that Her Majesty's Government had not given any clear indication of what was going to happen. I would take issue with the noble Lord on that.
It was stated perfectly clearly on 6th November that as from midnight that night visas would be required. The Member of Parliament for Great Grimsby was advised on 6th November by my honourable friend the Parliamentary Under-Secretary of State at the Home Office that no exceptions would be made for the ALERT group as its journey had not yet begun. It was fully aware that visas would be required and that these could be obtained only from a British post outside the former Yugoslavia. ALERT officials were subsequent-ly in regular telephone contact on the Friday, Saturday and Sunday —6th, 7th and 8th November
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—with officials of my department. They were consistently advised that no exceptions could be made and that it was unlikely that the vast majority of the group would qualify for visas under the immigration rules. So ALERT was warned about that and was told about the position; however, ALERT did not stop the coaches leaving the United Kingdom for Ljubljana. As the Statement said, ALERT was then responsible for moving those people from relatively safe conditions to the relatively inconvenient conditions of the foothills in the north of the country.
I can understand certain noble Lords being concerned at the fact that the visa regime was instigated, but we felt that that was necessary because we cannot take everyone into this country. One must try to take those whom the United Nations High Commissioner for Refugees and the International Red Cross consider the most appropriate. In that respect, it would be wrong for the ALERT group (or for any other group) to take advantage over those who might be in an equally or sometimes even more competitive position in terms of requiring consideration to be given to their cases.
The noble Lord, Lord Judd, referred to the position of the Red Cross. ALERT is well aware that the International Committee of the Red Cross had not asked the United Kingdom to take this group. I think that what the noble Lord, Lord Judd, is referring to is the local delegation of the Red Cross in Ljubljana. That is a local committee; it is not the International Committee of the Red Cross, which is situated in Geneva and which deals on a government-to-government basis. Therefore, whatever the local branch of the Red Cross said, that did not have the authority of the international committee.
I also point out to both noble Lords that Slovenia is in fact a different country. These people had gone from Bosnia to Slovenia and therefore they were in a different country. What we now have to do is to find out whether they nevertheless still require to come to this country.
In all this ALERT has, if I may say so, been responsible for the condition in which these people find themselves. ALERT was warned by the Home Office; it was advised by the Home Office; and despite all the warnings and despite all the advice it nevertheless sent coaches over there; it nevertheless moved these people from a safe position. Then when it finds that it is impossible to give them the visas which they require, ALERT complains and says it is unfair. The responsibility was theirs.
4 p.m.
Lord Ennals: My Lords, does the noble Earl remember the question that I put to him on Thursday of last week about these refugees on the frontier? Does he recall that he said to me then that visa officers were being sent, presumably from Britain, to deal with this problem? Would that not give the impression to those involved, including ALERT, that there was an intention by the British Government to deal effectively with the issue? I was very pleased with the answer that the noble Earl gave me at that time.

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Does the Minister accept that ALERT had the support of the local Red Cross? We should not write off the value of the Red Cross at a local level. Does he accept that housing had been obtained in the United Kingdom for all these refugees? In all the circumstances, how could these people be called economic migrants, as they were this morning by Mr. Charles Wardle, the Home Office Minister responsible? It is intolerable and an act of intolerance that the Government should treat these unfortunate people in such a hardhearted way. Will not the Government think again? I wonder whether the noble Earl heard the exchange on the radio this morning between Mr. Charles Wardle and the man who was looking after these people on behalf of ALERT. Does he not feel a certain sense of shame that the British Government are behaving in this hardhearted way? If he does, will not the Government think again about this appalling way of treating people who are in such distress?
Earl Ferrers: My Lords, I know the anxiety of the noble Lord, Lord Ennals, over these people; and I remember well his question on whether or not these people would have visas. I did not say that visa officers would be sent but that forms would be sent to these people. One has to have a form before one can apply for a visa. I did not give any indication that, having filled in those forms, those people were more likely to have preferential treatment—
Lord Ennals: Huh!
Earl Ferrers: The noble Lord says "huh" or perhaps it was just an expletive that he emitted while in a sedentary position. I gave no indication—I could not do so—that because a person fills in a form he is to have preferential treatment.
Lord Ennals: My Lords, I did say it from a sedentary position. If the noble Earl says that visas are being sent and decides that he will not send an officer with them, does it not give the impression that the Government have an intention to issue visas?
Earl Ferrers: Certainly not, my Lords. The noble Lord may wish to have a passport. He applies for a passport and then it is up to the Government to consider whether it is suitable to issue it. It is just the same with a visa. One applies for a visa but that gives no indication whatsoever that there is an intention to give a visa. Those forms were sent out there. They were processed over this last week-end in order to help these people. In fact it was found, for the reasons that I have given, that it was not possible to give these people visas.
I come back to the point—but it is an important point—that ALERT took these decisions and took its action against the advice of the Home Office and against the advice of officials there. And having done that, I find it hard to think that it ought to feel a sense of grievance. I quite understand that those people who hoped to come in and now will not do so may feel a degree of sorrow. But there are 2 million people there in as good a position as or in an even worse position than those 180 people. ALERT cannot be the
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organisation that decides who should or should not come into this country. It must be done by a proper method. The noble Lord asked whether we take account of the support of the local Red Cross. Obviously, that is a matter of interest. But the local Red Cross is not the international committee, and it is that body to which we have to go for advice as to who are the most suitable people to bring in.
Lord Tordoff: My Lords, who will advise the international committee if it is not the people on the ground? I should have thought that the best information available was precisely the information from the international Red Cross people on the ground. Any bureaucracy that may have to take place in Geneva is only adding to the problem. I should have thought that this was a useful short cut.
Earl Ferrers: My Lords, perhaps it is a useful short cut but it may not be a very accurate one because there may be all kinds of other local committees which might give information and advice to the international committee. Governments cannot decide on the basis of dealing with a local committee. One has to decide on the basis of the advice of the international committee and the United Nations High Commission for Refugees.

Insurance Companies (Amendment) Regulations 1992
4.6 p.m.
Baroness Denton of Wakefield Baroness Denton of Wakefield rose to move, That the draft regulations laid before the House on 2nd November be approved [9th Report from the Joint Committee].
The noble Baroness said: My Lords, the principal purpose of these regulations is to implement Council directive 90/618/EEC of 8th November 1990 into United Kingdom law. This directive brings motor liability insurance within the framework of Community law which enables insurance companies to conclude contracts with policyholders in other member states. This is generally referred to as "the freedom of services". Previously, third party motor liability insurance has been excluded from the scope of Community law on freedom of services. This directive, and a parallel directive on freedom of services in life assurance, also contain provisions intended to improve access for EC insurance companies in non-Community markets. For convenience, the regulations implement these provisions together. These regulations also make a number of technical amendments and improvements to existing insurance law.
I do not propose to describe all the draft regulations in detail, though I shall be happy to explain any of them more fully if that would be helpful to noble Lords. However, I shall refer briefly to some of their more important aspects. The present regulations extend the scope of Part IIIA of the Insurance Companies Act 1982 to companies writing motor liability insurance. This part of the Act applies to insurance companies operating under the freedom

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of services. However, as a counterpart to the liberalisation of motor insurance, the regulations also insert new measures laid down by the directive to safeguard the interests of the victims of road accidents. EC insurers selling motor liability insurance in the UK must join the Motor Insurers' Bureau and must also appoint a representative resident in the UK to handle claims made against the insurance company.
The directives enable the Commission to open negotiations to improve market access for Community insurance companies in non-Community countries. They provide for further action to be taken at national level if these negotiations are unsuccessful and Community insurers suffer discrimination.
These provisions are quite separate from the provisions on motor insurance. They are reserve powers which are designed to encourage liberalisation in third countries rather than to protect the EC market. We very much hope that, in the context of the GATT Uruguay Round, there will be an agreement on trade in services under which all parties make acceptable commitments to liberalisation. The Community has said that it would not invoke these provisions in respect of other signatories to such an agreement.
The Government attach a high priority to the completion of the single market in insurance so that both our insurance industry and consumers may enjoy the new opportunities that it offers. We look forward particularly to the significant benefits that will flow from the entry into force of the third directive on insurance. The present regulations represent a small but necessary step in that direction and I commend them to the House.
Moved, That the draft regulations laid before the House on 2nd November be approved [9th Report from the Joint Committee].—(Baroness Denton of Wakefield.)
Lord Williams of Elvel: My Lords, I must first of all apologise to the House and to the noble Baroness for not being in my place when she moved this Motion. She did me the kindness of sending the draft orders to me before they were moved so, as I told her beforehand, I have had an opportunity to look at them. So far as we are concerned, they fulfil the directives which are in place, and as such we have to accept that they must go through.
I have only one question for the noble Baroness, which is about Regulation 15. I am not sure whether the noble Baroness can give me an answer on this as it is a rather complicated question. Regulation 15 applies to Lloyd's. I was wondering whether that meant that there would be an amendment consequential on this to the Lloyd's Act? I am not sure quite how that will work. Other than that, I can only say to the noble Baroness that we welcome these regulations and believe that they are a step forward in the single market for financial services, which we have joined with the Government in trying to promote.
Baroness Denton of Wakefield: My Lords, regulations should not be taken to imply any inadequacy in self-regulation at Lloyd's. The
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regulatory function at Lloyd's is now clearly separated from business leadership. I hope that will reassure the noble Lord.
On Question, Motion agreed to.

Protection of Posted Workers: ECC Report
4.12 p.m.
Baroness Elles Baroness Elles rose to move, That this House takes note of the report of the European Communities Committee on the Protection of Posted Workers [5th Report, HL Paper 16].
The noble Baroness said: My Lords, a draft directive adopted last year by the European Commission concerning the posting of workers in the framework of the provision of services has been considered by sub-committee E of the European Communities Select Committee. Its report has been published under the somewhat cryptic title of Protection for Posted Workers. I have to explain to those Members of the House who have not been involved in the drawing up of this report what this draft directive refers to. The directive seeks to encourage the free movement of services throughout the European Community, to ensure legal certainty as to the laws to be applied where otherwise a conflict of laws may arise, to protect the worker, and to avoid distortion of competition which could be consequent on differences in pay, working time and holidays between the member states of the European Community.
The principal concerns for the committee were, first, whether the directive would attain its objectives; secondly, whether the directive might have a negative impact on the labour market rather than contribute to reducing unemployment; thirdly, recognition that labour laws vary considerably from state to state; and, fourthly, whether, while legal certainty might be ensured, the employee or worker would be guaranteed that certainty in practice. We are grateful to those who gave evidence to the committee, both written and oral, and to the legal adviser, assistant, and clerk to the committee.
While some bodies were in favour of the directive, there was no concrete evidence provided by any of the bodies who produced either written or oral evidence that problems had so far arisen, at any rate as far as the United Kingdom is concerned, in those cases where undertakings based in the United Kingdom had posted workers to do temporary work in another member state or indeed in other member states. I should like to outline briefly some of the issues set out in the report and the grounds for our conclusions without, I hope, being too repetitive for those who have had the onus of reading this report.
It is useful to look first at the provisions of the Rome convention on the law applicable to contractual obligations ratified by 10 member states at the time of our deliberations, and open to member states of the European Community. It only remains for completion of certain procedures for the convention to apply in all the member states. This convention has been in force

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since 1st April 1991—just about 16 months ago—which of course is not a long time. The principal objective of the convention is to provide freedom of choice for parties to a contract as regards the law to be applied to that contract.
A second objective is to clarify which law is to apply where the parties have not made it clear which is the applicable law. The convention covers individual contracts of employment, and provides in Article 6 a guaranteed protection for the employee based on the law of the country in which the employee habitually carries out his work. However, under Article 7(1) there is provision for mandatory rules of the law of another country to be applied, in so far as these rules are applicable, regardless of the law applicable to the contract. Under Article 22 of the convention, the United Kingdom and three other member states so far have reserved the right not to apply the latter provision. The United Kingdom therefore will not apply any of its labour laws in such a way as to override freedom of contract where the proper law of contract is neither English nor Scottish law.
In the draft directive, the Commission is seeking, by providing that certain mandatory rules shall apply throughout the Community for undertakings posting workers to another member state, to remedy what it regards as a lacuna in the convention. While the freedom to provide services is set out in the treaty under Articles 59 and 60 there still remain legal obstacles and uncertainties, and that the committee unanimously agreed. A case in point which was brought to the notice of the committee is the recent Rush Portuguesa case. This referred to the European Court of Justice and relates to Portuguese workers who were sent to carry out work in France. Although the Portuguese company had the right to send its workers under the provision of services article in the treaty, the court stated that member states:
"were not precluded from extending their legislation or collective agreements entered into by both sides of industry to any person who is employed, even temporarily, within their territory, no matter in which country the employer is established."
But the Court did not go any further than that. Hence the Commission's attitude to this particular draft directive, because it is partly on the basis of this judgment that the Commission proposes that there should be what is termed a hard core of conditions applicable to the posted worker in accordance with the laws and regulations of the host state, as well as those laid down by collective agreements or arbitration awards, setting out the workers to whom these conditions would apply, and with a proviso that these laws would not be applicable to postings of under three months' duration.
The provision referring to collective agreements or arbitration awards covering the whole of the occupation and industry concerned having an erga omnes effect and/or being made legally binding in the occupation and industry concerned has raised certain queries. The TUC in its written evidence questioned the clarity of this provision. In the United Kingdom, collective agreements, while not legally binding, are reflected, as explained in UCATT's evidence, in the
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individual contracts of employment as in the case of the NJCBI agreement, and are seen to be part of the implied terms and conditions of a building worker's employment contract.
I should like to express our gratitude to the noble Lord, Lord Wedderburn, for his helpful note on national laws on collective agreements in member states, setting out the very different approach of the United Kingdom compared with that of other member states, as well as the differences between the member states in the application of agreements to different occupations and industries. I should like to say at this point that the committee very much regretted that, for medical reasons, the noble Lord, Lord Wedderburn, was not able to take part in the discussions during the deliberations of the committee. I know that we shall be hearing today some interesting points, which may or may not be in total agreement with the content of the report. In view of the noble Lord's distinguished position as a leading labour lawyer not only in the United Kingdom but throughout Europe, we shall listen with the greatest interest to what he has to say.
The nub of the directive lies in Article 3, which sets out the hard core items which must be applied to the posted worker in accordance with the laws of the host country. Mandatory rules of the host state would apply to working time, pay and holidays as well as to health, safety and hygiene at work, protective measures for pregnant women and including other groups needing special protection, equality of treatment between men and women, and prohibition of discrimination on grounds of colour, race, religion, opinions, national origin or social background.
The committee recognised the essential importance of posted workers being protected by the same health safety and hygiene rules, though they are mainly already covered by Community legislation applicable in all member states. Similarly, the committee agreed with the two other terms of protection, though some doubt was raised as to Community competence in regard to racial discrimination. However, no one on the committee denied that that was an essential protection for all workers throughout the European Community. It is on the question of application of rules on the remaining three hard core items that the committee concluded that it could not agree with the Commission's proposal. I should like briefly to outline our anxieties.
Several reasons are set out in the report—I have in mind, in particular, page 20—among which it is stated that there would be an intolerable additional burden on businesses, especially small businesses, to estimate correctly the effect of mandatory rules of another member state on its contracts with its employees. Holiday periods vary from state to state, but not in such a fundamental way as to operate unjustly. The complexity of adjusting contracts for short periods, even those over three months—although it may be four or five months—where, possibly, the posted worker has to work in more than one host country, seems unreasonable. If that is not a particularly

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legalistic approach, it is, nevertheless, a very practical one which reflects our genuine concern for the protection of the worker.
However, it is the minimum pay condition which gives rise to the greatest complexity and concern. Not all member states have rules covering national minimum wages. If the minimum only is to apply, it still leaves the posted worker with a variation of pay packet as against his fellow worker, the national of the host state. Therefore, what might have been the desirable aim of bringing about equality in the wage packets of host member state nationals and the posted worker, is in fact not achieved. In any case, pay in accordance with the decisions of the European Court of Justice includes social security benefits, family allowances, credit facilities, to say nothing of medical care, maternity benefit, unemployment benefit and pension rights.
Anyone who has had to deal with the administration of cross-border claims relating to those provisions—and those who have served in the European Parliament will be among them—will agree that by far the simplest, fairest and most protective solution from the point of view of the employee is to retain the home system without running into unnecessary complications and delays.
I should also add that there is a further complication with regard to pay adjustments which has not in fact been mentioned by the Commission. As I understand it, posted workers will, for tax purposes, remain resident in their home country. Their tax liability will therefore be under home country law. That would add a further complication to an already complex issue where, I should have thought, certainty and guarantee based on existing contracts of employment must be essential ingredients for the posted worker.
The proposal further complicates the task of businesses, especially small businesses, when tendering for a contact to provide services within another member state under, for example, the public procurement directive for provision of services. Following on from the Note in the report by the noble Lord, Lord Wedderburn, on, for instance, French law (covering collective bargaining) it would seem—at any rate to me; but perhaps the noble Lord will be able to explain—that, while the directive would lead to the application of French law, it would be difficult to identify the consequences of that application when assessing the pay rates, including benefits, to be calculated when tendering for a contract. It seems to me that there is a wide variety of results consequent upon collective agreements. We maintain that security for the posted worker lies in the continued application of his home state rules with regard to pay, including his right to home state benefits, and that this is also desirable for the obvious administrative reasons which I have already mentioned.
The application of host state rules regarding working time again raises the issue of freedom for the posted worker to decide with his employer what is most beneficial to him. It was pointed out in evidence that, for example, construction workers—and they seem to be the category of worker which is most
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affected, or at any rate, would be affected for the time being by the draft directive—going to another member state would prefer, in order to return home to their families earlier, to complete their work in a shorter time, without tight restrictions of hours per day. That was confirmed in the reply that the committee received from the Government. I should like to express our gratitude for that most full reply.
There are one or two other points where our examination of the directive led us to feel that there is a lack of clarity and as regards which the committee has asked for further clarification. First, there is the question: to whom should it apply? The Commission proposes that it should apply to all posted workers whatever the country of the undertaking which employs them. It is not clear how the treaty provisions of Articles 57(2) and 66 (the legal base upon which the Commission has relied in proposing the directive) can apply to any other than the member states of the European Community. I should be grateful if, at some stage, the Commission can be asked how that anomaly may be clarified; that is, how can the proposed directive applies not only to member states but also to any third country from which posted workers come as regards an undertaking in one of those third countries?
Secondly, more detailed clarification is needed for workers such as cross-frontier workers, seamen, tourist guides and others who would be excluded from the measures set out in the directive. I think that that should be fully spelt out in the directive so that those categories of worker know where they stand. At the time when we considered it, the draft directive was defective in many ways both as to law and as to consequences for undertakings which would have to operate in a complex area without certainty of existing contracts with their employees.
We believe that it would be beneficial to see whether the provisions of the Rome Convention may assist in resolving conflict of law questions in relation to individual contracts of employment—as I have already said, it has been in force for only a few months—before embarking on this new unchartered course. If the single market is to work for the benefit of all, especially for workers, reducing unemployment must surely be one of the main objectives. For more extensive use of cross-border contracts for the provision of services, there must be a need to guarantee workers their existing rights and for posted workers to know what their guaranteed position is with regard to family allowances, social security benefits and the rights which pertain to workers generally throughout the Community. Should evi-dence come forward showing that provisions of the Rome Convention do not fulfil its principal objective, that there is unfair treatment of posted workers, or that there is resentment between nationals and non-nationals coming from Community member states, we would strongly recommend that the situation be reviewed.
As a result of the brief outline of our report that I have given your Lordships, I very much look forward to hearing what other members of the committee and other speakers have to say about it. I shall also listen

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with the greatest care to my noble friend Lord Ullswater when he tells us what is the Government's position and how far the draft directive has gone down the line of European Community legal procedure.
Moved, That this House takes note of the report of the European Communities Committee on the Protection of Posted Workers [5th Report, HL Paper 16]—(Baroness Elles.)
4.27 p.m.
Baroness Turner of Camden: My Lords, I should like first to congratulate the committee on the production of a very clear and extremely informative report. I should also like to thank the noble Baroness for the clarity of her explanation. The draft directive concerning the posting of workers in the framework of the provision of services is explained in a quite exemplary manner in the report. Moreover, the committee was careful to ensure that it took evidence from those with a keen and legitimate interest in the subject; for example, the CBI and the Engineering Employers' Federation as well as the Institute of Personnel Management and major unions, including the TUC. Naturally, the Department of Employment has made its views known and they are included in the report.
The Community has come to the view—which I am sure is correct—that the completion of the internal market is bound to lead to an increase in the number of short-term postings of employees in the services sector to other member states in the Community. As the noble Baroness has already pointed out, some of the respondents indicated that they had not hitherto encountered problems. But things are bound to change. It is pointed out that where an employment relationship is temporarily carried out in a member state other than those whose laws govern the contract of employment, issues as to which law applies are likely to arise.
It seems to me that the directive has a number of quite reasonable objectives. First, it wants to ensure so far as possible that there is clarity and an avoidance of legal uncertainty. Secondly, there is the commendable desire to try to ensure that posted workers are protected from exploitation. Thirdly—and this is connected with the second objective—it wants to ensure that the principles of fair competition are maintained so that it would not be possible for a provider of services to succeed on the basis that his labour force was cheaper than those bound by more stringent laws operating in the host country. Personally, I can see nothing wrong in all this. I do not accept that there is no need for such a directive, simply because the Department of Employment is not convinced there is a need for it. The attitude in the past of the United Kingdom Government has been in opposition to any attempt to interfere in industrial relations where the aim is to benefit or to protect the employee; and it seems to me the same stance has been adopted in relation to this directive.
It is not surprising either that this view as to the necessity for a directive has been supported by the CBI, the Engineering Employers' Federation and
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other organisations normally representative of employers' interests. However, the Institute of Personnel Management and the unions take a different view, the Institute of Personnel Management believing that it would be beneficial to clarify which laws govern the conditions of temporarily posted workers, and the TUC arguing—surely sensibly—that posted workers ought to receive a written statement of their terms and conditions before they accept a posting elsewhere in the Community. As has been explained, the directive seeks to identify a so-called hard core of protective legislation with respect to workers who are temporarily posted to work on the territory of another member state.
The list of working conditions is set out in detail on page 12 of the report. There seems to have been little opposition from respondents to conditions relating to health and safety and equal treatment being applied to posted workers; but strong opposition by employers to the inclusion of pay, working time and minimum paid holidays—even though it is intended that minimum paid holidays and minimum rates of pay should apply only in postings of more than three months.
In this latter connection, it should be noted that the union representing building workers was opposed to the three-month "threshold", claiming—I am sure correctly—that many building workers are posted to other countries within the Community for shorter periods and need protection against exploitation for these shorter periods. Others expressed doubts about the threshold, pointing out that it might induce employers to post employees for periods of three months or perhaps lesser periods.
There are problems about the United Kingdom. The noble Baroness has already alluded to that aspect. We do not have minimum rates of pay laid down by statute, except where wages councils exist, and the Government are intent upon doing away with those, a move that will be vigorously opposed from these Benches. But now is probably not the appropriate time for talking of that. However, there are industries, where there are collective agreements which could be applied and be deemed to be a means of giving effect to the directive. The unions favour the directive on the reasonable ground that if operative it would prevent undercutting and thus ensure that the objective of fair competition is maintained, while at the same time giving protection to employees who are posted to other states in the Community.
They, and other respondents, also raised the matter of non-Community undertakings. UCATT in particular drew attention to the East European building workers being employed in the United Kingdom and other Community states at rates of pay considerably lower than those set out in the building industry's national agreement. That seems to me an important issue and it needs to be addressed.
We now come to our comments from these Benches on the conclusions of the committee in relation to the draft directive. First, the committee agrees that the draft directive is a potentially useful measure to assist courts in member states to clarify the law applicable to employment contracts of posted workers. It seems to

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me that is a sensible thing to say. However, they go on to say—and the noble Baroness has explained this earlier—that rates of pay, working time and paid holidays should not be matters where the host state may issue mandatory rules overriding freedom of contract. In other words, the committee has decided to agree with the Government and the employers' organisations which gave evidence. I regret that this is so. These are, after all, the most important items to the worker in his contract of employment. If the intention is to prevent undercutting, and thus ensure fair competition, it is difficult to see how this can be obtained if rates of pay are to be excluded from consideration.
Nor is it possible to prevent the exploitation of workers unless the protection afforded to them includes the most important item: what they are actually going to be paid. To an employee, what he is paid and how long he has to work for it are the most important items in his contract of employment. I do not accept the committee's conclusion that it is a form of fair competition for an employer in a member state, perhaps with high unemployment or a minimum wage law, to take advantage of relatively cheap labour to provide cross-border services.
It has always been necessary in a civilised society—even one committed to a market philosophy—to protect those who are most vulnerable. Obviously, in recessionary situations where there is a lot of unemployment and job uncertainty, it is absurd to talk as though the parties to an employment contract are in any respect on an equal footing. It is one of the positive aspects of the Community, in my view, that this is acknowledged and we have the social chapter—which unfortunately the United Kingdom Government have decided they will not have. When we debated Maastricht in this House, I said that the United Kingdom Government believed that they could deal with unemployment by creating "sweat-shop Britain". This kind of outlook still informs their thinking, and I am sorry that in relation to pay and working conditions the committee seems to have chosen to go along with it. I think it was wrong to do SO.
Let me say finally that I support the directive but I believe it needs amplification. In particular, I should like to know how it is proposed that it should be enforced. I should like some clarification about the position of undertakings external to the Community, and I support entirely the opinion of the European TUC that posted workers should have the right to a statement of terms and conditions from employers before accepting posting to another member state.
4.37 p.m.
Baroness Robson of Kiddington: My Lords, when I put my name down to take part in this debate, as a member of the committee which produced the report, I did not realise that we were going to have a Statement and that we were also going to have a long debate on the amendment of the noble Lord, Lord Bruce of Donington, at the beginning of our session. Unfortunately, I have a long-standing engagement,
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which means that I must leave your Lordships' House at five o'clock and I apologise therefore for not being able to stay until the end.
As a member of the committee, I am in agreement with its recommendations. In my view, the directive itself helps to clarify and fill in gaps in the Rome Convention, particularly in relation to Articles 6 and 7. However, the directive misses out certain points. For instance, there is no clear definition of the word "posting" or what "a posted worker" means. The noble Baroness, Lady Elles, mentioned that. There is a great need for clarification as to the position in which people may find themselves if, as a result of their occupation, they are permanently crossing borders.
We considered which mandatory rules should be applied to a worker in the host country and to what extent a proper balance must be arrived at between the interests of the host country and the interests of the provider from another state. I was certainly keeping in my mind all the time the primary objective of the directive, which, in my view, is the removal of obstacles to the free movement of services. It is not, in itself, a directive particularly dealing with a measure of worker protection. That exists in other directives within the Community and therefore the balance of interests is most important.
The mandatory rules in the host state must obviously cover matters such as health and safety and non-discrimination. But we must take great care all the time to prevent the mandatory rules from stifling competition within the single market just as we must take great care to see that competition does not penalise the worker excessively. There is a very fine balance between the two aspects of the problem.
On matters such as rates of pay, hours of work, work on Sundays and paid holidays, the committee came to the conclusion that they should be left to the law of contract in the provider state. We had evidence particularly from the construction and engineering industries. It was stated forcefully that hours of work were of great importance as quite often speed of completion was of the essence in some contracts taken on by these two industries. For example, with a firm in this country which had achieved a contract for major repairs on a power station in another country, it is important to the other country that the job is completed as quickly as possible. Hours of work are of the essence. Therefore, one should not follow whatever mandatory rules exist within the host state.
Secondly, the employer of the posted worker may have a core of employees who may be posted across frontiers on a recurrent basis. Employers frequently have workers who are always working abroad, but not always in the same country. So there is the problem of the worker from the same company having to face up to different conditions on pay and working hours. I believe that that is one of the reasons why it is sounder to have paid working hours dependent on the rules of the home state, not of the host state.
The question of a worker who has been posted abroad has already been mentioned by the noble Baroness, Lady Elles. The worker has to take into account the tax liabilities and social security benefit of

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the home state. But he must also take into account the increased costs of working abroad, travel and accommodation, when he is not living at home.
Thus it seems to me that the committee came to the right conclusion in deciding that there should be a balance between the rules that must be obeyed in the host state and the rules that should still govern employment from the home state.
One of the most difficult questions is how the directive should be enforced, by whom, and how it should be monitored. The Pappayanakis Report proposed that the competent authorities should be set up in each member state with adequate powers to monitor and enforce regulations. I have never been in favour of setting up any more authorities than necessary.
The Institute of Personnel Management suggested that enforcement of this directive should be through the national courts of the host state. But, on the basis of the recommendation in the report, it would have to be through the courts of both states because they would govern different parts of the directive. I would say that the most important aspect is that the question of enforcement should be resolved.
4.45 p.m.
Lord Wilberforce: My Lords, I wish first to join other noble Lords in thanking the noble Baroness, Lady Elles, for her clear presentation and, so far as I am concerned, for her chairmanship of Sub-Committee E, of which I was a member and which produced the report. It was a remarkable job to have got it done in such a short time and short compass.
In the directive we are concerned with quite a significant piece of European Community legislation. I do not believe that anyone would dispute that the matter of posted workers is entirely suitable for regulation by means of a directive, whatever one may think about other emanations from Brussels. The directive deals with a real situation which is likely to become more conspicuous as the single market comes into effect. There are sure to be more posted workers seeking and taking up employment across borders.
It must be in the United Kingdom's interests that the situation should be recognised since we or our big companies, both in the construction industry and in engineering, send a number of people to take part in important projects on the Continent such as Euro Disney, Expo in Seville and so on. Therefore, we have an interest in seeing that the legal system is clear. On the other hand, that brings about a number of complications which brought the report into being.
It is difficult to evaluate the merits or demerits of the directive because the objectives are multiple, not single. As the noble Baroness, Lady Turner, said, there are three quite separate objectives—the free movement of workers, the protection of workers and the promotion of fair competition. Those are not always consistent with each other and one has to strike a balance between them which is a matter of judgment.
Under the heading of "worker protection", the report of the European Parliament, which is in the committee's report, takes the view that the most
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important factor is that workers and also employers should be placed under a legal regime and should know what that legal regime is. That appears on page 50 of the committee's report. The TUC naturally takes the same view. If there is one slight omission in the report from the sub-committee, it is that it does not sufficiently underline the necessity for employer and employee to be supplied at an early stage with full particulars of what the legal regime is. That brings us to the Rome Convention 1980 with which the directive has been running in parallel for a number of years, as successive drafts have been produced. In my view, it is important that one should recognise—as I am sure the Government do—that the Rome Convention deals with the conflict of laws. It is designed to deal with matters of private international law which arise when people of different nationalities—say English and Spanish—seek employment in another state and work side by side with people coming from yet other member states of the Community, or even from outside the Community, as the noble Baroness said.
The object of the Rome Convention is simply to establish for the benefit of both employer and employee what is the law which governs their contract of employment. One has then to recognise that workers and employers, as well as having a contract of employment, are interested in a number of important requirements in the public law field: requirements as to health, hygiene, social security, minimum wages and so on.
So one has not done everything when one has found a legal regime. One still has to reconcile it with what are called mandatory requirements. The Rome Convention recognises this in Article 7 which, however, is fluid and is not accepted at the moment by the United Kingdom.
The subject of mandatory requirements brings one at once into the whole area of labour law. That matter is fully recognised by the Commission in its introduction to the directive. It is worth noting that the Commission states at paragraph 24 on page 33 of the report that Article 3—the critical article in the directive, which gives the list of requirements—
"does not intend to harmonise the material rules of the Member States concerning labour law … but to co-ordinate their conflicts of law rules … In that sense, this is not a labour law instrument, but a proposal concerning international private law".
The same point is made in paragraph 27. Therefore this is not a matter of harmonisation. The measure does not attempt to harmonise, however desirable one may think harmonisation is. It is not a social security measure either. As one of our witnesses pointed out, social security matters are being, and are intended to be, dealt with by other directives from the Community. An example of a social security matter is the problem of education of workers or of their families who are sent to work in another state. That matter was raised by one of the witnesses. It is extremely important; it has even been considered by the European Court of Justice in Luxembourg. It would, of course, be attractive and nice if one were able to have all matters such as social security, education, minimum wage and others dealt with in

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one directive. But having regard to the way in which these matters are worked out in the Community, that is simply not possible.
In the result the directive is much more modest in its aims. It produces a list in Article 3 of what it calls core matters which are in general to be made effective. The report agrees with that list, subject to some modifications. The principle, in other words, of having a core list of non-exhaustive requirements is, in the report's view—I agree with that—a correct one, even though one may venture to disagree as to detail in some items.
I wish to say a few words about competition, which is one of the objectives of the directive. Fair competition is an objective, and one has to recognise the reality of what competition may be. There are enormous differences in wage rates and conditions of work between workers in different member states. The tables in the report show that between Portugal and Denmark there is a difference of a factor of nine in wages for manual workers. The difference is even greater between construction workers in the two countries. Denmark pays its construction workers 10 times the rate that is paid in Portugal. As the noble Baroness, Lady Elles, said, the pay of a worker constitutes more than simply a weekly cheque. All kinds of other items are recognised by the European Court as ingredients in pay such as pensions, allowances and perks.
There is more to competition than pay. The Engineering Employers' Federation states on page 19 of the written evidence in the report that there are different levels of productivity of workers as regards quality control and in other areas. All these matters enter into fair competition. One cannot simply fasten on to the amount of the weekly pay cheque. Competition may, however, be very real and very serious. Can one do anything to ensure that it is fair? The directive seeks, in the view of our report—again, I agree—to strike a compromise between the requirement of fair competition and the protection of workers. Our report follows that, subject to a reservation which it makes as regards items one to three of Article 3. That relates to pay and conditions.
It is the view of the report—again, I agree—that one must not be too ambitious or too inflexible about these matters. One must leave something to progress according to developments. Above all, one must not overlook the problems of enforcement. The noble Baroness, Lady Turner, rightly drew attention to the necessity of enforcement. However, I respectfully suggest that in doing so she very much weakened the force of her argument to have the directive extended to matters of pay, conditions and social security. The more one takes in in this area, the more difficult it must be to achieve and to devise a satisfactory measure of enforcement.
The noble Baroness, Lady Robson, referred to the Pappayanakis Report which, fastening on this point, suggests the setting up of competent authorities with adequate powers. The prospect of setting up yet another elaborate body to monitor the working out of social security, pensions, pay and other areas in relation to all these possible combinations of workers
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from different states in different labour markets is terrifying. I believe that the report has taken a realistic line in turning away from that and suggesting that the list of mandatory requirements should be limited. As it is realistic and a fair compromise and as it is the best way of achieving the three objectives I have mentioned, I respectfully support the report and hope that the Government will do the same.
4.56 p.m.
Lord Wedderburn of Charlton: My Lords, I, too, thank the noble Baroness, Lady Elles, for her introduction to today's debate and also for her leadership from the chair in our committee on the occasions when I was present in the committee and on the occasions when I was not present, to which she kindly referred. I knew that under the noble Baroness the committee would produce its report, as indeed occurred.
It is a matter of fact, and we should not forget it, that almost everyone is agreed there should be a directive. The European Parliament, the Commission, the economic and social committee and indeed the report of the sub-committee support that view. That latter report speaks of the directive as being a potentially useful measure. It is agreed that problems of legal uncertainty and social difficulty are arising and that the Rome Convention is insufficient by itself to solve them. That is especially true if one renounces Article 7 in the manner of the United Kingdom and three other governments.
This report contains a presumption that the directive, or something like it, is needed. I wish to make two points in regard to the evidence. First, it has been said there is some likelihood that a directive of this kind is likely to contribute to unemployment. I think the burden of proof is on those who make that assertion. I do not believe there is evidence to support that. There is certainly no such evidence in the report.
Secondly, it is said that there are uncertainties. I suggest that this draft directive is not outside the normal range of uncertainty. I do not know of a draft Bill or measure which does not have a large number of uncertainties. A Bill without uncertainties is like a tiger without spots. It would be unfair to my brethren who earn their living on those uncertainties if the position were any different. What one has to ensure is that as many uncertainties as possible are cast out.
The social evidence has been recently added to by a working party report—I understand that is being sent to the Commission—co-ordinated by Dr. David Marsden of the London School of Economics. That report has two findings of interest. First, the movement of workers, in terms of mobility in the normal sense, under the treaty has not increased very fast—that is not surprising—but postings and a variety of similar practices have increased, and are likely to increase, not least because of the manner in which capital can flow among frontiers. The rate of mergers has doubled in the past five years. Therefore, there are more internal labour markets, and the posting of workers within those internal labour

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markets in multinational enterprises is likely to involve a large number of postings and a variety of types of employer. Dr. Marsden writes:
"Such developments raise many problems, among which are the transferability of terms and conditions negotiated in one country to another and the potential disadvantage of women's access to careers".
That, too, has a dimension which relates to problems for women workers especially.
The Commission's proposal for a directive was not for the free movement of workers nor based upon welfare for workers. It was based upon Articles 57 and 62 relating to the provision of services in the Community. That immediately raises the question of creating or removing obstacles to free competition in the single market. It is at that point that I believe the report, in its final deliberations, is open to question by confining the permissible subject matter of the directive to only a few of the conditions of employment of posted workers and by excluding from mandatory application in the host state's laws, or collective agreements, maximum working hours, minimum pay and paid holidays. The noble Baroness referred to a note on collective agreements which I prepared for the committee and that is an issue to which we shall have to return. The application of collective agreements in the Community will create more and more difficulties.
The report supports its solution by applying the maxim of freedom of contract. I should like to make two points in relation to freedom of contract as that subject appears in the report. It is a well-known will-o'-the-wisp. The general point is the one made by my noble friend Lady Turner. It is a commonplace in freedom of contract and employment matters that terms and conditions are, for the most part, imposed conditions for the average individual employee unless they are negotiated by his or her trade union. Even the Rome Convention departs from the classical maxim of freedom of contract when it comes to employment contracts in Article 7. That is very significant.
There is also a particular reason why blanket application of the maxim of freedom of contract is not useful here. If no directive on posted workers is adopted the result will not be freedom of contract in the form in which it has been debated here or written about in the report. National governments will retain their competence to make rules for their own employment law in respect of their own minimum standards provided; and I apprehend that this is a proviso which has to be made to any quotation from the Rush Portuguesa judgment (I have my own but I shall not use it because we have already heard from the Rush Portuguesa judgment). They are not discriminat-ory. There may be situations in which the Government will have to be careful to avoid that.
For the most part, if we do not have a directive we shall have what the Engineering Employers' Federation—which I do not claim supports the directive in all respects—describes as a piecemeal approach. The choice is between co-ordination through a directive and not freedom of contract but a market in which states, as time goes on, will individually apply different national laws to posted
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workers. It is therefore not helpful to the argument in the report to claim that freedom of contract will produce the greater certainty. Nor is it a sensible solution.
One could draw an analogy between the directive, at its minimum, and a double taxation agreement. It seems to me that our report approved the double taxation agreement but excluded the basic rate. That would be very strange indeed. The report argues that the directive should require member states to apply common terms of employment to posted workers on safety at work, discrimination—a wide area of discrimination far beyond our present law, except in Northern Ireland—temporary work and protection of young workers and pregnant women, but not further than that.
Beyond that I do not claim to be a matter of legal analysis. It is a judgment of political economy. My judgment would be that the report errs when it says that,
"it is a form of fair competition for an employer based in a Member State, perhaps with high unemployment or a low minimum wage law, to take advantage of relatively cheap labour to provide cross-border services".
There is no protection of the employee there. With great respect to the noble Baroness, who will no doubt tell me where I should look for that if I have missed it, I did not find any protection of the employee as a basic ground for the proposals in our report in the subsequent paragraphs either. I did not find it in paragraphs 79 and 80, where the interests of the host state and the interests of the employer are balanced. I accept that the interests of both states are involved. However, that somewhat strabismal perspective omits the interests of the posted employee and of the other workers involved. There is no single concrete instance of employees' interests in that sense.
It is here that I approach the matter slightly differently from my noble friend Lady Turner. It is not so much an issue of the Maastricht agreement. We all have our own personal views on that. That is not very important at the moment. What is important is that from the Madrid summit onwards the United Kingdom Government, as one of all 12 governments, have accepted that by 1993 the market must have a social dimension. The Government have accepted statements from the Madrid summit that the social and economic dimensions of the market are equally important.
If that is so then the directive, which is based largely upon the economic issue of competition and provision of services, must nevertheless be tested in the social dimension of the interests of the workers concerned, which will be equally important. That is why the Commission speaks of the need:
"To protect the workers concerned from practices which may emerge in the international framework".
It is also why the European Parliament's Pappayanakis Report seeks to,
"protect workers from exploitation as a cross-border labour market develops"
and from "social dumping". Longer passages are printed with our report.
To the practical and legal problems, which are likely to increase, must be added the social dimension for the employees both in the host community and in

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the posting state. Merely to say that cheap labour is a fair competitive device without addressing the problems of unprotected undercutting is not wise. There is disillusionment with the Community; not just in Britain but in Denmark and France and across the whole Community. That is due partly to bad luck because during a recession people do not feel so good; but people expected, because they were told again and again, that there would be a social dimension to the internal market of the Community which would take the edge off what everybody knew would be a difficult period in the first year or two of that internal market. The recession does not distinguish between working hours, pay and rules on safety at work. Nor do people who are at work, who know that those will be the targets of the recession in their households and in their families.
In a sense this is a small matter, but if we take away from instruments such as the one proposed a dimension of protection for employees then we may unintentionally contribute to the acceleration of a negative process which could have frightening consequences in the next few years.
5.10 p.m.
The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater): My Lords, I welcome the opportunity to take part in the debate. I read with great interest the report prepared by the Law and Institutions Sub-committee (Sub-committee E) under the chairmanship of my noble friend Lady Elles. I am most grateful to my noble friend and her colleagues for giving the issues such a thorough and expert examination. I am grateful to her for the way in which she explained the report and its contents to the House today.
The report and the evidence it contains will make a valuable and lasting contribution to our consideration of the proposed directive in this House and elsewhere. The Government will take careful account of its findings and recommendations.
The subject of our debate today may seem at first sight dry, technical and obscure. But first impressions are misleading. The development of a free and open market in services is one of the most important aims of the European Community. It is an aim which the United Kingdom has consistently supported for many years. The draft directive that we are considering could either help the process or hinder it.
My departmental colleague the Minister of State for Employment has given some detailed comments on the sub-committee's report in a written response. I am grateful to my noble friend for her words of thanks for that response. I shall therefore concentrate on the two major issues raised in the report and in the debate. The two main conclusions are, first, that the draft directive is a potentially useful measure in assisting courts in clarifying the law; and, secondly, that posted workers should not be covered by mandatory rules on rates of pay, annual paid holidays and working hours in the host country.
On the first point, the European Commission has argued that the directive would help resolve legal uncertainty. The Select Committee agrees that the
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draft directive could potentially be useful for that purpose. The Government accept that legal uncertainty could discourage the use of posted workers in the supply of services between member states of the Community. When employees are posted temporarily to work in a member state where they do not have a contract of employment, are they covered by the law of their home country—the country where they have their contract of employment—or of the host country where the temporary work is done? What happens if neither legal system clearly covers them, or if both systems cover them and there is a conflict between the two?
Existing case law of the European Court of Justice has gone some way towards resolving these questions. Broadly, the court has established that any member state is entitled to apply its own statute law or equivalent provisions to workers from other member states who are temporarily working within its jurisdiction, provided that in doing so it does not discriminate in favour of its own providers of services. Clearly, that is a very important and desirable proviso.
The Rome Convention on the law applicable to contractual obligations also lays down some useful rules to determine which system of law governs a contract. Nevertheless, it leaves some points to the discretion of individual states. Notably, it is left to them to decide whether to apply their mandatory rules, such as statutory employment law, to posted workers. Any employer or user of posted workers would therefore need to take account of the legislation enforced in the host country, discover whether it applies to posted workers, and what it requires if it does.
In principle, some uncertainty or conflict could arise. Whether it actually does arise is another matter. The Commission's explanatory memorandum provided little evidence on this point. My department therefore highlighted the issue in its consultation exercise. We asked what problems employers and users of posted workers had encountered in practice. While they did report some practical problems, these tended to be more concerned with taxation and social security matters, which are not covered by the draft directive, than with employment law. The evidence given to the Select Committee confirmed that there could be a problem in principle, but my noble friend Lady Elles confirmed that few if any witnesses gave any concrete examples of actual difficulties in practice.
The noble Lord, Lord Wedderburn indicated that the increase in the flow of capital across boundaries in the member states was likely to be followed by an increase in the number of posted workers. I am prepared to accept that assumption. However, the Government remain uncertain about the extent of the practical problem to be dealt with. We do not say that there is no problem. But the evidence is inconclusive. Under our presidency of the Council we have therefore focused on this issue in discussion with our Community partners.
Assuming that a significant problem does exist, we must be satisfied that the directive would help resolve it. Many employers and users of posted workers are sceptical on this point. Some even fear that the

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directive in its present form would increase rather than reduce the uncertainties. That is perhaps too pessimistic. But there is a real danger that adding a layer of Community legislation above the existing legislation of member states could complicate matters rather than simplify them.
We must also take account of the Rome Convention. While the convention admittedly leaves some potential problems unresolved, we should remember that it only came into force in the Community in April 1991, as my noble friend made clear.
The noble Lord, Lord Wilberforce drew attention to the Rome Convention and the fact that it dealt with a conflict of law. However, I believe he also questioned whether the directive as it stood was strictly necessary or strictly required. It may therefore be rather premature to propose measures to complement the Rome Convention before the effect of its operation over a reasonable period of time can be assessed.
The second main conclusion of the Select Committee's report was that rates of pay, working time and paid holidays should not be matters where the host state may issue mandatory rules overriding freedom of contract. My noble friend Lady Elles and her colleagues rightly said that there is a need to strike a balance between the potentially conflicting interests of the host state and the employer. The interests of the employee must also be considered. It is far from easy to decide where the balance should be struck. The European Commission favours an approach which would require mandatory rules on pay and related matters to be applied to posted workers but only after a threshold period of three months. Some Members of the European Parliament would prefer a shorter threshold, or none at all. In contrast, the Select Committee would prefer these matters, and working time, to be excluded from the directive entirely.
Both the noble Baroness, Lady Robson, and my noble friend Lady Elles drew attention to construction workers posted to another member state where they may wish to work longer hours in order to fulfil and finish an important construction contract. Indeed, if I understand the committee correctly, it does not believe that member states should be allowed, let alone required, to apply their domestic law on these matters to posted workers. That would involve some curtailment of the discretion that member states enjoy at present.
The noble Baroness, Lady Turner, and the noble Lord, Lord Wedderburn, signified their dissent from that conclusion of the committee. The evidence provided to the committee was divided and, therefore, it is not surprising that some members of the committee should support the views put forward by the trade unions. The Select Committee rightly placed much emphasis on the need for free and fair competition for services within the single market. It argued that in some member states lower wages are a legitimate competitive advantage, as the noble and learned Lord, Lord Wilberforce, stressed by referring
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to the tables published in the report. The directive must not have the effect of restricting any legitimate cost advantage in the supply of services.
The noble Baroness, Lady Turner, and the noble Lord, Lord Wedderburn, made the important point that the exploitation of posted workers should be avoided. However, employees, posted or otherwise, will have agreed their contracts of employment in their own country. We must also consider the practical implications of the directive for the employers and users of posted workers. There is a danger that the directive as it stands would create new bureaucratic complications for employers. There might be particular difficulties in determining the appropriate terms and conditions for posted workers in member states where there are many legally binding local and sectoral agreements. There would certainly be difficulty in ensuring that comparisons are made on the same basis between the pay of posted workers and that of their host country counterparts. That point was made by many noble Lords.
For similar reasons there could be practical problems in determining the holiday entitlement of posted workers. Most other member states have statutory rules on minimum holidays and often have many mandatory public and local holidays. Calculating any extra leave entitlement in relation to a worker's existing holiday terms would be a complex exercise and a particular burden for smaller firms. My noble friend Lady Elles drew attention to that matter.
The issue raised by the committee's report is clearly both important and difficult. On the one hand, freedom of competition in the single market is a central aim of the Community; on the other hand, member states already have a certain discretion to apply their domestic law to posted workers, provided that they do so without a discriminatory effect. They will be reluctant to see that discretion curtailed. The EC Commission has proposed one way of striking a balance; the Select Committee favours a different approach; while the European Parliament and some member states may prefer to go in the opposite direction. The Government have not yet reached a final conclusion. In our presidency of the Council we aim to promote a constructive debate on the issues.
The Select Committee also discussed the appropriateness of the legal base chosen by the Commission. Its report concludes that Articles 57(2) and 66 of the treaty are an adequate and appropriate legal base. The United Kingdom has doubts on this point, as do other member states. The committee's report suggests that the directive is not primarily a measure of worker protection. Nevertheless, the primary effect of the directive's only substantive requirement (Article 3) is to ensure that posted workers are not deprived of the benefit of whatever relevant employment rules apply in the member state to which they are posted. This does on the face of it appear to be a measure of worker protection whatever the underlying motives for it.
Another reason for questioning the legal base chosen by the Commission is that the draft directive attempts to regulate the position of workers posted into the Community from non-EC countries, even where there is no supply of services between member

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states. There is considerable doubt about whether that would fall within the proposed legal base and, indeed, whether it is a proper matter for action by the Community at all. Similarly, some of the matters covered by Article 3 of the draft directive, such as discrimination on grounds of race or social background, are not in themselves within the competence of the Community. We are not satisfied that it is proper for the Community to concern itself with them even in the indirect way proposed in the draft directive.
In conclusion, I am sure your Lordships will agree that although short in length the directive raises many complex issues. We hope to pursue those in further discussions in the Community. The United Kingdom presidency of the Council has proposed a discussion among Ministers of some of the key issues raised by the proposals. That may take place at the Social Affairs Council on 3rd December. It would help to clarify the priorities and standpoints of other member states and the prospects for agreement on a way forward. The European Parliament also has still to deliver an opinion on the proposals. I understand that a debate in a plenary session of the parliament is not expected until the new year. I have indicated that on some matters, such as the Commission's proposal for a three-month threshold, there may be a difference of opinion between the Commission and the parliament.
As matters stand the Government remain open minded about the merits of the directive but want to be convinced that it addresses practical and not just hypothetical problems. In the Government's own consideration of the issues, the committee's report will be invaluable. I thank my noble friend Lady Elles for chairing Sub-committee E and the Select Committee for the valuable report. I thank noble Lords for their contribution to our debate.
5.26 p.m.
Baroness Elles: My Lords, I thank my noble friend Lord Ullswater for his reply to the debate. I thank also noble Lords who have taken part, in particular the noble and learned Lord, Lord Wilberforce, and the noble Lord, Lord Wedderburn, who were members of the sub-committee.
We have dealt with many points tonight, all of which I regard as important. Some noble Lords considered that we were not sufficiently concerned with the protection of workers. I do not agree with that conclusion. Our main concern is that there should be a practicable solution for employers. The onus on them to discover the necessary facts—if, for instance, employment contracts for those who are going to work abroad must be drawn up in detail before a posted worker is sent—must not be burdensome. Above all, our main concern is that there is certainty for the posted worker himself. I do not believe that that certainty is guaranteed under the directive as drafted.
There is no certainty as to the wage which a posted worker will receive in the host state if the provisions remain in Article 3. There is no provision for knowing that social security benefits, family allowances and so forth, which go with what is termed under European
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Community law "pay", will be guaranteed, thereby assuring posted workers that the benefits will be available to their families while they are working in another member state.
Finally, it is important to point out, as the noble and learned Lord, Lord Wilberforce, did, the effect of the distortion of competition. That is a difficult issue and I do not intend to take up the time of the House tonight. However, workers might go from their home state to another where wages were lower. Therefore, it is understandable that, in accordance with the terms of the directive, the worker from the home state can retain the higher wages while in a member state where the wages are lower. There is not a simple answer to that particular problem. I hope that the Government will look closely at the issues that have been raised on all sides of the House and take them into account.
Above all, I assure noble Lords that in spite of opting out of the social chapter, many of us on this side of the House are well aware that there is a major social dimension in the development of the single market. We are concerned that there should be social measures to protect posted workers, whether in their home state or in a host state. I look forward to the Government's conclusions as regards the adoption of the directive in due course.
On Question, Motion agreed to.

Legal Services
5.30 p.m.
Lord Mishcon Lord Mishcon rose to move, That this House takes note of the findings and recommendations contained in the report, A Strategy for Justice, published by the Legal Action Group and in particular those recommendations aimed at providing satisfactory services for citizens in need of them through law centres, advice agencies and the proposed community legal centres.
The noble Lord said: My Lords, the House, and indeed the nation, may well believe that a debate in your Lordships' House on publicly funded legal services has never been more necessary or timely. The recently issued report of the Legal Action Group—an organisation founded some 11 years ago as a registered charity with the aim of improving legal services, particularly in the field of social welfare law—supplies a very suitable basis, especially in the light of certain recent announcements in regard to legal aid, for discussing the whole question of what should be the proper provision of those services in the 1990s. That report is entitled A Strategy for Justice.
As I have indicated, this debate takes place, albeit fortuitously, but a few days after the announcement made by way of an Answer to a Written Question posed by the noble Lord, Lord Boyd-Carpenter, who appears to be ever helpful in such matters. It appeared in last Thursday's Hansard and on Friday last The Times reported it under the grim heading, "Deep Inroads into Legal Aid." The Answer was described as constituting,
"the most significant curbs on eligibility in the scheme's forty-year history".

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I summarise the proposals of the noble and learned Lord the Lord Chancellor, as I understand them to be. They provide—and this is in more senses than one the unkindest cut of all—that the lower income limit for civil legal aid (that is, the limit of disposable income below which an applicant for legal aid pays no contribution) is to be reduced to income support levels. On current figures that means reducing the limit from £3,060 to £2,213 per annum. Contributions are to be increased from one quarter to one third of income above the free limit and are to continue for the length of the case instead of, as now, 12 months. Legal advice under the green form scheme is to be abolished for all whose income is above £60 per week. That follows upon the history of dramatic decline in eligibility figures since 1979.
Between 1979 and 1990 the estimated proportion of households entitled to legal aid on income grounds dropped by 25.5 per cent.—from 69.7 per cent. to 44.2 per cent. In human terms that fall represented 15.3 million people, leaving only 37 per cent. of the population covered by the legal aid scheme compared with 66.2 per cent. in mid-1979. Between 1987 and 1990 alone, the numbers eligible fell by 5.3 million people. Because the capital limit is very low for advice and assistance, it is likely that the numbers actually made ineligible over that period is much higher than the figures I have just given. Now, these proposals will mean that many millions of adults will be required to pay legal aid contributions which they are likely to be unable to afford.
Never before have any government, so far as I know, attempted to reduce the free limit. It seems to have been with all-party agreement that the free limit was deliberately set above the level for welfare benefits, it having been recognised that those without the means to pay for such essentials as the rent for a roof over their heads were manifestly below the income group which could be expected to contribute towards their legal costs. If those proposals are carried into effect, it will place legal aid, for all practical purposes, out of the reach of almost all whose incomes are above the level of income support.
As regards the almost complete abolition of the green form scheme, except for those who receive income support, I can only emphasise what a great role that scheme has played in providing people of limited means with advice on problems which could be sorted out without resorting to litigation. If that proposal is carried through, the legal aid scheme will no longer provide that service other than for the very poorest of our citizens.
We are fast reaching the situation—indeed, we shall reach it if the proposals are carried through—where the proud name of the legal aid scheme, in truthfulness, will have to be changed to the pauper legal aid scheme. In that context I must perforce remind the noble and learned Lord the Lord Chancellor—indeed, he may even have been the author of the relevant words—of the assurance contained in the Conservative election manifesto of only some months ago. It stated:
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"We are committed to enabling people with limited means to have access to legal services".
I note with pleasure that so many distinguished Members of your Lordships' House are to participate in this debate. At the outset I ask the noble and learned Lord the Lord Chancellor, when replying, to give the House an assurance that before finally putting the proposals to Parliament, he will consult fully with such vitally interested bodies as consumer organisa-tions and both branches of the legal profession. Will he also refer the proposals to the Lord Chancellor's advisory committee on legal aid, giving it an opportunity to comment upon them and to make such recommendations as it thinks fit? Finally, when regulations dealing with the proposals come before your Lordships' House, will steps be taken by the noble and learned Lord through the usual channels to ensure that such important regulations do not come before the House late in the evening and that the fullest opportunity is given for them to be debated?
Of course, we must all realise that in the present economic climate, priorities in public expenditure must be examined and chosen with the greatest care. However, I make bold to submit that very high among those priorities, as A Strategy for Justice affirms, must always be the principle that justice and a knowledge of his legal rights must not be denied to any citizen merely because of lack of means. That principle now looks as though it is to be sunk almost without trace.
My plea is not on behalf of practising lawyers and certainly not on the issue of their remuneration. My plea—and it is the emphasis of A Strategy for Justice—is on behalf of the consumers. The noble and learned Lord the Lord Chancellor will undoubtedly refer, as he has done in this House on several recent occasions, to the fact that government gross spending this year on legal and advisory services will be over £1 billion. He will add to that the figures for planned expenditure over the next three years which were published last Thursday.
Undoubtedly, considerable sums are involved. But I must ask, as the president of the Law Society asked, whether approximately 1 per cent. of total public expenditure is such an exorbitant price to pay for a fair system of justice. Are we satisfied that in paying out those sums we have a coherent and cohesive plan by way of a national policy for the supply of legal and advisory services for those who, for lack of means, would otherwise not receive them? Has there been an adequate study of the availability of alternatives to our present procedures and policies?
I submit that at present there is no comprehensive national policy as such. There should be, for good social and economic reasons. I give but one example of what deserves to be looked at by way of economy and what I submit is a considerable reason for court proceedings being so costly to the Legal Aid Fund. It is that all too often proceedings are unnecessarily expensive in terms of time spent hanging around in court corridors. Indeed, it is not only the costly wasted time of practitioners which is involved; it is the inconvenience and frustration suffered often by parties and witnesses because of what frankly seems to be inadequate and at times—if I may be blunt—selfish

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administration in our courts. Too often—I speak in the main of magistrates, county and Crown Courts—our courts appear to be run almost solely for the convenience of those who administer them with all too little regard for the parties they are there to serve.
I ask for a national legal aid and advice programme and policy. If nationally funded and planned, much more assistance in the area of legal aid and advice could be obtained from organisations which now exist quite separately from private practitioners in the law. Especially with the proposed measures in regard to the green form scheme, those organisations should be incorporated in a national policy. Unfortunately, many of them are struggling and in some cases have had to close down for lack of comparatively small financial assistance. They are quite capable of supplying help and advice in matters which are so important, especially in current conditions, to so many of our citizens. I have in mind in that context, as did the report, problems such as those arising out of debt; problems of repossessions; problems in regard to social security; and problems about employment and attendant redundancy. In so many instances those organisations are able to give wise practical advice which often obviates the necessity for matters to reach the stage of litigation or indeed the necessity to consult private practitioners.
In continuing the submission as to the need of a coherent, cohesive national policy in which legal and quasi-legal services would be publicly funded by central government, I ask the noble and learned Lord the Lord Chancellor, as indeed does the report, what possible policy justification there is for retaining the historical but quite illogical and uneconomic separation of legal aid on the one hand and the voluntary advice sector on the other. What logical administrative argument can there be for two separate government departments to have responsibilities in this field; namely, the Department of Trade and Industry and the Lord Chancellor's Department? Surely that is an anomaly which demands correction? In addition, the report suggests that the Legal Aid Board should have its responsibilities enlarged and should have within its purview the entirety of legal and quasi-legal advice whether given by advice agencies, the legal profession or whatever.
In an integrated national policy the advice sector would provide an extremely important tier. Those independent agencies—and they must indeed remain independent—muster a substantial number of fine volunteers. They more than deserve to be encouraged. With a modicum by way of backbone of employed staff, properly supported nationally and properly planned from the point of view of location and need, they could fulfil what at the moment is a huge gap. Legal advice centres, the citizens advice bureaux and the considerable number of advice agencies of varying types, many of which are members of the Federation of Independent Advice Centres, should become a vital part of a national network. At this moment, without such a national integrated policy, those advice agencies have to function with complete uncertainty as to their future and depend financially upon completely varying funding from local authorities.
In 1990–91 the National Association of Citizens Advice Bureaux reported that,
"funding from county councils varied from nothing to close to £30,000: funding from metropolitan districts ranged from just over £30,000 to just over £560,000".
I need not tell the House that current restrictions on local authorities' spending are throwing the whole future of those organisations into doubt. Nor need I emphasise the obvious in saying that the local authorities whose citizens have the greatest need of assistance in their area are the very authorities which are least able to afford to make the necessary grants. Indeed, they are unable in many cases to afford to carry out their statutory duties and this Motion is not about a statutory duty. As a result, citizens advice bureaux have been lost in metropolitan boroughs as far apart as North Shields and Camden. An urgent voice cries out in what may fast become a wilderness: that those organisations fulfil a national need, even more so when the Lord Chancellor's present proposals see the light of day, and that that need should and must be nationally recognised and financed.
Obviously, local authorities are best able to judge the requirements of their areas and must be consulted about them. Within the framework of national financial responsibility there should be a statutory duty upon local authorities to provide within their areas an adequate level of independent advice. The Legal Aid Board or a new body such as a legal services commission should lay down guidelines on what is deemed to be an adequate level and, based on objective indicators of need, there should be a central government grant by way of subsidy. They should and would continue to specialise in those areas which are of such importance to our poorer citizens, areas in which the legal profession itself frankly is not generally known for its specialist skills—the fields of social welfare law such as those I have already mentioned; housing, immigration, employment, debt and welfare benefits. All that in the era of charter rights for the citizen would appear to be elementary. Regional legal services committees, which have already proved their worth where they have been set up, should be extended to cover the whole country.
There is another area in which one would like to see those bodies—the law centres, the citizens advice bureaux and so on—help to fill a real lacuna in our judicial system. I refer to representation at tribunals which determine many matters in the social welfare field. It is an area which becomes more and more complex as we in this House have learned when grappling, for example, under the expert guidance of the noble and learned Lord the Lord Chancellor, with some recent legislation relating to a parent's obligation to maintain children, the arithmetical working of which he appeared to understand rather better than we did.
It is so unjust that in the vast majority of tribunal cases the government department has the benefit of representation and the citizen does not. In the case of industrial tribunals the employer very often has the benefit of legal representation and the citizen, especially one who for one reason or another is not a member of a trade union, has none. Perhaps I may remind the noble and learned Lord, if indeed he needs

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any such reminder, that his department commissioned a report from Professor Hazel Genn of London University which was submitted July 1989. It related to the effectiveness of representation at tribunals. That report quoted in turn the findings of the Royal Commission on Legal Services which found the position of representation on tribunals as being "unsatisfactory" in the availability of advice and representation. It recommended that encouragement and resources should be given to lay agencies which would provide this advice and representation. The Genn Report for its own part concluded:
"Representation of appellants and applicants contributes to more accurate decision-making and to the fairness of the process by which decisions are reached. If it is considered desirable that tribunals should achieve these objectives, and if those appearing before tribunals unrepresented do so because free representation is not available to them and they cannot afford to pay for representation, then the argument for improving access to representation is unassailable."
This representation could so easily and most economically be provided by an agency employing both lay specialist advisers and lawyers along the lines of the already existing Child Protection Action Group, Citizens' Rights Office, some of the tribunal representation units and law centres. Included would be all hearings before the Social Security Commission, immigration appeal tribunals and industrial tribunals.
To conclude, I submit that some re-thinking about the Lord Chancellor's present proposals in regard to legal aid and some re-thinking about an integrated national policy has to take place.
I hope that in initiating this debate—a debate which has become all the more urgent and vital in the light of what I can only call the draconian proposals which have just been announced—the noble and learned Lord the Lord Chancellor will consider that a sincere attempt has been made to do some practical thinking on the lines of A Strategy for Justice. Others who follow me will make, I know, more useful contributions than I have been able to make. What is indisputable is that the debate is on a subject which many in your Lordships' House regard as one of high priority, especially having regard to the difficulties which confront so many of our people in today's economic conditions. The noble and learned Lord must know that this House will never forget our traditional adherence to the principle that justice and a knowledge of their rights should be available to all who dwell within our midst regardless of their means. That principle is now under dire threat. I beg to move.
5.54 p.m.
Lord Donaldson of Kingsbridge: My Lords, I am at a loss to express my appreciation of the really powerful speech we have just heard which included almost all the facts available. Most of us have prepared many things to say, but they have all been said and said better than we are likely to say them. In particular, the opening attack describing the changes now being considered was absolutely devastating.
When my old colleague asked me to support him in this debate there were no speakers listed to take part and the debate was for the next day. I said, "All right, you deal with the legal aid difficulties and escalations
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and I will deal with the advice centre side". But the noble Lord has dealt completely with both. Therefore, I shall try not to repeat them but merely add a few thoughts.
The first relates to a matter which I said I would leave alone; namely, the legal aid principle itself. The Independent today contains the suggestion that those accused and with previous convictions should get no help in the magistrates' courts. Nothing less than access to a duty solicitor could possibly cover that. If that is true, I hope that we can persuade the noble and learned Lord to change it. It may be just a rumour, but the idea that a man straight from prison, feeling resentful and wanting to get back to his old life which was not a very good one, should then be prosecuted for a petty crime without the right to advice from anybody, is intolerable. That is my first point. I repeat that nothing less than access to a duty solicitor can possibly deal with that situation.
The type of man we are trying to protect not only requires defence at law, but sometimes he also requires to be able to attack and to bring justifiable arguments against people who have been unfair to him. I have opened in error so many letters meant for my noble and learned namesake from Lymington that I am under no illusion as to the existence of a small but determined number of absolutely relentless litigants who will go on as long as anyone will pay for them, and a good deal longer than that. It is perfectly clear that there are some limits which have to be considered as regards legal aid. That, again, I shall leave to the lawyers to deal with. In particular, I shall look forward to the noble and learned Lord's comments on our joint correspondence.
I turn now to the need for help and advice for the weak and confused, without which the courts are bothered with innumerable cases which should never reach them at all. It must be nearly 30 years since I had the honour to chair the executive committee of the family service units in this country. Those units continue to flourish and to serve some of the neediest and most confused parts of society. They were expressly set up to help families which have been given up in despair by other helpers. Many of our clients came then, and probably do now, from local authority housing departments. They are sent to us as a last effort to avoid eviction.
I then learnt from my daughter, who worked for the FSU for a couple of years after her education, that the first thing one has to do is to make friends with the mother, gain her confidence, and go around the house searching for unpaid bills which will be stuck behind a clock, in the back of drawers, in the pockets of winter coats and all over the place. When they have been collected and listed it is possible to see the extent of the problem and as often as not to arrange weekly repayments with one or more of the creditors and thus gradually get things back to a manageable state. Any one of such cases left to itself might run into a court case and need legal aid.
I want to stress the case made by the noble Lord, Lord Mishcon, that one of the most certain ways of decreasing public expenditure on legal aid is to

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increase public expenditure on advice and law centres. I quote one sentence from the excellent report we are discussing. Page 20 states:
"Legal aid is, on the whole, only available where solicitors choose, for commercial reasons, to provide it".
That will not do for a start. Nobody can say that that is any way to run a business. It is not acceptable and it shows that the whole set-up is topsy-turvy.
The report goes on to argue that, as the noble Lord told us, legal aid should be be part of an integrated strategy aiming at equal justice for all members of society. Again as the noble Lord said, the main weakness today is that the provision of legal help stems from the historical separation of legal aid from the voluntary advice sector, which has grown up in various forms. The noble Lord, Lord Mishcon, described them so I shall not bother your Lordships by doing so again, but they include the citizens' advice bureaux, the legal aid centres and the advice centres. The legal aid centres aptly describe themselves as,
"independent agencies mobilising large numbers of volunteers around a spine of employed staff".
Expert voluntary advice and help is the cheapest and most effective kind available and, if I may say so without offence, is a most useful outlet for lawyers who are sometimes embarrassed by the size of their fees. It always amazes me that the Treasury makes no attempt to foster such work. As the noble Lord pointed out, these centres are haphazardly funded by local authorities. Some get a lot; some get nothing. As long as they are funded directly by the local authorities, nothing much will happen. If that is to be done by the local authorities then, to use the word which the noble and learned Lord, Lord Hailsham, prefers, the aim must be to have "hypothecated" rather than ring-fenced funds.
I should like to see that work carried out directly by the noble and learned Lord's department, or in any way that the noble and learned Lord the Lord Chancellor thinks fit, provided he takes the responsibility for ensuring that the provision goes right across the country and that it is not muddled up by a lot of other people, especially the local authorities, which in most of these cases are the enemy rather than the friend of the man in trouble. Local authorities may be great friends to people who are not in trouble, but anybody who is in trouble locally is nearly always in trouble with the local authority.
I think that that is as far as I want to go. I really believe that the recommendations could make everything very different for the poorest. Again as the noble Lord said, the truth is that modern social welfare legislation (relating to debt, as in the example that I gave; divorce; marital problems; immigration and all the other things) is so complicated that it leaves the uneducated struggling family at a loss. Whatever else we persuade the noble and learned Lord to do, we must persuade him to pay, say, 1 per cent. of the money that he is going to spend on direct legal aid on this indirect advice which is cheap. If that is done, I believe that there could be a change for the better which would help us all very much in the future.
6.4 p.m.
Lord Renton: My Lords, I join the noble Lord, Lord Donaldson of Kingsbridge, in paying tribute to the noble Lord, Lord Mishcon, who addressed us with his usual clarity and persuasion and who, in my opinion, set out the matter fairly and made a very formidable case for further action in this regard.
The debate is timely coming as it does so soon after the Autumn Statement, which defined new limits for legal aid of the kind which the noble Lord, Lord Mishcon, described. I have some experience of the evolution of legal aid because, like my noble and learned friend Lord Hailsham, I was in the Chambers of Mr. Eric Sachs, King's Counsel (as he then was), who was largely responsible for formulating the original legal aid scheme. It worked wonders within its original limits, but it gradually expanded. I also served for 18 months on what used to be called an "area legal aid committee", composed largely of solicitors. I was the only Queen's Counsel on it. I remember the genuine concern that the solicitors showed in trying to get things right in the relatively early days of the scheme—I am speaking now about the middle of the 1950s. In practice, I eventually did a good deal of legal aid High Court work.
Since the scheme was started back in the late 1940s, there has been an enormous increase in the acknowledgment by Parliament of the people's rights, and new tribunals have been established in order to assert them. As a result, the work of the courts has increased. Very recently, and thanks to the Children Act (which my noble and learned friend the Lord Chancellor introduced in 1989) there has been a most remarkable extension of the rights of children. It is estimated that 7 million children now have rights of their own in the courts which they never had before. Previously, those rights had to be used by other people. That, in itself, is a very big step.
Over the years, the legal aid scheme has done a lot to achieve justice but as all of us, including the noble and learned Lord the Lord Chancellor, are conscious—by implication the noble Lord, Lord Mishcon, admitted this—it has become a very great financial burden on the public purse. It is hardly surprising that in the present conditions my noble and learned friend the Lord Chancellor and the Treasury have had to think of some way of limiting legal aid. Some will say that the limits are a bit too tough; others will say that they are inevitable. But the point is—and that, I think, is the point of this debate—that those limits on legal aid make it even more necessary to consider and support alternatives, some of which were mentioned by the noble Lord, Lord Donaldson of Kingsbridge, as well as by the noble Lord, Lord Mishcon.
Before going any further, I must make a confession. I have a longstanding public engagement this evening which I cannot avoid, so I cannot stay very long for the debate. I am therefore keeping my speech very short. What I should like to do in the time that I shall engage your Lordships' attention and indulgence is to praise the efforts of the Legal Action Group and to say how remarkable the book, A Strategy for Justice, is. It is thorough and I thought that it was truthful. It is perceptive and delves deeply into the problems. Its

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recommendations, let us face it, are very far reaching. They would cost a good deal of taxpayers' money if fully implemented, but would of course save money on legal aid. We should note in passing that those recommendations would require major legislation—and quite a lot of it. It would not come all in one Bill because, among other things, it is said that there must be more law reform, and that opens the door very widely.
So, what is to be done? It would be tempting for a government to suggest that there should now be another Royal Commission to consider the whole thing in the light of what has been put forward in A Strategy for Justice, and in the light of this debate. I hope that that will not be done. I do not think that it is necessary, and it would take too long. It is better for the Government, Parliament and both branches of the legal profession to consider the proposals in A Strategy for Justice and try to get consensus on general principles, as the noble Lord, Lord Mishcon indicated. That is important so that we know exactly what we are aiming at.
We should be building on what is already there. The legal aid centres and advice agencies do good work and there could be more of them. I give that as one example of building on what is already there. But much more could be done. Then, having agreed on the general principles, particular steps could be taken to implement them as and when time and money permit. There is great opportunity given for enabling the people to enjoy their rights and to get justice done. Although I could be accused of suggesting piecemeal solutions, the practical way is to take the step-by-step approach in this matter.
6.10 p.m.
The Lord Bishop of Liverpool: My Lords, if you seek to work with Judaeo-Christian insights into public policy, it will not be very long before you come to the rule of law. Indeed I recall taking part in a brainstorming exercise some years ago when some of us were encouraged to set out public issues in order of importance. I came up with the rule of law at the top of my list. I agree with the noble Lord, Lord Mishcon, that access to legal services is as high a priority as we could name. Equality before the law is part of our democratic ideal. I welcome the report of the Legal Action Group because its recommendations seem to me to combine that ideal of equality of access to legal services with realism about how those services can be delivered.
Our Church report Faith in the City, published in 1985, and the subsequent report Living Faith in the City acknowledged the specific value of law centres and at the same time flagged up the precarious nature of their funding. As chairman of the Church of England Board for Social Responsibility, I am glad to say that the Churches have seen the importance of supporting legal services within the community. For example, the Church Urban Fund recently provided funding of £30,000 in partnership with a trust over a three-year period for a lawyer to be appointed at the legal centre in Aston, Birmingham.
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The value and importance of such legal services in the community was brought home to me in Liverpool, following the Toxteth riots of 1981. Leaders in the community came to us as Church leaders asking for us to help them. They believed that their greatest single need was to have a law centre. After long negotiations a plan was agreed. We were not to have control over what was properly to be accountable to the local community. The Churches would have representation on the management committee, as does the Liverpool Law Society, and we would offer to help in finding support, as we have continued to do over 10 years, some coming from Church sources, some from trusts and some from companies. My friend Archbishop Worlock went to see a wide range of people before the launch, including the noble and learned Lord, Lord Hailsham, who was then Lord Chancellor, a Home Office Minister and the noble and learned Lord, Lord Scarman. On all sides we were encouraged. It was seen as a good idea. But the means to support it were not willed.
The only hesitations I remember in those conversations were that the centre might become political. We felt that those who said that did not begin to understand how deeply alienated are many people in that community from the whole process of city, politics and the settled life of society. I am very thankful that the Liverpool 8 Law Centre came into being and that, through many times of anxiety about funding, it has continued through these years. In that very deeply hurt and deprived community people have found to their surprise that the law can be a friend. That has several spin-offs. When the law centre was launched there was no black barrister, solicitor or solicitor's clerk in Liverpool. Those gaps have begun very slowly to be filled since then.
Funding has remained a repeated anxiety. The Liverpool 8 Law Centre has only had funding from the local authority for three years—for salaries only. Funding from charities is generally for only three years at a time without much chance that it will be renewed. Staff have to put much energy into generating funds when they have enough burdens to bear for the community without that.
The funding of the network that is described in A Strategy for Justice is very fragile. Only nine out of 57 law centres receive contributions from the Legal Aid Board. I remember that figure from 11 years ago. It is apparently still the same. They depend on local authority grants which are easily at risk for centres often challenge local authorities and become unpopular with them—the very people who are going to vote or withhold grants.
A Strategy for Justice is the right title: something more secure and universal is needed. Stringency of funds in local authorities is currently putting a number of law centres at risk. Depending on charitable funds and haphazard local authority grants makes the provision highly erratic. The noble Lord, Lord Donaldson of Kingsbridge, spoke of his years of experience with the Family Service Unit, of which I have the honour to be the national president now. I have the very good experience of making a president's visit to different cities each year and I can draw on my

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knowledge of Liverpool. I see in all those areas districts where there is need for such legal services, where people feel deeply estranged from the normal workings of our society. But in so many areas there seems to be no possibility of finding the funding.
I understand the limits to public resources. The noble and learned Lord the Lord Chancellor has said that legal aid must be better targeted towards those people whose needs are greatest. Recently, John Pitts, chairman of the Legal Aid Board, said of law centres:
"We need those targeting skills to use resources most effectively".
There are many situations in which law centres will provide a more appropriate service than private legal practice because they are not constrained by the requirement of making profit. It may be that negotiations or education could avoid litigation. Might there not also be a very cost-effective investment in offering more resources to those working in the field of mediation? Set against a budget of £1 billion for legal aid, it seems odd that Mediation UK, for example, should find it so difficult to ensure adequate funding to develop its national role in promoting and monitoring local mediation schemes.
Like the noble Lord, Lord Mishcon, I deeply regret that legal aid is to be confined in effect to those who qualify for means tested benefits. That would be a serious blow indeed to law centres, for funding from the green forms is a major part of how they live. It would be an even greater blow to the low paid. I asked a lawyer who does a great deal of work in Toxteth to spell out for me who this new arrangement would hit. The example he gave was of a woman with no children, with a small part-time job earning, say, £100 a week. She would no longer qualify for legal aid. Suppose, he said, she was embroiled in divorce proceedings. She would now have to pay roughly a £40 court fee to issue a divorce petition and about £250 for a solicitor. Previously she would have been exempt from court fees and would have had to pay a solicitor between £5 and £70.
I believe that the report is right in recommending a mixed approach to the delivery of legal services. There is a need for flexibility and experimentation, but it is important that the most vulnerable members of our community have access to legal services which are well established in the community. They need to be consumer friendly. Many people are fearful of all the processes of the law. It is a very good day indeed when someone finds the confidence to think of the law as a friend.
In our priorities in this matter I believe that first and foremost should come the security of the established network of those 57 law centres. Many people are concerned that legal aid eligibility lacks sufficient coherence in terms of the criteria actually set. There needs to be much greater public debate both about the absolute size of the legal aid budget and how it is apportioned. That debate should not be the concern solely of legal aid practitioners on the one hand and the Lord Chancellor's department and Treasury officials on the other. Ensuring equality before the law should be the concern of us all, and often justice will not come cheap.
6.21 p.m.
Lord Archer of Sandwell: My Lords, the House will wish to acknowledge its triple debt today first to the authors of the report for accumulating so much up-to-date thinking and information; secondly, to my noble friend Lord Mishcon for drawing the attention of the House to the report and for the comprehensive speech with which he introduced this debate; and thirdly, if he will allow me, to the right reverend Prelate for reminding us that the subject that we are discussing today is not something that takes place in a vacuum but is an integral part in the life of local communities.
It is not difficult to point to defects in the present provision for legal aid and advice. The upper limits for eligibility—my noble friend referred to the lower limit—exclude large numbers of people who cannot make effective the rights that Parliament and the common law have conferred on them unless they have access to advice and, where necessary, to representation. In 1950 civil legal aid was available to 80 per cent. of the population. By 1973 that figure had fallen to 40 per cent. In 1979 my noble and learned friend Lord Elwyn-Jones was able again to extend that proportion to 79 per cent. That figure is written on my heart because virtually the last task that I was called upon to perform in government in 1979 was to introduce into another place the Bill that gave effect to that enlargement. Alas, by 1989, if we accept the figures of Mr. Michael Murphy—and I leave the analysis to those who are more numerate than I am—that figure has again fallen to 48.4 per cent. If people are to enjoy freedom under the law, those limits need to be extended. I am not speaking simply of the poorest groups. It is clear that we need to take account not only of people's resources but of the kind of litigation in which they may be involved. There are many people who could finance a county court action, or a day in the High Court, who would be crushed if they found themselves involved in a long hearing with a succession of appeals. So we may be looking for a sensible sliding scale in respect of eligibility.
Secondly, aid and advice are not available for a number of purposes for which they are clearly needed. Of course we need to make law and procedures readily intelligible to people who are representing themselves. Of course not every case requires representation by a trained lawyer. But we know at least since the Genn Report of three years ago, to which my noble friend referred, that those who have some representation have a significantly higher prospect of success. It follows that to deprive some people of representation is to deny them equality before the law. Like my noble friend, I should be grateful if, when he replies to the debate, the noble and learned Lord the Lord Chancellor could give us some indication of the Government's reaction to the Genn report. We have contained our curiosity for three years, and it may be that by now the Government have had time to consider some of these matters.
Thirdly, the noble and learned Lord the Lord Chancellor will not have overlooked a problem relating to the level of fees for those providing legal aid. This is not a matter for the benefit of lawyers. I

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say only that among the solicitors' profession it is becoming possible to make legally-aided work viable only by specialising. Not in terms of subject matter, which may be sensible, but specialising simply in legal aid work, while certainly in London and many of the larger cities there are many solicitors who are not prepared, because they cannot, to take legally-aided work. So there is growing up a limited and clearly-defined group of practitioners who are separate from the remainder of the profession.
It is not a question of whether they are better or worse, or whether their standards are higher or lower. Surely separation in this field is thoroughly bad. The philosophy behind legal aid since the Rushcliffe Report has been that those who are legally aided have available the same advice from the same practitioners as those who pay privately. If there were to be two services, or two professions—certainly one hopes there will not be two entrances for gentleman and players—that would not be the way to promote equality before the law.
Where we must most warmly recommend the report is its insistence, referred to by my noble friend, that we cannot discuss advisory services in airtight compartments. Of course the resources are finite. We need to look at advice and representation in the context of substantive law reform. Lord Elwyn-Jones was enabled to extend eligibility in 1979 because the formal hearing for undefended divorces had been abolished, and that was not uncontroversial at the time. I believe that money spent now on conciliation services in the area of family law such as those referred to by the right reverend Prelate could turn out to be a valuable cost-saving investment.
We cannot discuss legal aid without taking account of the other advisory services which are available. I believe now that the funding is extended among some seven government departments. Bringing them all within one departmental budget would be an important step forward, although I appreciate the political difficulties. The Royal Commission on Legal Services, which sat under the chairmanship of the noble Lord, Lord Benson, recommended a council for legal services, which admittedly they said should have advisory functions. The Society of Labour Lawyers in its publication More Law Reform Now argued that that council, whatever it was called, ought to have executive functions. This report speaks of a legal services commission, but I am not wholly clear from the report whether the authors propose that its remit should extend across the whole of the advisory services.
I would hope to see it identifying geographical areas in which there is no readily available advisory service at all, and identifying fields of practice where expertise is not easy to find. But it would also, I am sure, identify areas of duplication where there might be scope for savings. Certainly there are geographical areas where it is virtually impossible to have access to the advisory services. That may not appear a serious matter to those of us whose pedestrian activities are confined to walking from the front door to the car, but, if it entails two changes of bus, then, particularly
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if the prospective litigant did not have great confidence in the system in the first instance, that may serve to make such resolution as he or she had managed to muster evaporate. How many of us have been deterred from consulting a dentist because of a shower of rain?
The great virtue of the report is that it seeks to question some of the rigid concepts enshrined in our legal culture. The law centre movement has shown that the provision of services does not have to be kept rigidly separate from public educational programmes, or from identifying areas for law reform, or for providing practical experience for law students. I am old enough to have attended the conference of the Society of Labour Lawyers in 1967 when the idea of law centres was first ventilated. That gave rise to the report, Justice for All. But I do not believe that that was the last word; indeed, there has been a great deal of experience and certainly much thinking since that time. I believe that the law centre movement itself may need to develop new responses to the current situation.
I venture only to offer a respectful word of caution. Much of the material in the report, which I believe will prove to be of great value to future generations, is targeted to the future. We need to ensure that, in the process, the immediate needs of this generation are not overlooked. I say that because justice denied to an individual now cannot be retrieved 20 years further on. Therefore, I believe that we need to keep distinct our vision for the future and the urgent need, in specific areas, to act now.
The noble and learned Lord the Lord Chancellor has my sympathy. He has to reconcile an expanding need for resources with an ever meaner Treasury—although perhaps we should remind ourselves that the Treasury is a vehicle for the Government's economic policy. I hope that the noble and learned Lord will forgive me if I say that our sympathy with his position is not inconsistent with our insistence on the need for action. Your Lordships' House has traditionally sought to protect the rights of individuals under the law. That must take priority, in spite of our sympathy for the noble and learned Lord. After all, as my noble friend pointed out, we are discussing 1 per cent. of the national budget. I doubt whether there was ever a time when that function of your Lordships' House was more important than now. We are all deeply indebted to my noble friend for initiating the debate.
6.31 p.m.
Lord Alexander of Weedon: My Lords, I should like to endorse all the remarks made by the noble Lord, Lord Mishcon, on the importance of the work of the advice agencies, notably the citizens advice bureaux, and the law centres. It is important that they should be able to work within a coherent framework for their operations, and that such a framework should include some security of funding. I also believe that, while we all respect the importance of the pressure on the public purse, they are a remarkably cost-effective resource. I believe it is right that in the year 1990–91 the citizens

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advice bureaux handled 7 million inquiries at a total cost of £39 million, or at an individual cost of £5.50 per inquiry.
There are two aspects of the work of those agencies which seem to me to be of particular importance—and, I hope, fully in accordance with government policy—and therefore worthy of promotion. First, there should be clear explanation to people of their legal rights. That is a theme of the Citizen's Charter. Secondly, there should be advice to people as to how, wherever possible, they can deal with problems without recourse to the courts. That involves a saving of time, a saving of trauma and a saving of expense.
In passing, I believe it is most important that, wherever possible, the facilities of the citizens advice bureau or a similar advisory centre should be available at, or in the close vicinity of, the courts. I am sure that everyone who knows how the citizens advice bureau operates within the Royal Courts of Justice has been impressed by the work it carries out there and in other court centres where it is available.
Tonight I should like to concentrate upon the problem which seems to me to arise and to be inherent within our current adversarial legal system. This evening, I shall refer only to civil proceedings because criminal procedures are under consideration by the Royal Commission on Criminal Justice. As my noble friend Lord Renton said, for the past 40 years we have greatly enhanced individual rights; but, by contrast, our civil procedures have not been radically changed. They are seen by many as being prolonged, formal and expensive. They must increase and prolong the stress which is an inevitable, but unfortunate, aspect of litigation. I am sure the reduction in the legal aid threshold brought about by current pressures on public expenditure must exacerbate that difficulty.
How is the system seen? Justice, the all-party group which seeks to investigate miscarriages of justice and promote law reform, recently published its own pamphlet entitled Justice and the Individual. I shall quote from paragraph 1 of Chapter 1:
"Our present system of civil justice is Court-based and adversarial. Its use required skilled and expensive lawyers. It is not well suited to the needs of a modern democracy whose citizens find the civil judicial process daunting, especially because of its cost".
I know that similar sentiments have been expressed by the National Consumer Council.
Our legal system is slow to respond to those consumer pressures and perceptions. Why? It has been understandably reluctant to forgo safeguards which it sees as an integral part of fair process. But, at the same time, there is a risk that by doing its utmost to uphold what is seen from the perspective of those who administer the law as being proper standards, it may yet ultimately betray the very purpose of the law which is to provide access to justice which is surely integral to fairness.
Practitioners of the law have tended to believe that people in dispute have a right to what has been called their "day in court". However, I believe that most people actually have much simpler and rather different needs: they want an independent review of their case and they want an objective assessment; but they want
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to get to the heart of their grievance and have their views as speedily, and as economically, expressed as is sensibly possible.
In the recent Justice report, we drew attention to the small claims procedure and welcomed the fact that the limit for arbitration had been increased to £1,000. But we also suggested that the limit should be raised to £5,000 with a residual discretion on the judge to refer the case to more adversarial processes where the nature of the case made that desirable. The report also expressed the view that the county courts should be more efficiently run with greater use of computers and word processors. I would welcome the view of the noble and learned Lord the Lord Chancellor of how he sees the extent of progress which his department has been able to make in that area.
I turn now to what is known as "alternative dispute resolution"—that is somewhat formidable jargon for a simpler form of problem solving. I am convinced that we must make more use of mediation and conciliation and that our adversarial procedures which may be necessary sometimes should not, because of that, be the norm. I once heard Warren Burger, the former Chief Justice of the United States, speaking in that country, say that in the 21st century he thought that many in society would expect lawyers to be,
"reconcilers not warriors; healers not hired guns".
As we all know, that is a Utopian view carried to its ultimate extent. Within a democracy there will always be some issues where the rule of law requires that they should be resolved thorough process.
However, wherever possible, we should look to alternatives. I should like to speak briefly about one of which I have some experience over the past few years. I refer to the banking ombudsman. The system came into existence for the very good reason that, without it, individuals in disputes with large organisations would not have had an opportunity to have those disputes resolved because the court process was daunting and also a deterrent. So what people gain from the ombudsman system is a means of an examination of the case which would not otherwise be available. The emphasis is on conciliation. There is no oral hearing and the inquiry is conducted on papers. There are no costs to the applicant and the system is industry-funded.
Moreover, the ombudsman (who is currently a solicitor) is also able to develop norms for the industry in a way in which the operations of the court system cannot do, and he can reinforce those norms in an annual report. I find this a more flexible, more efficient and a more constructive jurisdiction that the courts can offer. As your Lordships are aware, there are other such systems. Nor do I hear the complaint that people feel this informal system deprives them of the rights and safeguards that they would have within a court's proceedings. I sense no great desire on the part of the public for the rigmarole and paraphernalia of court procedures to resolve these disputes.
As your Lordships will know, in some jurisdictions alternative dispute resolution has been developed as part of the court's jurisdiction. Some states of the United States offer mediation and conciliation under

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the auspices of the courts as an alternative to litigation. There has recently been a pilot scheme in New South Wales, where the judges sifted out cases which they felt it was appropriate to suggest should go to mediation.
I personally think that alternative dispute resolution is bound to develop further. I see advantages in it becoming part of the service offered by the courts rather than it developing fully separately from the courts. I should be interested to know whether the Government are considering the promotion of court-based alternative resolution as a way of easing pressure on the courts and giving parties a more easily accessible service.
Finally, a point on funding: money must be efficiently spent. That, as I see it, points to the Government taking the lead in promoting mediation and conciliation to avoid wasteful uses of resources where adversarial procedures are unnecessary. However, I should also like to draw attention to the proposal which we in Justice have been advancing for—I am tempted to say decades because it is almost two decades now. That is a proposal for a contingency legal aid fund. We raised it again in our recent report, of which I know the department of my noble and learned friend has a copy. I would be very much interested to know what the department's thinking is about the possibility of developing a contingency legal aid fund. We see it as a sensible aid to some litigants who otherwise would not pursue remedies.
In all this, if I am right in thinking that we need to look for simpler forms of problem-solving, the legal profession itself will have a large part to play. Some, I know, are cynical and others are sceptical. But I think that increasingly it is beginning to command respect. It is within the past year that the Bar Council and the Law Society have each produced a report on alternative dispute resolution. It is an issue in which the profession can make progress. The profession as a whole should seriously consider the extent to which mediation and conciliation techniques should become part of the education of lawyers. I hope, as part of this process, that the Government seek imaginatively to give a lead because this is one area in which we could seek to reduce delay, reduce costs and seek to compensate in some measure for the problems currently affecting the financing of the legal aid system.
6.45 p.m.
Lord Donaldson of Lymington: My Lords, may I join in the thanks and congratulations which have been tendered to the noble Lord, Lord Mishcon, not only for bringing this very important report to the attention of the House and providing an opportunity for debate, but for doing so with incredible skill as to timing. The timing could hardly be more relevant, following the announced intention to restrict legal aid costs.
I support almost everything the noble Lord said, and I say "almost" lest I miss something with which hereafter I might want to disagree. But, so far as my recollection goes, I support everything that he said
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and particularly the stress that he placed on the need for help in the fields of debt, housing and tribunal work. Those are the fields where the most people, and indeed the most disadvantaged, are involved.
Like other noble Lords, I can well understand that at the present time there is a need to restrict, or at least to cap, rising legal aid costs. But the question has still to be asked: where do the Government go from there? Restrict this particular funding by all means; but presumably if that is done, they have some alternative in mind. ADR has been mentioned. It is not a complete alternative but it is certainly something that needs to be looked at. Are the Government looking at it? There are possibilities in other directions, I do not doubt. In what directions have the Government looked?
In the absence of knowing what alternatives are proposed in the face of these swingeing cuts, I have a nasty suspicion that perhaps the Government do not accept the proposition, which I regard as fundamental, that justice and its availability to all is not an optional extra in a civilised society. It is one of the basic pillars of that society. That does not mean to say of course that it can only be provided by lawyers: very far from it. But justice itself seems to me to be something which—perhaps this is the wrong phrase but it conveys my meaning—is non-negotiable.
If we are not to use lawyers to the extent that we have previously used them, what is going to happen? The legal system in this country, for better or for worse, certainly in its higher reaches, has evolved on the assumption that the Government, in terms of resources, are responsible only for providing the judge, the courtroom and some minimal support in the form of a clerk, or something of that sort. Justice is administered in this country in the form of a partnership between the judge on the one hand and solicitors and counsel on the other. The judge relies to an enormous degree upon solicitors and counsel for assistance.
Soon after I became a judge, when I had a family in Canada, I propounded the idea that there should be an exchange of judges between the Canadian High Court and the English High Court—not an entirely disinterested suggestion. It was revealing to me that the Canadian judges said that quite frankly they did not think they would have much difficulty in sitting on the High Court Bench in London, but they told me that I could not begin to sit on the equivalent Bench in Canada, for the very good reason that I would not get the assistance from the Canadian Bar and legal profession which we get here.
If that is to be removed, or removed in part, we are entitled to ask: how is the system going to work? The immediate result will be that there are those citizens who just do not come to court. That will ease the judges' problems in some ways; but there will also be larger numbers of litigants in person who do come to court. Litigants in person are the bane of every judge's existence. The judge worries about whether he is overlooking something and whether he really is doing justice. He worries, with good cause, that he is taking

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far longer to try the case than he would otherwise do and that that is holding up justice for other people waiting in the queue.
What are we going to do about that? Are we going to provide the judges with judges' clerks—I use the American pronunciation—or some other assistance? What about basic assistance for the litigants? In the Court of Appeal we issue very clear and simple instructions to appellants as to how they are to make up a bundle of documents. A hard core either cannot read or, as I believe, can read, but totally fail to understand. The noble Lord, my namesake, referred to some of the correspondence that emerges. I wish that I could introduce him to some litigants; he would have had an even wider view of the horrors with which judges have to put up.
We tried. we tried to use the staff lawyers to help litigants, and some were helped. There were, of course, a few who did not want to be helped. The trouble was that there was no establishment in the Court of Appeal for staff lawyers to do the work. If those few we had were diverted to that kind of activity, their real work suffered. Thus I ask again: what alternatives are in contemplation? Is it proposed that there should be staff lawyers or trained staff—they may not have to be lawyers—who will assist litigants seeking to discover how to present their cases to the court?
There will be those whose familiarity with the legal aid scheme is much greater than mine who will want to comment in detail upon the changes which are proposed. I wish however to comment on one aspect. In the original safety net proposals, it was suggested, I believe by the noble and learned Lord the Lord Chancellor and certainly by me, that it is ridiculous that we calculate the contribution of a litigant on the basis of his available income for a limited period of 12 months. Litigation, if undertaken at all, should be about a serious matter. The average citizen of small means has no hesitation whatever in entering into a hire purchase agreement, for consumer durables or a car, extending over a period of three to five years. I cannot for the life of me understand why, if he is involved in serious litigation, he should not contemplate the same kind of commitment. After all, he commits himself to housing for a much longer period, although I accept that he has a property of a residual value at the end. He may not have that in the case of litigation.
Let us confine ourselves to consumer durables: three to five years is not unreasonable. I was absolutely amazed to hear that the current thinking of the Government is that contributions should continue for the duration of the case. What on earth does that have to do with the amount that a litigant can reasonably be expected to contribute? What if he has a really urgent case, one which we may say has national ramifications? I cannot speak for the trial divisions, although no doubt they would operate in exactly the same way as the Court of Appeal. In the Court of Appeal it would be brought on within a matter of days or hours. Is it to be said that his contribution is to be scaled down in that way?
On the other hand, there are many cases of lesser importance which, to the regret of the judiciary, have
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to be postponed in order that other more urgent matters can be taken. Is it to be said that the litigant's contribution towards the costs must be increased on that account? It makes no sense whatever. By all means fix a higher contribution spread over a greater period, but it must be a period which is fixed, just as it is under a hire purchase or similar contract. It can have no relevance whatever to the time taken, which may depend upon the pressure of listing or the sheer inefficiency of the lawyers advising him.
Incidentally, I mentioned listing. Is it really to be said that listing would have to take account of the fact that by not listing one case which was legally aided one was increasing the contributory costs of the party, whereas by listing another case where there was no legal aid it would not affect the litigant in any way?
Perhaps I may mention two other matters. The first is that I should like to see an increase in the efficiency, or at any rate see a check made of the efficiency, of the Legal Aid Board in deciding which cases shall be assisted on the merits and which shall not. In the Court of Appeal I have been very struck by the number of appeals which, on any view, were completely hopeless but which nevertheless were legally aided. I suggested to the board that it was not unreasonable in the case of an appeal which had been recommended by counsel, presumably on the basis that it was likely to succeed, and it then having failed—particularly if the judges indicated that it was hopeless from the beginning—that the board should invite counsel to make a report, free of charge, explaining why the appeal had failed. It is more difficult in a trial, of course, because witnesses may not come up to proof. But on appeal, we know what the facts are as found by the court; we know what the law is as found by the court. There are, agreed, a number of cases where the activities of the Court of Appeal cannot be forecast, but in a great many they can be forecast. I have been surprised at the number of those cases where the losing party has been legally aided.
Perhaps, in the same context, it is necessary to look at cases involving children. It is quite staggering the extent of the representation which is given in some cases. We may have mother, father, foster parents, guardian ad litem and the local authority all represented by counsel. On one awful occasion they were all represented by two counsel each. The only one of those parties who is not normally legally aided and usually on a nil contribution is the local authority. That type of case needs examination to see whether it is really necessary to have such expensive and diverse representation.
One last word, with apologies, about a topic which may not occur to noble Lords as being important. It is a point which will appeal to the noble and learned Lord on the Woolsack because the reform will cost the Government not one penny piece. There are two grounds for fear on the part of litigants. The first is the extent of the costs which he will incur. The second, which is just as important in my view, is the risk that he is taking that he may fail—perhaps through no fault of his own, if it is a doubtful case—and find himself visited with a totally crippling bill for the quite unlimited costs of the other side. I tell the House

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frankly—and I hope that the House will accept the first part of the proposition—that I am quite capable of conducting litigation on my own and without legal assistance, whether under the scheme or otherwise. However, I am not prepared to litigate unless driven into a complete corner simply because of the risk that I might find myself faced with a vast bill for costs from some rich appellant.
This is dealt with under the existing legal aid scheme by saying that where assisted litigants fail, their liabilities to the costs of the other side should be restricted to what is just and equitable in the view of the court. As a working rule the courts proceed upon the basis that it would be just and equitable that litigants should pay no more to the other side than they have contributed to their own costs. I am not entirely sure that that is a sensible formula but it is the formula which is adopted.
I suggest to the Government that if they are cutting down on eligibility for legal aid, they ought to put something in place which will protect those who have lost legal aid—and, indeed, a much wider class of people—from the deterrent fear that by engaging in litigation in defence of what may be a very real right, something may go wrong and they may be faced with crippling costs. I propose that this should be done by revising the costs rules in the courts so that where, if the disposable income of a party is under a given sum—it should be quite a high sum—the court has discretion in awarding costs against that party to look at the person's means and not award more than is just and equitable in all the circumstances of the case. At the moment we have no discretion in the absence of special circumstances which do not include the means of the litigant and costs follow the event. I hope that my noble and learned friend will take that suggestion on board. I sit down with apologies for having spoken for a long time.
7.2 p.m.
Lord Irvine of Lairg: My Lords, the House, as many of your Lordships have said, is grateful to my noble friend Lord Mishcon for calling attention to this important initiative by the Legal Action Group for improving access to justice. This is by no means the first time that my noble friend has spoken up for the voluntary sector. I well remember—perhaps he will allow me to remind him—that as long ago as 14th January 1988 when we sat together in Committee on the Legal Aid Bill in this House he moved an important amendment that the new Legal Aid Board should,
"have regard to the need to maintain and develop a competent accessible independent national network of advice centres and law centres".
One object of that amendment was to provide a secure basis for the funding of the voluntary sector. On many occasions we on these Benches have sought to draw to the attention of the House the fact that there is no duty on central government to fund these bodies and that there is no duty on local government to fund them. In fact, the bulk of their funding comes from local authorities. Local authorities have to rely on such limited discretionary powers as they have; but
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at a time when they are suffering from the effects of the recession, from grant penalties for exceeding government spending thresholds, from charge cap-ping, and from the huge difficulties they experienced collecting the poll tax, it is small wonder that many local authorities have had to cut down on the voluntary sector as they struggle to maintain minimum statutory services.
My noble friend, on the occasion to which I have just referred, won support from many parts of the Chamber. The noble Baroness, Lady Faithfull, in a notable contribution—she makes many notable contributions on these subjects—emphasised the geographical inequality that,
"the whole country is not covered by Citizens' Advice Bureaux, by legal centres or by money centres".
She called for,
"a network—or at least a survey to see how a network can be set up—to meet the needs of every part of the country, including the country areas".—[Official Report, 14/1/88; col. 1391.]
However, the amendment was defeated by the vote on which the Government could call.
I have to say that the noble and learned Lord on the Woolsack on that occasion disappointed many when he replied that he regarded as,
"quite outside the legal aid field—matters with which, for example, Citizens' Advice Bureaux are concerned".—[Col. 1396.]
I hope that this LAG initiative will bring forth a more positive and encouraging response this evening. The noble and learned Lord may not regard himself as compelled to defend, at any rate directly, the savage cuts in access to legal aid announced last week; however, I do not discourage him from such a defence. This House will certainly turn to that matter on another day, but this Motion directly invites him to respond to LAG's proposals for alternative access routes to justice. These may now be of some interest to the Government not least because, after last week's cuts, there may be some concern that their election manifesto pledge to enable people with limited means to have access to justice looks pretty tattered.
The basic problem is that legal aid has been treated as one issue, one problem, and the voluntary advice sector as another. The noble Lord, Lord Donaldson of Kingsbridge, put his finger on that central point. They should be seen as two aspects of the same issue: how the state can best secure access to justice. I, for my part, would accept LAG's central thesis—the need for a coherent and integrated national policy on publicly-funded legal services. With 7 million taken last week out of free access to justice, and with millions more compelled to choose between deterrent contributions to their legal aid costs, or going without justice altogether, it is absolutely obvious that it is the voluntary sector that will be asked to take up much of the strain.
The recession with its ever rising unemployment, multiple debt, the terrifying level of business failures and home repossessions, has hugely increased the burdens on the voluntary sector. I predict the pressures will become intolerable when the new cutbacks on legal aid really begin to bite. As the policies and legislation of central government give these voluntary bodies more and more to do locally,

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many have grave funding problems—as the right revered Prelate observed—and lead a hand to mouth, week to week existence.
The voluntary sector suffers from two basic weaknesses. The first is that it is not fashioned into a geographically fair national network ensuring equal access to justice. Everyone who has knowledge of these bodies is aware that the story of the generalist advice centres is one of serious geographically-based inequalities. The story of the specialist centres in many parts of the country is that they simply do not exist. So there are in fact two challenges to Government. The first is: do they have a policy for a geographically fair network of CABs, law centres and advice centres? The answer to that at present must be no. The second challenge is: do they have a policy for their secure funding? Again the answer, for the present, must be no.
The great bulk of the funding of the CABs, the advice centres and the law centres comes, as I said, from local government. However, I am sure that the great majority of people in this country would be shocked if they knew that there was so little central government funding; that provision is so haphazard and unequal across the country; and that neither local nor central Government are under any duty to provide any funding at all for any of these bodies.
The LAG initiative is a challenge to Government and in particular to the department of the noble and learned Lord the Lord Chancellor. The challenge is a well-meaning one. I suggest that the department should now respond by taking its own initiative to promote an immediate and intensive dialogue between the department and all agencies within the voluntary sector on how better access to justice can be secured.
There are many themes which should be addressed in that dialogue: what can best be provided by traditional legal aid; what can best be provided by the voluntary sector; or what can best be provided by a mixture of both. That dialogue should be free of "no go areas" on both sides of the dialogue. The issue of the provision of salaried legal services through the voluntary sector will have to be addressed. So, too, should the possibility of some provision of representation in the industrial and social welfare tribunals through the voluntary agencies, employing a mix of lay specialist advisers and lawyers. LAG's proposals for the gradual and planned introduction of a national network for community legal centres with core funding deserves the most serious consideration.
I ask: can funding come from a partnership between the Legal Aid Board and the local authorities, with central and local government having funding duties? What scope is there for extending franchising to advice agencies? Has the green form franchising experiment in Birmingham, affecting the Bromsgrove and Birmingham city centre bureaux, been judged a success? Does it point the way to a broad expansion of franchising for specialist para-legal casework to be carried out by the CABs in areas where the voluntary sector is specially skilled and interested; for example, debt and welfare payments?
Also, the agencies themselves must be ready to look with an open mind, for example, at their own
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structures. What can best be done by the CABs and what can best be done by the law centres? Should CABs receive public funding for in-bureau lawyers, or is law centre provision for that preferable? Is the answer for particular bureaux and law centres to try to negotiate a common approach according to their particular skills, experience and resources in each neighbourhood, because general, nationally-based answers to those questions are likely to prove inappropriate?
The ultimate question must be: how can publicly-funded legal services be most effectively delivered? I for one believe, along with my noble friend Lord Mishcon, that the Government's response to the Legal Action Group's imaginative initiative will be a touchstone of its readiness to engage with new ideas and new solutions to the growing denial of a fundamental right of citizenship by exclusion from justice.
7.13 p.m.
Earl Russell: My Lords, like all other noble Lords I am deeply grateful to the noble Lord, Lord Mishcon, for introducing the debate and for doing so in such a timely way. I have rarely heard the House so unanimous and rarely been in such total agreement with everything I have heard.
At this stage of the debate what can be seen with the naked eye tends to have been said. I therefore wondered whether there might be a case for using first the telescope and then the microscope, for taking a long-term view and then for looking at how the propositions are illustrated in my own local area of Brent.
In the year 1208 King John deprived one of his barons of his lands. The reason given in the record was:
"because we were cross with him".
That is a necessary part of the background to Magna Carta. The arrogance of power is not confined to any century, to any country, to any party, to any type of person exercising power. It is part of the old Adam. What is so vital about the rule of law is that it is a means of controlling the arrogance of power. It ensures that those who hold power are bound to behave according to their own rules and that there are places where they can be held to account for it and which should be run at their own expense, for such the courts have always been. That is, of course, something which authority, through the centuries, has from time to time resented. It has from time to time resented it very bitterly indeed. That is precisely why it is necessary.
It has always been necessary to pay for the courts. Equally, it has always been necessary to recognise that some people must be able to plead, as the law used to put it, in forma pauperis. This is not new to a modern, subsidised society. It is as old as the law. The alternative is the use of violence.
During the debate I have been reminded of arriving in the United States in 1979 and receiving advice in my first week from people in Yale Law School. They told me that, if I were accused of anything of which I was not guilty which carried a penalty of anything up to

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and including a six-month prison sentence, I should plead guilty because the penalties of conviction would be less than the penalties of paying my legal bills. That advice somewhat disconcerted me and I hope never to receive it here.
The right reverend Prelate the Bishop of Liverpool made an absolutely central point when he said that it is essential for people to be able to perceive that the law is their friend. That is a condition of a civilised and law-abiding society. It is the central principle of the rule of law. I am reminded of the statement by Joan Twelves of Lambeth Council, who your Lordships may imagine has never been my favourite politician. When Lambeth won the poll tax capping case, Joan Twelves said that Lambeth was not used to winning cases in the courts. I could not help thinking what a wonderful experience that must have been and hoping that it was educational.
That is why the legal aid issue is so vital. I shall not gild the lily by adding to what has already been said except by expressing my entire and total agreement.
The advice function is equally vital. In many ways it is a different function, though it can overlap. Information can save a great deal of trouble, and as matters become more complex it can become more difficult. Every Tudor and Stuart historian knows the quotation from William Lambarde complaining about JPs groaning under stacks of statutes. The noble and learned Lord, Lord Simon of Glaisdale, is no longer in his place so I cannot ask him to remind me precisely how many pages those stacks of statutes have now grown to. Not many of us know them all.
I am sometimes asked by pupils about a precise point they need desperately in a Bill through whose passage I have sat. To my shame I do not always remember it, and it is to the citizens advice bureau that I turn on those occasions. It is facing an exceptionally heavy burden at the moment. I shall not repeat the figures which the noble Lord, Lord Alexander of Weedon, quoted, but they are worth remembering.
I entirely agree also with the noble Lord, Lord Alexander of Weedon, about conciliation. I agree about the need to get away, where we can, from the adversarial procedure. But I also believe—the noble Lord may not disagree with the proposition—that it is sometimes essential, in trying to seek conciliation, to be able to have the possibility of confrontation if it does not work.
People are not always very willing to listen. They are busy; they do not like being challenged. Sometimes they might listen with a great deal more attention were they to realise that, if they did not do so, there was a hypothetical possibility that a court case might follow. That is why we need law centres as well as advice bureaux.
I am sometimes reminded when dealing with certain authorities nowadays of a comment of one of my American colleagues on the American banks that they are impenetrable except to bank robbers. It is occasionally necessary to have an authority behind one in order to get the person with whom one is in conflict to listen.
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There has been much talk about the overlap of functions between law centres and advice bureaux. I sympathise but there are problems as well. There are differences of function; there are differences of organisation; also there may be motives for amalgamation which may not necessarily be in the interests of justice.
I have here an article in The Lawyer of 7th April which says that the Law Centres Federation is gearing up to fight a trend among local authorities of seeking to amalgamate law centres with other advice centres into one-stop shops. There may be good reasons for that, but there are also reasons which may enter into it which involve costs. This may be simply a concealed device for cutting costs. We all understand the pressure that local authorities are under to cut their costs. It may also—this point is rather more vital—be a means of trying to gain control.
Authority has never much liked being challenged in its own courts. That is true of all kinds of authorities. Local authorities are no exception. So behind these mergers may sometimes lurk the spectre of a local authority trying to gain control. I think it was the noble Lord, Lord Mishcon, who said that those involved in such things must remain independent. That is absolutely central.
That brings me to the particular example of the London Borough of Brent, in which the noble and learned Lord the Lord Chancellor has, to the great gratitude of many people in Brent, recently become involved in efforts towards conciliation. We thank him for it. The London Borough of Brent is not the easiest body to talk to. Recently it issued a summons for poll tax default against a four year-old child. The mother informed the council that it related to a four year-old child. There was no response. The mother informed the council again, and again. Finally she turned up in court with the child on her shoulders. The magistrates threw out the charge but made some observations. The next thing the woman knew was the arrival of the bailiffs to distrain for the poll tax of this four year-old child. The bailiffs inspected the child's bonnets but decided not to distrain. What the bailiffs said to Brent Council I do not know.
Your Lordships will understand that it is a little difficult to talk to Brent Council. This is why it is so vital to have a body like a law centre. Should it not be able to achieve conciliation, which it values deeply, it could retain the option of taking cases to court and providing something to which the local authority has to listen.
Brent has decided it wants to amalgamate a number of its advice centres: the private tenants' rights group, (a very valuable organisation to which I have referred pupils in difficulty with landlords in Brent and which has done what was needed), the citizens advice bureau and the law centre.
The citizens advice bureau first raised the problem that it is required to be independent; it got the reply that that was too bad for them. It pointed out secondly that it was a national organisation and therefore could not entirely detach itself from its parent framework; it got the reply in effect: "not impressed". The law centre asked the council why it
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was doing that and one of its spokesmen said recently: "When I asked the chairman of housing for the reason behind the proposals, he said that it was council policy. When I asked why it was council policy, he refused to discuss it." That is like the words to King John: "because we were cross with him".
The council is trying to require three conditions of the law centre. They are noted in the council's minutes. First, advice is to be restricted to first stage advocacy, which includes the preparation of casework for hand-over to other legal practitioners where litigation is necessary. Secondly, there should be no campaigning. I do not know why and do not see any problem about that since they have not campaigned. Thirdly—this risks contradicting the first condition—there shall be no litigation against the council without previous consultation. That can conflict with the lawyer's duty to the client, but again one cannot tell that to the council.
Next in the council minutes is the council note that there is—as it somewhat coyly puts it—a problem about the law centre's tenancy. What has happened is that, by agreement with the council and on the council's invitation, it removed from one set of premises into another with the council's full approval and a £10,000 grant very generously given for refitting. Now the council says that the centre has entered the place illegally and is squatting there.
A document has come out as a result of disclosure in court in which an officer of the council suggested that the council should stop the law centre's grant so that it should cease to pay its rent, so that the council would be able to evict it for non-payment of rent. Noble Lords may see why the law centre is a little distrustful of assurances.
It may perhaps be relevant and may illustrate the general point about the arrogance of power that the law centre has recently helped a client on whom the council had attempted to pull exactly the same trick. Indeed, with this particular council chairman that is something of a course of conduct. He has done exactly the same thing recently to a women's refuge, which, sadly, has now closed. It was recorded in the council minutes that the refuge was under council control. The refuge worker was paid a salary by the council. People were referred to it by the council. The mayor attended the Christmas party wearing his chain of office. The full council heard counsel's opinion that it was a council refuge. The council said that it was a squat and nobody could tell it otherwise.
That brings me back to the arrogance of power. In 1610 King James I, in a rash fit of pique, exclaimed: "I will not be content that my power be disputed upon". A Member of the House of Commons who was a barrister told him that if he would only go down and listen to the courts of law he would hear his power disputed every working day of the week. That is how it should be and as I hope it will remain.
7.30 p.m.
Lord Browne-Wilkinson: My Lords, I am conscious of the fact that it is not easy to persuade a man of anything when you stand between him and his dinner. Therefore, I promise to be brief. The debate inspired
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by the noble Lord, Lord Mishcon, has ranged widely; but I wish to concentrate on a narrow issue. Anyone involved in the administration of justice is conscious of the fact that whatever happens inside a court is useless unless people can get into the court, be heard and present their cases.
Like all publicly-funded services, the legal aid system is under great pressure. However, for a number of years we have had the law centre movement. I suggest that during its history the movement has unanswerably demonstrated three great virtues which cannot be disowned. It will surprise your Lordships to hear that not everyone finds lawyers attractive people to meet. The local inhabitants—the less privileged of us—had a deep antipathy of crossing a professional's doorstep. Law centres have met the need to provide an accessible and welcoming form of legal advice to people who otherwise would not have taken it. That is their first virtue.
Their second virtue is that they cover most areas of the law which are closest to the ordinary man in the street; and which, surprisingly, are exempt from legal aid funding; for example, a man's job, his social security rights, immigration, discrimination and housing. Those issues most closely concern the man in the street; yet they are the very areas in which legal aid is not available. Those areas have been served by the law centres. I am not saying that they are alone in doing so but they are the major providers of services in areas which legal aid does not cover. In the present circumstances, it is unlikely that legal aid will be extended to those areas.
Thirdly, it is undeniable that value for money, by whatever criterion one judges that, given by law centres far exceeds that given by any other form of legal advice and representation. The centres are non-profit making. The people who work for them are content to work for modest salaries, and they have a great deal of voluntary assistance.
We have an accessible advisory system covering areas which legal aid does not and it is run at a moderate cost. Yet two law centres have already closed for want of funding and many are under enormous financial pressure. Speaking from the Cross-Benches I do not wish to become engaged in any party political debate. I am far from saying that I regard all law centres or the whole law centre movement as perfection. One aspect of the movement, which was touched on earlier, was its previous political affiliations. I know not whether that is correct or whether it still continues. However, I hope that my noble and learned friend on the Woolsack will explain the basis on which public funding is not being extended to an efficient system which reaches people and that he will assure us that that is not based on the fact that there is a difference between the political ethic lying behind the law centre movement and that in government. At present, I am unable to appreciate why for so many years law centres, which provide such marvellous services, have not been funded in the way that they should have been.
7.35 p.m.
Lord Prys-Davies: My Lords, I wish to apologise to the House and to my noble friend Lord Mishcon for being absent from the Chamber when the debate began. My pre-planned programme for the day was upset as a result of an outside appointment which I had to keep. I am grateful to my noble friend for having initiated the debate. A wide audience beyond this House will read his words with great appreciation.
The report of the Legal Action Group upon which the Question is based is thorough, comprehensive and radical. Perhaps I may be permitted to concentrate my comments on the law centres. They bear a strong resemblance to the report's proposed community legal centres. The House will know that law centres and legal aid centres have been strongly supported on this side of the House. We recall that our late colleague Lord Elwyn-Jones constantly kept the item on the agenda. Their great value is that they reach out to the community and provide all citizens with legal advice in neglected but important areas of social welfare law.
We have heard that once again the future of many of the 57 law centres is at risk, and that at a time when the need for their advice and assistance has never been greater and when it continues to grow at a faster rate than ever before. That rate of growth is confirmed by the figures on page 74 of the 1991–92 annual report of the Legal Aid Board. It is confirmed also by the National Consumer Council and the National Association of Citizens Advice Bureaux—let alone the experience of the advice desks of the law centres themselves.
The point has been made that hitherto law centres have emerged in our large cities. Nevertheless, research demonstrates the need for such centres in socially and economically deprived areas all over the country, and probably in rural areas too. It can be fairly said that the supply of legal services is in inverse ratio to the need.
Before long, a good deal of information will have been collected and analysed by the Cardiff Law School at the University of Wales. It will show a hidden need in the valleys of Mid-Glamorgan. In view of references made to the local authorities' contribution, I acknowledge that the study of the Cardiff Law School is being financed in part by the Mid-Glamorgan County Council. That county has immense social problems but fewer providers of legal services than the average county of England and Wales.
I agree that most of the services now provided by the law centres could in theory be provided by the solicitor's practice in High Street which is open on week days between 9 a.m. and 5 p.m.. Sadly, they are not. That is acknowledged by the Law Society. Solicitors in private practice, with some notable exceptions, do not focus on the provision of legal advice and assistance on social welfare issues. I doubt very much whether that will be provided by private practices in the foreseeable future. There may be diverse reasons for that apparent failing; but I believe that the main reason is that solicitors in private practice, either from preference or necessity—and I suspect it is the latter more often than not—concentrate on those fields which generate high profit
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costs. Social welfare law is not well recognised as a generator of high profit costs. To generate more income each fee earner tends to expand as quickly as possible into commercial law, property law, probate or insurance-based litigation and there to provide a high quality service, which is promptly delivered to a satisfied client.
In a sense the modern successful law firm is a centre of excellence in its own field; but sadly, a price is being paid for that. Three weaknesses follow. First, under modern conditions the profitable departments within a modern and successful firm providing services of a high standard are unwilling to cross-subsidise indefinitely the low fee earning departments. Secondly, smaller practices—a firm of perhaps half a dozen solicitors drawing three-quarters of its income from the Legal Aid Board—have been unable to attract or develop a sufficient caseload in the branch of law which concerns us this evening to enable them to build up a bank of up-to-date knowledge and understanding of the practices and procedures within the executive agencies. That is almost as important as a firm knowledge of the substantive law itself. Hence, the quality of the service available may not be as good as it would be if the solicitor had been moving with confidence around the regulations and procedures.
Thirdly, if a young, newly-qualified solicitor decides to take on board an occasional social welfare case, there is no senior partner at hand within the practice who can steer him in the right direction based on his experience within the territory.
In the result, more often than not a client in need of qualitative legal aid services, in those important branches of law with which we are concerned, has to look elsewhere for that assistance and advice. That is confirmed by the CABs. I believe also that it is confirmed by the Law Society papers, which we have received. A client looks to the CABs or to a law centre if one is available.
In the mining valleys of South Wales, and perhaps beyond, until fairly recently a client would look also to the compensation secretary of the NUM lodge. I recall with great affection half a dozen compensation secretaries who undertook a wide range of services and were competent to undertake any work, apart from representation in court or taking out a grant of probate. They would sometimes refer a particularly thorny problem or a point with wide implications to one of my colleagues—Mr. Cyril Mosely, in particular. Sometimes we would look to counsel for advice. I can well recall that on a grey October morning about a quarter of a century ago I telephoned the clerk to one of the leading silks of London at the time. He agreed to accept instructions without mention of a fee because I was without funds to instruct leading counsel. Later on, the Treasury Solicitor, prompted by Lord Elwyn-Jones, paid the fee. Our clients were the families in the mining village of Aberfan. This debate gives me the opportunity to acknowledge publicly our indebtedness to the noble and learned Lord, Lord Ackner, who accepted that brief.
Only nine of the 57 centres are grant-aided by the Legal Aid Board, a point powerfully made by my

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noble friend Lord Irvine. As I read the table on page 31 of the board's 1991–92 annual report, the grant amounting in total to about £850,000 is borne by the board's own general and administration account, if I understand the documents correctly. That is puzzling. Why is there not a separate fund for law centres just as there is a fund for each of the four main areas of legal aid expenditure? Most of the 49 centres are supported by local authorities. Therefore, it is not surprising that in the whole of Wales there is only one law centre; that is, the Adamstown law centre in Cardiff.
The Welsh local authorities have always given a very low priority to expenditure on the private voluntary organisation funding sector. Before we rush to be overcritical of that approach, I should explain to the House that there are powerful and complex historical and philosophical reasons for that ap-proach. It was that approach which, in another field, led to the setting up of the Tredegar miners welfare scheme, which became the model for the first NHS.
The voluntary sector in Wales receives from local authorities less than 40 per cent. of the funding supported by local authorities in the rest of the country. In the UK generally the law centres must compete with many tasks and demands for money which assail a cash-starved council.
I accept that if the funding were tomorrow to be borne by the Legal Aid Board from a specific fund for that purpose, that in itself would not solve the problem unless the board were given an increased budget or satisfactory ways are found to transfer part of the existing expenditure on legal aid from private practice to the law centres.
Sadly, at present the funding available to the Legal Aid Board does not enable it to undertake any new initiative which involves additional expenditure although it could be beneficial. That emerges very clearly in paragraph 6.31 of the annual report of the Legal Aid Board. It acknowledges that the board was unable to obtain additional money, which initially was small, to finance consultation on the proposal to fund duty advice and representation in the county court where so many of the debtors, hire purchasers, companies, former tenants and licensees end up.
The report briefly notes in that one sentence,
"We have now been asked by the Lord Chancellor's Department not to do so".
Why on earth was the department so negative? Bearing in mind that the county court is such a vital and obvious arena for so many defendants, I should have thought that the department, indeed the Government, would have been anxious to give a high priority to the proposed initiative of the Legal Aid Board. I therefore attach considerable significance to the fact that the board was unable or unwilling to obtain the approval of the Lord Chancellor's Department.
As a result of last Thursday's announcement, like other noble Lords I fear that much worse is still to come. In the absence of a national system of legal advice centres supported by the Legal Aid Board, in the absence of adequate funds by the Legal Aid Board,
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and if the Lord Chancellor is in such immense difficulties with the Treasury, how can additional essential funds be found?
The House—and indeed the lawyers—have a duty to address that question. In view of the Law Society's position, which is geared to protect the interests of the profession, dare I mention that I for my part believe that a strong case can be made out for confining the green form advice and assistance to the local law centre or advice agency where the board is satisfied of its experience and expertise, and similarly in those cases which allow for lay representation. Of course there would be exceptions; but given good will they could be worked out.
I note from the society's briefing on the recent speech of the noble and learned Lord the Lord Chancellor to its National Conference that it would be opposed to such a restriction. I am sorry that should be its initial reaction. The Law Society is always conscious of the public interest and its own helpful policy statement on law centres is supportive of the concept of the law centre working in common harness with private practice. I would therefore be greatly encouraged if there were some indications that the society was prepared to rethink its attitude towards restriction of green form advice to law centres whenever that is appropriate. Possibly that is an area which the Legal Aid Board, with the active encouragement and support of the Lord Chancellor, could explore further with the Law Society.
I feel that the Legal Aid Board, for its part, has taken cognizance of the size and nature of the problem we are discussing this evening. I share the views canvassed by my noble friend Lord Irvine of Lairg that the Legal Aid Board should be actively encouraged to find some practical way of dealing with this greatest failure of the system. Its consultative paper on franchising issued at the end of October represents a move towards a planned approach to legal aid. Thus it should be one of the conditions of a franchise that a firm should develop expertise in those branches of the law so neglected.
The effect of that proposal over time would be the setting up of a kind of legal aid office in the private sector which had some of the attributes of the law centre in the public sector which we have come to know and learn to value, notwithstanding some imperfections. Unlike the public sector law centre, it would not be accountable to the community at large which it serves. It would not have the reach-out capacity which we believe to be so important, unless of course that could be brought within its remit and actively encouraged by the Legal Aid Board. That would be a kind of organic development which many of us would welcome.
In conclusion therefore right at the centre here in London we want more attention paid to the strategic direction in which the legal aid system should be advancing as we approach the end of our century. I earnestly hope that the Legal Aid Board with the sympathetic and active support of the noble and learned Lord the Lord Chancellor, and taking into account the powerful contribution of the legal action group, will provide the direction which is so necessary.
7.55 p.m.
Lord Williams of Mostyn: My Lords, it was an infinite pleasure to me to listen to the speech of my noble friend and supporter Lord Mishcon. It was a masterly critique informed by reason, if I may say so, as well as by passion and experience. Some things we appear to agree on. The first central proposition is that we all recognise that expenditure of public funds on legal aid cannot continue its inexorable rise year on year. Flowing from that, therefore, is the fundamental question of how available public funds are properly to be spent in the most productive way.
The answer to that question will require a coherent considered policy which, search as one can, is not evident to any of us, as my noble friend Lord Irvine of Lairg pointed out. I regret to say—I do not say this in any spirit of personal criticism because I believe that the noble and learned Lord on the Woolsack knows the personal regard I have for him—that the approach of the Lord Chancellor's department is crude, mechanistic and lacking in consultation. The response has been simply to cast out eligibility for legal assistance for millions of needy people. The numbers eligible for help fall year on year.
A person has no rights when, first, he does not know where they are and, secondly, cannot enforce them. More and more people will be left in ignorance of what the law should offer them by way of advice or redress. Even worse, those who dimly perceive what their rights may have been will be too poor or too afraid to try to enforce them. Perhaps I can give one simple illustration. A couple on an income as small these days as £8,000 per year before tax, with two children aged 8 and 12, will be assessed as liable to pay a contribution of £700 a year. I repeat, people will be too poor and too afraid to risk the enforcement of their rights. No couple with that income will be able to afford that sum. Even if they could scrape it together, they would be too fearful to risk it.
We have discussed on many occasions, in this House and elsewhere, miscarriages of justice. I intend to spend a moment or two on them. I do not refer to the headline miscarriages in regard to crime, but to the regular deep occasions when justice miscarries every day in this country. A man loses his job. He has no help before the industrial tribunal. That means he has lost his job, his home, perhaps his company car and quite likely his company pension. The employer is wealthy or insured. He is in an infinitely powerful position. There is nothing for the man who has lost his job. The man enmeshed in social security provisions before a tribunal has no effective redress. He barely knows his rights and he has no real assistance. People with personal injury claims will simply be afraid to pursue them.
Those are miscarriages in which we collude if we provide no assistance for people who are of the class which requires our assistance. I know that the noble and learned Lord the Lord Chancellor has spoken of legal insurance. That is a bare, mean palliative. The people of whom we speak this evening do not contemplate legal insurance; they cannot afford it. I am happy to reiterate what the right reverend Prelate
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said, that so many people who need legal assistance are afraid of the law; they are alienated by its systems and they do not know that there is redress for them.
I am obliged to the right reverend Prelate for returning at that precise moment because I was about to point out that I heard the noble and learned Lord, Lord Donaldson of Lymington, indicate that the litigant in person is the bane of every judge. I believe that our experience may be that, very often, the judge in person is the bane of every litigant in the eye of the litigant.
Law centres and the public facilities generally spoken of in this admirable report we are discussing are efficient and cost-effective. They provide a good service to the poor and unknowing. They provide that service near the place of need and at the time of need. The consensus among your Lordships seems to be that these vast sums are ill-directed; that they are not productive of what we all want; that there is little consideration put to the administration of this vast budget; and little effective consideration given to the ends which are supposed to be served.
I am deeply grateful to my noble friend Lord Mishcon for raising this topic, which is plainly one of enormous importance in this country. However, although I have joined in the gloom as much as anyone, we ought to bear in mind that the provision of legal aid and assistance at public expense is almost unique to this country. It is infinitely the best provision that is made anywhere in the world, whether or not one speaks of developed countries. In countries quite near to our own one very often finds no provision for civil legal aid and the meanest and most parsimonious provision for criminal legal aid, so I do not wish to be unduly critical of what is done. I well recognise the limits of public expenditure. I simply re-suggest that over the past 20 years there has not been a sufficiently considered policy for the spending of these enormous sums. Frequently, what is spent at the moment is not productive to those who really need it.
8.3 p.m.
Lord Ackner: My Lords, on the basis of alphabetical merit I usually gravitate to the top of most lists. When merit alone is the decisive factor the result, as your Lordships see, is quite inevitable. But in that situation I hope to be able to rely particularly on the indulgence of the House. I add my congratulations to those of my brother Peers to the noble Lord, Lord Mishcon. It takes me back a good quarter of a century when he used to be reckless enough to send me instructions as counsel. They were always, as his speech was today, clear, concise and exhaustive. They frightened me to death because the question at the end of an instruction was almost always of immense difficulty.
I had occasion last Thursday, when addressing your Lordships, regrettably rather late in the evening, to quote in abbreviated form from Bernard Shaw's The Devil's Disciple. The occasion was on the Third Reading of the Judicial Pensions and Retirement Bill. We were concentrating on an amendment dealing with the position of a judge who became disabled at an

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early stage of his appointment and/or died of that disability. So we concentrated also on the position of the widow.
The clause in the Bill was castigated by my noble and learned friend the Lord Chief Justice as "nothing short of shameful" and the amendment proposed by the Government as "mean in the extreme". It occurred to me that the same quotation, but this time perhaps in full, was equally pertinent to this debate. It reads:
"The worst sin towards our fellow creatures is not to hate them, but to he indifferent to them, that's the essence of inhumanity".
Indifference can arise out of a variety of attitudes. Perhaps the one which is most open to criticism is to pay lip service to a given need and then to ignore it.
In November 1983 the Government, having taken four years for its consideration, gave their response to the report of the Royal Commission on Legal Services (the Benson Commission). It is in Command Paper 9077. At the foot of page 10 this statement is to be found:
"The Government believes that legal aid should be available to assist those of small or moderate means, by giving them the same chance to pursue or defend their legal rights as those in a position to instruct lawyers privately; provided that it has been shown that there are reasonable grounds for pursuing or defending the right in question".
That now has to be re-written. One deletes the word "small" and either puts in "very small" or "minute". One certainly takes out the words "or moderate".
As the noble Lord, Lord Williams of Mostyn, said, it is axiomatic that one cannot begin either to pursue or defend a legal right efficiently or effectively unless one is first aware of the existence of that right and knows how to pursue or defend it.
In his speech on 19th December 1989 on the Second Reading debate of the Courts and Legal Services Bill (Hansard, col. 122) my noble and learned friend the Lord Chancellor said:
"Our keynote is to improve access to justice for all who need it. There are three elements to this".
The noble and learned Lord then identified the third element in these terms:
"an efficient and effective scheme to make public funds available to those who need legal services and cannot meet the costs themselves".
The keynote now is to be heavily muffled, if not rendered totally silent.
There can be no dispute that there are areas of the law which impinge disproportionately on the poor who are quite unable to obtain access to advice and assistance which they quite often desperately require. I refer to what has been comprehensively described as social welfare work, which is the law relating to housing, immigration, employment, debt and welfare benefits.
It requires no imagination at all to foresee that if everything is left, as the Government sometimes desire, to the mechanism of the market place these areas of the law will be—as, of course, they are now—under-resourced. Practice in such areas does not even pay a significant proportion of the practitioner's overheads, let alone make a contribution to his profits. At a time of serious recession there is no scope for the cross-fertilisation which exists when there is an adequacy of profitable work. I urge the Government not to be obsessed with the pursuit of cost-cutting.
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Some years ago when we debated the Courts and Legal Services Bill—and Part I in particular—your Lordships were concerned with whether large areas of jurisdiction could be effectively transferred to the county courts. We heard horrifying stories of the extent to which cost-cutting had affected the administration of justice in those courts. The clerks were told not to use first-class postage and to use only second-class postage. Electric bulbs were not replaced until darkness had almost descended.
A quite dramatic example which I heard from a judge in the west country whom I know well arose in these circumstances. A litigant in person, a husband, had been ordered to execute the necessary conveyanc-ing documents to enable the matrimonial home to be sold so that the proceeds could be divided. He refused to sign the documents so he was brought to court and the judge kindly sought to persuade him that if he persisted in refusing to obey the order he would, with great reluctance, have to commit him to prison. There would be no alternative. The litigant in person insisted that he would not sign. The judge said, "You give me no alternative" and made the committal order. There was no bailiff available because staff was being cut down, so the judge said, "Kindly wait at the back for the bailiff to come". Being the first case in the court's list, the man waited all day, but still no bailiff. So he was sent home with the polite request from the judge, "Would you kindly wait at home for the bailiff to come and collect you?" The man went home and he waited and he waited. He grew more and more depressed and in the end he burned the house down. That is a wholly true story, and is an indication that the pursuit of shortsighted economy is self-defeating.
I have recently received a Home Office publication entitled Costs of the Criminal Justice System, which I have not yet had time to read in full. I have, however, observed the following statement in the introduction to this work. I quote:
"The need to give value for money is an important factor which courts should bear in mind when deciding what is the appropriate decision to make in any particular case".
That is referring to criminal cases.
I find the generality of this observation quite startling. How on earth is a judge expected to reflect this philosophy when considering the appropriate sentence for a serious rape case, an armed robbery case, a case involving death caused by dangerous driving, drugs-related offences or offences in a similar category?
As I have urged previously upon your Lordships, penny-pinching is almost invariably a self-defeating operation. I have always thought that starving the family advice and conciliation services of the necessary money only results in losing, in many cases, the opportunity of preventing costly breakups of marriages. Early advice and assistance in the field of social welfare is bound to result in many instances of substantial savings in social welfare payments, let alone valuable court time.
I urge my noble and learned friend the Lord Chancellor to treat any money—and not a great deal is being required to assist in extending the legal advice centres—not as mere expenditure, but as an investment; and not only as an investment in justice

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but as an investment in terms which the Treasury can understand. In practice, it will save an immense amount of costs.
8.15 p.m.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, if the list of speakers is dealt with on the basis of merit, I obviously come below my noble and learned friend Lord Ackner as well as all of your Lordships. We have had an extremely interesting and, for my part, an extremely useful debate. I join in the congratulations to the noble Lord, Lord Mishcon, who selected the date with such consummate skill.
I do not think that this is the time for me to deal in detail with the proposals put forward in relation to the public expenditure announcement of the Autumn Statement last Thursday, except to say that after these proposals are given effect, our estimates are that the legal aid budget in England and Wales will grow to £1,284 million in 1993–94, to £1,406 million in 1994–95 and to £1,528 million in 1995–96. There is no question whatever of the legal aid budget being cut. Quite the opposite—it is rising inexorably. It would obviously have risen more if steps had not been taken to contain it. It is no particular pleasure to me to have to take such measures but I have sought, as I have explained, to protect the poorest in our society against this so far as I possibly can.
The intimation of what I am proposing is quite detailed. Obviously, I am willing to receive representations from all the bodies to which the noble Lord, Lord Mishcon referred. I would find it particularly useful if the representations contained suggestions on how the budget might be contained otherwise than I have proposed.
The principle theme this evening is A Strategy for Justice, the work of the Legal Action Group. I read that work with great interest; indeed I have discussed some of these matters with members of the Legal Action Group previously. The situation so far as legal advice centres and law centres is concerned is that I believe that they have a very useful role to play. I also believe that the determination of precisely what form the centres should take is a matter that should grow from the local community. I do not believe that it is satisfactory to seek to impose some national pattern —whether one calls it a "strategy" or whatever—on these particular institutions. Those who have worked in them take the view that they should be developed out of the local community, with the local community having a sense of propriety about the institutions which, I think, makes for a strong bond and makes it easier for those who have some problem to go to the centre rather than to seek some other type of advice.
The noble and learned Lord, Lord Archer of Sandwell, mentioned the difficulty of having to go to a number of different places. Looking in some detail at what has happened in Brent, I see that Brent law centre would prefer that, on the whole, its operations were separate from those of the other agencies whereas Brent thought that these should be put together. I discussed this in detail with representatives of the Brent law centre not so long ago and there are
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reasons why, in their judgment, the old arrangement was better. That is just one example of the need to look at the matter from the point of view of local and community considerations.
In addition to expressing my appreciation to the noble Lord, Lord Mishcon, for initiating the debate, I should like to express my gratitude to all those noble Lords who have taken part. I listened to the debate with great interest. The noble Lord, Lord Prys-Davies, put his finger on what is for me one of the most important aspects. I refer to the question of where the money comes from to fund the law centre movement. Under the legal aid budget I provide core funding for some law centres but the legal aid budget also provides legal aid payments to law centres which undertake legal aid work. So there is an additional source of income to law centres in that area. I have been considering this matter for a considerable time. One of the difficulties I have had over my period of office is the rate at which the present legal aid system has consumed resources. That makes it very difficult in this time of acutely rising resources to make adequate provision for additional resources. I believe that what may be required is some re-ordering of the present system.
How does one bring that about? I have been trying to give that question some careful consideration also. I believe—and in this I follow the noble Lord, Lord Irvine of Lairg—that the franchising system which is being developed by the Legal Aid Board is probably the best method available for dealing with the problem. For one thing the franchising system enables us to specify the nature of the advice in question and will, for example, enable us to give some priority to the areas of welfare law, housing law, debt advice, in so far as that is legal advice, and so on. The franchising system which is being developed by the Legal Aid Board is a way forward which can be used without very large or sudden lurches from one type of provision to another. It is capable of being used differently in different local situations. Therefore I believe that there is scope under this system for a community based development which has appropriate national encouragement if proper standards can be achieved. It is essential to the franchising system that standards of quality and service are specified and adhered to. That is the way forward.
A Strategy for Justice deals with the matter on a fairly wide basis and does not attempt in any detail to assess the costs of the proposals. I am grateful to the noble Lord, Lord Williams of Mostyn, for saying what I believe to be true: that the legal aid system provided in this country is a very generous one by international standards. It is one about which I am certainly not complacent because I believe that it needs to be developed. The Legal Aid Board is a very useful way of taking that forward. The experience of the members of the Legal Aid Board is of vital consequence in this connection. I am particularly grateful for the help that the noble Lord, Lord Williams of Mostyn, has given me in seeking to identify new members for the board.
A number of particular matters have been raised which are not quite so central to the main theme as the

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matters with which I have already dealt. I am very much in sympathy with what my noble friend Lord Alexander of Weedon was saying about the possibility of giving service which was not the ordinary form of adversarial litigation. Progress in that direction is not without difficulty. As my noble friend said, I have increased the limits for small claims to £1,000 and I have also been anxious to extend the scope so that, for example, simple personal injury claims might be covered. Unfortunately, it has proved difficult to achieve any kind of consensus on that because questions of cost and the like have been raised.
One of the essential qualities of the present small claims system is the absence of fear of costs, a point to which my noble and learned friend Lord Donaldson of Lymington referred. I am not keen to depart from that aspect of the small claims procedure. On the other hand I am told that in order to make a claim for personal injury one needs medical advice. One does not get that for nothing. One also needs to get technical advice about the nature of the accident. One does not get that for nothing. The question is then asked: should not those costs be allowed? I am doing my best to secure some kind of compromise in that area but I do believe that the kind of litigation that is permitted under the small claims system is a good way forward. We have introduced measures which would enable that to he done without necessarily having professional legal help through opening the scheme to permit other types of help.
At the moment I am very concerned to try to develop a system along with the proposals made by the Law Commission in respect of divorce. That is a good area for some form of mediation using the system of voluntary agencies so far as that can be done. One of the difficulties, however, is that to which the noble Earl, Lord Russell, referred. If one provides that, one may also have to provide for litigation over and above. There is quite a risk that what should produce a saving if one provides for extra work to go into it will in fact mean a combination of the requirement for mediation in the first place and the cost of that and then the cost of litigation over and above. The devising of a suitable system for controlling that is something to which I am giving attention. Any suggestions that your Lordships may have about how it should be done will be received with warm gratitude.
My noble friend Lord Alexander of Weedon and other noble Lords asked me about computer support for the county courts. One of the first things that we have been able to do is to take out of the county courts altogether the banking function that they used to have which was a tedious money collecting process. They have managed to avoid that without detriment to anyone. The second thing that we have managed to do is to provide a summons production centre at Northampton for the automatic processing of bulk issues; that is to say, large organisations like banks and credit agencies, which have a large number of summonses to issue, put them on a tape and give them to Northampton which is able to issue them from there. We also have a bulk issue centre at Northampton to do the later processing. We had to
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change the rules a little to make that possible, but we are taking forward vigorously improvements of that kind. I have learnt—and some experience of other agencies in the public sector reinforces this—that one must be careful in developing computer systems that they will do the job required of them. I have a team at Northampton which is seeking to develop computer systems for the management of county court business, which is an essential part of the civil justice review proposals for court management of cases, instead of just leaving them to the parties.
My noble and learned friend Lord Donaldson of Lymington mentioned the possibility of some kind of special discretion to be granted in respect of litigants of small means who might be frightened of costs. My understanding of the law —here I speak subject, particularly as I am so late in the order, to correction by others—is that Parliament has given the courts a complete discretion on costs. It is true that the decisions that have been elaborated from that have perhaps made the discretion a little less flexible than otherwise it might have been, but the courts certainly have a wide discretion in these matters and I see no reason why, in a suitable case, they might not use it in the way that my noble and learned friend has suggested.
The noble Lord, Lord Donaldson of Kingsbridge, asked me about a consultation exercise being pursued in relation to criminal legal aid in the magistrates' courts. The problem with regard to this is that the present rules are quite difficult in practice to enforce. One of the results is that the National Audit Office, in seeking to audit the legal aid accounts, has found it necessary to qualify the accounts on the basis that it cannot be satisfied that the money is properly spent because it cannot check that the present rules have been properly complied with. I have therefore found it necessary to consult on what the new system should be. One aspect of course is that the Criminal Justice Act has changed the range of penalties that may be exacted in some cases. That is a factor relevant to the interests of justice test.
I think that the noble Lord may not have the complete detail of what is proposed. I am certainly looking at that in order to try to produce a workable system which is capable of being checked, and therefore capable of producing a basis on which the Comptroller and Auditor General can properly certify the accounts. It would be unfair to your Lordships if I were to detain your Lordships further. I have sought to deal with the main matters that were addressed.
Lord Archer of Sandwell: My Lords, before the noble and learned Lord sits down, can he at least indicate when we may hope to hear the Government's reaction to the Genn Report?
The Lord Chancellor: My Lords, I have reacted to the Genn Report on a number of occasions previously. I appreciate what was said there. I have repeatedly pointed out that it was not legal representation that Hazel Genn thought was necessary in these cases. I had in fact endeavoured to work on that in a particular example not very long ago in seeking to use the United Kingdom Immigration

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Advisory Service as a means of providing both advice and representation on a cost-effective basis such as my noble friend Lord Alexander of Weedon said was true of advice centres. I am sure that the noble Lord remembers the great pleasure with which that proposal was greeted by many in the legal services sector. It did not work, for reasons really connected with the UKIAS organisation.
I have sought ways—and I have not given up the search—in which the legal aid budget might be used to provide representation in certain areas. I cannot of course, in present circumstances, contemplate increas-ing the expenditure, but the method of franchising that I have described is sufficiently flexible to make it possible to consider this kind of thing as a way of taking forward that particular objective. But it has to be within the constraint that there is then less money available for other aspects of legal services covered under the legal aid system at the present time. I think I have given that answer—perhaps not elaborated to the franchising—and I have certainly appreciated in the past what Hazel Genn had said. Certainly I have always been on the lookout for ways in which to ameliorate the present difficulty, which I need not remind the noble and learned Lord faced him when in government as well as me.
I repeat my gratitude to the noble Lord, Lord Mishcon. It would not be a practical expression of that if I detained your Lordships longer than the 20 minutes that I have apparently taken so far.
Lord Mishcon: My Lords, it only remains for me to express my gratitude to all your Lordships for having participated in this debate and to the noble and learned Lord the Lord Chancellor for the way in which in his reply he has given consideration to what has been said.
If I may say so, I could have wished that the whole of this debate had indeed been televised. If it had, it would have served to counteract the farcically false way in which a programme entitled "The House of Lords", which sought to depict the typical activities of your Lordships' House and its Members, came over on Channel 4 yesterday. If anyone were prepared to sue the producers of that programme, I would hope that the noble and learned Lord would see that he got a free legal aid certificate.
On Question, Motion agreed to.

London Underground (King's Cross) Bill
Committed to an Unopposed Bill Committee.

Llanelli Borough Council (River Lliedi) Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments considered and agreed to.
House adjourned at twenty-four mi-nutes before nine o'clock.