Lords Sitting of 23 July 1993

Preamble
The House met at eleven of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers-Read by the Lord Bishop of Lichfield.
Earl Sondes—Took the Oath.

EC Commission: UK Staff
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
How many staff are employed by the Commission of the European Communities in Brussels, and how many of those staff are British citizens.
The Minister of State, Department of Transport (The Earl of Caithness): My Lords, there are 14,802 officials employed by the European Commission in permanent and temporary positions. Of those, 1,190 are British. In the administrative grades, 527 out of a total of 4,534 officials are British.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for that interesting information. Can he say who is responsible for the size of the establishment of the Commission, and whether whoever it is seeks to achieve economies by effecting reductions?
The Earl of Caithness: My Lords, it is up to the Commission within the budget agreed by Ministers of ECOFIN to decide the amount of permanent and temporary staff it requires. It does of course consider that specific issue. My noble friend may be interested to know that although there are 14,802 officials employed by the European Commission, there are 14,400 staff in the Department of Transport. There are 12,800 serving the London Borough of Croydon; 15,000 serving Gloucestershire County Council; 17,600 serving Fife region; and 14,800 serving Gwent County Council.
Lord Bruce of Donington: My Lords, is the noble Earl aware that the House has the greatest admiration for the borough of Gloucester and the way it goes about its task? Is he further aware that if the European Commission had to deal with the problems created by the exodus of mentally ill people from hospitals into the community, the number of staff at the Commission would probably have to treble? Will he state why the preliminary draft budget of the Community for 1994 indicates an increase in administrative expenditure by the Commission of £143 million despite the fact that Maastricht has not yet come into operation?
The Earl of Caithness: My Lords, no. I regret that I was not at the appropriate meeting at which the matter was discussed, but I shall find out.
Lord Renton: My Lords, will my noble friend say how many officials administer the common agricultural policy; and how does that compare with those employed in our own Ministry of Agriculture?
The Earl of Caithness: My Lords, my noble friend Lord Renton asks a question to which I do not know the answer. I shall find out.
Lord Holme of Cheltenham: My Lords, is the noble Earl aware that as a country we have somewhat below our share of civil servants in the Commission? Does he believe that that may have something to do with the relatively low level of language skills of officials? A recent survey of the European Companion indicates that of the British civil servants who work in the Commission at Brussels, we and the Irish share the position of being the worst linguists? The Dutch are at the top of the table. Does he believe that that reflects on our foreign language teaching in schools?
The Earl of Caithness: My Lords, overall, in percentage terms, we should have about 15 per cent. of officials working for the European Commission. In the A grades, we have about 11.6 per cent. In total, we have about 8 per cent. We seek every way possible to increase that percentage. We hope that a number of people will come forward at the next round.
Lord Beloff: My Lords, with regard to the British employees of the Commission, will the Minister say whether any measures are taken to prevent them going native like our British cornmissioners?
The Earl of Caithness: My Lords, I thought that being British was being native.
Lord Howell: My Lords, will the noble Earl tell us how many British officials are working on the social protocol? Related to that, does he agree that they are doing excellent work?
The Earl of Caithness: My Lords, every British official is doing excellent work.
Lord Mackie of Benshie: My Lords, will the noble Earl answer my noble friend's important question on the linguistic ability of the Brits compared with our European counterparts, or does he not understand English as well as French?
The Earl of Caithness: My Lords, we hope that a number of people will come forward and obviously, to some extent, linguistic skill is necessary. However, the grade of French which an applicant needs is somewhere between GCSE and A-level.
Lord Hailsham of Saint Marylebone: My Lords, is there not a general law that the linguistic ability of a country is in inverse proportion to its size? May that not explain why the Netherlands and Ireland have the lowest linguistic ability?
The Earl of Caithness: My Lords. I listened with care to what my noble and learned friend said. It may also have something to do with geographical position.
Lord Campbell of Croy: My Lords, can my noble friend give the proportion, approximately, of the staff who are engaged full-time and part-time in

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interpreting and translating documents? Can he say whether any attempt is being made at rationalisation, with the prospect of more languages within the Community within the next three years?
The Earl of Caithness: My Lords, there are 1,576 linguists working for the European Commission, of whom 188 come from the United Kingdom. However, as my noble friend rightly points out, there will probably be a need for more when other languages are introduced.
Lord Richard: My Lords, as a native who has returned—if I may put it that way—I am grateful to the noble Earl for putting the size of the Commission's bureaucracy in context. Does he agree that it is likely that in this country the Department of Agriculture employs as many people as the Department of Transport? If that is so, since the Department of Transport employs 14,000 people, as the noble Earl told us this morning, and since the Commission as a whole employs only 14,000 people, it seems likely that fewer people are employed in looking after the agricultural policy of the whole Community than are employed in looking after the agricultural policy of the United Kingdom.
On the point raised by the noble Lord, Lord Holme, is it not true that Britain is under-represented, particularly in the higher ranks of the Commission's services, the A grades? Can the noble Earl tell us whether anything is being done to try to redress that?
The Earl of Caithness: My Lords, the noble Lord the Leader of the Opposition is right to mention MAFF. There are several departments such as MAFF, the DTI, the Home Office and the department of my noble and learned friend the Lord Chancellor whose staff number between 10,000 and 13,000. Some other departments are bigger.
With regard to the under-representation which the noble Lord raised, yes, we are under-represented. We seek in a number of ways to encourage people to take up employment in the European Commission to continue the good work for Britain.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for the gratuitous information which he added to his Answer in respect of the number of staff in organisations in this country. Can he say whether any of the staff whom he enumerated are paid at anything like the rate of the Brussels bureaucracy?
The Earl of Caithness: My Lords, the information may have been gratuitous, but I also hope that it was helpful to my noble friend. No, I do not know what the wage level comparison is.
Lord Ironside: My Lords, does the low number of English people employed in the Commission also account for the fact that we have the least number of directors general in the 23 directorates, while the French, I believe, have four and the Germans five?
The Earl of Caithness: My Lords, I do not know the number of people from England who are employed in the Commission, but I have been able to give the
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British figures to my noble friend. I know that there are some extremely good Scots, as usual doing a wonderful job, and also some Welshmen. I say that for the benefit of the noble Lord, Lord Cledwyn of Penrhos. We are better represented in the A grades than in the lower grades, but we wish to see more British people in all grades.
Lord Cledwyn of Penrhos: My Lords, I thank the noble Earl for what he has just said. However, in view of what the noble Lord, Lord Ironside, said in his supplementary question, can the noble Earl give me an assurance that the Welsh, Scots and English are reasonably represented on the Commission—the British element of the Commission?
The Earl of Caithness: My Lords, I certainly believe so.
Lord Campbell of Alloway: My Lords, can the Minister say who appoints the A grades and how they are appointed?
The Earl of Caithness: My Lords, there is a quota for the A.1 and A.2 grades. How the appointment is carried out I do not know, but perhaps the noble Lord, Lord Richard, as a former Commissioner, would be able to help me on this occasion.
Lord Richard: My Lords, that is one of those slightly arcane areas which successive governments over the years have felt should be a little shrouded.

Taxation
11.17 a.m.
Lord Monson Lord Monson asked Her Majesty's Government:
Whether they intend to increase the level of taxation in response to pressure from the finance Ministers of other European Community countries, as widely reported in the Press.
The Earl of Caithness: My Lords, the level of taxation in the United Kingdom is entirely a matter for Parliament to decide.
Lord Monson: My Lords, I thank the noble Earl for that not wholly unexpected reply. Does he agree that the day before yesterday his right honourable friend the Chancellor of the Exchequer hinted to the House of Commons Select Committee on the Treasury and the Civil Service that the VAT base might well be widened? That was clearly in response to the pressures exerted on him in Brussels on 12th July to lower our Budget deficit, in conformity with our prospective obligations under the Maastricht Treaty.
If and when this wretched treaty is ratified, does the noble Earl agree that under the provisions of Articles 104c and 109e, Her Majesty's Government will be legally obliged to submit to such pressures to raise taxes or slash public spending, or both, so as to reduce our deficit?
The Earl of Caithness: No, my Lords, I disagree fundamentally with the noble Lord. He takes one view. The true view is that the level of taxation in the United Kingdom is entirely a matter for Parliament.
Lord Bruce of Donington: My Lords, is the noble Earl aware that continuous pressure is exercised by the Commission and in ECOFIN, as the occasion arises, for Britain to increase her indirect taxes, particularly VAT, to become more in conformity with taxes on the continent? The pressure is continuous. Can the noble Earl give the House an assurance that pressure will continue to be resisted to the utmost, whatever is in the sixth directive? In order to make it quite clear, will the noble Earl agree that it is high time—as indeed the Prime Minister indicated at the meeting in Copenhagen—for the meetings of ECOFIN to be made public rather than to take place in secret?
The Earl of Caithness: My Lords, I certainly remember at the ECOFIN councils that I attended discussions about levels of VAT, not just in this country but throughout the other countries in the European Community. I can assure the noble Lord that the same robust stance is being taken now as was taken in my day.
Lord Harmar-Nicholls: My Lords, does the Minister agree that the level of taxation depends upon government commitment—whether it be to defence, social costs or Europe—and is decided on that basis however that taxation is inflicted, be it directly or indirectly?
The Earl of Caithness: My Lords, there are a number of factors, of which my noble friend mentioned some, that my right honourable friend the Chancellor of the Exchequer needs to take into account when setting his Budget and the level of taxation.
Lord Monkswell: My Lords, are we to gather from the Minister's Answer to an earlier Question that the Government intend to ratify the Maastricht Treaty, and then take no notice at all of its provisions?
The Earl of Caithness: My Lords, the noble Lord is wrong. That is not what I said.
Lord Marlesford: My Lords, is my noble friend aware that the rate of vehicle excise duty, despite the increase last year, still lags behind the inflation that has taken place over the years? Does he agree that, were it to be increased, that would not only produce useful extra taxation but, in so far as it discouraged the number of cars, would reduce the need for more public expenditure on projects such as the M.25, and would therefore strike a "double whammy" at the PSBR?
The Earl of Caithness: I am surprised that my noble friend did not go on to say that it would encourage more people to take to bicycles, which I believe is what was behind his question. I take note of what my noble friend says.
Lord Eatwell: My Lords, does the Minister recall that in an interview broadcast on the "Today" programme, the Chancellor of the Exchequer stated that it was the Government's objective to balance the budget? Can the Minister tell us why that is the
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Government's objective? Can he also tell us by how much taxation will have to be increased to achieve that goal?
The Earl of Caithness: My Lords, I look forward to discussing these kinds of matters when we come to the Finance Bill, when I am sure the noble Lord will wish to take part in the debate. His question is considerably wider than that on the Order Paper.
Lord Richard: My Lords, will the Minister continue to reject the allegations that British taxation policy is somehow or other determined by pressure from other finance Ministers of the other countries inside the Community? Will he also take notice of the fact that., were the Government to put VAT on such items as children's clothing and public transport, as well as on domestic fuel, we would not accept any suggestion that that was due to anything other than the decision of the British Government?
The Earl of Caithness: My Lords, with regard to the noble Lord's first question: yes, let me reaffirm is nothing to do with pressure from the European Community countries. The level of taxation in the United Kingdom is a matter for Parliament to decide.
Lord Monson: My Lords, does the noble Earl deny that under Articles 104c and 109e of the Maastricht Treaty, the United Kingdom, like every other country, is obliged to do everything in its power to reduce the deficit to less than 3 per cent. of GDP before 1st January 1994; and that in practice that can only come about through higher taxation or slashed public spending?
The Earl of Caithness: My Lords, the noble Lord excludes growth in his calculations. As I said in the discussion that we had in this House not so many days ago on this particular matter, the objectives set out for the control of public expenditure and for running the economy are very similar to those of the Government.

Bus and Coach Operators
11.24 a.m.
Lord Rix Lord Rix asked Her Majesty's Government:
Whether they will promote a national code of practice for bus and coach operators which will make the protection of vulnerable passengers a matter of national priority rather than local discretion.
The Earl of Caithness: My Lords, the protection of vulnerable passengers is a matter for the operators. The Bus and Coach Council code of conduct for bus and coach drivers pays particular attention to customer care, including the special needs of elderly and disabled people. It is up to the operators to ensure that their staff carry out their work in accordance with the code.
Lord Rix: My Lords, I thank the Minister for his reply, which is as expected. Is he aware of the origin of my Question? A young girl was turned off a bus recently, in the evening, for want of 2p, and was subsequently foully assaulted and then raped.

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Furthermore, two people with learning disabilities in this area—namely, London and Reading—have also recently been subject to (shall we say?) discriminatory practices on the part of the bus crew. A young man was turned off a bus in London recently because he produced his pass which operated from 9 o'clock in the morning and he was on the bus at 8.30. He was thrown out into a neighbourhood with which he was totally unfamiliar. A young woman with—
Noble Lords: Order!
Lord Rix: Is the Minister aware that a young woman with learning disability in Reading was recently driven into the bus garage, the garage was locked up and she was left apparently overnight? Surely these instances—
The Minister of State, Home Office (Earl Ferrers): My Lords, perhaps I may interrupt the noble Lord. I know that he is very concerned about these matters, but he is extending the use of Parliamentary Questions to rather longer lengths than normal. If the noble Lord would be kind enough to put the question to which he seeks an answer from my noble friend as briefly as possible, I believe it would be with the approval of your Lordships.
Lord Rix: My Lords, I thank the noble Earl. I shall be as brief as possible. In view of these incidents and others, and with the advent of vulnerable people taking advantage of public transport as a result of the policy of care in the community, would it be advisable for the Government or the department at least to issue guidelines for the practice of bus crews around the country? Does he agree that common sense and common courtesy alone could be recommended?
The Earl of Caithness: My Lords, it was entirely because of the incidents to which the noble Lord refers, and other incidents which he did not mention, that I changed the Answer to give him the Answer I gave today. It was specifically because of that. I am sure that the whole House regrets the terrible incidents that have happened, and particularly those that have happened recently. That is why I said that it is up to the operators to ensure that their staff carry out their work in accordance with the code. That code has been very carefully drafted with the help of the department. If the Government were to issue a code, it would be almost identical to that which the Bus and Coach Council operates now.
Lord Clinton-Davis: My Lords, is the Minister aware that the noble Lord, Lord Rix, has single-handedly done more for vulnerable and disabled people than perhaps the Government have collectively? Will the Minister indicate how many of the privatised bus services and coach companies have developed special standards of care and of service for particularly vulnerable passengers? Does he agree that it is high time that the Citizen's Charter was extended to people who are vulnerable in this sense and who have real grievances but who would now have to look to the courts in order to gain any redress, which is almost impossible?
The Earl of Caithness: My Lords, I certainly join with the noble Lord in paying tribute to the work of the noble Lord, Lord Rix. And I would go further —I know that the noble Lord, Lord Rix, will not mind. I pay tribute to what this House has done for disabled people and others. I remember from my own experience of health debates some of the work that this House has done. My noble friend Lord Renton has been particularly involved in that work. Some of the incidents to which the noble Lord, Lord Rix, referred have taken place on London buses recently. What is important is that the operators use the code of conduct and take the appropriate management measures to make certain that their operators abide by the code and the appropriate action should they not abide by the code.
Lord Clinton-Davis: My Lords, following on from that answer, what redress is currently available to people who are vulnerable and who are put into this position? Does the Minister agree that to look to the courts at the present time is really quite absurd? Does he accept that there is a lack of available legal aid and that the sums of money available for redress are likely to be very small? Will he further accept that it is right that the privileges extended by the Citizen's Charter should be extended to cases such as this?
The Earl of Caithness: My Lords, the Citizen's Charter is designed not so much for the private sector but for the public sector. That is why it affects London buses. What is more important is that there is the Citizen's Charter and it is for every operator to abide by the highest standards for all its passengers.
Lord Renton: My Lords, is my noble friend aware that the Highway Code is issued by a Secretary of State under a statutory power whereas the other code to which he referred is not issued by a Secretary of State? Will the Government consider enhancing the value of that code by ensuring that it is issued by a Minister responsible to Parliament?
The Earl of Caithness: My Lords, I looked very carefully at that matter in preparation for the Question today. The Government have the overall responsibility, which is why the Highway Code is published by the department and the Secretary of State. But, as the noble Lord knows, we consult very closely with the Bus and Coach Council. We believe that it is more appropriate for them to operate in that way with our support. That does not necessarily mean that there will have to be regulations coming through Parliament whenever small changes are needed and improvements need to be made at short notice.
Lord Teviot: My Lords, may I develop the question asked by my noble friend Lord Renton? Could my noble friend consider providing that when a new driver takes his test he is examined on a form of code or asked some questions? Will he accept that a driver is trained to be a driver and is not necessarily trained in customer care, and that might be a good thing?
The Earl of Caithness: My Lords, my noble friend has a point. That is why first of all there is a code of practice and secondly there is encouragement to

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drivers to undertake assessments leading to a national vocational qualification, which is a nationally recognised standard. I perused some of those forms yesterday. They are quite detailed and very helpful for passenger care.
Lord Campbell of Alloway: My Lords, will my noble friend the Minister confirm that the code issued by a Secretary of State in order to afford redress, as indeed was a reasonable suggestion made on both sides of the House, would have to be introduced by a clause in primary legislation?
The Earl of Caithness: My Lords, I believe that my noble friend is right. That is why, when I answered my noble friend Lord Renton, I said that we believe that a code such as that operated by the Bus and Coach Council allows for more flexibility without regulations having to be made. It can therefore be adapted more quickly to needs when any lacuna is found.

Statute Law Repeals Bill [H.L.]
Report received.
Highland Regional Council (Wester Bridge) Order Confirmation Bill
Considered on Report.

National Lottery etc. Bill
11.34 a.m.
Earl Ferrers: My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the National Lottery etc. Bill, has consented to place her prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Bill read a third time.
Lord Airedale Lord Airedale moved the amendment:
After Clause 59, insert the following new clause:
Betting. Gaming and Lotteries Act 1963
(". Paragraph 13(a) of Schedule 2 to the Betting, Gaming and Lotteries Act 1963 shall ceas to have effect").
The noble Lord said: My Lords, I believe that we may take this matter quite shortly because we have been round this course twice already. One reason why I come back to the subject is that on Report the noble Earl questioned the basis for the argument put forward by the noble Lord, Lord Allen of Abbeydale, suggesting that the noble Lord had founded his argument on the wrong section of the wrong Act. Having regard to the experience of the noble Lord, Lord Allen, I feel that that was extremely unlikely. But in case the noble Earl is still unhappy about the matter, I have now founded the same argument upon the schedule to the 1963 Act which was the foundation for the House of Lords case which went right up to this House. The judgment of the court was delivered by lord Pearson.
I am sorry that the amendment does not on the face of it explain what it is about. However, the facts are
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quite straightforward and are non-controversial. The facts are that the football pools started out as a competition which consisted overwhelmingly of a game of skill, whereby the punters each week attempted to forecast the results of the football matches of the following Saturday. But as time went on the football pools were transformed overwhelmingly into a gigantic lottery, so that less than a fortnight ago a letter was received from the managing director of Littlewoods Pools, who wrote:
"90 per cent. of [our clients] tend to use the same numbers on the coupon week after week".
So obviously those people are using the pools as a lottery. The question is whether that is legal.
The pools promoters claim that it is legal because, they say, the pools provide an opportunity for their clients to exercise skill in forecasting the matches. But unfortunately for the promoters, Lord Pearson, delivering the judgment of the court, came to the opposite conclusion, having listened to the arguments in favour of their proposition. Perhaps I may just refer briefly to the salient points of Lord Pearson's judgment. He said:
"For the 99 per cent. in any week, who make no forecast but win prizes if their numbers happen to be lucky numbers for that week, the competition has the character of a lottery. For them the distribution of the prizes depends entirely on chance and no element of skill is involved. Is the competition saved from being a lottery by the fact that the participants have in each week an option to substitute chosen numbers, involving a choice of teams, and on the average 1 per cent of them exercise the option in any week? In my opinion it is not saved from being a lottery by that fact. In substance and reality what is offered is a lottery available to all the participants, but there is associated with it an option to opt out of the lottery in a particular week and try to win a prize by making a forecast. This option is something collateral to the lottery and does not take away its character as a lottery".
I fear that unless the Government are prepared now to accept the amendment, the anti-gaming Lobby will start a new prosecution against a football pool for running an illegal lottery.
On the strength of the judgment of Lord Pearson, the chances must be that there will be a conviction. All hell will then be let loose. At present the pools are bobbing along to the entire satisfaction of promoters and their clients; they will be thrown into confusion. The Government will then have to table an amendment to legalise the status quo of the football pools. All I ask is that the Government take the opportunity now to legalise the status quo of the football pools.
In Committee, the noble Earl said something which he may now regret and wish to take back. At col. 1627 on 8th July he said,
"But whereas the national lottery will be promoted to benefit good causes, the lotteries run by Littlewoods, Vernon's, Zetters and so forth will be promoted for commercial gain".
I did not know that the Government were against commercial gain; I do not find that theme in the Railways Bill, for instance. In any event, the football pools, on top of their commercial gain and on top of paying magnificent winnings to the Chancellor of the Exchequer every Saturday, still manage to provide £60 million for the Foundation for Sport and the Arts. I hope that that puts the matter into perspective and that the noble Earl will wish to think about it again. I beg to move.
Earl Ferrers: My Lords, the noble Lord, Lord Airedale, said with a great deal of truth that we have been round the course twice already. He is a persistent rider, and today he is going round for a third time.
The noble Lord says that I said that there was a difference between the football pools and the lotteries because football pools are basically run as commercial businesses. That is perfectly true. I do not deny for a moment that they contribute to good causes; they do. But much of the money which goes to good causes is because of the revenue which is foregone, and it is money from punters. The essential distinction is that the football pools are basically set up as a commercial exercise whereas the national lottery is set up to benefit good causes.
On this occasion the noble Lord has produced a rather different amendment. I am afraid, however, that it still would not achieve his objective. Disapplying paragraph 13(a) of Schedule 2 to the Betting. Gaming and Lotteries Act 1963 will not change the fact that a registered pool promoter, such as Littlewoods, Vernon's and Zetters, is, nevertheless, carrying on a pool betting business. If a pool promoter promoted his competitions as lotteries, rather than as a form of betting, then he would fall foul of Section 1 of the Lotteries and Amusements Act 1976 which provides that all lotteries are unlawful, with the exception of those lotteries which are made legal by that Act. So the noble Lord's latest amendment gets us nowhere.
The noble Lord rests his case on the judgment of Lord Pearson in the case of Singette Ltd. and others v. Martin. But, as I sought to explain last week on Report, there is a substantial difference between the football pools which are conducted today and the competition which was promoted by Singette Ltd.
In the Singette case, participation was essentially a passive exercise. The promoter simply allocated numbers to each entrant. In contrast, participation in today's football pools is an active exercise in that the entrant must select his or her own numbers. He actually has to do something. In selecting the numbers the opportunity is available for the participant to exercise his skill. But as Lord Pearson pointed out in his judgment, a person who has no knowledge of football cannot use any skill and, even a person who has such knowledge, may choose not to make use of it. But the opportunity is there for skill to be used. The pools companies cannot compel an entrant to exercise skill when making his or her selection. Given that distinction between the pools as they are presently operated and the competition as it was run by Singette Ltd., there is really no need—or justification—for a change in the law.
The noble Lord, Lord Airedale, says that people use the pools as a lottery. That may be the noble Lord's view; indeed it may even be the case. The point is not whether a person is using the pool as a lottery, but whether the pool is a lottery. The pool is not a lottery because one has the opportunity of using skill.
The noble Lord, Lord Airdale, would have a better case if the pools companies were to market their football pools as a lottery but fail to tell prospective participants that the object of the exercise was to
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forecast the result of football matches. But that does not happen. I quote from the terms and conditions which are printed on one of Vernon's standing forecast entry forms. It says:
"I [that is, the entrant] understand that the numbers on my Standing Entry coupon serve to identify the matches appearing in the current coupon/fixture list for each week as published in certain newspapers. I understand I can change my forecast at any time".
It is clear therefore that the pools are marketed as a game of skill. How any particular entrant makes his or her selection is a matter for them. Last week we heard my noble friend Lord Brabazon—who is closely associated with the pools industry through the Foundation for Sport and the Arts —confirm that the pools are indeed a game of skill. I hope that the noble Lord, Lord Airedale, will now exercise his skill and realise that his argument, for once, is flawed.
Lord Airedale: My Lords, the noble Earl has undoubtedly taken great trouble. I advise him to read the judgment of Lord Pearson again. I do not believe that he has quite grasped the essence of it.
I am in good company with the noble Lord, Lord Allen of Abbeydale. In the opinion of the noble Earl we both chose the wrong section of the wrong Act upon which to found our amendments. I do not know whether the noble Earl is right in that regard. But I do not wish to pursue the matter further. I shall await events and see whether another prosecution is brought forward by the anti-gambling lobby. If it is, and if all hell is let loose and the Government have to rush in with legislation, I shall do my best not to say, "I told you so". In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
11.50 a.m.
Earl Ferrers: My Lords, I beg to move that the Bill do now pass. The Bill has been extensively debated in your Lordships' House, and I would not wish to detain your Lordships for longer than is necessary to extol the virtues of a measure which has had, on the whole, a very good reception. There is no doubt that the scrutiny which your Lordships have given it, laced with a mixture of knowledge, enthusiasm and even, sometimes, hopeful anticipation, have made it even better than when it first came here.
In considering the way in which this innovative piece of legislation has been so greatly improved there should be a number of prizes awarded. I would not wish to enter into a lottery to determine who deserves the highest prize or praise. I should, however, like to thank those on the Front Benches opposite for their considered co-operation in ensuring the Bill a smooth passage.
The noble Lords, Lord Donoughue and Lord McIntosh, from the Labour Front Bench, and the noble Lords, Lord Holme and Lord Redesdale, from the Liberal Democrat Front Bench, have played a notable part. I thank them for the helpful way in which they put their arguments. I referred in an earlier debate to my noble friend Lord Swinfen as being like a person who had been given a slice of cake but who then returned and wanted the icing and the candle as

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well. In Committee my noble friend sought to ensure that the limits on turnover for society and local lotteries were varied yet further from those increases already made so that in the event the turnover of individual society lotteries has increased from the current limits of £180,000 to £1 million and the prizes from £12,000 to £100,000. That is a tremendous increase. A formidable feast—slices of cake, icing, candles and the box too!
I remember that there was a schoolboy whose half term report consisted of one word—"trying". His parents were absolutely delighted. His end of term report consisted of two words—"very trying". If I were my noble friend's schoolmaster, I would have used the same single word for his half term report—"trying". His end of term report would have been of one word too—"succeeded".
I realise that my noble friend's "gluttony" or "success"—whichever metaphor he may choose to align himself with—was not for himself but for those whose interests he sought to represent; namely, charities and those who run charitable lotteries.
My noble friend Lord Mancroft made similar points about charities, as did the noble Lord, Lord Allen of Abbeydale. I hope that both feel that charities have had a good deal from the Bill.
The Bill will mean a great deal to the good causes which stand to benefit. That is, of course, its purpose. We heard a great deal from the noble Baroness, Lady Birk. the noble Lord, Lord Birkett, and the noble Baroness, Lady O'Cathain, and others, on arts and on films. My noble friend Lord Cavendish, the noble Lord, Lord Gibson, and other noble Lords gave their views on heritage. The noble Lord, Lord Howell, spoke with his usual authority on the subject of sport. I hope that all feel that we have taken the interests of their chosen subjects very much to heart throughout the Bill.
The aim of the national lottery is clearly to benefit good causes, with the ultimate aim of improving the quality of life of the people in our country. It also offers the opportunity for us to look back on, and to reflect on, the best of the old millennium while looking forward to the new one and the exciting projects which will be funded by the Millennium Commission. It will also enable us to enhance the valuable role played by the charitable and voluntary sector and by those who participate in the work which they undertake.
We think it right that the lottery will be run by the private sector. The need to earn a profit will sharpen up the operator so that he runs his operation as efficiently and successfully as possible within the rules which will be provided. Your Lordships were concerned that the lottery should be conducted with dignity and in a well regulated way, and in this respect the post of director general will be important. He—or she—will be the watchdog—or bitch—who will ensure that the lottery is run for the nation in a way which reflects the ideals and the aspirations which inspired its establishment. The director general will agree codes of conduct for advertising and other matters with the successful licensee.
Lotteries are important for a great number and variety of charitable organisations, both large and
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small. Lotteries run by particular societies will more than ever be patronised by people whose motivation is to contribute to the good causes which they represent.
We had some discussion on the football pools, much of it inspired by my noble friend Lord Brabazon of Tara, and the possible effects on them of the introduction of the national lottery. My noble friend was anxious to see that what is at present being done illegally should be made legal—arid as soon as possible too, please. Well, we even met him on that; at least part of the way.
The noble Lord, Lord Airedale, was convinced that all football pools are lotteries, that they always have been, and that there is no skill involved. I do not .think that my limited powers of oratory ever persuaded him that that was wrong. I had another shot this morning but to no avail. That was because of my own limitations and not the noble Lord's.
Lord Airedale: My Lords, I never said that the pools had always been a lottery.
Earl Ferrers: My Lords, I would need to go back and look at Hansard, but the noble Lord certainly left me with that very vigorous impression. If I misquoted him, I would be the first to apologise. However, all his intervention has done is to stimulate me to look at Hansard to make sure exactly what he did say. He was, I think, wrong. But he has a perfect right to be wrong. And he does it with great charm.
I believe that, provided the pools cornpanies fully utilise their considerable expertise in realising the sales potential of their long established product, the size of their market position should not be greatly affected by the introduction of a national lottery. The Government have included a number of proposals in the Bill which will allow the pools considerable additional advantages. In particular, we introduced a facility for the pools companies to roll over their prize money in equal measure to the national lottery.
I, for one, have learnt a great deal, as a result of the Bill, of areas of which I am bound to confess I did not have much previous experience or even, in some cases, knowledge. Some of your Lordships who might be in an uncharitable mode could say that that was pretty obvious. Football pools, long odds, short odds, scratchcards, rollovers—these are all in a world of their own, and very interesting it has been.
It is a world of gambling, chance, skill or lottery —whichever takes your fancy—in which many people, according to their wishes, like to indulge themselves. It takes up a large part of the relaxation time in people's lives. It is not wrong that it should do so. And it is right that it should be conducted properly. That is what the Bill tries to do.
In all this my noble friend Lord Astor has borne the burden and heat of the day. He has been responsible for dealing with the vast majority of the Bill while my appearances, rather like those of a Sputnik from outer space, have been made periodically. M y noble friend has discharged his responsibilities with skill, understanding and courtesy. I am grateful to him for taking the nasty parts and for leaving me the more understandable ones.

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The setting up of a national lottery is an exciting venture. Nothing in this life is for free. Of course there will be losers—stacks of them—but that is part of the fun of participating. If you are not prepared to lose your money, keep your money in your pocket. But many people will become winners and many organisations will benefit.
I am grateful to your Lordships for the consideration which you have given to the Bill and for the courteous and understanding way in which that consideration has been given to it. I beg to move.
Moved, That the Bill do now pass.—(Earl Ferrers.)
Midday
Lord Donoughue: My Lords, this has been an interesting Bill both in content and in the nature of its political passage through both Houses. It is the first serious Bill that I have handled from the Opposition Benches and it has been an education for me as for the Minister. I am interested in sport. The House may not know that I quite like horses. But I am not a gambling person: so I also learnt a lot about that.
We on these Benches supported the Bill in its broad principle although we had numerous reservations on details. One of the most striking features—and it gave us some difficulty—was the uncertainty and the cloudiness about the precise nature of the national lottery animal. The House still does not know exactly what it will look like; how it will operate; who will operate it; who will regulate it. Although much of that is inevitable—it is in the nature of the process that we must have the Bill before we have the details—it has presented some difficulty. To some extent we have been dancing and voting in the dark on this Bill. I say at the beginning that I support very much the views which the noble Lord, Lord Holme, has frequently expressed in regretting the absence of detailed regulations.
However, having said that, in addition to the normal courtesies which I wish to express and which are always expressed on these occasions, I would like, with unusual warmth, to give particular thanks to the Minister for the exceptional degree of friendliness, flexibility and co-operation that we have experienced in our dealings throughout the passage of this Bill. It has been to an exceptional degree. Throughout Ministers have been very open with us as regards their wishes and intentions and very willing to listen to our suggestions and to try to find a compromise. In fact, because of that we on this side—I am sure that it is also true of noble Lords on the Liberal Democrat and Cross-Benches, as we have heard this morning and at great length throughout earlier stages of the Bill—all feel sure that we have secured a number of valuable concessions in the same way as we also secured them at earlier stages in another place. It is a better Bill as a consequence. I mention in particular the concessions in relation to various aspects of charitable lotteries and the provision of monitoring of the impact on charities and racing revenues. These are particularly welcome.
What was also quite striking was that these improvements were secured by reasonable discussion
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and negotiation. There has been very little marching of the infantry blindly into the machine-guns of the Lobbies on this Bill. In fact, there may be some lessons for all of us on all sides of the House in that it is one constructive way—although it is not always appropriate—to conduct the business of this House. But it requires flexibility on all sides and we have had that. One fortunate result is that the Bill is out of this House this summer and I am sure that that is a relief to all involved.
Having been positive, and genuinely so, I conclude with one or two continuing reservations about the Bill and in particular what I feel about the role of the Treasury. The Treasury take is nothing short of being outrageously greedy. It will take 12 per cent. direct tax which is twice the average of our European partners who have lotteries. The Treasury will also of course take corporation tax on the operating profits which I estimate to be equivalent to at least another 1 per cent. take. It will also, I assume—perhaps the Minister can tell us via the Customs and Excise —have a VAT take.
I am not clear about the VAT situation, but I am sure that somewhere there will be revenue from that. If so, this lottery will be thrice taxed if it is only on the lottery tickets, the papers and so forth. The Treasury becomes the biggest beneficiary taking, I expect, more than the arts, sport, charities and heritage together. So, sadly, it becomes a case that really the main function of the Bill is to help fund the terrible deficit on domestic public finances which exists in this country due to the appalling recent mismanagement. That is very sad. Indeed, it is intolerable. We have been unable to discuss properly that Treasury tax due to the conventions of this House that that subject comes under the Finance Bill. That is a major continuing reservation. When the lottery is operating, I hope that it will still be possible to look at that again.
I would like to restate and stress, in case it is lost sight of, that the original and prime purpose of our national lottery was and is to raise money for good causes. My fear is that that great purpose will be lost sight of partly because of the Treasury's take, although that is often silent, but also because of another factor. It will be lost sight of in the consortia bidding to run this lottery. We see the consortia publicly salivating and boasting of their huge potential profits which they expect to make out of running the lottery. That distasteful process has already begun within the confines of this Palace.
I ask the Minister to give the House the strongest assurances that, first, the prime purpose is to provide funds for good causes. Secondly, that the profits of the operator, when selected, will be scrutinised and restrained. I would like to be confident that excess profiteering will be grounds for a rapid change of operator. Thirdly, that the Treasury take will be reconsidered for downward revision once the consequences of the appalling state which the Treasury is in is corrected. There is no doubt that on a change of government, which may be imminent—I have chosen those words carefully—this tax will be looked at again. I believe that everyone involved with charities throughout the land, but particularly those in

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the Christchurch district of Southampton, should note that there is the prospect, on a change of government, that that heavy tax will be reconsidered.
Finally, I hope that the operator will be British and will include our post offices in the operation. I trust that the regulator will be very careful and wary of, for instance—and I am a great friend of America—American operators who may arrive with George Raft as chairman and various distinguished Italian families in the background. So I hope that this lottery will be run on a proper, British basis.
With those observations and reservations I am happy to see the Bill passed. I look forward to the deserving worlds of the arts, sport, charity and heritage receiving significant benefits because it will be a waste of all our time if they do not.
Lord Holme of Cheltenham: My Lords, like the noble Lord, Lord Donoughue, for me this Bill has been on-the-job training. It has been a pleasure learning how to take a Bill through the House in his distinguished company. I would like to get the courtesies over at the beginning. They are more than formal. It has been a very great pleasure working not just with the noble Earl who has made one of his characteristically stylish guest appearances this morning on the Bill, but also with the noble Viscount, Lord Astor. I hope that it is not invidious to say how much we have appreciated his very great courtesy and consideration when dealing with some of the anxieties which have been advanced throughout the House.
Within the limits of a Government who are clearly in a hurry on this Bill, if on nothing else, Ministers have tried to be as flexible as possible. I am grateful for that. Although we shall not be voting against the passage of the Bill, I cannot pretend that we on these Benches are entirely happy with it. I have not been happy at any point. Excepting that many people like a flutter and that putting down a small price for a large daydream is a relatively harmless form of human frailty, I am not sure that it is right for the Government themselves to move beyond tolerating gambling and regulating it, to becoming the sophisticated promoter of gambling, particularly if the justification for doing so is the distribution of the ultimate surplus, whatever that may be, to worthy causes and projects which in many cases and in most civilised countries would be funded largely, if not entirely, by taxation.
In that context, I should like to pay particular tribute to those noble Lords who have contributed so much to our debates, particularly to the noble Lord, Lord Houghton. When so many of your Lordships, to put it candidly, have had an interest in the outcome of the Bill (whether as potential operators of the lottery or potential beneficiaries of the money raised), the noble Lord has sounded a very proper social and moral note about whether this is a proper activity for the Government. We are all greatly in his debt for that.
Accepting that the Government are determined to press ahead, we have seen it from these Benches as our principal obligation to try to improve the Bill. However, I am still concerned that the ostensible beneficiaries of the national lottery—the arts,
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heritage, sports and charities, which as the noble Lord, Lord Donoughue, said are, after all, the justification for the whole exercise—are still being treated as a contingent variable and as the residual at the end of the line once the Treasury, the prize winners and the operators have all taken their cut.
We need to take the greatest possible care over the selection of the operator and in writing the tightest possible contract for the operator. It would be outrageous if the billions of pounds which are potentially passing through the new lottery machine (including, for those of your Lordships with a commercial instinct, a mouth-watering cash flow, on which the interest alone would make this an extremely profitable business to be engaged in) led to excessive profits being made on the operation of the lottery.
In that context, I should like to raise the same issue as the noble Lord, Lord Donoughue, raised in his concluding remarks. I refer to the test of who is a "fit and proper" operator for the licence. I have not been one of those at any stage of the Bill who has tried to maintain that there should be anything but an open competition for the lottery. I do not want to exclude people because they come from abroad. I do not want to exclude certain sorts of businesses from bidding for the lottery. I am glad that the Tote will be able to bid.
I do not have any problem with the widest selection of people being able to bid for the operation. However, I think that the Government have a particularly heavy responsibility to ensure that a test of "fit and proper" is applied so that this massive new business does not end up in the wrong hands. That is a problem in the United States and we do not want it to become a British problem. The Government could draw on their experience of the Gaming Act of 1968 and apply that test of "fit and proper". I should very much like to be reassured by the noble Earl that when allocating licences for gambling the test of fitness will be subject to the Government's experience of the Gaming Act.
The Bill still leaves too much power in the hands of the Secretary of State and the Government. Although I have reservations about the amendment tabled by the noble Lord, Lord Birkett, I think that the Government would have been well advised to find ways of making this whole operation more semi-detached from the Government. It is because I think that there is still too much power in the hands of the Secretary of State and with the Government in general that I have paid particular attention to the question of the licence regulation.
The noble Viscount, Lord Astor, has been good enough to write to me about that and I should like to read to your Lordships a very short passage from his letter, which I was encouraged to receive. The noble Viscount wrote:
"I can confirm that the Department has undertaken some preliminary work on the kind of things which might be contained in the licence… From this work, for example, has emerged the need for the Director General to establish codes of conduct in order to reflect your Lordships' concerns on matters such as advertising—particularly in relation to young people, and the concerns of charities. We have therefore amended the Bill at Report in your Lordships' House to allow for codes of conduct as a result of these concerns, which were raised at committee stage".

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My one observation on that is that I wish that the Government would put it more strongly than "allow". I would expect that the sense of your Lordships' House and good sense itself would mean that the Government would wish and would say now that they are going to have codes of conduct, rather than simply permissibly saying that they should be "allowed". There was general concern about advertising aimed at young people, and the Government should take that seriously.
Perhaps I may make one parenthetic note on behalf not only of myself but also of the noble Baroness, Lady Birk, who is not able to be here today. The Government showed some signs of flexibility in giving guidance to the Arts Council on the issue of films. I hope that they do that. There have been two pieces of relevant news in this morning's newspapers. First, Elstree Studios are to close. That was reported on the same day as the fact that the top 10 films on exhibition in this country are all American. That is a terrible missed opportunity and has great artistic significance for Britain as a whole.
The concession to which the noble Lord, Lord Donoughue, referred in relation to reporting is welcome, much appreciated and will improve the Bill and ultimately the operation of the Act. However, I am not clear yet whether the Government will have an independent agency to make the annual analysis and to report back.
I turn now to the question of the regional balance of the funds. I know that it is the Government's intention to ensure that the money does not end up disproportionately in London, but I hope, on the question of the sub-committees, that when it comes to the distribution of the funds, a real structural effort will be made—not just a good will effort—to ensure that the money is distributed as widely as possible around the country, remembering always that the people who put up the money, the gamblers, will not necessarily be drawn from the great metropolitan centres but will come from all over the country.
In conclusion, this is one of those Bills which presents a broad brush picture. It leaves an awful lot to our good will in assuming that the fine print will be well worked out. I wish that we had the regulations in front of us. I understand the reasons given, but I do not altogether accept them. I simply say to the Government that at the moment they are taking a substantial leap in the dark. I hope that, like anybody taking a leap in the dark, they will take every possible care that the implementation of the lottery meets the aspirations which have been expressed in this debate in your Lordships' House.
12.15 p.m.
Lord Birkett: My Lords, as co-chairman of the Lottery Promotions Company, it is a matter of enormous satisfaction to me that the Bill looks poised to pass through your Lordships' House. I have enjoyed the debates very much, and I, too, would like to pay my tribute to the immense courtesy and
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consideration that I have always received from the noble Earl, Lord Ferrers, and the noble Viscount, Lord Astor.
I confess to being rather disappointed that your Lordships did not agree with me that the whole thing should be run by a charitable trust. However, if I understand the timetabling of the Bill correctly, it looks unlikely that your Lordships' amendment will be considered in another place until October. If that is the case, there is the whole of the summer for the fine tuning of the Bill to be considered. The reasons why I thought that the lottery should be operated by a charitable trust were simple and still remain slight worries. In determining the projects on which the money is spent by the good causes, and in particular by the Arts Council, the Sports Council and the National Heritage Memorial Fund, I hope that those bodies are empowered to seek advice from any other bodies that they choose. I hope that they will be urged to do so because the moneys involved will be very large. It is dangerous that the decision-making process on such large sums should rest in each area within one door only.
Like many of your Lordships, I also hope that the question of profit will be carefully considered. Indeed, so many of your Lordships have wanted 35 per cent. of the eventual money from the lottery to be devoted to the good causes. Since it is well known that almost every successful lottery puts 50 per cent. into the prizes and that 15 per cent. is the average figure for the running costs of a lottery, not much is left over for profit if 35 per cent. is to be achieved for the good causes. If that can be achieved within the figure of 15 per cent., it should be. The noble Earl said that the profits involved would sharpen up the operator concerned. I hope that the sharpening process does not depend upon too large a profit. It would be a shame for the nation if it were to become a private profitable rather than a public profitable lottery.
The one thing that will affect that famous 35 per cent. figure more than anything else is taxation. I well realise that we in this House are not supposed to debate in detail matters of taxation, which are not within our province, but I hope that in the course of the Summer Recess the noble Earl will urge his right honourable friend the Chancellor of the Exchequer to consider carefully whether the benefit to the nation in general, and the benefit to the Treasury, might not he better served by a tax-free lottery rather than by a tax of 12 per cent. upon it.
Everyone's concern in the Bill has always been to see that the good causes receive as much as they possible can. It was the foundation for proposing a lottery Bill in the first place. I am delighted that the Bill looks set to pass through your Lordships' House. I hope that it will come out as profitable for all those good causes as all your Lordships hope.
Lord Howell: My Lords, I support what has been said in appreciation of the Ministers who have conducted this operation, not just with great skill but with remarkable co-operation such as we rarely see in the House these days. That is to be commended. I join with the noble Lord, Lord Birkett, in paying tribute to the lottery promotion company, of which he is a joint

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chairman. I, with the noble Lord, Lord Gibson, was once a director. should like again to mention the work of Mr. Dennis Ward, the director of that organisation, which has been sterling.
I was pleased that the noble Earl, Lord Ferrers, and the noble Lord, Lord Holme, touched a philosophical note about gambling and losing. I warmed especially to the noble Earl's remarks about the joy of losing. I would not go as far as Kipling. If I can recall his words accurately, he said:
"If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss".
That is a commendable philosophy for those of us who gamble occasionally. But the point about this lottery is that the winners will not be able, unless they are remarkably stupid, to risk all their winnings at one turn of pitch and toss because they will just be buying another ticket. Charities have conducted lotteries for many years, and many of us have been associated with them. I am glad that we have been able to make special arrangements for charities. Many people expect to lose when they take part in a lottery for a specific good cause. That is what we are dealing with here, although on a much larger scale.
One or two questions remain. I endorse everything that my noble friend Lord Donoughue, the noble Lord, Lord Birkett, and others have said about the 12 per cent. which the Treasury proposes to take. We have at the moment a Chancellor of the Exchequer who might well be imaginative enough to have a further look at that point during the summer. It is essential, if the lottery is to succeed, that people see that there is enough money distributed in prizes and enough to go to the good causes which we are all seeking to help. Nothing should undermine that.
I take particular pleasure in recalling again the undertaking given by the Government, and especially the noble Viscount, Lord Astor, that there will be an annual report to Parliament about these matters so that we can keep them under constant review. One matter that we have not discussed which is worth mentioning in passing is that the distributors—this is something with which I agree—will be the regional councils for sports arid arts when they are concerned. I hope that the Government will resist the temptation to impose in their way guidelines which are too rigid and leave them as much freedom of action as possible to decide how to spend the money.
The temptation will be for Ministers for Sport and the Arts or the Secretary of State for National Heritage to try to lay down too closely guidelines as to how the money will be distributed. If that happens, it will turn the lottery into just another arm of government policy, and that would undermine its purpose. I am delighted to have been associated with the lottery from the outset. Those of us who started the campaign for it thank the Government for taking it on board. We wish it every success in the future.
Lord Swinfen: My Lords, my noble friend Lord Ferrers said that he had found me trying, indeed very trying. I am sorry if I caused him distress, because I suspect that that may also have extended to my other
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noble friend Lord Astor. I do not regret trying. 1 was not trying to improve the Bill for myself. I was trying for all charitable organisations throughout the United Kingdom. I am sure that my noble friend appreciates that. He suggested that I might be greedy in what I wanted. If it had been for me, I should have taken that as just censure, but as I was attempting to improve the position of charitable organisations which, as my noble friend will realise; help millions of people in this country and throughout the world, I believe that i was justified in doing so.
I welcome the Government's undertaking to monitor the effects of the national lottery on charities and voluntary organisations. I still feel that there is a big chance that a number of them could lose a slice of their expected income. I hope that they will be the first to benefit from any distribution resulting from the Bill. I welcome also the increase in the size of small lotteries and the amount of the prizes that can be awarded by them in their attempt to raise income.
On Report I raised queries on Clause 24. I should like to thank my noble friend Lord Astor for sending me a letter on 20th July which has clarified the position and eliminated my concerns on that point. He also wrote to me on 22nd July, for which I thank him, about the National Lottery Charities Board. He has given me the clarification which I was seeking on Report, something which I believe should have been made clear at an earlier stage. Perhaps I may quote from his letter because it should be on the record. My noble friend wrote:
"The committees for each of the four nations that make up the United Kingdom, and that the Board can appoint as many other committees, with whatever delegated powers it wishes".
He goes on to say:
"These statutory national committees may take on non-executive advisers to help them directly with their work and may wish to establish further committees in each country to handle applications. For these further committees., the Secretary of State has the power to appoint additional committee members, who will be members of the committee only and not of the full Board. Under powers of delegation from the main Board these further committees would, if the Board wished, be able to make grant decisions".
In the next paragraph he states:
"The Board will have overall control. But it will be able to decide the extent to which committees will have delegated powers, and we expect most of the detailed work on funding decisions to be taken by committees rather than the Board itself".
My noble friend's letter has been extremely helpful to me and I hope to the House as a whole. He has offered to place a copy in your Lordships' Library, which will be useful. I am grateful. I hope that the proceeds from the national lottery will be spent wisely. I and others will be watching to see how it is carried out.
12.30 p.m.
Lord Houghton of Sowerby: My Lords, I would call this day the "parliamentary gambling day". In another place the Prime Minister is gambling everything in his political life under the eyes and the bourses of the world in a desperate struggle to survive. He is engaged in a gambling exercise. We at this end of the building are also engaged in a gambling exercise —or should I call it a gambling enterprise?

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I regard this Bill as the sleasiest of the Session. It was introduced with the urbanity, dignity and skill of the best-liked Earl in the House. And what miserable tasks he is given. A large part of the work of Parliament is to deal with the vices and weaknesses of mankind. I say with great affection that the noble Earl, Lord Ferrers, preserves his sense of humour remarkably well.
I am sorry that the noble Viscount, Lord Tonypandy, has temporarily left the Chamber. I had intended to try to coax him to give us the best high moral line that he had on the subject. After all, he is the most skilled proselytizer in the business and I thought that he might be able to help us. At the present time it is difficult to find one, even in the best company.
The Bill is not the result of a public clamour nor the proliferation of lotteries authorised by the present law to the point of being out of control. Not a single person has written to me and said, "Give us our lottery, and give it us quick". I have had letters of an opposing kind, but probably I am regarded as a depository for people with moral grievances. The Bill is the product of the mind of the Treasury, which is looking round for means of raising money. It is not promoted primarily for the upkeep and promotion of good causes. Good causes are the alibi. It is intended to make money in order to save public expenditure, and the first hand in the till will be that of the Government. They must have their grab at the result of public stupidity and will want to take their cut for Treasury purposes. It is the means whereby the Government can say, "We have a proven way of getting money out of people who when they are taxed say that they cannot afford it". Indeed, the Government keep telling us what they cannot afford. We know what rubbish that is because from time immemorial governments have been telling us in a highly selective manner what the country cannot afford. When we see the billions of pounds that are likely to result from the Bill, spent by people who are overtaxed and cannot afford more, one realises that that is not true.
I shall not weary your Lordships with more of my reflections on that aspect of the Bill. I dislike it. Its effective introduction depends upon the judgment of the Home Secretary or the Secretary of State responsible. I doubt whether between now and Christmas or the New Year he will find the right time to introduce the national lottery. It may come oddly to the nation to find Parliament and the Government busying itself with the national lottery when so many other anxious cares must be dealt with during the next 12 months. We do not know what awaits us in that time; indeed, a good deal may depend on the outcome of the events in another place today. I hope that I am not being unduly censorious but I believe that what we need in this country at the present time is not more laxity in approaches to standards of public life and of social activities but a more stringent approach to our sense of duty and an acknowledgment that we are in a tough period in history. I shall let that matter pass and not trouble your Lordships further with it.
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However, there is one matter that I must mention and as far as I am concerned it is new. The Government will be creating a new agency which will handle a great deal of money subscribed by the public. It is therefore imperative that the highest standards of efficiency, and in particular of financial management and accountancy, should be promoted in the national lottery. Such financial transactions make a vulnerable target for shysters, fraudsters, counterfeiters, burglars and any other member of the criminal world. Investigations into other national agencies are afoot and many people close to that problem are most anxious about the less-than-satisfactory standard of probity in the agencies as compared with central government. Two different standards appear to exist. As regards the Government, that stems from the austerity of William Ewart Gladstone who appointed the first Comptroller and Auditor General. It is a matter of passing interest that my noble friend Lord Wilson was the Chairman of the Public Accounts Committee of the House of Commons which celebrated the 100th anniversary of the creation of the Comptroller and Auditor General. But the standards of accountancy, though not always the standards of wisdom, in the Exchequer and Audit departments, overseen by the parliamentary mechanism, shone above all else.
Another aid to central government's standing in this field is the Duchy of Lancaster. As a matter of fact, the Duchy of Lancaster first gave evidence of the efficiency as regards the custody of the king's ransom. This country probably has the highest standards of public administration in the world.
Some very grave losses have been incurred in the health service. They are already public knowledge. Two regional health services and a local authority are involved. Reports on those cases are now being prepared. I am told by a person who knows that one of them is horrifying. It may be that a warning must be given to the Government and to the people that they had better take care of public money which is in the hands of agencies and decentralisation may be an additional risk in that connection.
I ask your Lordships to be vigilant during the autumn so that those matters receive a great deal more attention. I notice that the Bill refers throughout to the Comptroller and Auditor General. That is extremely reassuring. The National Audit Commission is an enlargement of the district auditor and other audits of that kind. I see that my noble friend Lord Bruce of Donington approves of my reference to that. I remember so well his many contributions to the Bill which created the national audit service. That service is busy and has a task far beyond its existing resources. That matter needs attention.
This Bill will create another agency vulnerable to some undesirable elements. After all, it is not an agency which will recruit from among retired clergymen, out of work curates or those who may be expected to come with a high standard of personal honesty. The agency will recruit from those who know

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the jargon already and who may be engaged in it. Again, that requires some watching because familiarity can sometimes breed contempt.
Those are my final words on the National Lottery etc. Bill. I have criticised the silly title. I hope that the lottery goes well. I share the view of my noble friend Lord Howell and I wish it well. Why should I wish it ill? However, I hope that we shall not play too much on the good causes element because in my view that is only a veneer which is spread over the whole enterprise, when we are after money from people who might feel rather squeamish about going in for that kind of thing because they have been taught in the past that gambling is wrong and that wanting something for nothing is worse. I was certainly taught that at a Methodist Sunday School. That would have been my contact with my noble friend Lord Tonypandy. I shall leave it at that and I am grateful to your Lordships for listening to what I have to say.
12.45 p.m.
Earl Ferrers: My Lords, I did not think that there would be too much enthusiasm for this Bill on the part of the noble Lord, Lord Houghton. He gave us a number of pieces of advice to which he believes that we should adhere. He said that this was a product of the mind of the Treasury and is not for good causes but merely to raise money. I thought that that was rather harsh. He knows really that the whole purpose of the lottery is to raise money. It gives people the opportunity to have a bit of a flutter but it will help good causes, and that is its purpose. With all his knowledge of Whitehall and his experience of the processes of Whitehall the noble Lord will know that Shylock could not go without his pound of flesh. That is why the Treasury has an interest.
I was fascinated by the quotation from the noble Lord. Lord Howell, from If about losing money. When I was about 12 my school moved during the war from the South of England to Scotland and there was a delay to the start of the term, which did not commence until November. My father was anxious that I should not lose the desire to work and he made me learn two things: one was If and the other was the 13th chapter of the First Epistle of Paul the Apostle to the Corinthians all about faith, hope and charity. I do not believe that in this respect the charity part is relevant but it was something that I never forgot.
I remember If but not quite in the way that the noble Lord, Lord Howell, remembers it. My memory does not enable me to recall the last verses but I remember the first verse:
"If you can keep your head when all about you, Are losing theirs and blaming it on you".
I thought that that was an extremely apposite quotation which might he used at both ends of the Corridor today.
I must say to my noble friend Lord Swinfen, lest he should have misunderstood me, that I never said that he was very trying. I said that he was trying. I then said that he had succeeded. If he is offered a carrot, he should not turn it into a pumpkin.
The noble Lord, Lord Donoughue, is worried about VAT. As for all businesses in the United
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Kingdom, VAT will be payable on all services provided to the lottery but not on the commission paid to the retailers. There will be no VAT on the tickets.
He was anxious also that the tax should be revised downwards. The Chancellor is always able to review levels of duties and taxes on anything. He indicated on 16th March that the level of duty on the lottery will be kept under review, particularly in its initial years. The figure for the first year of the lottery's operation will be 12 per cent., as set out in the Finance Bill.
The noble Lord was worried also about excess profiteering being grounds for the revocation of a licence. The level of operating costs to be proposed by the potential operators will be one matter which will be taken into account in the bidding process. It is quite likely that the level of operating costs will be reduced as the turnover increases. In other words, for the first, for example, £1 million the bidders will say that they will take a certain level of profits and for subsequent additional turnover the amount will be reduced. That would be part of the competitive process. Therefore, do not believe that there will be excessive profiteering.
The noble Lord, Lord Holme, was concerned about the codes of conduct. He told me that he would not be able to be here for my winding-up speech. We clearly intend that there should be codes of conduct. The letter from my noble friend Lord Astor intended to convey that the precise detail of the contents of the codes of conduct and which areas they might cover would be for the director general when he is in post. Of course, your Lordships' views will have been taken into account.
The noble Lord was also concerned about the test that an operator should be a fit and proper person and that the test should be effective. Under Clauses 5 and 6 it is quite clear that the director general would have the necessary powers to investigate not only those who bid to run the national lottery but also all those—for example, shareholders and other controlling interests—for whose benefit the business is carried on. There should be no risk that criminal or other undesirable people can benefit from the national lottery. We shall insist that the lottery is run with the utmost integrity.
As the noble Lord, Lord Holme, said, the lottery is a leap in the dark. That was also the inference that I drew from the speech of the noble Lord, Lord Houghton of Sowerby. Of course, anything new is of necessity a leap in the dark. We must try to ensure that the rules are such as to make the lottery least susceptible to things going wrong and that it is constructed in a way that should provide the greatest benefit all round. I believe that we have done so.
Your Lordships have been kind enough to help in the process during all the stages of the Bill as it has gone through Parliament. Of course, the Bill will not be acceptable to everyone; indeed, we all have different views on the matter. However, the fact is that many people, charities and good causes will benefit. Of course, as the noble Lord, Lord Howell, reminded us, many people will also be losers—but that is part of the form of gambling.
The noble Lord, Lord Houghton of Sowerby, was worried about the prospect of a national lottery and

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said that no one really wanted it. I can only remind him of what Bernard Shaw said when he dedicated the site of the first National Theatre before the war. In his speech he said:
"Do the British people want a National Theatre?"
Well, of course, they did not; neither did they want Westminster Abbey, but they now have it and are well content with it. Perhaps that will be what happens with the national lottery. I commend the Bill to the House.
On Question, Bill passed, and returned to the Commons with amendments.

European Parliamentary Elections Bill
12.50 p.m.
Earl Ferrers: My Lords, I beg to move that this Bill be now read a second time.
At last year's Edinburgh Summit, it was agreed that, following the reunification of Germany, the number of seats in the European Parliament which are allocated to the larger member states of the European Community should be increased. The United Kingdom, Italy and France each received an extra six seats. Germany has received an extra 18 seats. Some of the other smaller member states also received extra seats. The Government have decided that the six extra seats, which have been allocated to the United Kingdom, should, in line with our electoral traditions, be single member constituencies, as is provided for in the European Parliamentary Elections Act 1978.
Your Lordships have debated the merits of other electoral systems on a number of previous occasions and the Government see no reason to change from the present system, which is well understood by the electorate and which provides close constituency representation. Next year's European parliamentary elections will, therefore, be contested in the traditional manner.
Some of your Lordships may question why the Government are taking no account in the Bill, which is before your Lordships, of the requirement under Article 138(3) of the Treaty of Rome for a uniform electoral procedure to be set up, following unanimous approval in the Council of proposals brought forward from the European Parliament.
The position is that a report, which was prepared by the Institutional Affairs Committee of the European Parliament, of which Mr. de Gucht was the rapporteur, is before the Council. It has not yet been discussed, and we are not aware of any plans to discuss it.
The Government will look at any proposals in a constructive manner, but we do not at present consider that we should change from our present system, which is well known to us and which also happens to be a system towards which some of our European partners are also, in fact, moving.
Clause 1 of the Bill will amend the European Parliamentary Elections Act 1978, so that the total number of United Kingdom seats in the European Parliament will be 87 instead of 81. The number in England will be 71 instead of 66; the number in Wales
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will be five instead of four; the number in Scotland will remain at eight; and, the number in Northern Ireland will remain at three.
The system of election, which is provided for in the European Parliamentary Elections Act 1978, will continue to apply. In Great Britain, there will be single-member seats, and elections will be by simple majority.
In Northern Ireland the three seats will be filled from one constituency by the single transferable vote system of proportional representation. That was the system which Parliament chose in 1978 so as best to represent the different communities which exist in Northern Ireland. We do not intend to change that, nor do we intend to change the way in which we choose MEPs in Great Britain.
Five of the six extra seats are given to England and one to Wales. That produces the fairest arithmetical split. The average electorate per seat in Scotland is 11 per cent. lower than it is in England, but the average in Wales is 1 per cent. higher than in England. The effect of the Bill will be that the Welsh average electorate present in Wales will become 13 per cent. lower—instead of 1 per cent. higher—than that of England and that of Scotland will remain at 4 per cent. lower. That gives the fairest split for average electorates, but it still provides slightly higher levels of representation in the smaller parts of the United Kingdom.
There was much debate in another place about the idea of giving an extra seat to Scotland on the basis that some Scottish constituencies, particularly the Highlands and Islands, cover very large areas. That is perfectly true. The Highlands and Islands constituency has about the same area as Belgium. But an increase in the number of Scottish seats would not change that situation. An extra seat would probably have gone to the more densely populated central areas of Scotland, and not to the Highlands and Islands. The distribution of seats in the Bill is on arithmetical grounds and, on that basis, no extra seat for Scotland can be justified.
Clause 2 and the Schedule to the Bill deal with the mechanisms which are to be used for redrawing the constituency boundaries.
The nature of the task of allocating the extra seats in the European Parliament has meant that special European parliamentary constituencies committees for England and Wales will need to be established. Under the Bill, they can be appointed before the Bill is passed. My right honourable friend the Home Secretary has appointed them.
Those committees will be strictly impartial and apolitical. They will be required to draw up only the initial constituency boundaries for the 1994 European parliamentary election. They will only carry out that task, and then they will be disbanded. When the parliamentary boundary commissions—as opposed to those temporary committees—have completed their general review of Westminster constituency boundaries, which is likely to heat the end of the next year, the boundary commission will be required to carry out a consequential review of the European constituencies in the usual way.

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There are three boundary commissioners in England; three in Scotland; three in Wales; and, three in Northern Ireland. I am glad to be able to tell your Lordships that five of the six existing boundary commissioners for England and Wales have agreed to sit on the committees. The additional member of the English committee will be Mr. Michael Lewer, who has been an assistant commissioner since 1965. The chairman of the committee for England will be Miss Sheila Cameron QC, together with Mr. David Macklin and Mr. Michael Lewer QC as members. The chairman of the committee for Wales will be Mr. Justice Pill, together with Mr. Peter Davey and Mr. Murray McLaggan as members. The membership of the committees is, as your Lordships will see, very similar to that of the boundary commissions.
The intention of the Bill is that the committees will function in a way which is as close as possible to that of the boundary commissions.
The Bill, unlike the existing legislation which governs the redrawing of constituencies, does not require the committees to hold local public inquiries simply because there is not sufficient time. It will not, in fact, be the first time that that has happened. In 1978–79, when there was also a very tight timetable, the Government of the day decided that it was necessary to forgo public inquiries in order that the constituency boundaries could be in place in good time for the election which was held in June 1979. Despite that, the new boundaries were not in place until March. This time we hope to improve on that date and to complete the review by Christmas.
The European parliamentary elections are to be held in June of next year, and it will be necessary to have the new constituency boundaries in place in good time so that the political parties and the electoral administrators can prepare themselves.
If public inquiries were to be required, they would take too long and, as a result, the new boundaries would probably not be decided upon in time for the elections. We could not afford to take that risk as we need to ensure that the seats are in place in time for next year's elections. With the exception of local inquiries, the criteria which the committees will follow will be as close as possible to those of the existing boundary commissions. There will be as much time as possible for open consultation. In order to allow for this, the committees will publish their proposals—I hope in early August—and they will allow several weeks for interested parties to make their representations to them. These will be considered and, where necessary, changes will be made, before the committees issue their final reports.
The criteria which the committees will follow will be the same as those which are laid down in the 1978 European Parliamentary Elections Act. This means that the constituencies will be made up of at least two Westminster constituencies, and no Westminster constituency will be able to be partly in one European constituency and partly in another. Each constituency should be as close as possible to the electoral quota for that part of Great Britain, although special geographical considerations may he taken into account. Once the committees' final reports have been
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submitted to my right honourable friend the Home Secretary, he will be required to lay the reports before Parliament together with the draft of Orders in Council giving effect to their recommendations.
Both your Lordships' House and another place will be given the opportunity of debating the contents of the reports, and the approval of both Houses will be required before the constituencies can be put in place. The Bill, I think, provides a fair distribution of seats and machinery for redrawing the boundaries for these additional seats. The mechanism is as similar as possible to that which has been used in the past. I commend the Bill to your Lordships. I beg to move.
Moved, That the Bill be now read a second time. —(Earl Ferrers.)
1.2 p.m.
Lord Tordoff: My Lords, I am grateful to the noble Earl, Lord Ferrers, for his, as always, clear exposition of this Bill. It will come as no secret to him or to the rest of the House that we have grave reservations about it, and indeed my colleagues in another place voted against the Third Reading. We considered the possibility of putting down a reasoned amendment at this stage of the Bill, not surprisingly on the subject of the system of elections to be used, but we decided that it would be better to wait until there were more people around in the overspill period, and to give noble Lords on the Labour Benches time to discuss the outcomes of the Plant Report in relation to the European Elections. However, the House may rest assured that we shall return in the overspill period with appropriate amendments as regards the method of voting.
That brings us to an interesting point; namely, that we are told by the noble Earl that the first draft of the new constituencies that we have been talking about will be out in August before your Lordships' House has had a chance to deal with either Committee, Report or Third Reading of this Bill. My noble friend Lord Harris of Greenwich will deal with that matter in more detail later, but it seems something of an offence for a Minister of the Crown to say, "We are really not worried what the Upper House of Parliament says about this. We have started the process; we have appointed the people and they will produce their draft results before the Upper House reaches the Committee stage of the Bill". We will see what happens at the Committee stage. The Government may be disappointed.
The reasons that my colleagues in another place voted against the Third Reading of the Bill were threefold. First, there was no additional seat for Scotland. When one considers that we have a significant number of Members of another place from Scotland, I suppose it is not to be wondered at that they gave that matter some priority. Secondly, they voted against the Third Reading because of the failure to carry out the obligations under the Treaty of Rome as regards a uniform voting system and, thirdly, because the Government have got themselves into a time warp which means they cannot—they say—use the normal boundary commission system to do a proper job.

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As we have heard, the Government's proposals give England five seats, Wales one and Scotland nil. Therefore England will have 71 seats, Scotland eight and Wales five. One would have thought that England could have managed with 70 seats and that Scotland could have nine, but obviously the Government do not see it that way. We understand that the size of the electorate is as important in determining the size of Euro-seats, as of Westminster seats. But of course there is a considerable disparity, even as regards Westminster seats in Scotland. It was always a proud boast of mine that on the occasions that I fought elections I obtained more votes than my noble friend Lord Grimond, sitting as he did for Orkney and Shetland with a small electorate. It is possible to vary the size of the electorate to deal with geography.
Questions have been raised in connection with the Highlands and Islands seat. That is a huge seat. One would have thought that some method could have been found—if one were to go down this road of single Member seats—of reducing that size. It runs from a latitude north of the south of Greenland to a latitude south of Berwick-upon-Tweed. If we are talking about Members of the European Parliament having constituents with whom they are in touch, I would have thought that it would take quite a long time for a Member for that area to find his constituents, let alone talk to them. However, we well understand why there is this reluctance to give an extra seat to Scotland. It is, of course, because there are not many Tory votes in Scotland.
Noble Lords: There will be even fewer!
Lord Tordoff: My Lords, yes, there will be even fewer after this week, and perhaps even fewer still after next Thursday. As regards the uniform electoral procedure, again my noble friend Lord Harris of Greenwich will say more about the systems of voting in Europe. That point always confuses the noble Earl. He has confused us again today by saying that the Europeans are moving towards our system. Presumably he is referring to the recent changes in Italy. Of course they are not moving towards our system: they are moving towards the German system.
Lord McIntosh of Haringey: My Lords, they are moving towards the Plant Committee recommendations to the Labour Party—a regional list.
Lord Tordoff: My Lords, I hope that we can argue about that at a later stage because it is not quite as simple as that. But what is true is that they are certainly not moving to a first past the post, single Member constituency.
The de Gucht proposals have been passed overwhelmingly by the European Parliament. There is an obligation on the Council to make progress on that. I have no doubt that the British Government will seek to block that. But of course there is a possibility that the European Parliament will take the Council to the European Court at some stage. The European Liberal Democrat Reformist Group has already taken the Parliament to court. I believe that the score is 15 all at the moment. At least the court on this occasion
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was prepared to listen to the argument. At a later stage it may well be prepared to listen to the argument from the European Parliament when it is put. I accept that the matter rests with the Council, but it is quite clear that at the moment this country is in breach of the Treaty of Rome. That not only reduces the ability of minority parties in this country to obtain proper representation—something which the Conservative Party may in its turn live to regret as it shortly becomes a minority party—but also distorts the parliament itself in Europe. There is no doubt that at the previous election the majority in the European Parliament was changed by the imbalance of the system in this country.
A further reason that my honourable and right honourable friends in another place voted against a Third Reading was because of the boundary commission farce. The Government complain about urgency but that is entirely of their own making. If the Government had wished to go down this road, they could have started the procedure certainly as early as last December. As they probably had knowledge of the fact that it was going to take place, they could have started the procedure even earlier than that. We shall have a procedure which is totally unsatisfactory. There will be no opportunity for proper consultation or for proper appeals. It is my understanding that the boundary commission proposals are frequently changed on appeal. As much as 70 per cent. of the seats are affected by appeals.
It is an astonishing piece of legislation. It is undemocratic; it is loaded. I would not accuse the noble Earl of being involved in gerrymandering; but if I were in another place, I might accuse some of his right honourable and honourable friends of gerrymandering. However, we do not use that sort of word in this place.
We deeply regret that once again the Government have not taken the opportunity of fulfilling their obligations under the Treaty of Rome. Undoubtedly in this case the six seats should have been used on an additional Member basis—that is the way in which the Germans use them and in which eventually the Italians may use them—in order that there should be proper and fair representation not of the parties but of the electorate of this country. Why should they be deprived by this constant, dogmatic refusal to have a fair electoral system? The Bill is yet another step on that long trail on which the Government are fighting a rearguard action to stop fairness coming into our electoral system.
1.11 p.m.
Lord Bruce of Donington: My Lords, I rise to support the Government, somewhat unusually. Speaking personally, they have my assurance that I shall do my utmost to ensure its satisfactory establishment in the statute book.
European parliamentary elections now have an importance which was not always accorded them. During the proceedings of the Maastricht Bill—your Lordships will expect that I shall naturally refer to it —much was made of the argument that the satisfactory establishment of the European Parliament

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and the possible extension of its powers was one way in which the democratic deficit could be tackled. The democratic deficit exists because of the tremendous powers possessed by the European Commission which is not accountable to anyone, and the somewhat diffuse and ambiguous powers that were retained by the Council of Ministers. It was correctly apprehended that one way of curbing those non-accountable powers and many non-accountable acts lay in the hands of the European Parliament. It is therefore of the utmost importance that we should consider how the European Parliament is composed.
I first went to the European Parliament as a delegate from your Lordships' House. That meant that there was a dual mandate. On the one hand, those of us who were chosen from your Lordships to attend the European Parliament had certain responsibilities at Westminster; and at the same time we were given new obligations, admittedly not onerous, but of a certain shade of supervisory character in the European Parliament. I had not been there for more than two years before I became aware that there was a move, in particular by the Dutch, to adopt direct elections to the European Parliament, in terms similar to those that were put forward in Article 137 of the Maastricht Treaty. The article states:
"The European Parliament, which shall consist of representatives of the peoples of the States brought together in the Community, shall exercise the advisory and supervisory powers which are conferred upon it by this Treaty".
Article 138.3 states:
"The European Parliament shall draw up proposals for elections by direct universal suffrage in accordance with a uniform procedure in all Member States".
I venture to suggest to your Lordships that the last sentence was the identical phraseology that was brought forward in the year 1977. In those days, I was an innocent. I assumed that when direct elections were talked about, it meant direct elections in the way that we have them in the United Kingdom: that the country would be divided up into constituencies; that the constituencies themselves would hold elections within their own boundaries on a given date; that the various party forces would be deployed; that the usual arguments would take place; and that each constituency would elect a member representing it. In the case of the Westminster Parliament, the constituency would he between 60,000 and 70,000. There is a very close identity between the Member and the comparatively small constituency. The disadvantage about having direct elections to the European Parliament and at the same time to have a parliament of a reasonable size was that each Member of the European Parliament would be responsible for between 600,000 and 700,000 people.
That size is somewhat diffuse. I would not argue its effects in this Chamber. But at least there was some identity with the proposed Member of Parliament and a defined constituency. I was only to learn later that the proposal was agreed to by the then Prime Minister, my noble friend Lord Callaghan, on the basis of a deal with the Liberal Party to have direct elections, among other things, as a reward for maintaining its co-operation in a loose coalition which ensured the Labour Government's survival at that time.
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I make no complaint about that; but in the event direct elections were held. However, to my astonishment, the only two countries that changed their position with regard to the European Parliament were our own country and the Republic of Eire which maintains to this day an identity of the Member of Parliament to a specific constituency. The remainder of Europe did not change. It carried on exactly as before. It has a series of regional lists which are not identified to any specific constituency. Those lists are highly convenient for the party machine in that a number of people are put on the list without local intervention or local responsibility. They then become European Members of Parliament and sit in plenary in Strasbourg and Luxembourg.
Lord Tordoff: My Lords, if the noble Lord will forgive my intervention, his reference to the Lib-Lab Alliance—it was never called a pact; it was firmly called an alliance—is slightly in error. If the noble, Lord, Lord Callaghan, were present, he would agree that there was never a promise on European Parliamentary elections save only that there would be a free vote. That was a significant difference. It is one which perhaps my right honourable and honourable friends might have regretted later. However, there was a free vote, and unfortunately a number of his colleagues did not honour the understanding that we had.
Lord Bruce of Donington: I am obliged to the noble Lord for the correction. My information comes from properly accredited biographies. They must be accurate in material respects. I accept unhesitatingly the words of the noble Lord, Lord Tordoff, in the matter.
However, in the event, out of the 12 countries in the Community, the United Kingdom has direct elections and Eire has direct elections with a limited form of proportional representation. There are seven other countries that operate on national lists, two on regional lists and one—Germany—on a mixed national and regional list.
There may be other views, but my hope is that the day will come when the remainder of the Community, 10 countries in all, will adopt a form of direct elections which identifies the Members of Parliament with specific parts of the country and specific responsibilities. However, that is for the future.
In the meantime, the redistribution of seats, as proposed at the Edinburgh conference and faithfully reflected in the Bill before us, puzzles me. On the new basis, the United Kingdom. with a population of 56.9 million, will have 87 seats. That is less than some other member states combined. The United Kingdom will have less representation under the new arrangements than a combination of Belgium, Denmark, Ireland, Greece, Luxembourg, the Netherlands and Portugal who, together, will have 143 seats. I am afraid that our position is that we have a bigger population but the number of seats we are given is less than that of others. Already, even though we have a greater population than the countries I mentioned, we shall have far less representation.
Lord Harris of Greenwich: My Lords, may I ask the noble Lord one question? Is he worried about the under-representation of Germany?
Lord Bruce of Donington: No, my Lords, I am not. Under the new arrangements, Germany will—in my view, quite properly—have many more seats. She will have 99, whereas on the basis of her population she should have 131. I have no objection to that at all. On the basis of population, the United Kingdom would have 94 instead of 87. Italy would have 95 instead of 87, and France 94 instead of 87. Spain, uniquely, would remain exactly the same. Luxembourg, with a population the size of Bristol, instead of having six seats, would have only one; Belgium, instead of having 25, would have 17; Denmark, instead of having 16, would have eight; Ireland, instead of having 15, would have six; and Greece, instead of having 25, would have 16. The Netherlands would have 24 instead of 31 and Portugal 17 instead of 25.
On the basis of population, the position remains distorted. In my view, sooner or later it will have to be corrected. It is all very well having 12 stars on the European flag, when one star represents Luxembourg with a population of 400,000, the size of Bristol. Yet that is equivalent to Germany which ought, on any population basis, to have 131 seats. I do not believe that that is entirely defensible. Ultimately the situation will have to change.
What will have to change even more is the whole system of elections. Whatever the results which may ultimately come from a whole series of independent commissions—including one of my own—I do not believe in lists. I do not believe in parties drawing up lists of people for mass approval as a substitute for direct representation such as we have had until now. One of the defects of the projected system in Europe will be that 600,000 to 700,000 people will be too many for one person to represent. In a parliament which remains advisory and which has no particular powers, that may be all right. However, in a parliament which may even remotely make up the democratic deficit, I am afraid that it will not be acceptable.
I do not propose to move any amendments to the Bill at the Committee stage. I reiterate my support for the Government and for the Second Reading of the Bill.
1.26 p.m.
Lord Harris of Greenwich: My Lords, it is always a pleasure to follow the noble Lord, Lord Bruce, on any matters concerning Europe. He can claim to have been wholly consistent in his position on Europe for many years. He took the same view during the debate on what became the European Parliamentary Elections Act 1978 as he did today. So there was nothing unduly surprising in what he said.
I have only two points to make about the noble Lord's speech. First, I have a piece of bad news for him. if and when the Conservative Party finds itself sitting where the noble Lord, Lord Bruce, now sits, he will find that the enthusiasm for the cause of proportional representation starts to grow at a remarkable rate. He has only to look at some of the
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debates between 1974 and 1979 to realise that the Conservative Party was finding it increasingly difficult to get hold of anyone who was prepared to stand up from the Front Bench and speak out against proportional representation. That is the first point.
Secondly, I come to the size of constituencies. The noble Lord, Lord Bruce, was worried about the size of European constituencies or the average number of electors per member. I wonder whether there is anything at all in that argument. Is it suggested that the quality of representation in the United States House of Representatives is inferior to that of the House of Commons? In my personal experience, the answer is no. Yet the number of constituents per member of the House of Representatives is infinitely larger than in this country. So I do not think that there is much in that point. Quite apart from anything else, if the European Community increases the number of member states, I find it hard to believe that we shall not have to look again at the number of seats in the European Parliament to prevent it becoming an unwieldy organisation.
Having said that by way of introduction, I should like to raise two issues in relation to the Bill first, the system by which the boundaries of European constituencies are to be determined; and, secondly, the system of election, to which my noble friend Lord Tordoff referred.
I find it surprising that the Government have come forward with the truly remarkable system of determining the boundaries of European constituencies. As the noble Earl, Lord Ferrers, said, there are to be two special ad hoc European parliamentary constituency committees. They will determine the boundaries. As the noble Earl said, there is to be no question of a public inquiry; yet, in terms of the alteration of boundaries of Westminster constituencies, there is a requirement, in appropriate circumstances, for a public inquiry to take place. Of course, in many cases, as a result of those public inquiries, the boundary commission reviews its original decision and comes forward with a modification. Why is that not being done in the case of the European constituencies for next year's elections?
The answer of the Home Secretary is this:
"Due to time constraints, it will not be possible to hold public inquiries".—[Official Report, Commons, 30/6/93; col. 988.1
His second line of defence was—as it was with the noble Earl, Lord Ferrers—that when the first direct elections for the European Parliament took place in 1979, the legislation made no provision for public inquiries. That is entirely true, and for the reason given by the noble Earl.
Let me take that latter point first. Undertakings were then given—indeed, they were given by me, speaking as a Home Office Minister both on the Floor of this House and outside it—that this procedure would not be adopted in the case of any future election. That was a commitment entered into, and it was pressed very vigorously upon us outside this Chamber by the representatives of the noble Earl's party. Yet that is precisely what we are being asked to agree to today.

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I return now to the first excuse; namely, to quote Mr. Howard, time constraints. This really is a frayed and tattered thing. Let me remind the noble Earl of what the Prime Minister said last December following the Edinburgh Council. He said:
"The provision of six extra MEPs will mean that fresh boundaries are set across England, Scotland and Wales, which will be a matter for the Boundary Commission, not for the Government".
That promise has of course been wholly dishonoured within a period of six months.
What we are being asked to agree to today are not decisions taken by the boundary commission but by these curious new parliamentary constituency committees, bodies which, as I have explained and as was explained at some length in the House of Commons, will not be able to organise public inquiries. I believe that to be wholly wrong; indeed, quite indefensible. I hope that the noble Earl will return to that point when he replies to the debate.
The noble Earl has another problem. He has to explain to us why the difficulty of "time constraints" arose in the first instance. As my noble friend Lord Tordoff reminded us, the British Government had the presidency of the Council of Ministers in the six months before the Edinburgh summit. They were therefore in a better position than any other nation state in the Community to know that as a result of German reunification the allocation of German seats in the European Parliament would be increased significantly and that there would be additional seats for France, Italy and the United Kingdom.
In those circumstances there should clearly have been work going on in the Home Office and among parliamentary draftsmen with a view to producing this Bill before the Christmas Recess last year. It was the result of a decision by Ministers that that Bill was not presented before the Christmas Recess.
It was presented for Second Reading only 23 days ago. The Government, preoccupied with their internal disputes over Maastricht, preferred to give absolute priority to such carefully considered measures as the Education Bill—I am not much of a statistician, but I believe that the number of amendments which had to be agreed was about 830 or thereabouts—and the railway privatisation Bill, which was also given absolute priority. I say to the noble Earl in the most amiable of ways that that particular measure is doing a tremendous amount of good to the Conservative candidate in the Christchurch by-election.
We are faced with a profoundly unsatisfactory situation, in which we are being invited to legislate and, without the Bill even having gone onto the Statute Book, we are told that these parliamentary committees are hard at work anticipating the decisions of both Houses of Parliament. My goodness, I wonder where all those people are who like to come here to tell us about the advantages of absolute parliamentary sovereignty. There is not much parliamentary sovereignty about this.
I turn now to the system of election, which was foreshadowed by my noble friend Lord Tordoff. As the noble Earl, Lord Ferrers, has indicated—as indeed did the noble Lord, Lord Bruce of Donington—
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Article 138.3 of the Treaty of Rome, to which this country subscribed when we entered into the Community, requires the European Parliament,
"to draw up proposals for election by direct universal suffrage in accordance with a uniform electoral procedure in all Member States".
That could not be fairer—and we know what the current situation is. We were reminded by the noble Lord, Lord Bruce of Donington, of the situation in the other member states: Belgium has proportional representation in two regional constituencies; Denmark has proportional representation in a single constituency; Germany; Ireland; Greece., Spain; France; Italy; Luxembourg; the Netherlands; and Portugal. All of those countries have a form of proportional representation.
Lord Bruce of Donington: And what about the list systems?
Lord Harris of Greenwich: My Lords, I shall come to that in a moment. There is something in what the noble Lord says. If I were given a choice about a system so far as the European Parliament is concerned, I should like to move to something like the German system. I have made that clear in a number of previous debates.
It is interesting to note that at the same time as we are being asked to hang on to first-past-the-post for England, Wales and Scotland, the situation is to continue to be totally different when it comes to Northern Ireland. Strangely enough that point was not touched on in the speech of the noble Earl, Lord Ferrers. There STV is of course an absolutely wonderful idea. We have to have STV in Northern Ireland. Why do we have to have it in that country? We have to have it because in the situation in Northern Ireland the Government want a fair and balanced electoral system. But of course they do not want a fair and balanced electoral system in the rest of the United Kingdom. Northern Ireland has to be treated wholly differently.
To its credit, this House has not accepted that situation. Indeed, in 1989–90 this House passed the European Parliament electoral reform Bill, introduced by my noble friend Lord Bonham-Carter, which provided for elections by the single transferable vote. But that was blocked when it reached the House of Commons by the Government Whips.
The argument against proportional representation for Westminster is that it creates weak and unstable Governments. Weak and unstable governments, my Lords! We are not doing terribly well down the corridor at the moment on the basis of this electoral system which the noble Earl champions today.
Even were the current political situation to he entirely different, that does not begin to answer the argument so far as proportional representation in Europe is concerned. There is no government in Strasbourg. Therefore, that line of defence so far as Ministers are concerned is a pretty unpersuasive one. However, there is at Strasbourg a settled determination to ensure that the Parliament is elected on the basis of common principles. The report adopted at Strasbourg by 207 votes to 80 said that Members of the Parliament should be elected,

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"in accordance with the uniform electoral procedure based on the principles of proportional representation".
The resolution added that if a member state—I come back to the point to which the noble Lord, Lord Bruce of Donington, referred—used a single member constituency system, not more than two-thirds of the seats should be distributed in that manner, with the balance being distributed to take account of the proportions of the total vote cast.
What could be fairer than that proposition so far as concerns the European Parliament itself? I should like to imagine that the Government would be persuaded by that argument. But of course they will not be persuaded. As I indicated earlier, they may be rather more attracted by the idea as and when they find themselves sitting on the Opposition Benches in both Houses of Parliament. But they will cling on to this tired, old, discredited system for as long as they can do so.
Speaking for myself and my colleagues, I do not have the slightest doubt that proportional representation is coming. I also have little doubt that when it arrives it will be welcomed by a clear majority of the British people. Until then, the Government will be ignoring the unambiguous requirements of the Treaty of Rome and the Government's professed desire to be at the heart of Europe will be mere empty rhetoric.
1.40 p.m.
Lord McIntosh of Haringey: My Lords, there can be no doubt that with or without Maastricht the European Parliament and the system of election to the European Parliament are of great importance to this country. It is shameful to this country that we have such a low participation in the European parliamentary elections. I shall spend a certain amount of time considering why that might be so and whether electoral systems have anything to do with it. Therefore it is particularly disgraceful that the Government should present this Bill at this time.
I remind the House that on 14th December last, the Prime Minister came back from Edinburgh and promised that there would be a European Parliamentary Elections Bill, and that specifically it would involve the boundary commissions. The implication of that, although it was not spelt out, was that there would be public inquiries, which is the normal way in which the boundary commissions proceed.
What happened? My honourable friend Tony Blair wrote to the Home Secretary on that same day, 14th December, asking for details of the legislation that would be introduced and when it would be brought forward. Despite considerable prompting there was not even a reply from the Home Secretary until 27th January. So that was the start of the delay. In practice, as the noble Lord, Lord Harris of Greenwich, reminded us, the Bill was not given its First Reading in another place until 13th June and was not given its Second Reading until 30th June.
Why was that? It is hardly because it is a complicated Bill. There are only three clauses and one schedule. It is hardly because there is any new thinking
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in the Bill. The Bill simply provides for the work of the ad hoc commissions. No, of course not; it is for the same reason as we have been kept up night after night in the past few weeks. It is because the Conservative Party is in disarray. The Conservative Party has, both domestically in the form of the Education Bill and the Railways Bill and in other legislation, no legislative programme on which it can secure the command of its own party. Internationally it is grotesquely failing to maintain the unity of its party on Maastricht. So any talk about delay being for any reason other than the progressive demoralisation of the Conservative Government is nonsense.
What is the effect of the delay? That is much more serious. The effect of the delay will be that the ad hoc commissions will not observe normal boundary commission procedures. I have no reason not to welcome the announcement by the Minister today that five of the six commissioners will be boundary commissioners. I am sure that he is right in calling attention to the integrity of the sixth commissioner. So I have no problems at all about the membership.
My problem is the way in which this matter is being approached. First, the commissioners will start work without parliamentary approval. That cannot be a precedent that we should accept. Secondly, they will proceed without public inquiries. In fact I thought that Sir Teddy Taylor in another place had it right: if we in Parliament were to adopt the procedures which those commissioners are to adopt, we would cancel the debate, all go home, submit written representations to the Home Secretary or the Minister on the Front Bench opposite and await his conclusions. That is the way that they will operate. It is not the way that we operate and not the way that we should be operating in representing the people.
It is not as though these are matters which are so complicated. The building blocks for the constituencies are parliamentary constituencies—Westminster constituencies. Mapping by computer graphics has well advanced since 1978, the last time that such problems arose. Frankly, the whole thing could be done in 48 hours and all the options counted, costed and evaluated. Then there could be proper public inquiries as to a realistic set of options. So adequate attention is not being paid to what could be done with an up-to-date and efficient boundary commission procedure.
Let us look at the results. We are told that it is because of statistical equality that Scotland is to be denied an extra seat, whereas England is to receive five extra seats. Literally that is the case. It is literally true that under the Government's proposals England will still be slightly under-represented in comparison with Scotland and slightly more under-represented in comparison with Wales.
But if we were to give Scotland another seat, in view of the huge geographical areas which Scottish MEPs cover—not just the Highlands and Islands; it is true in large parts of Scotland—then the total electorate of the average English constituency would only go down by 7,000, which one might think is an insignificant amount, whereas the total electorate of the average Scottish constituency would go down by 55,000, very

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much more closely representing the need of Scottish constituencies to be workable from a representative point of view. We are certainly not satisfied that the allocation of seats between England, Wales and Scotland, as proposed in the Bill, is correct. We shall seek amendments to that effect.
Finally, I turn to the issue of the electoral system. To use the words of the noble Lord, Lord Harris, I have bad news for him. If he thinks that harmonisation of electoral systems in the European Community will lead to the kind of proportional representation that he wants, he has another think corning. By the way, I notice that the Liberals always talk about proportional representation as if there were only one form of proportional representation. The noble Lord, Lord Harris, constantly referred to proportional representation as if it were an electoral system.
Lord Harris of Greenwich: My Lords, perhaps I may interrupt the noble Lord. I notice that the noble Earl, Lord Ferrers., at least agrees with what troubles the noble Lord, Lord McIntosh of Haringey. If he reads my speech, he will find that what he has said happens to be untrue.
Lord Tordoff: My Lords, perhaps I may also intervene. It is not true to say that we always confuse matters. I can think of a number of occasions on which I have held small teach-ins in your Lordships' House on the various systems. If the late lamented Lord Underhill could be with us and hear what is being said I think that he would agree with us.
Lord McIntosh of Haringey: My Lords, I do not doubt that the Liberal Democrat party is very well versed in different forms of proportional representation and that its members make a number of lengthy speeches on the subject. What I said was that the noble Lord, Lord Harris, in his speech referred to proportional representation as if it were an electoral system which could be adopted for the European Parliament. What he failed to do—if I may be allowed to finish my sentence—was to refer to the fact that proportional representation is a family of electoral systems.
Lord Bonham-Carter: My Lords, perhaps I may also say that the noble Lord, Lord Harris, pointed out that of the systems he preferred the German one. That indicates that there are other systems.
Lord McIntosh of Haringey: Then again, I have bad news for the Liberal Democrat Party. The report says that there should be either national or regional lists. Ten members of the European Community have regional or national lists—regional in the case of Italy, Germany and Belgium; national in the case of seven other member states. Only Ireland, which has a single transferable vote (which for most purposes is the preferred system of the Liberal Democratic Party) and the United Kingdom, which has single member constituencies, are out of line.
It is fair to say that the Liberals have been—
Lord Harris of Greenwich: Consistent!
Lord McIntosh of Haringey: —I was not referring to consistency. I do not think the Liberals are being particularly consistent in changing from a single transferable vote to a regional list. They are taking advantage of the fact that we in the Labour Party will have the presentation of the Plant Report to our party conference before the Committee stage of the Bill. The Plant Report is well known. It recommends a regional list for European elections. I support that and hope that after the Labour Party conference it will be possible for us to be of one mind in the matter. It will be a change not only for the Labour Party but also for the Liberal Democratic Party.
I was slightly surprised, but not entirely surprised, by the speech of my noble friend Lord Bruce of Donington. He expressed support for the Bill but proceeded to speak almost entirely about other matters. After Tuesday and yesterday I thought That we would not see again the blue document with the 12 stars on its front. That is not the case, arid I perhaps should have been warned by Second Reading in another place that those who are opposed to Maastricht are prepared to take any steps to express their disapproval, even if it means expressing approval for undemocratic procedures in the European Parliament.
My noble friend does not believe that the European Parliament should have its powers increased. That is legitimate. He does not think it is possible for the European Parliament to work with such large numbers of electors. I do not agree. If that were the case, it would not be possible for the. United States Senate and Congress, or for the Congress of the Russian Federation, to operate at all—though he may say that the latter does not operate very effectively, anyway. But clearly the European Parliament can be made to operate if its powers and composition are correct. That is what we should be looking to achieve.
It is important that justice should be seen to be done. Neither in the conclusions which the Government reached in regard to electoral systems, nor in the way that they propose to proceed in reaching conclusions about boundaries, is justice being seen to be done. The Bill will need significant amendment in Committee and we shall see that it gets it.
Lord Bruce of Donington: My Lords, before the noble Lord sits down, as he was kind enough to mention my name, albeit somewhat critically, I should like to ask this question. Will he be kind enough to explain to the House how the list system is compatible with the democratic process whereby electors are represented by people who are known to them and are within a reasonably accessible distance from them?
Lord McIntosh of Haringey: My Lords, that question gives rise to a number of different answers, and I shall try to avoid putting all of them forward. The first is that in other European countries where they have regional or national lists, they have substantially higher participation in European elections than we do in Britain with single member constituencies.

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Secondly, our single member constituencies are already too large for the kind of personal contact which my noble friend and I would wish to see. I agree with him in that regard. I happen to be well represented by Pauline Green who is the leader of the Labour MEPs. But I do not believe that even she would say that many of her constituents have access to or know her. The third and final point is that the regional list system achieves the adequate representation of minority as well as of major parties.
1.55 p.m.
Earl Ferrers: My Lords, whenever there is a debate or Bill about electoral systems, one can guarantee that it will stimulate good argument, and it has done so this morning. The noble Lord, Lord McIntosh, cannot help it; he has to make a political speech. He started by saying that the delay was a progressive demoralisation of the Conservative Party. I have never heard such rubbish in my life! He knows that perfectly well. If ever a party was in a mess, it is the party opposite.
I shall not involve myself in the party politics which he stimulated. The Labour Party has always supported the system of first past the post. Now it has a committee which says that it should go to a different system. It does not know whether it is coming or going. Even the noble Lord, Lord McIntosh, admitted that. He said he must wait for the Labour Party Conference to make up its mind first—so much for leadership.
We introduce a Bill to allow more seats for better democratic representation in Parliament and the noble Lord, Lord McIntosh, acts as though the Government were doing something terrible. We are not doing anything of the kind. It was fun to see him bait the Liberal Democrats, and I agree with him on that. And because I happened to say, "Hear, hear" the noble Lord, Lord Harris, was stimulated to rise to his feet. It was interesting that the noble Lord, Lord McIntosh, managed to stir to their feet every single member on the Liberal Democrat Benches bar one, so he did not do too badly.
Lord McIntosh of Haringey: My Lords, I must respond. I never consider that I have been entirely successful unless I can persuade the noble Lord, Lord Boyd-Carpenter, to rise.
Earl Ferrers: My Lords, the noble Lord, Lord McIntosh, will have to imagine that he did; he was not in his place this morning. Had he been so, I am sure that he would have been stimulated just as I have been.
I was grateful also to the noble Lord, Lord Bruce of Donington, for supporting the Government in the first-past-the-post system. He is absolutely right. The noble Lord, Lord Bruce, is a man of individual characteristics, as we have seen over the past six weeks. He does not like the European Community all that much, but he is good and sensible enough to say that when we are represented there we should be represented by the first-past-the-post system. On this occasion, he is wholly correct and I am grateful to him.
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As the noble Lord read out all the different alterations in the numbers of seats in the different European countries, he made me realise how difficult it is ever to achieve perfection. It is difficult to achieve perfection in any form of parliamentary system. The great advantage of the first-past-the-post system is that everyone knows that it is a tried and workable system and everyone understands it. The fellow who obtains the most votes wins and that is a good old adage that everyone understands.
Lord Harris of Greenwich: My Lords, perhaps I can ask the noble Earl one question. Is it his view that the people in Northern Ireland have a superior intelligence to those in England, Wales and Scotland, who are not able to understand the system now applied in Northern Ireland?
Earl Ferrers: My Lords, the noble Lord, Lord Harris, asks what he thinks is a difficult question; in fact, he knows the answer perfectly well. The single transferable vote system was used in Northern Ireland because of the peculiar circumstances whereby there are different communities and different loyalties within those communities. It is right to ensure that some other system should try to make them better represented.
In general, nobody understands the list system and how votes are transferred one to the other. I cannot understand how some people get into some parliaments by a transferable vote system when they have been rejected by the electorate. The noble Lord, Lord McIntosh of Haringey, is quite right: proportional representation is not a system; it is a family of a variety of totally different systems.
I believe it was the noble Lord, Lord Tordoff, who said that we should have the additional member system; that that is the best system to use. I ask: why? Does he not realise that in order to introduce that kind of system into this country for those six seats would require a whole new parliamentary system? We would have to introduce legislation to allow it, which would involve discussions as to whether it should be that system or another system. That legislation would have to pass through another place. When the noble Lords say that we have hurried this, they have no idea of the delay that would have been involved had we gone to a different system.
The noble Lords, Lord Tordoff and Lord Harris of Greenwich, were worried about the committees starting work before the Bill has finished its parliamentary passage. It is essential that the committees start their work as soon as possible in order to give us as much time as possible for public consultation over the new boundaries. It is also important that they should complete their task by the end of this year so as to give the political parties and the administrators time to prepare for the elections next June. Waiting until the Bill receives Royal Assent would leave them with little more than a month for their task which would clearly be nothing like enough time. That is why it is necessary to start as early as we have done.
The noble Lord, Lord Harris, made a great song and dance about the committees starting before

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Parliament had approved the Bill. How terrible it is, and so much for parliamentary democracy, said the noble Lord, Lord Harris.
Lord Harris of Greenwich: Parliamentary sovereignty.
Earl Ferrers: All right, so much for parliamentary sovereignty, said the noble Lord, Lord Harris. I should like to take his mind back a few years when he was a very distinguished member of the then government. They were putting through a certain Bill to devolve power. It was called the Scottish devolution Bill. I seem to remember his government having spent £2 million on building a Scottish Assembly before the Bill even got through Parliament. It never did get through Parliament. Therefore, that is a perfectly good example of how in that case that was an erroneous thing to have done. In this case it is a good thing to do because it is enabling the parliamentary systems to get into place in sufficient time so that people will be able to vote and to get their political organisations in train for the new seats and the new elections next year. It would have been quite impossible to have had six seats run under a totally different system from the one that we have at the moment. That is why we considered it appropriate to use the first-past-the-post system.
The noble Lords, Lord Tordoff and Lord Harris, seem to be like two birds singing together the same song. They asked why the Bill was not introduced earlier. The formal decision on the extra seats was not taken by the Council until February of this year. It was impossible, therefore, to have produced it before that. Your Lordships will be aware that there has been a certain amount of, shall we say, parliamentary congestion during that time. Therefore, it has not been possible to produce it earlier.
The noble Lord, Lord Harris, also said that the Prime Minister had pledged that this would be done by the boundary commission and that that pledge has been dishonoured. It is not the boundary commission that is doing this; it is the constituency committees that are doing it—two of them. They will consist of virtually the same people as are on the Boundary Commission—all except one. Five will be the same and there will be an additional one. They will be totally apolitical and will deal with their responsibilities in the way in which they would be expected to deal with them.
There is not a public inquiry as such because, as I have explained, there is simply not time for a public inquiry. But there is time for public consultation, and public consultation will take place. They will then he able to produce their views afterwards. The boundary commission will then be able to take over responsibility for all the European parliamentary constituency boundaries after the elections have taken place next year and so will be able to address anything that needs to be addressed then. The reason why this has. been done now is in order to get into place a system whereby the extra six seats can be used properly for the European parliamentary elections next year.
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I am grateful to the noble Lord, Lord Bruce of Donington, for one very statesmanlike remark. He considered the Bill and said that he has no intention of putting down any amendments. I commend him for that thought and for that approach. I would also commend such an enlightened view to the noble Lords, Lord Harris of Greenwich and Lord Tordoff, because if they are concerned about getting the European parliamentary system through in a good democratic way, it ought to be done as quickly as possible in order to allow the correct mechanisms to be in place and the political parties to be able to get their organisations going so that the six seats can be used to the best of their ability next year. I commend the Bill to the House.
On Question, Bill read a second time, arid committed to a Committee of the Whole House.

Education (Assisted Places) (Amendment) Regulations 1993
2.5 p.m.
Viscount Astor Viscount Astor rose to move, That the draft regulations laid before the House on 29th June be approved [36th Report from the Joint Committee].
The noble Viscount said: My Lords, it is my pleasant task to explain the regulations governing the administration of the assisted places scheme to your Lordships. The purpose of the regulations is to make minor amendments and update the regulations of an already well-established scheme. The draft regulations provide for amendments to be made to principal regulations which are the Education (Assisted Places) Regulations 1989.
The assisted places scheme was established in 1981 for the purpose of widening the educational opportunities of able children from less well-off families. It provides their parents with assistance towards the fees of some of the best independent schools in the country. The assistance is on a sliding scale based on parental income and the principal changes embodied in the amending regulations are concerned with the annual revision of those scales.
There are several other technical amendments which are necessary in order to keep the definition of "total parental income" for the purposes of the scheme in line with changes in tax legislation and to update the wording of the regulations to reflect current practice and circumstances. I beg to move.
Moved, That the draft regulations laid before the House on 29th June be approved [36th Report from the Joint Committee].—(Viscount Astor.)
Lord Ponsonby of Shulbrede: My Lords, I thank the noble Lord for his introduction. If he will forgive me, I shall briefly discuss some of the political implications of the regulations as this is really our annual opportunity to discuss the assisted places scheme and its ramifications.
The arguments against the assisted places scheme will be familiar to the House. We believe that it is wrong in principle to subsiclise the private sector. It is wrong in principle to cream off some of the most able

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pupils from the state sector and send them to the private sector. We would go further and say that it is an admission of failure by the Government that they think it necessary to have this scheme in order to educate properly some of the most able children from our poorer families.
We go even further and say that there is a substantial body of evidence that the system does not provide the added value (to use the current jargon) to increase the educational achievements of the children. They are bright and they would do well in the maintained sector. They do well in the private sector but, as far as I understand it, neither HMI nor the Audit Commission could see any actual benefit in the examination results and the like to the children who take up the assisted places.
In practice the scheme has been characterised as one to benefit what one might term "distressed gentlefolk"—that is to say, the kind of parents who were themselves educated in the private sector, who I believe make up the majority of parents with children using the scheme. Such parents have fallen on hard times and they are no longer able to afford fees. So in practice it is turning into a self-perpetuating scheme for people who are used to the private sector; and it is the majority of children in the state sector who are suffering as a result.
I believe that current statistics show that only 7 per cent. of pupils on the assisted places scheme are the children of manual workers. As I said, about two-thirds of the pupils who take up the assisted places when they are 16 are already in the independent sector before doing so.
A more compelling reason to be against the scheme is a cruder one—that is to say, it encourages educational snobbery in that it undermines the maintained sector. In a nutshell, one can say that it is social opportunities for the few at the expense of the many.
As I said in my introduction, these arguments have been well rehearsed and they will be well understood by the Minister. What intrigues me is how the argument in favour of the assisted places scheme will change as the educational measures which this House and another place considered very fully are put into place. We are in the process of concluding consideration of the Education Bill. The Government will see a great change in the educational landscape of our country. The catchphrase which we have heard time and time again is introducing greater diversity and choice into the maintained sector.
Noble Lords may be aware that I am a local councillor in the London Borough of Wandsworth, which is a Conservative-controlled council. In the past three years in Wandsworth we have seen—very much against my wishesthe introduction of a diversity of schools. We have selective schools; specialised schools in the secondary sector; two CTC schools; and we shall he having a Church of England school moving into the borough. That is very much the kind of provision which the Education Bill seeks to put
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forward across the country. Conservative councils argue that they are putting forward these policies in anticipation of national government policies.
It would intrigue me to be a fly on the wall and hear the Minister justifying to his Conservative colleagues in Wandsworth Borough Council why it is that the children in that borough council are getting less support from the Department for Education because that department chooses to subsidise the private sector. It has exactly the system which the noble Viscount says is to their benefit. Yet he still maintains the subsidy to the private sector.
In practice, I suspect that it would not be an intriguing conversation, because the Minister is well used to having his cake and eating it. I suggest that he has done very well on that. I wonder how the diversity of choice which is being introduced does not detract from the necessity for introducing choice to go to the independent sector.
In conclusion, I ask the Minister how it is that sending children to the private sector benefits the vast majority of children who are still educated in the maintained sector. For our part we are opposed both in principle and in practice to this scheme. We see it as socially and educationally divisive, expensive and fundamentally misguided.
Lord Addington: My Lords, I rise to comment only briefly on the assisted places scheme. As the noble Lord, Lord Ponsonby of Shulbrede, has just pointed out, it is expensive. Essentially, it is a system for distressed gentlefolk. The middle classes take advantage of it to place their children in certain schools—and in schools in which the children do not necessarily receive a better education. There is no evidence to prove that a child who achieves under one system cannot achieve under another.
The Government are paying more money to educate children in this way. I have the figures with me. It costs about £3,100 to educate a child under the assisted places scheme, as opposed to £2,195 in the maintained sector. We are paying more to have children wearing slightly smarter blazers. It is ridiculous. It could be argued that if such children receive a state education, they will still achieve because if a child can pass exams, he or she can pass exams no matter what school is attended. But if bright children are now to receive a slightly better standard of education in the new, reformed education system in which there is increased diversity, why on earth are we paying extra for them?
It has already been pointed out that people from the lower social classes—if I can use such a term—are not benefiting from the scheme. Perhaps a better way of putting that might be to refer to people who are not traditionally recruited into the public school system. So why do we have this system? There does not seem to be much of a case for it. My party and I are not opposed to the principle of private education per se, but we are opposed to wasting money on it by subsidising children within it when that money is desperately needed in the state system.
If one can provide the same standard of education and the same benefits within the state system, why pay more into the private system, especially when we are

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establishing a greater diversity of schools? Surely the pupils in a school which has grant-maintained status and which is funded directly by the Government are receiving funding which is identical to that given to a child who has an assisted place, so why are we still pumping in this money? This system is not only anachronistic; it does not make mathematical sense.
2.15 p.m.
Lord Strabolgi: My Lords, I should like to say just a few words. I greatly regret the fact that I do not agree with either my noble friend Lord Ponsonby or the noble Lord, Lord Addington, about the assisted places scheme. I regret that I cannot agree with my party's policy on this as described by my noble friend, particularly because I was a very old friend and admirer of his father. I am so glad that my noble friend has taken over the mantle of speaking on educational matters from our Front Bench.
However, I find my party's attitude on this much too rigid. It does not take account of clever children from all classes. If I may say so, I also object to the phrase that the scheme is helping the "distressed middle classes". Does it matter if the middle class is distressed? Does it matter if a middle class family is poor and cannot send a child to a good school? Why should that be regarded as something to be disapproved of?
I know of one little girl whose father deserted the family and who then had to attend the village school where she was not fully stretched. There was no Latin or modern language teaching. The school went at the rate of the slowest child and the little girl was very bored. However, she was able to get an assisted place in a good private school where she is already the head of her form and is doing extremely well. We all know of such cases.
It seems to me that from a national point of view we have to cream off the talent of the country from whichever class they come—from the working class or the distressed middle class. We should be talking about any children whose parents cannot afford the best education for them. In France, for example, the talent of the country is creamed off. The clever children are sent through the system. The brilliant ones end up as products of the grandes écoles which produce high powered technocrats to an extent that is hardly known in this country and to the great benefit of that nation.
Although I have agreed with hardly anything that the present Government have done during the past decade, I support the regulations. I think that the Government are to be commended on introducing this scheme—and on their courage in doing so—because the realistic point of view is that it is much the best way of using the talent of the most brilliant children in the country, from whichever class they come.
Lord Ponsonby of Shulbrede: My Lords, before my noble friend sits down, I am grateful to him for the remarks he made about his regard for my father. Does he accept that the argument he put forward and the argument I put forward are not necessarily exclusive? I was arguing that it was an admission of failure by the
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Government that they see it necessary to send the brightest children into the private sector. They are not providing suitable education for such children themselves. As I said, that is an admission of failure.
I was also arguing that, in practice, as the statistical evidence demonstrates, it is those in the know who take advantage of the scheme. I was questioning whether the places are going to the brightest children rather than just the bright children with parents in the know. I believe I quoted the statistic that only 7 per cent. of the children on the scheme have parents who are manual workers. We are interested in ensuring that the most able children are educated properly. I do not see that our points of view are exclusive.
Lord Strabolgi: My Lords, perhaps I may be allowed briefly to answer that point. First, of course, the children have to pass an examination to get into a private school. Secondly—here I am in agreement— the scheme stems from the fact that this country does not have a good public education system. We do not have a public education system of the standard one finds in Germany or France. Until we have that, I am afraid that we have to make use of schemes of this kind, otherwise there is a great waste of natural talent and brilliant minds.
Viscount Astor: My Lords, the noble Lords, Lord Ponsonby and Lord Addington, have made it plain that they do not like the scheme. The noble Lord, Lord Strabolgi, is in favour of the scheme but says that we have it because this country does not have a good education system. I dispute that. The reason we need the scheme is because it provides choice. The scheme is a good one.
Perhaps I may answer some of the points made by the noble Lords, Lord Ponsonby and Lord Addington. They said that it was a scheme for distressed gentlefolk only. That is not true. The figures show that it is not true. I shall prove that now. The most recent statistics prove that the assisted places scheme is meeting its objective of helping children from disadvantaged families attend some of the best independent schools in the country. More than one third (38 per cent.) of all pupils receiving fee remission qualify for free places because of the level of their parents' income; that is, —9,056 or less in the year 1992–93. Sixty per cent. of all assisted place holders are from families with incomes of less that £13,000 per annum.
Independent surveys, such as those taken for ISIS by Mori, confirm that low income families are the ones being reached and served. well by the scheme. The Mori study shows that the majority of parents entitled, to assistance are from the lower middle class, skilled manual workers and similar groups. Eighty per cent of parents with children on assisted places are from social groups other than the middle class or upper middle class traditionally associated with private schooling. I believe that that proves the point.
Perhaps I may make one other point to the noble. Lord, Lord Strabolgi. Entrance to the schools is run on the basis of examinations, but selection need not be based exclusively upon academic merit. Some schools place particular emphasis upon helping children from

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disadvantaged backgrounds. The Government believe firmly in the principle that parents in every part of the country should have access to the opportunities which a scheme such as this offers. The assisted places scheme is now in its twelfth year. The Government have done and will continue to support the scheme as part of their policy of widening educational choice and opportunity. Along with many parents throughout the country, we are immensely encouraged to see the successes—in music, the arts and sport as well as in academic subjects—which assisted pupils have
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recorded. Over the years since this excellent scheme was introduced, over 60,000 children have benefited from education at some of the best independent schools in the country.
There are now more than 28,000 pupils in the scheme, well over one-third of whom are enjoying totally free education at the schools. This is a good scheme. I commend the regulations to your Lordships.
On Question, Motion agreed.
House adjourned at twenty-five minutes past two o'clock.