Lords Sitting of 17 May 1993

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Guildford.

Nuclear Missiles: Policy
Lord Mayhew Lord Mayhew asked Her Majesty's Government:
Whether they propose to procure an air-to-surface nuclear missile system.
The Parliamentary Under-Secretary of State, Ministry of Defence (Viscount Cranborne): My Lords, we are considering a range of possible options for our long-term sub-strategic nuclear capability after the eventual withdrawal from service of the WE177 free-fall bomb. An announcement will be made at the appropriate time.
Lord Mayhew: My Lords, does the noble Viscount not agree that at a time when we are cutting the defence budget and our infantry regiments, it makes no sense to spend huge sums of money on the new nuclear missile system? Its purpose is not clear and can probably be carried out much more cheaply and better by a Trident submarine.
Viscount Cranborne: My Lords, I hope your Lordships will forgive me if I say that I suffer from a distinct sense of déjà vu. The noble Lord and I have exchanged similar views at several intervals over the course of the past 12 months. I ask the noble Lord to restrain his impatience a little longer. We are considerably nearer reaching a decision on this important matter than we were when he first raised the question. I assure him that the point he makes has played an important part in the consideration of the decision that we have to take.
Lord Mayhew: My Lords, is the noble Viscount aware that the reason I have repeated the Question is a stubborn belief that sooner or later he is bound to come up with a better answer?
Viscount Cranborne: My Lords, I am flattered by the kind suggestion of the noble Lord, Lord Mayhew, that I am capable of coming up with a good answer. However, I am sure he will agree that the decision we reach will be a rational and sensible one. We have not yet taken that decision. I shall be among the first to be able to lay before your Lordships the answer to the question that he poses. We are not yet in a position to do so.
Lord Jenkins of Putney: My Lords, is the noble Viscount aware that this is one of the few occasions when I hope that he will come up with one of those negative answers he is so good at giving.
Viscount Cranborne: My Lords, flattery from the noble Lord, Lord Jenkins, is something that I always
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examine with slightly mixed feelings. However, I hope that, as always, my attitude towards the defence of the realm will be positive rather than negative.
Lord Williams of Elvel: My Lords, can the noble Viscount confirm that it is the Government's view that the WE177 will not be effective after the end of the century? If that is the case, can he outline the strategic justification for the type of missile to which the noble Lord, Lord Mayhew, refers? In case it has escaped the attention of the noble Viscount, the Cold War has ended. Therefore, in order for the noble Viscount to provide a rational and sensible answer, is it not the time to conduct a complete strategic defence review of what we need?
Viscount Cranborne: My Lords, the noble Lord, Lord Williams, is, I am sure, as aware as I am of the rationale for the possession of a sub-strategic nuclear capability. There is no point in possessing such capability unless it carries conviction. There is no point in spending money on a capability that does not carry that conviction. I asked this of the noble Lord, Lord Mayhew, and now I ask the noble Lord, Lord Williams: will he contain his impatience for a little longer? I hope that I shall be able to satisfy both noble Lords that our decision is rational and sensible when the time comes to announce it.
Lord Holme of Cheltenham: My Lords, in arriving at the decision shortly to be announced, will the Government ensure that they take into account Section 2 of the Nuclear Non-Proliferation Treaty to which we are a signatory? Does he accept that a "rational and sensible" decision would take that fully into account?
Viscount Cranborne: My Lords, the noble Lord, Lord Holme, knows as well as I that we are registered under the non-proliferation treaty as a nuclear power. Any decision under this head will take full account of that.
Lord Mackie of Benshie: My Lords, instead of advancing ponderous arguments about secrecy and waiting to see what comes, is there any good reason why the Minister cannot relate, for the benefit of the House, the arguments between Trident and the expensive alternative?
Viscount Cranborne: I am sure that all noble Lords would agree that any presentation of a recommendation by a Minister of Her Majesty's Government to your Lordships' House should be well considered. It is the process of that consideration which is causing your Lordships some impatience. Nevertheless, I hope that the justification for the recommendation that I shall make in due course will be rational. One of the reasons it will be rational is that we have taken a sensible amount of time to come to our conclusions, which we shall defend to your Lordships in due course.
Lord Williams of Elvel: My Lords, will the noble Viscount undertake that, when the decision is finally announced, it will be the result of a defence review? In that way, whatever the Government decide, we will know exactly what they are trying to do.
Viscount Cranborne: My Lords, I have the feeling—it may be unjustified—that the noble Lord, Lord Williams, is entering into the beginning of a circular argument which will not take us any further. The question of whether or not we have a defence review is immaterial. However, it is sensible to ask a question in regard to whether or not we should have a sub-strategic capability. Both I and Her Majesty's Government believe that it has a rational justification. The question is how it should be achieved. That is under consideration, as I have already said to your Lordships and to the noble Lord, Lord Williams, a number of times. I am glad to be able to say that we are reaching the moment when I shall be able to announce the recommendation. Your Lordships' reactions will be of considerable interest both to me and to Her Majesty's Government.

Prisoners and The Citizen's Charter
2.44 p.m.
Lord Erroll of Hale Lord Erroll of Hale asked Her Majesty's Government:
Whether, in keeping with the Citizen's Charter, persons serving sentences in prison are now to be treated as customers, as indicated by the Sunday Telegraph (2nd May).
The Minister of State, Home Office (Earl Ferrers): My Lords, the Prison Service intends to act on Citizen's Charter principles in its dealings with both the public and prisoners. But it has no intention of treating prisoners as "customers".
Lord Erroll of Hale: My Lords, I thank my noble friend for his Answer. May I say that perhaps there is a need to ascertain the likes and dislikes of those in prison? Possibly one good way of doing it—not the Sunday Telegraph way—would be to take a random sample of perhaps one prisoner in 10 for a private interview with outside investigators who could ascertain the views of the prisoners themselves.
Earl Ferrers: My Lords, I am glad that my noble friend thinks that it is a good idea to find out what prisoners feel. I would point out to him that it was not the suggestion of the Sunday Telegraph. The proposal was put forward by the Director General of the Prison Service. That is one way of finding out people's views. My noble friend has put forward another way. I shall certainly pass that suggestion on to the Director General of the Prison Service to see what he thinks about it.
Lord Plant of Highfield: My Lords, does the noble Earl agree that commercial and market-based language and commercial relationships are totally out of place in the context of judicial punishment? Surely our concern with justice does not stop with sentencing but should also cover the implementation of the sentence and should shape the prisoner's experience of punishment. In that context does the Minister not agree that standard setting and the definition of rights, duties and expectations of those in prison is the way forward, as suggested in the Woolf Report, to help to
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secure a just and fair prison regime? Does the Minister not agree that those kinds of standards and those kinds of rights and duties cannot, as experience in the past few weeks has shown, be secured by contracts with private firms?
Earl Ferrers: My Lords, if I may answer the last part of the question first, I do not agree. It is perfectly possible for standards to be adequately maintained by the private sector, as indeed by the public sector. There is nothing peculiar about prisoners that requires them to be looked after by civil servants. The important thing is to ensure that the contracts which are placed are correct and are kept. With regard to the main onus of the noble Lord's question, of course it is important that standards should be high. It is the business of government or the country not just to lock people up but to work with them. That is why the Prison Service has set forward its own proposals not only in its corporate plan but also in the Prison Service Citizen's Charter Standards of Service, in which it says exactly what it is going to do in order to raise the standards in the prisons and to make sure that the service is accountable properly to the prisoners, to the public and to families, friends, legal representatives and the visitors to the prisons.
Lord Mackie of Benshie: My Lords, does the noble Earl agree that the motivation for any private firm is to make money? I understand that that is part of the Conservative belief but it may not be the best way to try to reform people while they are in prison.
Earl Ferrers: My Lords, I do not agree with that. The whole point of privatisation is to see whether the private sector can produce the same standards as, and possibly even better standards than, the public sector is at present producing, at a cheaper price.
Lord Campbell of Alloway: My Lords, does my noble friend agree that the question of the treatment of prisoners, the subject matter of this Question, lies within the remit of Judge Tumim, Her Majesty's Chief Inspector of Prisons? He is doing a pretty good job and this matter is for the moment best left to him.
Earl Ferrers: My Lords, my noble friend is quite right. Judge Tumim does a very good job of work as Chief Inspector of Prisons. But how the prisons are actually run and the way in which the prisoners are dealt with are specifically and principally matters for the Director General of the Prison Service. That is one of the reasons why it is important that he should know, and governors should know, the feelings of people in prison at any one time about any number of matters —apart from anything else, to stop trouble from brewing.
Lord Harris of Greenwich: My Lords, if the questionnaire which is in the process of being sent to prisoners is such a good idea, why is the document headed "Confidential", as described in the Sunday Telegraph?
Earl Ferrers: My Lords, the noble Lord has a peculiar fascination for believing every single thing that he sees in the Sunday Telegraph. It is perfectly true

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that it is headed "In Confidence", which is not perhaps quite the same as "Confidential". Even my own diary for the week is described as "Confidential". In confidence, I cannot think why.
This is at the moment being used as a pilot scheme in eight prisons. The idea is to see whether it works and whether the format is right. If it is right, then the matter might be pursued later. The questionnaire came into the public domain because the Prison Officers' Association said that it did not want to have anything to do with it. What is more, in a letter the general secretary, Mr. Evans, said:
"I have to tell you that in the event of this survey being promulgated the association will not only make it public but will ensure that the general public are made fully aware".
I dare say that that is the reason why the words "In Confidence" have a wider canopy.
Baroness Mallalieu: My Lords, in view of the press reports over the weekend that one of the private security firms ferrying prisoners to and from court is considering the use of leg restraints, can the Minister say, first, whether the Government are aware of that proposal; secondly, whether they approve of it; and, thirdly, what safeguards there are, if any, that private security firms, or indeed those running privatised prisons, do not reintroduce regimes and methods which were rightly consigned to the dustbin of penal history many years ago?
Earl Ferrers: My Lords, the noble Baroness is ingenious. She must know that that question has nothing whatever to do with the Question on the Order Paper which is to do with the questionnaire that has been sent out. I am aware that the proposal referred to by the noble Baroness has been made. I believe that the Government will consider all manner of methods of preventing people from escaping, but I do not believe that they have yet come up with an official reply to that particular suggestion, and now is certainly not the appropriate time to give it.
Lord Campbell of Croy: My Lords, although aiming to please the customer is a praiseworthy principle, can the Government restrain Group 4 from taking that principle too far?
Earl Ferrers: My Lords, there have been one or two unfortunate incidents recently. Your Lordships should be fully aware that, regrettably, they are not peculiar to the privatised sector. Of course, steps are being taken to ensure that they do not happen in the future.

M.25 Congestion: Relief Proposals
2.52 p.m.
Lord Allen of Abbeydale Lord Allen of Abbeydale asked Her Majesty's Government:
Whether they will postpone their proposal for up to 14 traffic lanes between junctions 12 and 15 of the M.25 until the schemes they have subsequently announced for speed restrictions and other traffic management measures affecting the same stretch of road have been tried and evaluated.
The Minister of State, Department of Transport (The Earl of Caithness): My Lords, the experimental variable speed limits proposed for a section of the M.25 are intended to smooth the flow of traffic. They will not, however, provide a long-term solution to congestion on the motorway or provide the additional capacity urgently needed between junctions 12 and 15. We have proposed link roads for this section of the motorway and, following public consultation, hope to announce the way forward shortly.
Lord Allen of Abbeydale: My Lords, I am obliged to the Minister for that Answer. I am sure that he is aware that the original £150 million proposal called forth objections on a very large scale. The closing date for objections was more than six months ago and we still await a draft order which may then he the subject of a public inquiry. In view of the expense, the controversy and the threatened devastation, both urban and rural, would it not make sense to wait and see whether these experiments, which themselves are costing millions of pounds, go some way towards meeting the problem of congestion for perhaps two hours a day, which is all that the problem involves?
The Earl of Caithness: My Lords, when the noble Lord speaks of expense and inconvenience, I know that he will bear in mind that the M.25 is perhaps the largest bottleneck between Scotland and its markets in Europe and that it is a problem which needs addressing urgently. That part of the M.25 is taking twice the amount of traffic that it was designed for. It is probably one of the busiest motorways in Europe, carrying over 200,000 vehicles a day. There is desperate need for additional capacity. That need is forecast at something like 30 per cent. to 40 per cent. required to accommodate the traffic. The slowing down of traffic to prevent bunching, on all the evidence which we have from Europe, would account for only 5 per cent. to 10 per cent.
Lord Boyd-Carpenter: My Lords, can my noble friend say whether the statement in the Question that it is proposed to introduce 14 traffic lanes on this road is accurate, and, if so, why?
The Earl of Caithness: My Lords, the motorway will remain the same size. What is proposed is that there should be adjacent roads to the motorway to help relieve some of the local traffic which is at present using the motorway. It is interesting that the M.25 in particular is used as a local road as well as a motorway and that over 60 per cent. of vehicles leave at the second exit after joining it.
Lord Tordoff: My Lords, would it not he better for the Government to have a comprehensive transport strategy and to use the kind of money involved to encourage freight to go by rail from the North of England to the Channel Tunnel rather than to go round the London périphérique?
The Earl of Caithness: My Lords, the noble Lord knows of the steps which we have taken to encourage freight to go not only by rail but also by sea. The fact

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is that almost 90 per cent. of the internal movements of the people of this country are done by car and that situation will continue for a very long time.
Lord Marlesford: My Lords, as a member of a listening government, is my noble friend aware of the growing body of opinion that to spend a projected billion pounds widening the M.25—which will certainly not solve the long-term congestion on that motorway or anywhere else, as Los Angeles has shown—is a poor use of public resources either in terms of the opportunity costs or in terms of the very real problems which the Chancellor has with the public borrowing requirement?
The Earl of Caithness: No, my Lords. I take the reverse view. The return from widening the M.25 in order to reduce the bottleneck which causes so much inconvenience to business is well worth while and is something which should be undertaken.
Lord Allen of Abbeydale: My Lords, the noble Earl confirmed, in a slightly tortuous way, that the Question is correct in saying that there will be 14 lanes, plus, no doubt, hard shoulders. Can he explain more clearly whether it is proposed to go ahead with the original scheme without troubling to wait to discover whether the money spent on the other plans shows results?
The Earl of Caithness: My Lords, all the evidence that we have shows that being able to reduce the speed at which traffic moves around a motorway improves the traffic flow by about 5 per cent. to 10 per cent. As regards the M.25, the problem facing this country is considerably greater than that. The scheme, which will be put forward as a result of the consultation, is something which I cannot forecast because we are still considering it.
Viscount Cross: My Lords, does my noble friend the Minister agree that the M.25 has been a great success in that it has kept much through-traffic out of central London? Does he further agree that the proposed lanes for local traffic will be of great benefit to local residents? I may be wrong, but I visualise a three-lane road similar to the A.4 (the Great West Road) but without the traffic lights. Perhaps I may also congratulate the Minister on this far-sighted proposal which, by relieving congestion on the M.25, will enable that road to fulfil the purpose for which it was built.
The Earl of Caithness: My Lords, I am extremely grateful for the support which my noble friend has given the Government on this issue. There is certainly a problem. I believe that the proposal for link roads will be of benefit to the local community.
Lord Carmichael of Kelvingrove: My Lords, does the Minister not agree that the idea of the M.25 was that it would solve all the problems of the London area? We now have another projection from the Ministry—no matter how well it is couched—that we are going to need 14 lanes. Will we not end up with adding more and more lanes until there is a complete
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circle of 14 lanes on the M.25? I understand that the scheme will cost £144 million. Does the Minister agree that the Government should begin to look at other methods of handling this situation, for example, by encouraging public transport rather than through continual expansion which eats into the green belt and causes pollution?
The Earl of Caithness: My Lords, the noble Lord is right to draw attention to the much wider problems which the question of traffic flow poses. As he will be aware, we are considering that at the moment. I hope that my right honourable friend the Secretary of State will make an announcement shortly.

Visiting Domestic Workers: Conditions
3 p.m.
Lord Beaumont of Whitley Lord Beaumont of Whitley asked Her Majesty's Government:
Whether they will set up an interdepartmental committee to consider safeguards against exploitation and abuse of individuals brought into the United Kingdom by visitors as domestic servants or part of a family.
Earl Ferrers: My Lords, in May 1991 we introduced tighter criteria for the exceptional arrangements for domestic servants after an interdepartmental review had been undertaken. We have no plans to set up a further such review.
Lord Beaumont of Whitley: My Lords, while thanking the Minister for that Answer, may I ask what the Government are proposing to do about a number of cases of abuse of human rights recently reported in the Independent which have caused considerable trouble and distress to a very large number of people in this country, including Members of your Lordships' House?
Earl Ferrers: My Lords, if there is an abuse of human rights, the correct method of dealing with it is to go to the police and to complain of such an abuse.
Viscount Tonypandy: My Lords, is the Minister aware that the people to whom reference has been made are easily blackmailed into silence and are not able to complain in case they have to leave the country? Does he agree that there is room for further examination of this question in case in this land, the mother of democracy, there is almost a form of slavery for these people from the Philippines?
Earl Ferrers: My Lords, I would certainly be horrified if there were any form of slavery. The people who are given permission to come in are those who have been with their employer in their country of origin for at least 12 months, so they should know their employer's behaviour. We issue them with a leaflet and the entry clearance officers inform them of what is likely to be the case when they come to this country, explain their rights and so forth. Of course, one can never prevent anyone from contravening the law whether that person comes from another country or is indigenous to this country.
Baroness Seear: My Lords, if the noble Earl had been in the Moses Room a fortnight ago at a meeting organised by the noble Lords, Lord Judd and Lord Hylton, he would have realised that something very near to slavery—if not slavery—is going on in this country. The noble Earl says that it is possible to go to the police, but some of these women are not able to get out of the houses in which they are locked, and their passports are taken from them. If they do get out and attempt to leave their employer, they can be deported as illegal immigrants. This is an absolute scandal, as I am sure the noble Earl will agree. We urge him strongly to look at the matter again and not to say that the existing law is operating because, indeed, it is not.
Earl Ferrers: My Lords, I recognise the concern of the noble Baroness. Anyone who restrains a person from so getting out is operating against the law. That happens to people in this country who are restrained by intruders and so forth. It is, of course, illegal to seize a person's passport, but all that one can do is to set the law and the standards and to say what is legal and what is illegal. The same applies in this case as to any other crime: it has to be pursued and notification has to be made to the policing authorities. I can see that that is difficult if a person is prevented from leaving a house, but that applies also to a person who is kidnapped in his own house.
Lord Molloy: My Lords, is the noble Earl aware that many of our British newspapers are carrying horrendous stories, including mental and physical abuse, of what is happening to some 20,000 home helps in domestic service who come from overseas? Is it not a disgrace to our nation? Will the Minister also take into consideration the fact that, as the noble Viscount, Lord Tonypandy, rightly said, some of these people are being treated in such an appalling manner because those who employ them know full well that what they suffer here does not matter because, whatever it is, it is not so bad as what they would suffer if they went back home? Can the noble Earl also say whether the Government really intend to give tax relief to people who bring domestics to this country under the pretence that they are assistants to help in their homes to suffer what they are suffering?
Earl Ferrers: My Lords, the noble Lord says that the newspapers are full of stories of 20,000 people who are suffering such damage. In fact, only 8,000 or so come here afresh each year. If the newspapers have information about 20,000 people, it is up to them to provide it to the correct authorities. When the noble Lord says that the people concerned know that they will be subjected to even worse procedures if they go back home, I can only tell him that when a person comes here—the majority come for six months—and requests to bring his servant with him, the latter is interviewed and his position and rights are exactly explained to him. One cannot do a lot more than that. Nobody will come to this country under those circumstances, which are outside the immigration
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rules, without having been in the employment of his employer for at least a year, so he knows what his employer is up to.
Lord Plant of Highfield: My Lords, the Question posed by the noble Lord, Lord Beaumont of Whitley, contains a reference to "exploitation". Can the noble Earl say whether the Government have a view about the nature of exploitation and, if so, what it is since many of their labour market policies, as I think will be illustrated in this evening's "Panorama" programme, suggest otherwise?
Earl Ferrers: My Lords, there is no question about it—the Government disapprove of the exploitation of anyone whoever they are and whatever country they come from if they are resident in this country.
Lord Beaumont of Whitley: My Lords, is the Minister aware that his comparison with kidnapping is not particularly apt since someone who is kidnapped almost always has someone outside who knows about their plight, whereas we are talking about people whose plight is not known? Will the Government do something about their immigration rules to ensure that people who are suffering this kind of persecution have a choice between incarceration by their employers where they are ill-treated or being deported if they complain?
Earl Ferrers: My Lords, with the greatest respect to the noble Lord, there is no way in which the Government can say that they can prevent employees being persecuted. All that one can do is to make the law so that those who do the persecuting are found to be criminal and incorrect. If the employee who suffers such persecution goes to the authorities, there is no reason for him to be deported unless, of course, he is here as an over-stayer, in which case that is a different matter.

Disability (Grants) Bill
3.7 p.m.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): My Lords, I beg to move that this Bill be now read a second time.
This is a short Bill. It serves one purpose and one purpose only. It provides authority to my right honourable friend the Secretary of State for Social Security to make grants to the Independent Living Extension Fund, the Independent Living 1993 Fund and Motability. The first two are the successors to the Independent Living Fund—the ILF—which has done a splendid job over the past five years in providing help for the severely disabled and enabling them to live independently in the community. The growth and success of the ILF is a tribute to the hard work and judgment of the trustees and staff of the ILF and I should like to pay tribute to all those involved with it. The work of the fund has paved the way for the community care reforms in demonstrating that disabled people do not have to be passive recipients of

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care plans devised for them by experts. They can participate in devising and managing their own packages of care.
But that said, the ILF was announced as an interim measure, pending the introduction of the community care arrangements. Those arrangements are now in place but, as I have said, the ILF has been so successful that the Government have chosen to continue support for independent living, adapted to suit the new arrangements.
As I have said, there are two successor funds which were established by trustees in February of this year, with operations starting on 1st April. The extension fund is quite simply what its name implies. It takes on the existing case load from the older ILF and will continue payments and will have the power to increase rates where any individual shows such a need. The other is the 1993 fund. By far the most popular aspect of the ILF was the flexibility and freedom of choice it allowed disabled people. The whole point of community care is that local authorities will respond to their clients' needs and provide such flexibility in the future. The 1993 fund is designed to fit closely with those arrangements, adding an element of cash payment, to ensure that the dignity and independence conferred by the old arrangements are carried forward into the new arrangements.
Both the new funds are now operational, with a full board of trustees. The hand-over from the ILF to the extension fund went smoothly and all clients continued to receive their weekly payments. The new director is also now in post, and we are progressing towards building the necessary bridges that will allow the innovative new partnership between the 1993 fund and local authorities to work smoothly.
With the introduction of the new community care arrangements, the vast majority of disabled people—including the bulk of those who would have looked to the ILF for help in the past—now look to their local authority to arrange their care needs. Local authorities either provide services themselves or contract with other providers to meet the needs of their clients. For the most severely disabled people whose care needs are so great that without additional help they would have to go into residential or nursing care, the 1993 fund will provide an additional option for social workers in planning packages of care with their disabled clients. The first applications have been received by the fund, and those are now being processed.
We expect that each year about 1,500 people aged 16 to 65 will get a cash payment from the new fund as well as help from their local authority. The Bill is part of the Government's overall strategy for disabled people—a series of measures that improve the lives of disabled people. Being able to make choices and decisions about everyday matters, like when to get out of bed in the morning or when to eat lunch, is something that many of us, for now, take for granted.
By continuing to fund the independent living extension and 1993 funds which offer flexibility and independence, more of the most severely disabled
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people in our society are able to make these important decisions for themselves. That undoubtedly increases the quality of their lives.
Finally, I should like to say a couple of words about Motability. The Motability scheme is an extremely successful joint enterprise of government, voluntary sector and the clearing banks. It serves to increase the quality of life of ever increasing numbers of disabled people and commands all-party support. I feel sure, therefore, that the House will wish to support this provision, which puts Motability funding on a statutory footing to ensure continued financial support in the future. I commend the Bill to your Lordships.
Moved, That the Bill be now read a second time. —(Lord Henley.)
Lord Ennals: My Lords, before the Minister sits down, there are a number of Members on this side of the House who are worried about certain aspects of the legislation and who have been concerned since the funds were established. Will we have an opportunity to table amendments? Will there be a Committee stage? What is the situation in relation to whatever ruling may have been given by the Speaker in another place?
Lord Henley: My Lords, as the noble Lord will be aware, this is a money Bill. The decision about whether it is a money Bill is a matter for the Speaker of another place. It is not something we in this House can challenge. My understanding is—this has been agreed through the usual channels and was moved last week by my noble friend the Leader of the House—that we shall take the Second Reading and all other stages today. I do not therefore imagine that it will be possible for the noble Lord to put down amendments. Bearing in mind that it is a money Bill, it would not be right for this House to send the Bill back amended to the other place, it having been declared by the Speaker to be a money Bill. It is not for us to challenge that decision.
3.14 p.m.
Baroness Hollis of Heigham: My Lords, we thank the Minister for his clear introduction of the Bill. As the Minister said, the Bill funds two successor bodies to the old ILF—an ILF extension fund for existing clients and ILF 1993 for a limited number of new clients. Despite the Bill's bland clauses, the Bill is decidedly controversial. It disposes of considerable sums of public money to the disabled in ways that the disabled and the local authorities regard as retrograde. It is an odd Bill, drafted in a way which means that it evades, as my noble friend Lord Ennals has rightly pointed out, proper parliamentary scrutiny.
Those of us interested in DSS matters always face difficulties over scrutiny because the Benefits Agency is at arm's length. The ILF was set up by the Secretary of State, and the Bill merely grants its successor bodies the funds with which to fulfil their functions. Its terms of reference, including controversial items such as debarring those over 65 from applying to the ILF cannot, as such, be debated properly. It has been laid down in trust deeds, determined by the Secretary of

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State, and beyond parliamentary scrutiny until Members in another place demanded that the trust deeds be placed in the Library, and then moved amendments accordingly.
The Bill, as drafted by government, means that we in this House cannot even do that. As it is a money Bill we cannot realistically seek a Committee stage in which to press amendments which might have enjoyed your Lordships' support today, even though, as I say, it is a controversial measure with major implications for public policy and the disabled.
We on this side of the House face an arm's length DSS, an inaccessible trust and an unamendable Bill. So I hope that your Lordships will forgive us if I, and other speakers, make somewhat longer Second Reading speeches than we normally would, and go into matters in rather greater detail than we normally would so as to press those issues which ordinarily would have been explored in Committee. All that is the more worrying because of the unfortunate way the transition between the old ILF and the new successor bodies has been handled by government.
The original ILF was set up in June 1988 for five years to replace the special payments to the disabled which were wiped out by the Social Security Act 1988. Clearly, the original ILF had to be reconsidered in the light of the care in the community proposals, and we take no objection to that. But suddenly, and on 24 hours' notice, the Government announced last November that the ILF was to be replaced by two successor funds. When we on this side pressed the Minister at Question Time, he said that the Minister for disabled people would wish to hear the ILF's views about future arrangements. He did not and has not.
The original ILF had unrivalled experience and effectiveness. One might have expected it to have been consulted by government about successor bodies. No such consultation has taken place, despite the Minister's assurances to the contrary. One might have expected that some of the trustees—perhaps half—would have been invited to serve on the successor body, but not one of the Disability Income Group trustees was approached. Not one trustee will provide continuity between funds carrying the same name.
One might have expected that the old ILF would have been involved deeply with hand-over arrangements as 22,000 disabled people were affected. It was not. One might have thought that at the very least the old ILF fund would have been consulted about the timetable. It was not. It read about its fate in the DSS press release.
I cannot speak too highly of the two founding trustees of the successor bodies, but I have to say that I have never seen trustees of such a reputable body treated with so little respect for their skills and so little courtesy for their position. I can only assume that that was not because they did a bad job on behalf of disabled people but because they did a good job—too good a job for the comfort of Ministers and the Treasury alike.
In consequence, the old ILF had to close with 24 hours' notice, leaving a black hole against which disabled people could not claim for four-and-a-half months. Meanwhile, the Benefits Agency was
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introducing, or more accurately not introducing, a disability living allowance, and doing it so incompetently that it has recently been censured by the Parliamentary Ombudsman. Because applicants to the ILF had to be in receipt of DLA, it meant that many thousands lost their claim to such money because DLA claims had not been processed by the department.
When at Question Time the Minister, the noble Lord, Lord Henley, was pressed on the matter he blamed the trustees for not exercising the discretion which we know they did not have. However, the Minister in another place, Mr. Scott, said on 15th March:
"It has been said, and technically it is correct, that trustees of charitable funds have discretion. However, I have always recognised that the need for an orderly handover prevented the trustees from being able to exercise their discretion in those circumstances. I want to make plain my regrets and apologies".—[Official Report, Commons, 15/3/93; col. 38.]
I am sure that on reflection the Minister will wish to be associated with Mr. Scott's apologies.
The way in which the two successor funds have been set up is unfortunate enough. More worrying still are the new terms of reference—the trust deeds—within which the successor funds will operate. As I said, and as the Minister frankly explained, the ILF extension fund will support existing ILF clients who in the past have approached the fund directly. ILF 1993 will support new clients but only if they have been referred by the local authority as needing more than £200-worth of care.
Who are we talking about? ILF clients are severely disabled people. Most of them suffer multiple disabilities; 45 per cent. are not able to move at all; 50 per cent. are able to move only with difficulty or with help; 45 per cent. have impaired sight. Only 6 per cent. can wash themselves; only 7 per cent. can toilet themselves; only 7 per cent. can go to bed without assistance; and only 4 per cent. can cope with their nightly needs without help. The majority of the young disabled are men. Of the elderly disabled, three-quarters are women. They need care throughout the day because without that they will have to go into residential care.
Astonishingly, only one-quarter of ILF clients were receiving any help from the local authorities. On average that help was limited to two hours per week of home help and one day a week at a day centre. They remained in the community not because of the help which they received from the local authorities but because they were able to tap a network of informal, private and voluntary caring. That in turn was made possible precisely because ILF moneys could reimburse the expenses of informal carers, pay for respite care and pay for additional help when informal carers were themselves in poor health or burnt out.
ILF moneys were useful because, as they were flexible and in cash, they could leverage the rest of the care package. By funding between 20 and 25 hours the ILF could float a further 60 or 70 hours of informal care cheaply for all of us and allow the disabled to do what they wish to do; that is, to remain in the community. The fund was targeted, flexible, in-dividualised, welcome and cheap. Without it the

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disabled would have had to enter residential care. All the research shows that people enter residential care not because their disabilities have grown more severe but because the informal network of caring has broken down.
That is why we believe the Bill and the two new successor funds have the structure so tragically wrong. The Bill destroys the capacity of disabled people to tap ILF funds to keep their informal care arrangements afloat. As a result, if informal care falters, as it often does, the disabled will become more dependent on formal and more costly local authority care. The local authorities themselves cannot afford to finance that.
I wish to look in particular at three aspects of the new arrangements about which I have notified the Minister and which concern the disability groups. The first is that local authorities must provide the first £200 of package before the client can be referred to the ILF. The second is that that £200 must be in kind and in services but not in cash. The third is that the arrangements are restricted to the under-65s.
First, under the proposed new arrangements in the trust deeds disabled people must receive £200 in services from the local authority before the local authority can refer them to the ILF. Yet we know that the severely disabled may need 24-hour a day intermittent care. But where they receive local authority support—and only one-quarter of them do—it will average only about two hours a week of home help and a day at a day centre, the value of which is about £40 a week. Can and will local authorities top up those services as required under the new arrangements? That is impossible.
Local authorities receive some £536 million for care in the community arrangements. Those are funds transferred largely from the DSS to fund existing residential care arrangements in private homes. Some such arrangements are £200 million short of what local authorities need to meet their existing commitments. In addition, the Government are producing £26 million, which we welcome, specifically to fund the £200 care packages for the severely disabled during the first year. That works out at about £50,000 for every 100,000 people—the average size of a district council.
If the severely disabled are already receiving an average of £40 per week in care from the local authority that £50,000 will buy, in an average district council, care of £200 per week for just seven severely disabled people. If the local authority perfectly prudently decides to stretch its money more thinly to help to keep more people afloat, not one will breach the £200 ceiling which would allow them to tap the ILF. As local authorities are capped they cannot add to their resources themselves. No one can make the sums work.
Research by the director of DIG, Pauline Thompson, asked directors of social services whether they believed they could fund the £200 package, which the Bill requires, within their own resources. Of the 68 who took part in the survey —that is, two-thirds of all the directors of social services—only one was sure that he could fund the package, 25 were fairly confident
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but 32 doubted that they could or would do so. Forty of the directors—that is two-thirds—admitted that care packages for the disabled would be determined not by the needs of the disabled but be limited by the resources of their departments.
Very few severely disabled people, therefore, will be able to turn to the ILF not because their needs do not exist—their needs are great—but because the gatekeeper, the local authority, will not be able to fund the first £200-worth of services, which make them eligible to pass through that gate.
I turn to the second criticism. I say "pay" for services, but, of course, the local authority is not permitted to pay, which is the second major problem. Local authorities are allowed to provide that £200 care package only in the form of services. They are not allowed to offer cash even when they wish to do so.
Many of the issues were aired around the Private Member's Bill introduced by the noble Lord, Lord McColl, to permit direct payments. Noble Lords from all sides of the House unanimously reminded the Minister of the virtues of cash payments. Cash payments are flexible; services in kind are inevitably inflexible because the client must fit the services rather than the services fitting the client. The clients may wish to go to bed at 11 o'clock, but if the local authority staff are to put them to bed effectively some of them must begin at half past eight in order to finish.
Cash payments are not only more flexible but cheaper. Formal home helpers charge £6.50 per hour, social workers' time costs £30 per hour but self-management—private brokerage which comes with cash payment—is not only more flexible but much less expensive. Cash payments also put the disabled people in control. The most recent Rowntree Report shows that service packages—that is, services in kind—are determined by professionals whose judgments are often at odds with what the disabled people want themselves. Above all—and the Minister spoke movingly of this - it is a matter of dignity and choice. Jenny Morris, herself disabled, said:
"Having the money to pay for personal assistance is the most important factor in enabling disabled people to assert the kind of choices which non-disabled people take for granted".
Another young disabled woman, Jane Campbell, said:
"Direct payments have turned my life around".
She has rediscovered spontaneity: to get up when she wants, to go out when she wants, to stay up late when she wants. That is everything that we take for granted. With cash, the carers work to her.
That principle is widely accepted in the other place. I quote from the debate on the Bill:
"We all know that by far the most popular aspect of the Independent Living Fund is the flexibility and freedom of choice that cash payments bring. Dignity and independence are as important to disabled people as they are to everyone else in society. Disabled people have come to value the ability to select and employ their own carers".
The speaker, of course, was the Minister, Nicholas Scott, speaking on a Bill which for virtually all disabled people takes away that right.
Why is that? In the debate on the Bill sponsored by the noble Lord, Lord McColl, the Minister argued that it is the job of the DSS to provide cash, the job of the local authorities to provide services and there

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should be no trespassing. That is nonsense. In Scotland trespassing occurs all the time. Indeed, in England local authorities make cash payments to children leaving care, to adults fostering children, adults running sports, the arts, and voluntary organisations. Cash payments are made to a wide variety of organisations and individuals, unless they happen to be disabled. It is only the disabled who are not to be trusted with cash.
The Minister, the noble Baroness, Lady Cumberlege, told us also that costs would escalate. Why should that be so? We seek only to give power to, rather than impose a duty on, local authorities to make cash payments. That power would be exercised by the local authorities only where it offered better value for money. It is already clear that the same resource put into cash rather than services will leverage far more informal care from neighbours and friends. Therefore, it will go further and help more people.
Indeed, without cash payments there is a greatly increased likelihood of a need for residential care. The Shaftesbury and Cheshire homes cost between £400 and £600 per week for the provision of care for the physically handicapped; yet Kingston social services department was keeping eight severely disabled people in the community at a cost of £55,000—a tenth of what it would cost to keep them in residential homes.
The Minister, Mr. Scott, said also that if local authorities can find a way around the law—for example, by paying money to a local trust to pay out to disabled people —he would be delighted. Is it really sensible social policy to encourage local authorities to bend the law rather than expect the Government to amend it? That really will not do.
I turn now to the third major criticism offered by the disability groups; that is, that the new funds are confined to those aged under 65.
Lord Ennals: My Lords, I am grateful to my noble friend for giving way. I wonder whether my noble friend will deal with the top limit of £500. That seems to me to he extremely disturbing. There are many highly qualified doctors and nurses who have an enormous contribution to make who can only make that contribution if they are able to have the assistance which we are talking about here.
The Minister in another place, when dealing with the top limit of £500, said that he did not believe that there is anything offensive in our setting an upper limit beyond which it is not unreasonable that people would need help and decide, sometimes reluctantly, that the time has come for them to go into residential care. Does my noble friend find, as I do, that that is a shocking statement? Is the figure of £500 the price of freedom in this country for severely disabled people who have a great contribution to make to our society?
Baroness Hollis of Heigham: My Lords, my noble friend raises an extremely important point. Indeed, in the other place the discussions became somewhat muddied as the Minister used metaphors about sandwiches. If a disabled person requires £200 worth of care, he gets that as a package from the local authority in the form of services. If he requires up to
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£500 worth of care, the first £200 comes from the local authority and the next £300 can come from the ILF. But if he requires £501 worth of care, he is not eligible at all to apply to the ILF. All funding must come from the local authority and must be funded entirely in the form of services. Therefore, my noble friend is entirely right. It means that a person in that situation will not have the flexibility to construct the care package which is needed, but very few disabled people will be financed by local authorities in that respect.
Finally, I turn to my last criticism; namely, that those aged over 65 are not eligible to receive money from the ILF. Thirty-seven per cent. of the old ILF clients were aged over 60. We accept that resources are finite but why are the Government privileging those aged under 65?
The argument advanced by the Government throughout is that older people have had the opportunity to share in the country's growing prosperity and to build up pensions and savings. As with so much of the debate, that is simply not true. Only one-third of the retired are disabled but those who are have only 88 per cent. of the income of younger disabled people. Therefore, they are poorer. Only one in six of those disabled have income above income support levels. They are poorer. One should add to that that three-quarters of the elderly disabled are women. They will not have built up pensions in their own right. Indeed, only 28 per cent. of all women leaving work qualify for a state pension in their own right. The rest are dependent on their husband's contributions. They certainly do not have access to private pensions or SERPS in their own right.
The reason that those women are very poor, usually on income support with no savings, is because too often they have been among the army of carers, caring usually for men. That has kept them out of the labour market so that by the time that they need help for themselves they are on very low incomes, with no savings, in poor health and can find by caring for others that they have become socially isolated. When the time comes for them to need care in turn, often they have no informal network on which to draw. Three-quarters of those living alone are women. Therefore, they are more rather than less likely to need to buy formal care.
Because those woman are now refused access to the ILF, what do the Government believe will happen to those older disabled women? Are the Government saying that they will not be cared for, or are they saying that because they are over 65 and because they are women they must be cared for differently, more expensively and in ways in which the women almost certainly do not want? The connections between poverty, gender and disability are there for all to see. By confining ILF funds to those aged under 65, the Government are denying help to those very women who, when younger, kept many other disabled people afloat in their community. That is deeply unjust.
This is a rationing Bill. It requires the first £200 to come from the local authorities in kind, which most social services directors believe is not financially possible. Secondly, it provides payment by services rather than by cash. That will allow local authorities,

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if they follow Mr. Lemming's advice, to conceal assessed needs and to make obscure the degree to which that is being met. Confining ILF funds to those aged under 65 ensures that those who have least access to informal caring and are, therefore, in greatest need —women—are denied access to the ILF altogether.
It is a rationing device and it is clearly very successful. Whereas the old ILF had 8,500 clients per year, the new ILF expects only 1,500. Whereas the old ILF had nearly 600 inquiries in its first month, the new ILF has had only 12 and, even now, there have been only 56 inquiries. If the money provided by the Bill is sufficient for the successor funds, it will be so precisely because the disabled will have been deterred or debarred from applying for it. In terms of the funds that it provides, the legislation may well be successful. It is a pity about the disabled.
3.40 p.m.
Lord Addington: My Lords, it has been pointed out to me that, under the Companion to the Standing Orders, we are not debarred from amending the Bill. Moreover, if we choose to do so, the House of Commons does not have to consider the amendments. Indeed, there have been cases in the past where this Chamber has actually amended Bills and the other place has accepted such amendments.
Having said that, I now find myself in the position of having to follow the speech of the noble Baroness who examined the subject in such detail that much of what I intended to say is more or less superfluous. However, I should like to support the noble Baroness on several of the points she made. For example, if you provide help to those who are disabled so that they can choose what it is that they need—that is, by giving them cash so that they can purchase their own assistance and support—you will give them far greater freedom. If you give someone freedom you are adding to his status in life and his ability to enjoy a quality of life. The noble Baroness was right to draw our attention to that fact. I should have thought that it was fairly obvious to all concerned that that is the case. If you want to give someone dignity and control over his life by allowing him to organise it himself, invariably the people who are receiving the help will be the best people to tell you how that help should be administered.
I concur totally with the point that we should not have a finite cut-off limit. An article in Social Work Today said that about 1 per cent. of those trying to claim extra funding would go over the 5 per cent. limit. Surely, bringing down an arbitrary line with that sort of heavy terminology is just a little obscuring. For example, if someone needs £501, as the noble Baroness said, that person will be debarred from help. Surely it is better to have a more flexible approach.
There is the other area of debarring those below the age of 65. As the noble Baroness said, a person who has had a disability for quite a long time will have had less chance to build up a pension or savings and thus will be in more need of help. Surely, bringing down artificial barriers—namely, a very rigid level of finance and a very rigid age barrier—will mean that more
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people are forced into residential care which is invariably more expensive. They will not be able to live in their own homes in dignity and enjoy a far higher standard of living as well as saving the taxpayer money.
3.42 p.m.
Baroness Masham of Ilton: My Lords, on Thursday evening I attended a dinner with American people working in Britain. I was told that a couple of Americans were returning home and wanted to travel on the QE2. The wife was disabled. When the shipping firm was told, the attitude was that she would be a nuisance. I was told that the firm had been most unhelpful. The Americans, who now have antidiscrimination legislation, are understandably furious.
Are we, as a country, trying to push disabled people aside? The Disability (Grants) Bill now before us is causing great concern among organisations of disabled people. I am president of the Spinal Injuries Association. Many of our members are extremely disabled, having broken their necks in accidents which are often not covered by insurance. If you break your neck, you can become totally paralysed from the neck down. You can lose feeling from that area down and you can also lose the usual bodily functions of the bladder and the bowels. A manual evacuation of the bowels has to be performed every two days and the bladder has to be managed throughout the day.
To prevent pressure sores, the person has to be lifted and moved constantly. People without the use of their hands and arms require such things to be done for them. There must be trust in, and compatibility with, the carer. Care is costly. The Spinal Injuries Association runs campaigns on accident prevention. We are very pleased that the Government have put accident prevention as a priority category in The Health of the Nation.
I am attending a conference tomorrow on pressure sore prevention, organised by the Department of Health. Pressure sores are enormously expensive to the quality of life of the individual and to the Department of Health. I am very concerned that. without adequate care in the community, there will be an increase of such preventable conditions as pressure sores.
Will social service departments which assess and give grants to severely disabled people understand such matters? It is no small matter: we are talking about a life and death situation. Unless some amendments are made to the Disability (Grants) Bill, the organisations of disabled people believe that the Government's proposals will be the death knell of the future of independent living. Adequate and appropriate personal assistance provision is fundamental to equality for disabled people. Denial of that is a denial of equal rights.
One of the main reasons for the growth of the Independent Living Fund (ILF) was that social services departments were becoming increasingly unable to cope with the high degree of personal assistance needed by severely disabled people. It has been found that many local authorities are not providing adequate means; they are concerned that

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they are not meeting the needs because of financial stringency. Moreover, because of that, they may be under-assessing people so that they will not reach the threshold to qualify for the ILF money.
A young man who broke his neck in a rugby accident and lived with his widowed mother founded the Spinal Injuries Association with myself and others. David's mother was becoming very crippled with arthritis. On one occasion, he said to me, "I will never go into residential care". That severely disabled person must have realised how care in the community was moving, for some months after I saw him he was found dead in his lily pond in the garden. Somehow he had managed, without the use of his arms, to get himself there. To this day, no one knows how he did it. But I feel that society let him down. That is why our debate today is so important.
Another young man who had broken his neck was placed in residential care. His parents who lived in the East End of London did not want him home. They would not change to a more suitable flat. I saw the young man when he was being visited by his girl friend in a unit attached to a hospital for elderly people. The young man looked and felt like a caged animal. If that sort of person has to live in residential care, there is no light at the end of the tunnel.
I should like to ask the Minister why there is a requirement under the trust deeds that employment details of employees should be given to the trustees. That seems to be an infringement of privacy and confidentiality and represents unnecessary bureaucracy. It also negates the positive aspect provided by direct cash payments of flexibility and genuine self-control by the disabled person. I hope that the Government will review that requirement.
The Spinal Injuries Association estimates that, for its severely disabled members, the average personal assistance cost is in the region of £300 per week. Therefore, the amount of cash received under the new arrangements will not give them any meaningful control over their personal assistance arrangements. The Association of Metropolitan Authorities, the Association of County Councils and the Association of Directors of Social Services have said that that will lead to,
"muddled personal assistance provision for severely disabled people".
All those bodies support the case for direct payments.
There has been so much change, especially as regards severely disabled people. Some might say it is change for the sake of change. The Government seem to be restless. They are always changing benefits and making the vulnerable feel more vulnerable. Many people are sorry to see the end of the Independent Living Fund, as it was. Its replacement is but a pale ghost of the original. Such experienced, admirable people as Peter Large, who has done so much for disabled people through the Disablement Income Group, are worried about the changes. It is severely disabled people who know the real importance of the Government getting a Bill like this right.
Many people are concerned that the House of Lords will not discuss the matter fully enough. Disabled people must contact their Members of
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Parliament about financial matters. This issue is probably more appropriate for another place rather than your Lordships' House as it is a financial matter. I hope that the Minister will explain the Government's position so that we in this House are not thought to be complacent. We consider this to be a very important matter.
3.51 p.m.
Lord Campbell of Croy: My Lords, I thank my noble friend Lord Henley for his introduction of the Bill which contains the Government's arrangements to replace the former Independent Living Fund and, we hope, carry on its good work. The two new funds are also designed to enable the severely disabled to live in the community outside institutions. I remember when the ILF was created in 1988. There were then doubts and criticisms expressed, including from the Opposition Benches in both Houses of Parliament. Now there is general agreement that it has been a success. The noble Baroness, Lady Hollis, has just spoken of it in generous terms. It was intended to cover only a limited period of time until the community care system started.
In 1988 it was estimated that about £5 million a year in grants would be expended. But in the event after four years the figure reached about £100 million a year. It was also providing grants to some 21,000 severely disabled people. I wish to say a few words here about numbers. It may be pointed out by some that that is a very small proportion of the estimate of the total of disabled people in the United Kingdom which is thought to be over 6 million. The clear explanation must be made that these new funds are for severely disabled people who can, with help—and who wish to do so—cope with life without institutional care. The figure of over 6 million comprises disabled of all kinds, including people with minor handicaps, although the degree of handicap is sometimes not obvious. For example, the loss of one finger may not seem a serious disability but of course it has serious implications for a professional pianist. Moreover, about 80 per cent. of the 6 million are elderly people whose disabilities have arrived with age. They were able bodied in their youth and during their working lives. The large majority of these people who need help should be served by the general community care system now in operation. That new system caters for both disabled and elderly people. Many of its clients will be in both categories. This should assist local authorities in their organisation of functions. That, of course, is a wider subject and I hope it will be debated on another day.
I am glad that both in the general community care scheme and in this Bill which deals with the severely disabled the principle is to promote independence, if possible. Choice must remain because a few people prefer institutional care. We must remember that a choice must be given. Some of your Lordships will know that I have been advocating this principle in both Houses of Parliament for over 25 years. Therefore it will come as no surprise to noble Lords to learn that I support the principle of independence, where possible.

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In the mid-1960s the only disabled persons who received benefits related to disability were the war disabled and those who had received industrial injuries in certain circumstances. Others, however severe their disability— it may have been a lifelong condition—were subject to ad hoc care from their families, local communities, institutions, voluntary organisations or in enforced hospital life.
However, a voluntary organisation was founded in the mid-1960s with the aim of changing that situation. It has already been mentioned in the debate; it was the Disablement Income Group (DIG). After its earlier successes I was delighted in 1988 when it was chosen by the Government to manage the ILF upon its creation. I am sure that DIG contributed much to the ILF's achievements. Incidentally its founder, Mrs. Megan du Boisson, who died in a tragic motor accident four years later, was the first person in a wheelchair to ascend to the public gallery in another place. The then Serjeant at Arms co-operated admirably to enable her to hear one of the first parliamentary debates on disabled people. I initiated that debate as I had the good fortune to win a ballot.
I trust that comments in this single debate on the Bill in this House will be fully considered by the Government when bringing its provisions into effect. I shall now make my own comments. The noble Baroness, Lady Hollis, has already mentioned direct cash payments. These are cash payments to individuals but they are not included in this Bill although they were part of the former Independent Living Fund system. The same principle is in the Bill being sponsored in this House by my noble friend Lord McColl of Dulwich. It worked well with the ILF and the Government's objections appear to be technical. I understand the Government object because the trustees are already in place in conditions which have already been accepted. Surely the Government can find a way of changing this without necessarily changing the terms of the Bill.
Accountability is, of course, needed, but that has been arranged successfully in the recent past. The principle of direct payments to individuals also extends choice. That is an aim of the Government in this field. Costs would not be increased but there would probably be better value for money as the payments would meet the particular requirements of an individual.
I shall now comment on right of review; that is, a right to have a decision independently reviewed. Admittedly this did not exist under the former ILF scheme, but that scheme was temporary. I understand the Government have said that there will be a review mechanism, but will it be based on an independent body or person as that is the vital element if it is to be a proper review?
I now turn to Motability. The Bill is rightly being used as a timely means of continuing grants to this charitable organisation which runs an excellent scheme of helping to provide vehicles for disabled people. About 140,000 people are at present being helped in this way, mainly through favourable terms for leasing and hire purchase. Some 330,000 vehicles
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have been provided under the scheme since it started. Motability certainly deserves continued support with our approval.
I have a question for my noble friend. How do the funds relate to mental disability, a subject in which I am much involved? I was especially involved with it when I was the chairman of the Scottish committee during the International Year of the Disabled in 1981. As a result I am the patron of one of the mental illness organisations. Were some mentally disabled people included among those receiving grants under the old ILF scheme? I do not expect the Minister necessarily to reply today, but perhaps he could write to me later. Will such people be included in the new schemes?
I make clear my own view that the new fund is not likely to be applicable to the usual cases of severe mental illness because the individuals do not need physical help and their state is often highly volatile. They need understanding and sensitive supervision. When relapses occur, perhaps because on a whim the person has decided not to take medication, temporary institutional care is probably the necessary remedy. In other words, either the individuals are in the community or hostels under observation, or they are in hospital in a crisis.
The noble Lord, Lord Rix, is due to speak later in the debate so I have restricted my observations to the mentally ill. He may have more to say about other mentally disabled people.
To sum up, the old ILF was temporary and, contrary to some forecasts, has set an exemplary pattern. The new funds will be launched with the best hopes of most Members of this House. The Government will be wise to bear in mind the main comments made today in this debate.
4.1 p.m.
Lord Murray of Epping Forest: My Lords, we should welcome the fact that the ILF survives at all. Half a loaf is better than no bread. This is only half a loaf, but at least it gives us something to build on and to improve by continued pressure in the future. As my noble friend Lady Hollis spelt out so distinctly, this Bill certainly needs some improvement.
Incidentally, something else which needs improvement is access to this House for disabled people for the purpose of listening to our debates, particularly for those who use wheelchairs. I hope that that matter may be given consideration at some time.
This debate has demonstrated the widespread support for giving disabled people the resources with which they can buy the services which they need in order to live in the community. That was overwhelmingly clear in the other debate on the Bill to which reference has been made, initiated by the noble Lord, Lord McColl, a debate in which we who spoke scored all the goals but after which the Government Front Bench team awarded themselves the victors' medals.
The history of the Government's attitude towards grants for disabled people has been chequered. They have not so much moved the goalposts in the course of their consideration of the matter as changed their jerseys. Now we are told by Downing Street that we

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are to have a listening government. As the noble Lord, Lord Campbell, emphasised, it is critically important that the Government should listen to disabled people on this issue. They should listen to social service departments. They should listen, as I have, to those who are charged with assessing the needs of disabled people under community care, who are in no doubt whatever about the superiority of direct grants. They should, and I hope will, listen to their own Back-Benchers who have spoken this afternoon and on other occasions.
The Minister's right honourable friend the Minister in another place, speaking on the Bill said:
"I have a feeling that I will be constantly reminded of the arguments that have been put forward and that the Government will have to reconsider this from time to time to see whether the new arrangements are bearing up or what changes may be necessary".—[Official Report, Commons, 27/4/93: col. 902.]
Given the constitutional position, all we can do this afternoon is to put up some flags charting the areas on which we shall concentrate in the future. My noble friend Lady Hollis has done that very ably. Her comments were based on the proposition that assistance to disabled people to live an independent life should he a right. That assistance could take the form of providing the disabled person with the means to make decisions about his or her own care arrangements and providing the necessary resources. The Bill falls short of that test.
Those resources should he provided on the basis of common standards and common conditions, avoiding inconsistent treatment. No scheme which depends basically on assessment by a multiplicity of local authorities can meet that test. Finally, assistance should be available to anyone who passes the test of being able to cope in the community, and the Bill falls short on that score also.
I recognise that the Bill goes at least some way towards meeting the needs of disabled people, but it puts unnecessary hurdles in the way of disabled people. That is the very last thing we ought to do to persons who use wheelchairs or who have, for example, impaired vision.
My noble friend Lady Hollis made an overwhelming case. I should like to underline two of the points which she made in relation to the Independent Living 1993 Fund. The first is the fact that individual local authorities will decide whether people have access to the fund at all, and before an application can even be made the local authorities must be making a contribution or providing services of the order of £200 a week, an amount which very few local authorities spend on individual cases now. Local authorities have not been meeting the full needs of disabled people. As my noble friend illustrated, they are now telling us that they cannot meet them in future. We know that assessors are being told to keep down the provision which they make. They are being told in effect to deprive Peter in order to support Pauline. What ought to be a needs led service is obviously incompatible with budget limited provision.
We accept that there have to be some financial limits, but the likelihood is that different local authorities will interpret needs in different ways. That
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will lead to inconsistent treatment of people with similar needs. I hope that the Government will monitor that issue very carefully. I can assure the Minister that organisations for disabled persons and those of us who are sympathetic to them will be doing so.
My second point relates to the fixing of the upper limit at £500 a week, to which other noble Lords have referred, and the limitation on the ability of the 1993 fund to provide a cash top-up if the cost of the whole package is more than £500. Reference has been made to the uncertainty which surrounds that provision. I heard with interest my noble friend Lady Hollis claim that the local authorities would have to pay the whole of the cost. If that is so it is news to me. I hope that the issue will be clarified by the Minister beyond peradventure.
More important is the question of the £500 limit itself. It is my understanding that the extension fund can pay up to £560 a week whereas the 1993 fund can pay only up to £500. If that is so, why is there that difference? Independence should be based on an assessment that the person can cope and not on a cash limit. As has been said earlier, in effect the Government are saying that £500 a week is to be the price of freedom. I accept that there has to he some limit on the amount of cash made available, but this is unreasonably restrictive. There cannot be many disabled people whose costs exceed £500 a week, and surely the fund grants can be made sufficiently flexible to accommodate the few marginal cases which would be affected. The alternative is residential care, or possibly nursing care.
My final point, echoing what my noble friend and others have said, concerns the upper age limit which applies to both funds, namely the limitation of entitlement to people of working age—presently 60 and 65. That limit is being questioned strongly, not least by the Government themselves. It has been far too arbitrary in terms of defining the possibility of making contributions or the point at which needs begin to emerge in the community. We are told that drawing that line will save £2 million in 1993–94, £9 million in 1995–96. But that is marginal when we consider the amounts of money involved.
Previous speakers have emphasised the way in which the provisions will affect old people and their carers, many of whom are themselves beyond working age. It was said that old people have savings. Some do; but the recent Carnegie report on the third age has demonstrated the wide and increasing gap between the incomes of third agers generally, on the one hand, and the poorest of them, on the other, and the steady decline of income with age. It is also said that local authorities can provide additional services, if necessary. But those people do not want local authority services. As has been said, they wish to be able to choose.
I repeat what I have said in earlier debates. That provision is analogous to giving old-age pensioners grocery tickets instead of cash. The gross cost will be £2 million. However, instead of that money being made available local authority services in kind will be provided which will be more costly. Alternatively,

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some people will have to go into residential care which will also be more costly. On the grounds of the economical use of resources, it would be sensible to build adaptability and flexibility into the operation of the funds. I hope that it is not too late to review that proposal and to consider again the agreement that has been reached between the Government and the trustees. At the very least high priority should be given to extending provisions in that way as part of what must be an ongoing and regular reassessment of whether the funds are achieving the objectives that the Government themselves have set. The Minister said that he expects the Government to be under pressure on those and other points. He will not be disappointed.
4.12 p.m.
Lord Rix: My Lords, this is the first time that I have had the rather unusual experience of speaking in your Lordships' House during a debate on a money Bill, with its somewhat arcane restrictions. I am reminded of Harry von Tilzer's famous old music hall song of long ago—1900 to be precise—of being "A bird in a gilded cage". Admittedly, I am of the wrong sex. But as any amendments that I or other noble Lords care to proffer can be disregarded, emasculation rather than emancipation is a word which is more easily spoken "trippingly on the tongue". That is a pity, for there are many amendments which were offered by both sides of the House in another place which could have greatly improved the new Independent Living 1993 Fund and the Independent Living Extension Fund. Alas, those were largely disregarded.
We now face a Bill which has caused a number of grave concerns to be voiced by MENCAP and other organisations working with or on behalf of people with disabilities, as well as the Disability Alliance itself. Perhaps I may quote the words of Lorna Reith, the director of the alliance. She said:
"What is at stake is the quality of life and the right to live independently of the most severely disabled people in the country".
Other noble Lords, including the noble Baronesses, Lady Hollis and Lady Masham, have spoken eloquently and movingly on those grave concerns. With your Lordships' indulgence, I wish to summarise those anxieties.
The first concerns the problems to be faced by those affected by the upper age limit, with its ludicrous denial of funds for people over 65. Of all those receiving help from the old ILF, 34 per cent. were over that OAP limit. The second anxiety is over the £200 local authority contribution which can no longer make cash payments to an individual. The third involves the upper ceiling of £500 overall, with its overt threat of residential care being seen as the preferred alternative once that figure has been reached. The fourth is the right of review being qualified by those dread words "if necessary". The fifth refers to ensuring adequate provision for existing beneficiaries as promised in the Government's manifesto commitments but now capable of being set aside. The sixth involves confidentiality, which will
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now be breached by the disclosure of all carers' names, addresses and national insurance numbers to the Secretary of State.
The seventh anxiety involves the parliamentary accountability being promised in a very half-hearted way by the Parliamentary Under-Secretary of State, Mr. Alistair Burt, who said in another place on 23rd March, at col. 18 of the Official Report, that,
"as the fund is new, if time is available, a date would probably be appropriate after a year to see how the running of the new fund is progressing".
Another ministerial statement made a month later on 27th April, at col. 902 of the Official Report, seemed to anticipate U-turns ahead, as we have already heard from the noble Lord, Lord Murray of Epping Forest.
Finally I come to the dread hyphenated words "ring-fencing". The Disablement Income Group Report, Cause for Concern, found that only 57 per cent. of directors of social services surveyed were planning to spend their independent living allocation on funding the first £200 of individual care packages. Ring-fencing of those funds and others would assuage our fears on that and on community care as a whole.
That leads me in a general way to MENCAP's fears, as anticipated by the noble Lord, Lord Campbell of Croy. For those among us with a severe learning disability and additional sensory and/or physical disabilities, community care plans promise, at best, further thought and for the most part nothing, even though 12 years ago, and many times since in similar words, government have set out their community care priorities as being,
"to maintain a person's links with family and friends and normal life and to offer the support that meets his or her particular needs".
Five years after Care in Action the then Secretary of State for Social Services told the annual conference of the Association of Directors of Social Services:
"The reality is that community care policies have significantly improved the lives of many people who would otherwise have spent years in institutions cut off from normal living. None of us would wish to see the people for whom we care confined to that sort of existence indefinitely".
The vast majority of people with profound intellectual and multiple disabilities at present live at home with their parents. As the noble Lord, Lord Campbell of Croy, said, we want a flexible system which will support them more adequately while they live in the family home. Most care packages, to use the jargon, probably cost local authorities well under £200 a week. Some families receive negligible help. Beyond the family home most profoundly disabled people will in time need good quality residential care. For some the old ILF did, and the new ILF could, offer an imaginative alternative. That imaginative choice is ruled out by the Minister's statement in the Adjournment Debate on 25th February last that beyond an upper limit of cost, choice will be denied. Once again the most severely disabled people have least, or zero, choice.
If the Disability (Grants) Bill is not amended, many severely disabled people may well find themselves in the 1986 phrase uttered by the then Secretary of State,
"confined to that sort of existence indefinitely".

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Old Harry von Tilzer was pretty close to the mark, was he not? He might well have been writing about community care and the ILF—might he not—with the words:
"She's only a bird in a gilded cage,
A beautiful sight to see
You may think she's happy and free from care,
She's not, though she seems to be"?
4.19 p.m.
Lord Swinfen: My Lords, I welcome the Government's efforts to continue the excellent independent living fund with the Independent Living Extension Fund and the Independent Living 1993 Fund. However, that may be as far as my welcome goes today.
I have seen suggestions that the overall level of funding for the two new funds, with the number of severely disabled people who will be eligible under the funds, will produce a shortfall. Can my noble friend assure the House that sufficient funds will be available and, if not, the shortfall will be made up?
As the law stands, the inability of local authorities to make direct payments is disastrous to the working of the fund set up under the Bill. If the Government were to take on hoard the Bill proposed by the noble Lord, Lord McColl—the Disabled Persons (Services) (No. 2) Bill—and see it safely through not only this House but the other place, it would help to make the Bill that we are now discussing work properly.
The first £200 worth of funding for severely disabled people under the Bill has to be provided by means of services from the local authorities. As I understand it, that means that there will be little choice. A number of disabled people who are currently working, paying tax and playing a useful part in society will be unable to continue their work because they will not have the flexibility under the local authority services that they have at present.
The upper limit, the additional —300 over and above the —200 in services, can be provided in the form of cash. That will make an absolute mishmash and it will be very complicated. It would not be difficult for local authority staff to run, say, 50 or 100 severely disabled people and all that the staff would have to do would be to monitor the accounts of the special funds set up at banks and check the receipts for the money expended.
I gather that in the other place the Minister, when dealing with the Bill, suggested that once people needed more than £500 per week spent on them they would have to go into residential care. I work for a voluntary organisation which runs a number of good residential care homes, providing the kind of services to severely disabled people who, the Minister says, would have to go into homes and for which those people would have to find the funds. The cheapest I could find was £535 per week, and it does not include all the services that such people would require. For disabled people who need help with all bodily functions and feeding the cost works out at £635 per week. By my calculation that is 27 per cent. above the £500 that the Government say will be the cut-off point at which people will have to go into a home. Far better value for money could be obtained through increasing
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the grant, making it more flexible and allowing people to choose their own staff. It would be much more satisfactory for the disabled person and allow local authorities to distribute cash over the whole range, thus reducing administrative costs. There is no doubt in my mind about that.
The other point is ring-fencing, also mentioned by other noble Lords. I gather that the funds being produced under the Bill will not be ring-fenced. What steps will my noble friend the Minister take to ensure that the funds given under the Bill to local authorities are used properly and not for other social services? They should not just be frittered away. I am sure that local authorities will not be able to use the funds for totally different purposes, but it is essential to ensure that the money provided under the Bill is used for those for whom the funds are set up.
4.25 p.m.
Lord Desai: My Lords, with the permission of the House I wish to speak in the gap. I should like to make two simple points. As a preface, in the 1960s and 1970s the first attack on the welfare state was started by friends of the Government in the various think-tanks, including the Institute of Economic Affairs and other places. It was said that what was wrong with the welfare state was that it provided things in kind. It would be much better if the cash were provided.
The fundamental attack that people like Professor Friedman find Professor Hayek made on the welfare state was that by providing things directly in kind, the state denied people a choice. We have now come full circle, after 30 years. The Government who profess to defend choice now say, "No, you can't have cash, you must have things in kind". Clearly, as many noble Lords have pointed out, that will be a severe restriction on people's choice to live independently, as many will wish. It is also paradoxical that, as many people pointed out, that is a more expensive way of doing things than getting value for money.
I wish particularly to comment on the various parts of the so-called "sandwich" of £500 and above. It has been pointed out and corroborated by surveys that local authorities do not currently provide anything like sufficient help to the severely disabled to justify the £200 requirement in the present provision. People are required, under present legislation, to take £200 worth of services in kind from the local authority before they apply for the £300 in cash. That seems to be a perverse rule because I could easily imagine someone receiving, say, cash of £250 and being able to provide much better for themselves than if they had to go to the local authority for £200 for an activity which the local authority may or may not have the capacity to provide. What is more, if such rules are imposed it will lead to cost inflation. Services will be increased to £200 worth in order to allow a person to claim the next £300. Clearly, cost inflation is unnecessarily built into the sandwich. A direct payment of cash would save on expenses.
However, what about people who need to spend more than £500? As we know, most of us are able to make our own decisions on when to get up, when to eat, and so on. For other people it would cost a

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considerable amount to have such freedoms: for some it may cost more than £500, for some less than £500. What is the logic of the cash limit of £500? I do not understand it. It is not as though people will go on a bonanza if there is no cash limit.
I wish to put a question to the Minister and I apologise for not giving him notice of it. It relates to the top of the sandwich. If a person has a problem which costs £550, could the services for that person be unbundled so that he or she could buy £200 worth from the local authority and exactly £300 from the Independent Living Fund, with £50 coming from somewhere else?
There was an indication from the Minister in another place that some unbundling would be allowed because part of the sandwich could be bought one way and another part another way. However, if it is the case that someone who costs more than £500 would receive nothing from the Independent Living Fund, that is a severe restriction and, if I may say so, a silly rule. It helps no one. All it does is to take people into the much more expensive residential care option. Surely that is not what the Government wish. If they want to save money they should find a better way than they have found so far.
I should like to make one last point, about the elderly. We are experiencing a growing population aged about 75 and almost 80. Many are women. Many do not have private pension funds. Demographically it is also true that the generation which is now entering the 75-plus age group had fewer children than the generation which grew later on. That was the effect of the First World War. Those people do not have children. Therefore, if a person aged about 75 were to have an accident and suffer a severe disability, under the present rules that person would have nowhere to go. If the Government do not want that to happen, surely they must rethink the rules about the elderly not being eligible for the new fund which has been set up. I urge the Government, if they want to save money and to provide choice —both of which I entirely approve of—they must rethink aspects of the current Bill and, before too long, improve it in its implementation.
4.30 p.m.
Lord Carter: My Lords, as always when one winds up a debate of this nature, most of the points have been adequately covered and I can therefore be reasonably brief. As has been said, the Bill is a money Bill. We have no chance to probe or amend it at Committee stage. Even if we put down amendments, they would have to fit the Long Title of the Bill, which is about the making of grants. It is therefore important that when the Minister comes to reply he answers the many questions that have been raised in the debate. I am sure that he will.
It is a money Bill in another respect. It is a Treasury Bill, all about the limiting of cash and the rationing of provision. That has been made extremely clear by a number of speakers. I have no wish to go through the various points again in detail. It occurred to me that it would be interesting to go back to 1988 when the
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ILF was set up. I moved an amendment to the 1988 Social Security Bill at Report stage which was intended to probe the intentions of the Government in setting up the ILF. That debate makes extremely interesting reading now.
The amendment was purely a probing amendment, but I see that it included arrangements for adjudication and appeal concerning grants from the ILF. That point was well made by the noble Lord, Lord Campbell of Croy. At the time there was considerable interest in the number of people who were likely to benefit. I see that I said:
"In the week of the announcement, in a radio broadcast, the Minister referred to 'a few hundreds'. In the other place he referred to 'hundreds and not thousands'. I understand from the Disablement Income Group that it believes that the number of claimants might be of the order of 1,000 to 2,000". [Official Report, 3/3/88; col. 295.]
I asked the Minister if he could give the latest estimate of the department. The Minister, the noble Lord, Lord Skelmersdale, in his reply, said at col. 303:
"Our evidence is that this is likely to amount to a few hundred people. I have conceded already that 250 may not be exactly the right number, but we are in broad agreement with DIG that the numbers are small. We both agree that it is a few hundreds: up to 1,000".
I quote not in any sense of disparagement. We were all wrong. The estimates were wildly incorrect, and they merely revealed the paucity of adequate statistics concerning the incidence of severe disability.
We hear much now, in terms of community care, about unmet need. The success of the ILF proves that there was an unmet need which the ILF identified and met. I cannot help wondering whether, if the Government had known then what they know now concerning the numbers of people who would be helped by the ILF and the cost of that help, they would have been so keen as they were to set up the fund. It is clear that the ILF has been a very considerable success. I admit at once that the reservations and fears that I had, and that many others in this House and outside had, at the inception of the scheme, have proved to be unfounded. I am delighted that we have been proved wrong.
What is so worrying about the new arrangements, proposed in the Bill, is that they seem almost expressly designed not to build on the successes of the ILF or to deal with the problems that its operation has revealed. For example, the ILF weekly awards have maxima of £450 to £560 a week, excluding the value of local authority input where that exists. That compares with the much lower figures now proposed by the Government.
The Government make great play of local authority responsibility in providing community care, as if that were to wave a magic wand over the problems. The successful operation of the ILF has revealed the paucity of local authority effort and, above all, expertise in this area.
Enough has been said about the value of direct payments without my adding any comment, save to say that once again the DSS (or is it the Treasury?) seems to be flying directly and deliberately in the face of ILF experience. We can all understand that the limitation on grants of those under 65 is a deliberate

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exercise in cash limiting. It has no other rationale. The point was well made by my noble friend Lady Hollis. The majority of the elderly disabled are women.
The new arrangements seem almost perversely designed to drive severely disabled people into residential care—the precise opposite of the fundamental of the principles of community care that we all worked so hard to introduce in the 1990 Act. The situation is extraordinary. The ILF has developed a successful and flexible operation. It is ring-fenced. It can make direct payments to disabled people. It provides an expertise that most local authorities lack. It keeps people in their own homes and out of residential care. Do the Government attempt to build on that success and develop it? No, they do not. The dead hand of the Treasury intervenes and effectively kills the. scheme so far as the future is concerned. The buck is passed expertly back to the local authorities and to the new ILF fund. The Government are effectively able to wash their hands of the financial problem that the success of the ILF created for the Treasury.
I have referred to the problem over estimates of numbers at the inception of the ILF. I ask the Minister: what is the basis of the Government's estimate of 1,500 people and £4 million for the new fund? I hope that we are not about to have a repeat of the numbers game that we had with mobility allowance when a mysterious entity—the OPCS data tapes—was called in to justify the Government's under-estimate. It proved to be wrong by about 10 times when the final figure emerged.
I put another direct question to the Minister: what will the Government do if their estimate of 1,500 people and £4 million proves to be wrong? Will they increase the fund? Will they alter the criteria to constrain the cost? Or will they attempt to pass the buck to the local authority and the social services departments?
We have heard about the curious concept referred to in the other place of the "sandwich". I cannot resist passing on the comment of one disabled worker, who said that so far as she could see the main contents of the sandwich were pure boloney. How is that curious mix and match of local authority provision, the contribution of the ILF and the upper cash limit intended to work? The point was made extremely well by the noble Lord, Lord Swinfen, with his great expertise.
The question of the calculation of the £200 of services that the local authority has to provide is, as the Minister will know, causing considerable concern. Can he tell us how that is to be estimated? Will the cost of making the assessment be included in the £200? The press release from the DSS, which announced the new arrangements on 1st April, says:
"Prospective applicants should apply first to their local authority. If the application is supported a package of care will be drawn up by the Fund's social worker, the local authority social worker and the disabled person or their representative. The local authority will arrange care services to the value of about £200".
I cannot believe that it is proposed to include in that £200 the cost of the local authority social worker. I have been asked to make that point and put it to the
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Minister. If that sum were included, we would have the absurd situation of the cost of the bureaucracy created by that arrangement reducing the amount of direct services provided. I ask again for details of the guidance that the Government are giving regarding the calculation of the £200.
To pick up extremely briefly a few points that were made in the debate£and in the formidable analysis provided by my noble friend when she opened it—can the Minister explain the inexplicable? Why at least were not some of the trustees of the old fund asked to carry on in the new fund? Everybody concerned with this matter is baffled by the department and its failure to build on the expertise that those people have. An unelected and appointed independent trust, removed from parliamentary scrutiny, is allowed to make direct payments while local authorities, democratically elected and accountable, are not allowed to make direct payments to disabled people; as my noble friend pointed out, they make direct payments to many other people.
I am not sure whether the Minister has seen the study entitled Paying for Independence—the first findings of a new survey of more than 1,000 disabled people—published only last Friday by the independent Policy Studies Institute. It concluded that most disabled people preferred to employ people they already knew and trusted. Local authority services were seen as inflexible, difficult to obtain and vulnerable to cutbacks. Regular guaranteed payments from the ILF gave disabled people peace of mind that help would not suddenly be withdrawn.
It seems extraordinary that the Government have a policy—which we all welcome—of reducing bureaucracy and regulation in industry and other areas of our national life but are responsible for a Bill which will result in an increase in bureaucracy for severely disabled people. If we take the case of a severely disabled person trying desperately to maintain an independent existence in his or her own home; having to struggle with two rates of attendance allowance and a matrix of 11 variations of disability living allowance; having to negotiate a care package with the local authority and the ILF worth up to £200 (but with the calculation of the £200 still largely an unknown quantity); and, then having to obtain up to £300 of direct payments from the ILF and all the time worrying that if the total requirement exceeds £500 he or she may have to go into residential care, one wonders how all that is supposed to be an improvement on the existing arrangements.
The first Motion that I ever moved in the House was to draw attention to the needs and problems of people with disabilities. In that debate I coined the phrase "the disabled divide"—the gap between the expectations and the living standards of the disabled and the non-disabled. There is nothing in the Bill which helps to narrow that gap, and I fear that it will make it wider.
4.42 p.m.
Lord Henley: My Lords, let me reiterate the reason for the Bill. The need for it arose because doubts were raised in 1992 as to whether Section 64 of the Health

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Services and Public Health Act 1968 could properly be relied upon to cover payments made by the Secretary of State for Social Security to the ILF and its successor bodies. It is concerned with the payment of public funds to those new trusts. I must make it clear that the fact that that makes it a money Bill is entirely a matter for the Speaker in another place. The noble Baroness, I believe, claimed that the Government were trying to evade parliamentary scrutiny. That is not so and it is wrong of the noble Baroness to suggest that.
Baroness Hollis of Heigham: My Lords, I thank the Minister for giving way. I was clear in my opening remarks that the Bill, as drafted by the Government, meant that it was necessarily certified by the Speaker as a money Bill. I was careful to draw that distinction and it is unreasonable of the Minister to confuse it.
Lord Henley: My Lords, I was trying to make clear the purpose of the Bill, which is purely to fund the ILF. Both the previous and existing ILF organisations were set up as independent trusts by the Government and therefore all that was needed was a mechanism for funding them. We thought that Section 64 of the Health Services and Public Health Act was appropriate; it was not. That is why the Bill comes before us. It is wrong of the noble Baroness to suggest that we were trying to evade parliamentary scrutiny. Having said that, I accept, as my noble friend Lord Campbell put it, that we will take note of all the concerns put forward. I accept that that, to some extent, is the point of the debate. As the noble Lord, Lord Murray, put it, we shall certainly listen.
The noble Lord, Lord Addington, said that, strictly speaking, to move amendments to such a Bill was a matter for the privilege of another place. The Bill should not go to Committee. The House generally agrees not to commit money Bills. That is a well understood convention. We agreed in a Business of the House Motion moved by my noble friend the Lord Privy Seal last week to take all the remaining stages of the Bill in one day. Again, that having been said, I have no intention of not listening and not responding to the various points made by speakers in the course of the debate.
I shall begin by referring to some of the comments concerning delays that occurred in payment of disability living allowance. The noble Baroness said that I had not apologised for an occasion when she claims that I misled her. I reject the claim that I owe her an apology. I do not believe that I misled her on that occasion. However, I repeat the apologies made that the procedures for paying the disability living allowance did not meet the usual high standards of the Department of Social Security. Many people suffered some delay in receiving their payment. I am not sure that the noble Baroness has yet apologised for her own party taking over four years to bring back mobility allowance to its recipients in the early 1970s. I would certainly prefer to wait one year rather than a total of four.
The noble Baroness suggested also that the trustees were not consulted over the change-over. They always knew that their trust fund was an interim measure
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with a limited life, as I stressed in my opening remarks. It was the choice of the trustees to decide the point at which they would stop accepting applications in order to be able to process them by 31st March. There was no question of either the November decision on new applications or the 31st March final closure date being unknown to the trustees.
The noble Lord, Lord Carter, asked why none of the old trustees is continuing to serve under the new system. I stress that there will be a degree of continuity in terms of the staff. But I must make clear that we are talking of a different animal. The important new trust is the 1993 fund. The extension fund will merely mirror the old arrangements for the existing recipients.
Lord Carter: My Lords, perhaps the Minister will give way. Is he saying that it is the same bureaucrats but different trustees?
Lord Henley: My Lords, not entirely. As the noble Lord will be aware, there is a new director. But many existing members of staff are continuing in their jobs. The 1993 fund is the important one for the trustees looking after it because that is the one that will grow as the extension fund, sadly in the nature of things, gradually shrinks. We are not comparing like with like. The 1993 fund will operate in a different way.
The noble Baroness, Lady Hollis, the noble Lord, Lord Murray of Epping Forest, and the noble Lord, Lord Rix, in his theatrical intervention, questioned the £200 of services that the local authorities must provide before involving the ILF and the fact that local authorities would control access but not necessarily manage to meet all needs. A key feature of the 1993 fund is the partnership with local authorities. The scheme will help people who are the most severely disabled. That is the important point. The £200 threshold is a quick test for local authorities as to whether a person may be classed as severely disabled. If an individual is severely disabled it is absurd to think that local authorities would spend less than £200 on his or her care needs. Therefore, the £200 threshold should not exclude any of the people intended to be helped by the 1993 fund. As has been mentioned by various noble Lords, local authorities have been given an additional £27 million to meet the cost of providing the first £200 of care. I shall be turning to that somewhat later.
I turn now to the £500 limit which was the concern of many noble Lords. Again, I stress that the 1993 fund—the extension fund mirrors the old arrangements—is designed to target help towards a select group of people; those whose care needs are greater than £500 are outside that group and cannot be helped by the fund. When care exceeds £500 the local authority becomes solely responsible for meeting the individual's needs, as the noble Lord, Lord Murray, asked me to confirm. It may decide to provide intensive services to that individual or, in consultation with the disabled person, that his or her care needs can best be met in residential care. We believe that the numbers affected will be tiny.
Lord Swinfen: My Lords, I thank my noble friend for giving way. He said that the local authority might decide in consultation with the disabled person whether or not residential care was the right solution. What happens if it is not prepared to continue to give care at home and insists on the disabled person going into residential care much against the wishes of that individual and his family?
Lord Henley: My Lords, what I am trying to make quite clear to my noble friend and other noble Lords is that the £500 limit will not itself force any individual into a residential home. If the limit of £500 is exceeded it will be a matter for consultation between the local authority and that individual. My noble friend will have to accept that there will always be constraints on the expenditure of public money by both local and central government. Obviously, there may be occasions when in the end the local authority will have to say that the individual's needs are such that they can be met at reasonable cost only by means of residential care. I cannot give a guarantee that every local authority on every occasion will be able to say that any individual will be able to stay in the community. In passing, I stress that the old ILF had a countrywide higher limit that ranged between £450 and £560. Therefore, I do not believe that it is unreasonable that a limit should be imposed in the case of the new 1993 fund.
The second principal question raised by the noble Baroness and repeated by many noble Lords was why local authorities could not pay directly to individuals what we insisted they should provide in the form of services. The policy on direct payments is well established. I understand the strength of feeling on this point. We do not believe that now is the right time to add to their already full agenda as they set up community care. We firmly believe that direct payments should continue to be the province of the social security system. As the noble Baroness reminded us, this point has been extensively discussed during the passage of the Disabled Persons (Services) (No. 2) Bill. I do not wish to have a long debate about a supplementary issue at this point. However, I reiterate that this Bill is about the provision of funding for the new independent living funds. I do not believe that it is the right vehicle to change the way in which local authorities work merely to suit what, in the case of the 1993 fund, will be a very small number of people to be helped each year.
Baroness Hollis of Heigham: My Lords, I thank the Minister for giving way. I also thank him for his conciliatory remarks about direct payments. The main reason he found against it was that local authorities should not be asked to add to their already overburdened agendas for community care. Does he accept that if the local authorities themselves seek that power as a way of reducing their overburdened agendas for community care the department will in consequence respond?
Lord Henley: My Lords, I will not go as far as the noble Baroness. I was hoping to be relatively conciliatory. I do not believe that now is the right
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time, nor do I think that this is the right Bill. If others come forward with further plans no doubt they and the noble Baroness will discuss them further in relation to other Bills to which I have referred. But this Bill is certainly not the right vehicle.
I turn to another issue that vexed a great many noble Lords: the 65 year-old cut off. The noble Lord, Lord Carter, suggested—it was reminiscent of the old days in dealing with earlier social security Bills—that this was merely a Treasury Bill. To be reminded that the noble Lord had not changed his spots and was still prepared to spend money indiscriminately without any let or hindrance was most welcome. But at last we had an admission from the noble Baroness that resources were finite. Sadly, that was not echoed by the noble Lord, Lord Murray, but at least the noble Baroness from the Front Bench recognised the finite nature of funds available for all government spending, in particular by the department that spent most of the taxpayer's money: the Department of Social Security.
I stress that, given those limited resources, it is reasonable to limit the scope of that fund to people between the ages of 16 and 65. People in that age group are the most likely to have longer-term care needs. Those disabled early in life have often lost the opportunity to earn and save. The highest priority for independent living must be those for whom the usual pattern is to live and work in the community. Whether we like it or not, for elderly people residential care is often a necessity. Although the Government have every sympathy for people who are disabled after the age of 65, our research evidence has also shown a significantly greater disparity in income between younger disabled and non-disabled people than between those over pension age.
Nor do I accept that the provision of part of an individual's care needs by giving services necessarily reduces the choices available to the disabled person, as the noble Baroness and others suggested. It seems to me that people become rather confused when they discuss this issue and relate cash payments purely to dignity via the concept of choice. I cannot accept that if no cash is given a person automatically loses some of his or her dignity. However, I accept that it is extremely important to provide care services in a professional and co-ordinated manner. It is that which gives the individual dignity, not the provision of cash alone.
I turn next to the vexed matter of ring-fencing that was raised by my noble friend Lord Swinfen. I agree that the £27 million to which we have referred is not separately ring-fenced, but it is ring-fenced as part of the wider community care funding of some £539 million. Because of the very small number of people involved—we estimate about 10 per local authority —we believe that it is not sensible to ring-fence this relatively small amount of money separately, but as part of the wider provision it is ring-fenced within community care costs.
I deal briefly with the point made by the noble Baroness, Lady Masham, about the requirement to provide employment details of carers and the fact that this was degrading. I believe that it was the noble Lord, Lord Rix, who suggested that this could lead to

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some breaches of confidentiality. I would certainly be prepared to look at that suggestion to see whether there was any merit in what the noble Lord said. The old ILF asked applicants to provide the names and addresses of their carers. The new funds simply repeat that requirement in the trust deed, with the addition of a request for the carer's national insurance number. I believe that to be a perfectly reasonable check to ensure that payments are not abused.
Baroness Masham of Ilton: My Lords, perhaps I may ask the Minister whether that is also true of severely disabled people in the area of AIDS where confidentiality is very important. Those people fall into this category.
Lord Henley: My Lords, I do not think I can answer the noble Baroness off the cuff but I will certainly look at what she said. If necessary, I will write to the noble Baroness.
The noble Baroness, Lady Hollis, seemed to suggest that my right honourable friend the Minister of State in another place was encouraging local authorities to get round the law by devising schemes to make direct payments from local authorities. What my right honourable friend said was that it was up to individual authorities to ensure that any innovative and flexible schemes satisfied the district auditor. Obviously, it was not a matter that we should be looking at; it was for the district auditor to consider when he went through the accounts of the particular local authority. Many schemes appear to be running perfectly satisfactorily to the benefit of those authorities and disabled people. We welcome that.
I refer to the question of appeals and the review procedure. This matter was raised by my noble friend Lord Campbell and the noble Lord, Lord Rix. The new funds, like the ILF, are independent bodies which will be managed by trustees. Because of their independent nature and the fact that they are outside the social security system, we believe that it would be wholly inappropriate for their individual decisions to be subject to external scrutiny or inquiry. The ILF had an established internal review and appeal procedure. I could detail it now at the Dispatch Box but I do not think that that would be an appropriate use of the time of the House. It had a review and appeal procedure which the new trustees have certainly decided to adopt. I believe that it has worked very well in the past and there is no reason to think that it should not work well in the future.
Perhaps I may also respond briefly to the point raised by my noble friend Lord Campbell and the noble Lord, Lord Rix, on mental disability. I understand that the old ILF was able to help people with learning difficulties—what used to be called mental handicap—but the fund was never primarily intended for people with mental illness. They do not generally need the kind of personal, domestic services for which the old fund was intended. The new fund will, similarly, not generally be a suitable support for this group.
Lord Rix: My Lords, perhaps I may clarify one point. The noble Lord, Lord Campbell of Croy, mentioned mental illness. I mentioned learning disability or what used to be known as mental handicap. The two are different. I hope that that is clear to the Minister.
Lord Henley: My Lords, there is certainly clarity in my mind about this issue. What I am trying to say is that for mental illness in itself this is not generally the suitable vehicle to help. But for those with mental disability, there might be physical consequences for which the ILF might therefore be able to provide suitable help. I certainly see the distinction.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend for giving way. He is confirming what I said. I assumed that the old ILF and the new one were not relevant to severe mental illness. There is in the community care system now the ring-fencing of mental illness, which I welcomed at the time and which is now in the form of the mental illness specific grant.
Lord Henley: My Lords, I thank my noble friend for bringing even greater clarity to what clarity I thought I had on this matter.
Perhaps I may comment briefly on payments in Scotland. The noble Baroness, Lady Hollis, suggested that they were legal in Scotland. I understand that local authorities have power to make cash payments but it is a very limited one. Cash payments may be made only in an emergency and where this would be cheaper than some other form of assistance or where aggravation of the individual's need would cause greater expense to the authority on a later occasion.
Lastly, I turn to the question of adequacy. The noble Baroness questioned, as she normally does, despite her earlier return to fiscal responsibility, whether the —27 million was adequate. We estimate that some 1,500 people a year will be helped by the fund. That —27 million was costed on the basis that the caseload would build up over the year and not all come on-stream on 1st April. Funding of —27 million allows the entire 1,500 we expect to join the fund this year so long as they receive the first —200 of services from their local authority.
The noble Lord, Lord Carter, quite rightly asked how we estimated that total caseload of 1,500. We took the total caseload of the ILF and then excluded people with care costs lower than —200 and higher than £500 and then excluded all people over the age of 65. Four million pounds provides for a weekly payment calculated on the basis of the ILF experience allowing for a gradual take-up of 1,500 people over the years.
The noble Lord, Lord Swinfen, asked for a cast-iron assurance that any shortfall will be made up. I have to say, of course not, but I ask noble Lords to look at our record on expenditure on ILF over the years. In its first year the total spend (the estimate was some £5 million) was more than £1 million; in the second year it was £8.5 million; in the third year it was £26.4 million; in the fourth year it was £49.8 million; in the fifth year it was £95 million. The estimates for

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the current year for the two funds are some £124 million. If one takes the total expenditure on independent living, by adding in the £27 million to local authorities, there is total funding for independent living of some £150 million. That is expected to rise—these figures are provisional—in 1994–95 to £197 million and in 1995–96 to £241 million.
I could go on and list the increased caseloads for all our disability benefits and the dramatic growth we have seen over the past few years as we have made benefits available to greater numbers of people. Attendance allowance has gone up from around £250,000 in 1978–79 to jolly nearly £1 million; mobility allowance has gone up from under £100,000 to over £650,000. I could go on.
Many noble Lords have spoken as if the new independent living funds are the sole source of help to those who live in the community. That is to get the picture out of perspective. Those new funds are an extra resource available to provide extra help to a limited group of the most severely disabled people. The community care reforms were all about making choice and dignity available to all disabled people. These new funds will supplement this help, not replace it. It will not, as the noble Baroness, Lady Masham, put it, be the death knell of independent living but merely takes it forward further into the era of community care. I beg to move.
Lord Swinfen: My Lords, before the noble Lord moves the Second Reading, as I did not wish to interrupt his flow earlier, perhaps I may ask a question arising out of an exchange between him and the noble Baroness, Lady Hollis of Heigham. If local authorities were to indicate that it would reduce their over-burden to make direct cash payments to disabled people, would the Government accept the Disabled Persons (Services) (No. 2) Bill currently before the House, or would they bring forward their own legislation to the same effect?
Lord Henley: My Lords, I am not going to comment on that Bill. My noble friend Lady Cumberlege has done so. I was trying to make it clear that I did not think that this Bill was the right place for such provision; nor did I think this was necessarily the right time in the early days of community care when local authorities had, as I put it, a great deal on their agenda and a great deal to learn.
On Question, Bill read a second time; Committee negatived.
Then, Standing Order No. 44 having been dispensed with (pursuant to Resolution of 13th May), Bill read a third time, and passed.

Local Government (Amendment) Bill
Brought from the Commons; read a first time, and to be printed.
Noise and Statutory Nuisance Bill
Brought from the Commons; read a first time, and to be printed.

High Court and County Courts Jurisdiction (Amendment) Order 1993
5.8 p.m.
The Lord Chancellor (Lord Mackay of Clashfern)The Lord Chancellor (Lord Mackay of Clashfern) rose to move, That the draft order laid before the House on 21st April be approved [29th Report from the Joint Committee].
The noble and learned Lord said: My Lords, this order is made under Section 1 of the Courts and Legal Services Act 1991 and makes three amendments to the High Court and County Courts Jurisdiction Order 1991. The first two amendments are very minor and require only a brief explanation. The third amendment arises out of the new regime for enforcing parking charges in London and a rather fuller explanation may therefore be of some interest.
I turn first to Article 3 of the draft order. This will amend Article 6 of the jurisdiction order to provide that appeals against decisions of auditors under Section 19(4) of the Local Government Finance Act 1982 shall be commenced only in the High Court. At present such appeals are commenced in the county courts whereas other proceedings under Sections 19 and 20 are commenced in the High Court. This anomaly may cause practical difficulties for auditors involved in such proceedings.
Although appeals against decisions of local authority auditors can concern quite small amounts of money, they may involve questions of public law and raise issues of considerable importance. Consequently the policy of the jurisdiction order was that such cases should be commenced in the High Court. At present Article 6 does not mention appeals under Section 19. The proposed amendment will put appeals under Section 19 on the same footing as other applications.
I turn now to Article 4 and the second minor amendment effected by the draft order, which is contained in that article. The provision amends Article 8 of the jurisdiction order so that a judgment or order of a county court for the payment of a sum of money which arose out of an agreement regulated by the Consumer Credit Act 1974, and which it is sought to enforce by execution against goods, may be enforced only in a county court.
At present judgments relating to agreements regulated by the Consumer Credit Act 1974 can be transferred to the High Court for enforcement where the sum for which judgment has been given is £2,000 or more. The policy behind Article 6 of the jurisdiction order was that where it is sought to enforce a judgment arising out of a consumer credit agreement by

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execution against goods, enforcement should only be carried out in a county court. This will implement that particular policy.
Finally I turn to the third and main amendment effected by the order, which is contained in Article 5. This provision confers sole jurisdiction on Cardiff County Court in proceedings to enforce certain road traffic debts. These arise under the new regime for the enforcement of on-street parking charges in London, established by the Road Traffic Act 1991.
Under the Act parking enforcement proceedings are removed from the jurisdiction of magistrates' courts. A parking penalty will instead be enforceable as a civil debt by way of county court proceedings. A special procedure has been established for parking charges incurred in London and the initial processing stage of applications to enforce London parking charges will be dealt with by Cardiff County Court.
This order is not concerned with any of the details of what will happen when a driver in London receives a parking ticket. However, it may seem curious that Cardiff should be involved at all with the enforcement of London parking charges. To enable your Lordships to understand the way in which Cardiff County Court will be involved, it may be helpful if I briefly explain how the new system will work.
Under the Road Traffic Act 1991, a driver who receives a parking ticket will first have the opportunity to object to the local authority which imposed the charge. This will be done by making representations to the local authority and, if necessary, by way of proceedings before a new body to be known as the parking adjudicator. If the driver still fails to pay, the local authority will be able to obtain an order that the charge may be recovered as if it were payable under a county court order. Exclusive jurisdiction to make such an order is conferred on Cardiff County Court by Article 6 of the proposed amendment to the jurisdiction order. The procedure for making the order will be relatively straightforward and will be carried out at Cardiff on receipt of the requisite information from the local authorities. Even after the order has been made, a driver will have a further chance to object on grounds specified in the Road Traffic Act. If he does so, the case will automatically be referred back to the local authority.
The other aspect of Cardiff County Court's involvement will be to authorise the issue of a warrant of execution at the request of the local authorities. Distress will then be levied by bailiffs certificated for this purpose and will, of course, take place where the debtor's goods are situated. Where distress proves to be unsuccessful, and the local authority wishes to attempt enforcement by other methods, such as by garnishee or charging order, the order will be transferred to the driver's local county court.
It is expected that over a million of these cases will be enforced through the county courts each year. The administrative nature and the large volume of the work lends itself to a high degree of streamlining and computerisation, and it was therefore decided that only one centre would be used. Cardiff was chosen primarily on logistical grounds. It was clear that the
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county courts in the Greater London area would not individually have had the capacity for this work, and to site the parking enforcement centre, as it will be known, in London would have been an expensive alternative.
As your Lordships will appreciate, the jurisdiction conferred on Cardiff is very much of an administrative, rather than judicial, character. If, at any stage of the proceedings, it is necessary to consider a driver's individual circumstances, this will be done either in London or in the driver's home court, and the driver will be given an opportunity to make representations.
I hope that the proposed new rule will enable parking charges in London to be enforced by county courts with the maximum efficiency. In no circumstances will the driver be expected or required to attend the parking enforcement centre in person, and the fact that Cardiff is given jurisdiction to deal with these proceedings should not inconvenience drivers in any way.
Before making the order I am required to consult the designated judges—that is to say, the Lord Chief Justice, the Master of the Rolls, the President of the Family Division, the Vice-Chancellor and the senior presiding judge. I have done this. They are content that the order should be made. I beg to move.
Moved, That the draft order laid before the House on 21st April be approved [29th Report from the Joint Committee].—(The Lord Chancellor.)
Lord Irvine of Lairg: My Lords, we welcome the proposed arrangements. They make modest and useful improvements to the disposal of court business. Perhaps I may first mention Article 3. It is plainly right that appeals against decisions of auditors under Section 19(4) of the Local Government Finance Act 1982 should be commenced in the High Court regardless of the amount involved. We agree with what the noble and learned Lord said on that subject. The auditor's power to call in question an item of local authority expenditure is very important. The auditor can, for example, set at nought promises made by the majority party to its electorate and the auditor's decision could eventually lead to the disqualification of councillors. Plainly, the High Court should deal with those appeals because of their significance for good government.
Next, Article 4. We do not cavil at the county court as the choice of forum. No advantage, however, will be gained for the efficient dispatch of business unless the resources allocated to the county courts are commensurate with the additional workload. The noble and learned Lord's department is well aware of the increasing strain experienced by county court staff up and down the country, striving to deal with the increased workload which these, and many other measures, impose on them.
The commendable aim of allocating court business to the appropriate court level within the system will only be achieved successfully if resources follow the case loads. I seem to recall, in the context of the health service, that resources are expected to follow the patients. It would be welcome if the noble and learned Lord could comment on that issue.

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Finally, we agree with the noble and learned Lord that the most important issue is the choice of Cardiff County Court as the court centre for enforcing road traffic debts. We welcome that choice. We welcome the enhanced role for the premier county court in the Principality, but the efficiency that this measure is intended to achieve will not result, it would appear to us, unless Cardiff County Court has the extra manpower that it will need to discharge this major function.
The staff at the county court in Cardiff will have to process more than (as I understand the figure) 1.5 million charges every year. Why has Cardiff County Court been chosen? Perhaps I may make it plain that I have nothing but affection for the capital of the Principality. But the present county court building is a typical example of a public building erected nearly 100 years ago with scant interest or regard for the requirements of the public. The courts are high up in the building. They are approached by a very narrow, steep and precipitous staircase. There are no lifts. The location of the courts within that building is wholly unsuitable for the elderly. There is no provision at all for the disabled. Seven courts are able to sit; three presided over by circuit judges and four by district judges. The seven courts share only three conference rooms for litigants. Those rooms are minuscule in size. The former first-aid room has been converted to a court for a district judge and one of the robing rooms for solicitors or counsel has had to be taken over for use as a judge's retiring room. Staff are located in a dark and dismal basement where they are seriously overcrowded. That is the position on the ground.
We know that there are plans for a new court building but they have remained plans, with nothing done, for over 30 years. I understand—and the noble and learned Lord can better inform the House—that the most immediate plan is to convert the adjacent post office—derelict for a decade —into a new county court complex. Is that correct? Has building work commenced? When will it be completed? How many courts and conference rooms, and what provision for litigants, as consumers, will there be? Have the staff been informed and consulted about the large addition to their workload which will result from the implementation of the order? May I question whether the present building has the scope to accommodate the increased workload on a temporary basis? Has the noble and learned Lord satisfied himself to the contrary?
Of course the court staff will loyally make every effort to discharge every duty placed upon them. But has the noble and learned Lord any comment to make on the adequacy of the present building? Can he inform the House when the new court, if it is to happen, will be built and become operational? Does he envisage any increase in staff levels and any temporary additional staff accommodation being made available to cope with the increased workload which Article 5 will generate?
Where precisely in the new building will the new parking enforcement centre be situated, on the footing that that new building is to be the location of the new centre? Secondly, where will the new parking
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enforcement centre be situated on a temporary basis within the present accommodation? Thirdly, are extra staff to be engaged and, if so, how many and at what grades? Will they have the same conditions of employment as the existing staff?
Perhaps I should make it plain from these Benches that we support the principle of a parking enforcement centre for processing purposes, as distinct from disputed cases. We support Cardiff as that centre. But the reason that I have invited the noble and learned Lord to address the questions that I have sought to put in some detail, if he will be good enough, is that we are concerned that sufficient thought may not have been given to practical implementation on the ground.
The Lord Chancellor: My Lords, I am grateful to the noble Lord, Lord Irvine of Lairg, for his reception of the order in its three branches. Undoubtedly, the most important is that which refers to the parking enforcement centre. The reason that we thought, after considering the matter carefully, that Cardiff was suitable was the likelihood of the new building in Cardiff being able to accommodate the centre—that is, assuming that the order is passed.
The intention is that the new county court building in Cardiff should be ready in about 16 months' time. I stress that this particular enforcement centre is for administrative work. As I explained, there is no question of court accommodation being required for this purpose. We have been able to secure temporary accommodation outside the present court building for the work of the parking enforcement centre in the meantime. I expect that up to 24 staff will be employed in the centre although the precise number will depend on the work generated. Needless to say, we shall watch that as operations begin.
I believe that the earliest date on which work will come into the parking enforcement centre will be September 1993. So it is proposed that it should be accommodated in a reasonably near building (not absolutely adjacent) on an interim basis. I believe that it will be possible to make arrangements for the work to he located within the new county court building when it is ready in about 16 months' time. As I said, up to 24 staff will be required for that and they will be employed on the same basis as other members of the court staff.
I am satisfied that the correct arrangements are in place to accommodate the new work. Your Lordships will see from the order that I am left with the date on which the order shall come into force once your Lordships have approved the draft.
Lord Irvine of Lairg: My Lords, before he sits down will the noble and learned Lord be good enough to specify what the temporary accommodation for the parking enforcement centre will be within the Cardiff County Court before the new building becomes available?
The Lord Chancellor: My Lords, I thought that I had made it plain that it is not within the existing county court building but in a separate building which is available for temporary purposes on an interim basis until a new building is ready.
Lord Irvine of Lairg: My Lords, I followed that, but can the noble and learned Lord state where that accommodation is?
The Lord Chancellor: My Lords, I can give the noble Lord details of the accommodation if he wishes, but if he is prepared to accept it I shall do so in writing. I do not have the precise details with me although I have looked into the circumstances. I have been to the existing Cardiff County Court and know a little about its present facilities, as the noble Lord described them. Therefore, before I was prepared to accept Cardiff as the location, I needed to know that proper accommodation would be available. I am assured that proper accommodation is available on an interim basis to house the up-to-24 staff who will be required.
Lord McIntosh of Haringey: My Lords, before the noble and learned Lord again attempts to resume his seat, may I ask whether he can assure the House that the example of the city fathers of Limerick will not be followed in this case? He will recall that the city fathers of Limerick decreed that there should be a new gaol in Limerick, that it should be built from the stones of the old gaol, and that the old gaol should stay in use until the new gaol was completed.
The Lord Chancellor: My Lords, I hope that I have explained my proposal in sufficient detail for the noble Lord, Lord McIntosh of Haringey, to see that I am not proposing to follow the city fathers of Limerick. It would be particularly inappropriate to follow that example in the Principality of Wales. The Question is, that this Motion—
Lord Prys-Davies: My Lords, may I briefly—
Noble Lords: Order!
Lord Prys-Davies: My Lords, I understand that I am out of order, but what I wanted—
The Lord Chancellor: My Lords, before I resumed discussion and after the noble Lord, Lord Irvine of Lairg, had finished I gave the House some time to respond. However, I am very loath to exclude the noble Lord, Lord Prys-Davies, altogether, and it may well be that the noble Lord will be able to ask me some questions before I sit down and that I may be able to answer his points.
Lord Prys-Davies: My Lords, the first question that I should like to ask the noble and learned Lord, the Lord Chancellor, is whether he can give the House an indication of when he believes that the order will be applied. Secondly, is it envisaged that all the administrative functions will be transferred on a given date to the Cardiff County Court, or will that be phased in over a period?
Having said that, I very much welcome the decision to centralise this function at Cardiff County Court. Drawing on my own experience of that court over very many years, I can speak of the excellence of the administration there and of the sense of fairness of its staff. On the other hand, I, like most Members of the House, am conscious that parking charges are unpopular. I hope that Cardiff County Court will not
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attract to itself any unpopularity. I am sure that if it is given the accommodation and the staffing resources its history will stand it in good stead.
The Lord Chancellor: My Lords, I am delighted to answer those serious questions. First, I accept entirely the view that the administration in the Cardiff County Court, notwithstanding the physical difficulties to which the noble Lord, Lord Irvine of Lairg, referred, is good. I believe that it will be especially good at doing the work required. It is a new system to be set up in respect of London, the administration of which will start in Cardiff.
We shall seek to make as plain as we can that Cardiff bears no responsibility other than for the implementation of the order and that all the authority has come from elsewhere. In that way, we shall do our best to deflect from Cardiff County Court any suggestion that the unpopularity attracted by parking tickets should go to that court. It will be seen as merely carrying out the necessary administration so that parking charges, once properly incurred, are processed fairly. It is an extra operation for Cardiff which will help by employing additional staff there. No consequent obloquy of any sort will fall on Cardiff County Court.
On Question, Motion agreed to.

Functions of Traffic Wardens (Amendment) Order 1993
5.31 p.m.
Earl Ferrers Earl Ferrers rose to move, That the draft order laid before the House on 29th March be approved [26th Report from the Joint Committee].
The noble Earl said: My Lords, I beg to move, that the draft Function of Traffic Wardens (Amendment) Order 1993 be approved.
The order amends the Functions of Traffic Wardens Order 1970 in order to give new powers to traffic wardens. The order is designed to help the police by allowing traffic wardens to take on some additional parking enforcement duties. Those duties are ones which, at the moment, only a police officer can perform.
By allowing those duties to be undertaken by traffic wardens, the order will help to release police officers for other more important duties, which have, and should have, a higher priority.
If your Lordships have been good enough to look at the order —which I am sure your Lordships have in some detail—it may not have been obvious exactly what the order purports to do. That is because it amends an existing order, and its effects are not, therefore, immediately obvious. I will, therefore, try to describe, in plain language, the changes which the order seeks to make.
There are three main ways in which the order extends the powers and the functions of traffic wardens. The first of these main changes is under Article 2 (g) of the order. That gives traffic wardens the power to authorise the wheelclamping of vehicles which are illegally parked on public roads. Wheel

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clamping on public roads—which I know is not an act which endears itself to many of your Lordships—is authorised for use in London only, and then only in designated parts of it. In the year which ended on 31st March 1993, the Metropolitan Police authorised the use of wheelclamps in 93,541 cases.
Under the present law, each of those clampings had to be authorised by a police officer. But, we do not feel that it is the best use of the time of highly trained police officers for them to be tied up in duties such as wheelclamping when there are other—and considerably more important—demands to which they should reasonably address their attention. Traffic wardens carry out parking enforcement duties every day and they are quite capable of making proper decisions on when it is appropriate to have a vehicle wheelclamped. The instructions, which cover the wheelclamping procedure when it is undertaken by the police, will apply equally to traffic wardens when it is undertaken by them.
The second major change which is made by the order is under Article 4. Article 4 will allow traffic wardens to issue fixed penalty notices for three additional parking offences, two of which are endorsable offences. Traffic wardens can already issue fixed penalty notices for a wide range of parking offences.
The new offences, for which they will be able to issue fixed penalty notices, will be: causing an unnecessary obstruction; parking within the limits of a pedestrian crossing (which is an endorsable offence); and leaving a vehicle in a dangerous position (which is also an endorsable offence). At the moment, a police officer has to deal with those offences. The offences are, though, parking offences which wardens come across routinely in their daily duties. It seems to us, therefore, that it is perfectly sensible that traffic wardens should have the powers which are necessary to deal with them.
Endorsable offences are, of course, more serious than other parking offences, because they represent a danger to other road users. When taken to the courts, the offences carry a maximum fine of £1,000 and three obligatory penalty points on the driver's licence. When they are dealt with under the fixed penalty process, the penalty is £40 with the addition of three penalty points on to the licence.
The offence of causing an unnecessary obstruction, when it is dealt with by the courts, carries a maximum fine of £1,000. When it is dealt with under the fixed penalty system, the penalty is £30 in London and £20 elsewhere. The third change, which the order makes, is under Article 3. That will extend a traffic warden's power to require an offender to produce his or her driving licence. Traffic wardens already have the power to require the production of a driving licence when they are undertaking custody functions at a car pound. The order will give them the same power when they are dealing with the two endorsable parking offences to which I have referred.
As well as those main changes to the 1970 order, Article 2 of the order before your Lordships deals also
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with the interim disposal of vehicles which are removed under Section 99 of the Road Traffic Regulation Act 1984.
The term "interim disposal" describes the action which the police may take when they pass on abandoned vehicles to the local authority which has the ultimate responsibility of dealing with them. This is a small amendment which will ensure that if vehicles are removed by traffic wardens—which will be possible under another order—those vehicles, as well as those vehicles which are removed by police officers, can be handed over to the local authority for disposal if they are abandoned vehicles.
The order provides the police in England and Wales with the means to increase the role of their traffic wardens in day-to-day parking enforcement. The time of police officers can then be saved and can be devoted to work which is of a higher priority. It remains, of course, essential that the new duties which traffic wardens will have are carried out in a proper way. In particular, the training of traffic wardens in the exercise of the new duties is essential if they are to be correctly undertaken. We shall, therefore, be emphasising to chief constables the importance of training in the advice which we will issue to them about the new order.
I think that those new arrangements should make a helpful, and, in some cases, significant contribution to the ability of chief constables to make the most efficient use of all of their resources, whether those resources are police officers or traffic wardens. I commend the order to your Lordships.
Moved, That the draft order laid before the House on 29th March be approved [26th Report from the Joint Committee]. —(Earl Ferrers.)
Lord McIntosh of Haringey: My Lords, the House will be grateful to the Minister for explaining the orders so clearly. Before I make the few remarks that I have to make about the order, which we generally welcome, I suppose that I should declare an interest in that my car was towed away from a back street in Islington some 18 months ago. Since I could not possibly believe that I had committed an offence, I went to the local police station to report its loss. The local police station knew nothing about it but had a brainwave and suggested that I should telephone the Metropolitan Police pound, which is where, indeed, I found my car.
In that case there was a lack of communication between the police in their impounding capacity and in their local policing capacity. I hope that the Minister will be able to assure us that the order will not make that worse in any way, but indeed may improve it. There may be better communication between local police stations and the impounding authorities.
Having appeared to confess guilt to a crime, I should say that I took strong objection to being towed away when I considered that I had not committed the offence of unnecessary obstruction. I took the matter to Highbury Corner Magistrates' Court. The case was dismissed and I got all my money back.
The events covered six to eight months. During that time there were two adjournments because the

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policeman who had to substantiate the alleged offence was not available. When he was available, his memory of the occasion, which purported to be based on notes made at the time, was defective. I really do not believe that policemen who accompany vehicle removal squads make notes at the time. I also noticed that a large number of police officers spent a great deal of time in the many courts at Highbury Corner. It occurred to me that that was a shocking misuse of police time. My experience leads me to welcome the thrust of the order, which is to relieve police time for matters of higher priority.
My honourable friend Mr. Alun Michael asked in another place why the extension in the power of traffic wardens to see a driving licence or to insist that it be produced within seven days should not extend to an insurance certificate. My honourable friend is right. Is not an insurance certificate at least as important a part of the protection of the public as a driving licence and a greater element in that protection than a current road tax disc? Would it not have been wise, while the order was being prepared, to have extended the power to demand to see a current insurance policy on the same basis as a current driving licence?
With that minor proviso we believe that the order is a rational extension of the power of traffic wardens. Provided that it is adequately supervised by chief constables and the Commissioner of the Metropolitan Police, and provided that the training of traffic wardens meets the requirements, we believe that the order should be approved.
Earl Ferrers: My Lords, I am grateful to the noble Lord, Lord McIntosh, for giving such a warm welcome to the order, in particular such a personal one. I was disturbed to think that his car was towed away even 18 months ago. I realise that nothing infuriates people more than having their cars towed away. The noble Lord said that there had been a lack of communication between the impounding authorities and the police. I can only assume that in his view there was an excess of communication between the impounding authorities and his motor car. I am sorry that he had such an experience. However, it all ended happily and the noble Lord received his money back. That is an example of how true British justice works. I am glad that the noble Lord is happy to see the power to carry out the duties extended to traffic wardens.
Some people are always frightened at the thought of giving other people additional duties. However, these are duties with which traffic wardens perpetually come into contact. The police will be saved a great deal of time as a result of the order and will be freed to carry out duties which are more suitable to police officers.
The noble Lord asked why the opportunity had not been taken to allow traffic wardens to inspect insurance certificates. On the face of it that seems a reasonable question, as are all the noble Lord's questions. If that were done the powers of traffic wardens would be considerably increased because they would have to go into all the details of insurance; that is, whether the certificate adequately covers the
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car and so forth. It was thought that at this juncture it would be inappropriate to extend that power to the traffic wardens.
I am grateful to your Lordships for approving the order. I commend it to the House.
On Question, Motion agreed to.

Merchant Shipping (Prevention of Pollution by Garbage) (Amendment) Order 1993
5.45 p.m.
Viscount Goschen Viscount Goschen rose to move, That the draft order laid before the House on 14th April be approved [26th Report from the Joint Committee].
The noble Viscount said: My Lords, in speaking to the order I should like to speak also to the Merchant Shipping (Prevention of Oil Pollution) (Amendment) Order 1993.
These two orders are necessary to amend the Merchant Shipping (Prevention of Oil Pollution) Order 1983 and the Merchant Shipping (Prevention of Pollution by Garbage) Order 1988 and to incorporate respectively MEPC Resolutions 14(20), 42(30), 47(31), 51(32), 52(32) and 48(31) made by the Marine Environment Protection Committee of the International Maritime Organisation. The orders will implement amendments to the International Convention for the Prevention of Pollution from Ships 1973 and its Protocol of 1978, to which the United Kingdom is a signatory, and will enable amending regulations to be made to diminish the threat of pollution of the sea by oil and garbage.
A great deal of concern has been expressed about the effect on the marine environment of the operational discharge of oil into the sea from ships. The MEPC has acted upon this issue and Resolution 51(32) halves the permitted rate of discharge for oil from tankers to 30 litres per nautical mile. For discharges from the machinery spaces of all ships the maximum permitted discharge of oily mixture is substantially reduced from 100 parts per million to 15 parts per million.
This leads me to Resolution MEPC 42(30), which makes the Antarctic Sea below 60° south a special area for the purposes of Annex 1 of the MARPOL Convention. The effect of pollution on the delicate ecology of Antarctica has been of concern for several years and under this amendment the discharge of oil or oily mixture into the sea in the Antarctic area below 60° south will be prohibited. It will be the responsibility of the Government of a party to the convention, at whose ports ships depart en route to or arrive from the Antarctic region, to ensure that adequate reception facilities for oil and oily mixture are available. It will be the responsibility of flag states to ensure that before entering the Antarctic special area vessels registered with them are fitted with tanks of sufficient capacity on board for the retention of oil and oily mixtures.
A fundamental change to the design and construction of oil tankers to prevent or minimise oil

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pollution in the event of collision or stranding have been agreed at the IMO. Resolution MEPC 52(32) requires all oil tankers of 600 tons deadweight and above, for which a building contract is in place on or after 6th July 1993, or which will undergo a major conversion after that date, or which will be completed after 6th July 1996, to be built to new standards. Oil tankers more than 5,000 tons deadweight must have double hulls or be constructed to an approved, alternative design which will ensure at least the same level of protection against oil pollution in the event of collision or stranding. Oil tankers of between 600 and 5,000 tons deadweight must have double bottoms. Any alternative form of construction to that described in the resolution would require approval in principle by the IMO. While there is no proposal currently at MEPC to limit the size of tankers, the resolution does include revised calculations to limit the size and arrangement of individual cargo oil tanks.
It will be several years before these safeguards are in widespread use and, therefore, the IMO has also considered measures to enhance the safety of existing oil tankers. The same resolution requires that crude oil tankers of 20,000 tons deadweight and above and product carriers of 30,000 tons deadweight and above shall be subject to a more stringent programme of inspections. Such tankers more than 5 years of age shall have on board a complete file of the survey reports and structural work carried out, accompanied by a condition evaluation report. In addition, a phase-out/conversion schedule is introduced for tankers above a certain age. An oil tanker which is 25 or more years old must either meet the rules for new ships or have protective double bottom or wing tanks. If these conditions are met, or other operational or structural arrangements are made which can be shown to provide an equivalent level of protection, the requirement to comply with the regulations for new ships is deferred until the vessel is 30 years old.
Despite the improvements in tanker construction to prevent oil spills, it is accepted that accidental discharges of oil will continue to occur. The damage caused by oil spills may be compounded by ill-considered actions by those on the scene immediately after the event. To minimise this risk, Resolution MEPC 47 (31) requires that every oil tanker of 150 gross tonnage and above and every ship, other than an oil tanker, of 400 gross tonnage and above shall carry on board an oil pollution emergency plan, written in the working language of the master and officers. The plan must include procedures for reporting an oil pollution incident and a detailed description of the action to be taken immediately by persons on board to reduce or control the discharge of oil. For UK registered ships, these plans will be subject to approval on behalf of the Secretary of State.
The amendment to confirm Antarctica as a special area for the purposes of restricting garbage disposal under Annex V of MARPOL is contained in the second order before the House. Strictly limited discharge of food wastes is permissible within a special area but MEPC have resolved that the Antarctic area should be regarded as an exceptional case and Resolution MEPC 42 (30) prohibits the dumping of
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garbage of any kind into the seas of the Antarctic special area. Again ships entering the special area must ensure that they have sufficient capacity to store garbage while operating in the area and to conclude arrangements to discharge it at a reception facility outside the special area.
The other amendment on this second order designates the wider Caribbean a special area for the purposes of garbage disposal. The wider Caribbean area will be subject to similar restrictions applied to special areas which prohibits all garbage but pre-treated food waste from being discharged into the sea at a minimum distance from land. All other waste must be stored on board for disposal at a port reception facility.
In conclusion, we are satisfied that these amendments will contribute to the reduction of pollution at sea. I commend them to the House.
Moved, That the draft order laid before the House on 14th April be approved [26th Report from the Joint Committee]. —(Viscount Goschen.)
Lord Clinton-Davis: My Lords, I thank the Minister for his explanation of these rather complicated provisions. I have given him notice of a number of questions which I propose to raise in the course of my remarks this evening.
There is no doubt at all that marine pollution remains an extremely serious problem although it is as well to recall in that context that something like 85 per cent. to 90 per cent. of marine pollution is land based. Those are the land based sources of marine pollution. However, we obviously approve any reasonable proposals designed to cope better with pollution of the sea and, indeed, the accords based upon IMO legislation are thoroughly to be welcomed.
However, one must say that the wheels of implementing international maritime legislation grind exceeding slow and we need to devise ways and means of hastening those procedures and implementing through our own legislation accords reached at the IMO and then to ensure that there is swifter implementation in practice.
Even though the amendments to the 1973 convention and the MARPOL Protocol of 1978 enable amending regulations to be made to mitigate further the threat of pollution at sea by oil and garbage, a great deal more time will elapse before the safeguards will be applied generally.
I am sure that the Minister will concede—indeed, the Minister in another place did so—that helpful though the draft statutory instruments are, and we welcome the enhancement of shipping and environmental standards nationally and internationally, one regrettable factor affecting the IMO legislative process lies in the fact that public opinion demands urgent action, particularly in the wake of certain catastrophes. Public opinion regards delay which invariably occurs as unconscionable. Therefore, demands are made for unilateral action by governments. I believe that unilateral action is usually, certainly if it is taken outside the competence of the IMO, inimical to the interests of a sensible regime emanating for world shipping. Law must be capable of enforcement to have value and unilateral action is likely to be the subject of

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legal challenge. Therefore, governments must seek ways and means of coping with those apparently conflicting interests; for example, interests which arose after the "Torrey Canyon", the "Amoco Cadiz", the "Herald of Free Enterprise" and, more recently, the "Braer" disaster.
On the whole, governments—certainly those of the leading shipping nations—succeed by galvanising the IMO into a speedy response and/or taking action which can be legitimately undertaken in their own territorial waters. It is sometimes argued with force that apart from delays, IMO procedures lead to the adoption of the lowest common denominator. However, the best is so often the enemy of the good and the alternative to that patient approach is simply that no legislation would be applied at all in countries where it is most in need.
It is clear that the two draft statutory instruments which we are considering are by no means the only instruments which Parliament will have to consider concerning IMO legislation. For example, there is the question of the ratification of the IMO convention on salvage, a point raised by my honourable friend Joan Walley in the corresponding debate which took place in another place on 5th May. When can we expect that legislation in another place and then in this House? I am not sure whether the Minister replied to that point in writing to my honourable friend but, in any event, in my view, the reply should be on the record.
These draft statutory instruments are about setting standards rather than enforcement. But I suggest that enforcement needs to be given a much higher priority than is the case at present and, specifically, as regards the evenness of international enforcement of the law. Ports of convenience are quite as dangerous as flags of convenience. There have been one or two cases in the very recent past where ships have been sent to sea after inspection when they had no business to be there at all.
Of course, we welcome improved programmes of inspection. We are aware that the IMO is in the course of concluding its work on inspection guidelines to cover detailed inspections of all ships so that the guidelines can be introduced in about 1995. Nevertheless, inadequate attention has been given to the point raised about implementation. Why should consideration not be given to introducing the notion—to be applied, it is to be hoped, in the European Community regarding environmental inspection—of the creation of a Community inspectorate of national member states' inspectorates? I believe that that would create a much greater evenness of implementation.
I am sure that further useful consideration of safety measures which are needed will emerge from the Donaldson inquiry into the "Braer" disaster. We eagerly await the report and we shall certainly co-operate with the Government in ensuring the swift passage into law of any legislation which may be required in consequence.
In a similar debate in another place on 5th May an interesting point was raised by Mr. Jim Wallace regarding the working language of officers and crew. Of course, the Minister was right to say that, ultimately, it is a matter for the master. But too many
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instances of confusion regarding language have arisen to enable that principle to be the only effective guiding principle. That issue is specifically raised in the regulations.
We are living in a world where multi-lingual crews are more often than not the order of the day. Safety is too often subordinated to profit and if there were more reliance on the high standards set by reputable flags rather than on the loose standards operated by flags of convenience, and indeed others, then the maritime nations of the world would be insisting on stricter guidelines and not adhering to the rather casual reply by the Minister in another place. In that debate the Minister said that the IMO was reviewing the International Convention on the Standards of Training, Certification and Watch-keeping in order to ensure that its provisions are adequate. Perhaps the Minister would be kind enough to indicate what is the timetable for that consideration and for any action that may follow.
I return now to the statutory instruments specifically. I should like to make one or two points. While the Government must ensure that they play a leading role in the IMO for tightening the regulations for preventing oil pollution at sea, the technical regulations set out in the first statutory instrument may well require a thorough review in the light of the report on the "Braer". Does the Minister agree with that view? Incidentally, how widespread is the ratification by the IMO—or, at least, by member states of the IMO—of the accords which are the subject of the regulations?
So far as concerns the statutory instrument on garbage, there was some discussion in the other place about the definition of the word "garbage". The annex of MARPOL defines the word as,
"all kinds of victual, domestic and operational waste generated during the normal operation of the ship".
Accordingly, it would seem that that annex does not control the disposal of commercial waste. Is the Minister in accord with that view? While the regulations are clearly beneficial in implementing internationally agreed measures, they must not be allowed to be a substitute for the strict implementation of the prevention of waste measures by the United Kingdom in its role as a coastal and as a flag state. Does the Minister agree that it is in fact open for the United Kingdom to impose stricter measures than those agreed under MARPOL? Further, do the Government have any intention of so doing?
Finally, implementation of the measures agreed at the IMO should be as rapid as possible. Certainly, there is a great deal of room for improvement in that direction. But that should never be regarded as a substitute for the formulation of a consistent policy by the United Kingdom and by the UK operating as a member state of the European Community. That consistency is evidently lacking at present. It is lacking because of the wholly inadequate approach of the Government towards shipping policy generally. Perhaps we shall have a little more to say regarding that aspect during the debate on Thursday on the Merchant Shipping (Registration etc.) Bill.
Lord Shackleton: My Lords, I am most grateful to the noble Viscount for referring to the provision in the order as regards the requirement in the Antarctic. However, can he say anything about how it will be enforced? The matter has been discussed in the Antarctic Treaty. Therefore, if he can give us any information on that aspect it would be most helpful. There is no doubt that there is a real problem and one which will grow steadily as tourist ships tend to go into the Antarctic.
Viscount Goschen: My Lords, I thank the noble Lord, Lord Clinton-Davis, for his broadly favourable remarks this afternoon. He asked about the number of states which had ratified the International Conference on Salvage and the five annexes to MARPOL. For salvage the number is seven states. For Annexes I and II to MARPOL the figure is 74 states; for Annex III it is 52 states; for Annex IV, 43 states; and for Annex V, 57 states. The noble Lord also asked when the Government intend to ratify the salvage convention. I can only tell him that the Government have every intention of ratifying the convention at the earliest opportunity; but beyond that I cannot be more specific.
The noble Lord, Lord Clinton-Davis, further asked whether inspectorates should be established at IMO or EC level to ensure comparable standards of inspection. The European Court State Control Committee is aware of inconsistent standards being applied. Work to harmonise and to ensure comparable standards is now being undertaken. The UK has consistently exceeded the target level of 25 per cent. For inspections of foreign ships visiting UK ports the 1991–92 figure was just over 34 per cent., with 195 ships being detained. The International Maritime Organisation recently established a new subcommittee on flag-state implementation which will consider the enforcement of proper standards.
As regards the Donaldson inquiry, the Government have given a commitment to implement any findings that the noble and learned Lord recommends. As regards the question of the language of the oil pollution emergency plan, the requirements do not take the language of the crew into account. Crews of merchant ships work at all times to the instruction of the master and his certificated officers. Actions taken on board ship to control or reduce oil pollution are required to be taken by the master and his officers, assisted by the crew under their instructions.
The noble Lord also asked about the proposed timetable by the International Maritime Organisation for a review of the conventional standards of training, certification and watch-keeping. The IMO is aware of the urgent need for a review of the convention and is looking to put an accelerated programme in place. It is expected that work will commence in the Autumn of 1993 and be completed in June 1995.
The noble Lord asked whether the UK was prepared to take action independent of the IMO. The new requirements that have been agreed internationally at the IMO are broadly similar to those introduced by OPA 90, with the exception of the alternatives to the double-hull design. Therefore, the Government do not believe that action independent of
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the IMO on the issue is necessary. The noble Lord, Lord Shackleton, asked a question about enforcement in the Antarctic region. If I may, I should like to write to him on the matter. I commend the order to the House.
On Question, Motion agreed to.

Merchant Shipping (Prevention of Oil Pollution) (Amendment) Order 1993
Viscount Goschen Viscount Goschen My Lords, I have already spoken to the order. I beg to move.
Moved, That the draft Order laid before the House on 14th April be approved [27th Report from the Joint Committee]—(Viscount Goschen.)
On Question, Motion agreed to.

Potato Market: ECC Report
6.8 p.m.
The Earl of Selborne The Earl of Selborne rose to move, That this House takes note of the report of the European Communities Committee on the Common Organisation of the Market in Potatoes [19th Report, H.L. Paper 74].
The noble Earl said: My Lords, when Subcommittee D launched an inquiry into the regulation, we were all well aware that the proposal, which is described by the Commission as "lightweight", had explosive properties so far as concerns Great Britain. Your Lordships have already fully debated the possibility that our Potato Marketing Board might be ruled incompatible with the regulation: this was done when we discussed the Agriculture Bill. Strong views were expressed then on whether it was wise to change our existing potato marketing scheme, which has been operating for over 40 years and which is held in high regard by many.
The questions that we set out to address were as follows. First, do we need in this country—or, rather, in Europe —a common regime for potatoes? If so, is the proposed scheme one that we would want? Further, is it either necessary or desirable to change our existing potato marketing scheme even if we do decide that we need a common regime for potatoes? At the outset, I should like to say how grateful we were to have the help of our specialist adviser, Mr. North. I should also like to express my gratitude to our clerk Mrs. Mary Bloor for all her assistance.
The proposed regulation is deceptively simple. It seeks, first, to provide assistance for the formation of new producer groups; secondly, it seeks to bring under Community rules state aid for the production of and trade in potatoes; and, thirdly, it gives the Commission power to require third countries to apply for import licences.
All the force of the draft regulation lies in the second provision. That is the one which seeks to prevent member states from giving support to their growers, whether on an ad hoc basis or by sophisticated statutory schemes, such as ours, in so far as that might be incompatible with the Common Market.
Our report sets out in paragraphs 6 to 13 the nature of our potato marketing scheme and how it operates. I am sure that this will be familiar to your Lordships. Essentially it controls supply by transferable, tradable quotas and allows for intervention buying. There are, of course, additional functions which I shall refer to later.
The purpose of quotas is, above all, to achieve stability in the potato market, thereby benefiting both the producer and the consumer. It is most important that we keep the consumers' interests in mind. The cost of intervention buying, of administration, research, promotion and the collection of statistics is carried by producers. Government help on the cost of intervention buying is now about to end. It is necessary for anyone growing over 0.44 hectares of potatoes to have a quota. If a producer does not have a quota, he pays a fairly heavy penalty. Some would consider this to be a very heavy penalty.
The evidence we received, both written and oral, all tended to concentrate on the issue of whether the potato marketing scheme achieved the desired stability, and furthermore whether the demise of the board would lead to loss of stability and thereby to a loss of confidence by producers, to the disadvantage of consumers and the country as a whole. There was agreement that most member states intervened in the market, usually in times of surplus. Such support as was given by member states inevitably favoured the producers of one member state against another. A recent report from Nottingham University on this proposed regime—I believe that has been circulated to many of your Lordships—confirms the evidence that we received on this point. This report states on page 106 that many countries have provided intervention, aids for storage and indeed export subsidies.
We concluded that such distortions by member states were likely to occur where the farming lobby was strongest. We felt that such assistance was undesirable in a single market. Quite frankly we felt that if member states were going to play at this game of helping their own nationals with export subsidies and other such measures, we were likely to lose out, as we were not as likely to be so belligerent as some of our producer neighbours on the Continent. Therefore, for reasons of expediency—let us be honest about this —but also for reasons of principle, we favoured bringing potatoes within the scope of Community rules. This would mean that any further aid would have to be notified to the Community and would have to be compatible with the EC treaty. That does not rule out support but the support must be compatible with the EC treaty.
Most witnesses agreed—this opinion was almost universal —that the present potato marketing scheme was incompatible with the regulation as drafted at the moment. Some therefore concluded that the regulation needed amending. Others concluded that the potato marketing scheme needed amending or abolishing. All witnesses addressed the central issue of whether the scheme was achieving the desired objectives of stability for producers and consumers, as
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well as helping to advance the interests of the potato industry in this country. Not unexpectedly there were widely differing perceptions on this central issue.
We took evidence from the Ministry of Agriculture who acknowledged that plantings had been more stable than in other countries but suggested that prices fluctuated as much in the UK as elsewhere, though around a higher mean; that is, around a higher average price. The Potato Marketing Board disputed this, claiming that a stability had been achieved which would not have been possible without area control. It has since quoted the Nottingham report to substantiate this claim. There is a graph on page 15 at figure 2.6 of the Nottingham report. It does not match the graph of the Ministry of Agriculture, which covers a longer time span.
However, I shall for the moment refer to the Nottingham report. That report suggests to me that UK prices have indeed been on average higher. At least the Ministry and Nottingham University probably agree on that. However, the price fluctuations in the Nottingham report appear to have been less than in the three other member states mentioned in the report. However one looks at the graph, stability is not the word which comes to mind. Perhaps it is possible to reconcile the two graphs produced by MAFF and Nottingham University respectively, although my own suspicion is that much depends on the relative weighting of components. That point was made in the Nottingham report. I am quite content to leave the question of comparing like with like to the respective economists, and may they reach a conclusion! Some will say that that seems unlikely.
We had to conclude, however, that supply control by means of quotas has not achieved price stability. Bearing in mind the chronic fluctuations in yield of the potato crop, it is probably too much to expect that it ever could achieve stability in an absolute sense. The price of quota itself has proved an unstable element in potato production. We took oral evidence from the National Farmers' Union of Scotland. The union informed us that quota had peaked at about £2,500 per hectare and had now fallen to £50 per hectare and it was continuing to fall. The production costs of those growers in the quota market have therefore not been stable. One has to ask whether the operation of a transferable quota scheme, with its inevitable disincentive to expansion for those producers without access to the necessary finance, has worked to the detriment of the British potato industry.
The Ministry of Agriculture's evidence on the steady decline in numbers of producers is corroborated by Nottingham University. If the objective of the potato marketing scheme had been to keep potato producers in business—that was not the objective of the scheme—then an 80 per cent. drop in numbers between 1955 and 1992, as mentioned in the Nottingham University Report, would suggest that the objective had certainly not been achieved. However, this would not be a fair measure of success. Instead we suggest that we should judge the success of the potato marketing scheme by the extent that it has given the potato industry the confidence and stability

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to position itself in our own market, and indeed in the European market, as well as keeping consumers satisfied with our product. That should be the yardstick as regards our success rate over the years the scheme has been operating.
I have already referred to prices. The consumer might have a mild grumble here, as prices seem to have been a little high. However, the position on exports, as mentioned in our report, is confused by a subsequent revision of statistics by MAFF. To be fair to MAFF, it referred in the evidence it gave us to a forecast for 1992. I understand that has been revised. That has the effect of showing increased export figures over the figures for the years 1981 to 1983. There are now forecast to be 121,000 tonnes of exports in 1992. That is about 2.2 per cent. of production and it compares with 1.4 per cent. of production between 1981 to 1983. Those are not figures we can be proud of.
Our weakness is our level of imports, not so much of ware potatoes but of processed imports, which now stands at 556,000 tonnes. That is a much larger figure than the figure I have just mentioned for our exports. When the chairman of the Potato Marketing Board gave evidence to us he described 73 per cent. self-sufficiency in processed products as a success story as it was better than the 64 per cent. we had previously achieved.
Our main competitors in our own market are the Dutch. They have been more successful in attracting investment in processing and have thereby benefited from increased employment and the added value which goes with that industry. We could not agree that there was any element of success in our present level of imports of processed potatoes. Our conclusion was that quotas had inhibited investment in this country by processors in spite of the formation of the joint consultative committee. Our home producers had conceded a significant share of our own market when we should have had all the advantages. As producers we have economy of scale in what is a capital intensive crop where larger fields provide significant unit cost savings, and of course we are close to our home market, which is sophisticated in the matter of potatoes and recognises the much wider choice of varieties which are grown in this country. We have a high consumption of potatoes compared with other countries. This is a classic situation, in which, if ever there was a commodity where we should be able to take on the opposition and win, it is this one. However, we have not done so.
Therefore, we concluded that, with hindsight, the potato marketing scheme could not be judged a success and that we should allow our natural advantages to reassert themselves. Our proximity to the market and our relatively sophisticated production systems should ensure that we compete effectively within a common market for potatoes. We felt that to be the only member state imposing area supply control would be to inflict a self-imposed handicap on ourselves. While that might well be favoured by our competitors, it was not a move that we could recommend. We recommend instead that, rather than
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amend the regulation to allow the scheme to continue within the potato regime, we should abolish the potato marketing scheme itself.
The evidence we received from some of the more successful producer groups suggested that some faced the demise of the quota scheme with equanimity. However, it must be emphasised that a large number of producers are extremely alarmed at the prospect. It may be that some of those producer groups are not so strong as others and that some have not invested in suitable production systems for the developing market. It will be the case that, if we enter a common market for potatoes, a number of producers will face an uncertain future.
We have already seen a steep decline in the number of producers. That is bound to continue. We felt confident that the market share which would be released by such producers would and should be taken up by the more efficient producers. That is simply to state what has happened in the past. There is no reason why it should not happen in the future, with or without transferable quotas. If we kept the scheme in existence in the hope of sheltering vulnerable producers we would be failing to act in the long-term interests of the British potato industry or the consumer.
Lastly, we recognised that many functions of the Potato Marketing Board, such as promotion, research and collation of statistics, should continue. We acknowledge that a development council, as allowed for in the Agriculture Bill, might well be a suitable vehicle. We note the provisions in the regulation for promoting new producer groups and for enabling the Commission to require third countries to apply for import licences. We feel that those two measures, although relatively trivial, may be helpful.
We were suspicious of the proposal of the Council of Ministers to introduce quality standards into the regulation, although we felt that some common definition of quality standards might be helpful. That is not so much a matter for the regulation as for a code.
Without doubt most growers see the board as having achieved a stability which would not have been possible without a compulsory potato marketing scheme. Those producers claimed that when everything else is changing in the common agricultural policy this is not the time to abandon the scheme. Reluctantly, we have been forced to disagree. We should never have allowed ourselves to be put on the defensive and to become a net importer of potatoes and potato products when we have every natural advantage. We should be exploiting more effectively our expertise as producers and the advantage we gain from having a higher consumption of potatoes per head than any other European country. We need to encourage our successful producer groups and to allow them to make contracts with buyers uninhibited by an area quota scheme. This EC regulation should be seen as an opportunity to compete more effectively with the rest of Europe and to remove the danger of unfair national aid schemes which tilt the playing field against us. I beg to move.
Moved, That this House takes note of the report of the European Communities Committee on the common organisation of the market in potatoes [19th Report, H.L. Paper 74].—(The Earl of Selborne.)
6.24 p.m.
Baroness Carnegy of Lour: My Lords, I am sure that the whole House is grateful for the clarity and the concise way in which my noble friend introduced the report. Those of us who were members of the sub-committee are no less grateful for the ability with which he chaired the inquiry.
Potatoes, and how they are grown and marketed, are extremely important to this country, more important than to any other country in the European Community. Potatoes represent 16 per cent. of the output of our arable farms. If one excludes cereals they represent 84 per cent. We are the largest consumers of potatoes and potato products in the European Community. We consume on average 4½pounds of potatoes a week per head, 102 kilograms a year, while across the Community the average is only 80 kilograms. This report, and any changes in the arrangements in the Community or the United Kingdom which lie ahead, are important matters for the United Kingdom.
In its response to the report the Potato Marketing Board commented that this was a complicated subject. It certainly is. Perhaps with hindsight it is too complicated for a short inquiry and a quickly produced report. However, the Select Committee decided to deal with the matter this way to make sure that the report was published before final decisions were taken by the Community and while the related United Kingdom Agriculture Bill was still under discussion in Parliament.
Fortunately, some of the background information which the committee might have considered with advantage but could not because of the timetable—for example, information about the potato industries in other member states—has since been set out in a most helpful and interesting report produced by the Nottingham School of Management and Finance, to which my noble friend referred.
The questions which the Select Committee had to address, and which my noble friend rehearsed, were simple enough: is the European regime necessary at all? If it is necessary, is the suggested regime the right one? What should now happen to the existing potato marketing scheme in the United Kingdom?
Those are simple questions, but in considering the answers we encountered problems. First, the committee found itself shooting at a fast-moving target. The proposed European regime, for differing reasons in different member states, was meeting huge hostility among Community potato farmers generally. It was rejected by their two big co-operatives —COPA and COGECA—and those views were subsequently reflected in the European Parliament. There was clearly a growing likelihood that the Commission would have to amend its proposals or abandon them altogether. The regime was, and still is, a moving target.
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As to the future of the United Kingdom potato marketing scheme, the committee found itself hearing evidence that reflected deep divisions, with witnesses' opinions on all sides of the argument based partly, of necessity, on guesswork. The questions were simple but there was too much conjecture all round. For that reason, I found that it was not a comfortable inquiry to conduct.
In considering whether there need be a European regime at all, the committee received conflicting advice. As my noble friend said, the Commission's evidence expressed the view that the Treaty of Rome imposed a duty upon it. It told us that potatoes were one of only two major agricultural products not covered by the CAP and that that meant that there had been an "untidiness" for years.
The Potato Marketing Board disagreed. It considered that there was no legal requirement for a regime. The Country Landowners' Association commented, I thought refreshingly, that the nonexistence of a regime is no reason for having one. MAFF linked the proposed regime with the need to do away with national schemes which distorted competition, while the National Farmers Union and the Scottish National Farmers Union would only contemplate a European regime if it permitted national schemes to continue.
In the event, the committee was strongly influenced by the evidence of Mr. Pooley, the manager of a large group of many hundreds of farmers involved in the production of some 30,000 acres of potatoes in England, himself at present president of COPA and COGECA. He believed, from his European experience as well as his home experience, that it was important that there should be a European regime of some kind, if only to ensure that member states were not able to give direct government aid to their own farmers and so distort competition. The committee took that point, as my noble friend said. It has happened from time to time in the past. In the new single market it would no longer be appropriate and should not be possible.
My noble friend has commented on the committee's views of what sort of European regime it should be. I shall not reiterate them except to say that the committee looks for a very light regime indeed.
The third question relating to what should happen to the potato marketing scheme is of course by far the most important to the industry and in particular to potato farmers in this country. Living as I do in Angus, a part of Scotland where the growing of seed potatoes has for many years been the backbone of the rural economy, and indeed having had—although having no longer—involvement in the industry, I take seriously the doubts and anxieties of seed growers in particular about life beyond the statutory potato marketing scheme. Most seed potato growers take the view—and the evidence to the committee of Mr. Melrose reflected it—that without the potato marketing scheme, demand for and prices of ware potatoes, and with them the demand for and prices of seed, would fluctuate far more from year to year than they do under the scheme. Overall the price would be lower. It is because of that belief that the growers

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contribute large sums to the scheme. Seed growers are also of the view that fluctuation within the seed trade would be greater than the effect on the trade in ware potatoes. The Nottingham report confirms that and indeed estimates that the effect would be double.
Incidentally, at the back of most potato growers' minds is the fact that their own quota is currently without value. However, if quotas were maintained it might acquire a value again in the future although it will probably never reach the £2,500 referred to by my noble friend. It is in examining that question and the future of our UK scheme that the limitations on evidence and time imposed by a quick report show themselves most clearly. At the end of the day the balance of evidence received suggested to the committee that to limit production and to keep prices up by artificial means, as the potato marketing scheme does, in the context of the new single market, in the longer run must reduce rather than expand the scope for competent potato farmers. It must increase rather than decrease the import of potatoes and potato products from other Community countries to the United Kingdom. As my noble friend said, the Select Committee therefore takes the view that whether or not the European regime falls by the wayside, the United Kingdom potato marketing scheme, if retained, will over a period of time become disadvantageous to UK consumers who wish to buy British, to United Kingdom farmers, and to the United Kingdom economy.
Many of the committee's facts and figures are confirmed and enhanced by the Nottingham economists. The economists in fact come to a different conclusion, suggesting that the potato marketing scheme will continue to benefit the industry and even that it is a model for farm policy that might be developed in other sectors. It is perhaps a little wicked to comment that, "They would say that, wouldn't they?" After all, the report was commissioned by the Potato Marketing Board.
Lord Mackie of Benshie: My Lords, the noble Baroness is surely not suggesting that professional economists are incapable of being objective. It is surely not worth their being prejudiced if they do not produce decent reports.
Baroness Carnegy of Lour: My Lords, I would not dream of calling into question the integrity of the board, but the report was paid for by the board—which means by the producers. It must have cost a lot of money. I should have thought that the producers would be rather angry if the board then recommended that it does away with itself. I am not sure; I was making that comment in a rather light-hearted way.
Lord Carter: My Lords, I am grateful to the noble Baroness for giving way. Is she aware that one of the authors of the report is my noble friend Lord Peston? Is she calling into question his academic integrity?
Baroness Carnegy of Lour: My Lords, absolutely not. Perhaps I may explain what I seek to say. The report is fascinating and most useful. In the course of argument the report makes a good suggestion: that seed potato producers might with advantage link their
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businesses more closely to the producers of ware. However, as a lay person I perceive that the economists, like the Select Committee, have not been able entirely to eschew guesswork in some of the conclusions that they draw. For example, the report confesses that,
"it is extremely difficult to estimate the extent to which the quota holds quantity down and prices up".
Perhaps I may give another example. The economists arrive by a precise and clearly defined path at estimates of large numbers of farmers who might stop growing potatoes because of the ending of the potato marketing scheme. They then add, somewhat vaguely, that,
"of course, the more efficient farmer may seek to expand [though…] not overnight".
At the end of the day much depends on how people react. I often recall my experience as chairman of a committee which some years ago considered the likely effect of a projected relief road in Edinburgh on traffic in and out of the city. That experience leads me to suspect that, however skilled, professionals cannot always predict how human beings will respond to new opportunity in a complicated network of circumstances, whether those are changed choices of routes home in the rush hour, or a new freedom to choose to stop, reduce or expand the growing of potatoes.
The committee had a difficult task. I believe that the report should be helpful. I certainly believe that the Potato Marketing Board report is also very helpful. I commend the report of the Select Committee to the House.
6.38 p.m.
Lord Stanley of Alderley: My Lords, I have once again to declare an interest, in that I am and have been a producer of potatoes since 1954. As a result, I have to say that the report of the Select Committee is one that I cannot support. I do not look forward—indeed, I never do—to the remarks which I intend to make any more than your Lordships will care to hear them. I do not mind irritating some of your Lordships some of the time, but I am fearful of irritating all of your Lordships all of the time, including my noble friend on the Front Bench, although I detected that my noble friend Lady Carnegy also had reservations about the report. However, to be anodyne is a sin that I will not commit.
I believe that Sub-committee D failed to realise the importance of a number of factors that affect the United Kingdom potato industry. If it did so realise, it drew the wrong conclusions. I believe that it concentrated far too much on the quota as opposed to other matters. Indeed, the speech of my noble friend Lord Selborne concentrated vastly on the quota problem. The committee failed to understand the effect of the English Channel. It failed to understand how much more varied is the use of the potato in the United Kingdom compared with our continental colleagues, in particular, the stronger demand for the fresh potato. The committee failed to understand the effect of the strong co-operatives in Europe. I think that 80 per cent. of the Dutch crop is co-operatively

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marketed, which would put them in a powerful position should our potato marketing scheme be abolished.
The committee assumed that there is and will be a level playing field, though listening to my noble friend Lord Selborne I have to say that he put it in, if I may say so, a slightly more defeatist way. I wonder whether, when my noble friend on the Front Bench replies, he will be able to give an assurance that the United Kingdom Government will match, ecu for ecu, for United Kingdom producers any help given to continental producers.
The United Kingdom Government's record is not all that good. For example, I was staggered to be told in a Written Answer on 29th March (at col. WA. 33 of Hansard) that they were ignorant of how much continental countries had given in support last year, whereas a telephone call to Brussels would have enlightened them. I have sent my noble friend on the Front Bench details of those subsidies, which amounted in France alone to well over £19 million sterling, compared with the United Kingdom's paltry £1¼or £1½ million.
The committee came to the conclusion that our potato marketing scheme restricted the processors' ability to purchase United Kingdom produce. I do not believe that to be so. They could not or would not take up all the offers of contract last year; I know that we could not get all our extra quota acreage. In particular, frozen chips are imported because processors do not have the plant in the United Kingdom. It is a question of the chicken and the egg, I believe. If the processors put up more plant they would get more potatoes. Incidentally, the fewer chips eaten and the more fresh boiled and baked potatoes eaten, the better, I am told, for the country's health.
The committee was unfortunately fed inaccurate or incorrect information by the Ministry of Agriculture. For example, Annex A, Table 5.14—my noble friend Lord Selborne admitted this in the end—contained serious errors in the raw potato export figures. The UK raw exports increased; they did not decrease. If one bases one's evidence on a fact which is 100 per cent wrong, it makes it somewhat suspect.
Secondly, MAFF failed to understand the vital difference between a crop and a calendar year, so suggesting that there was intervention in each of the past five years, whereas it occurred only three times between 1988 and 1992.
On a smaller point, MAFF implied in Table 1, Annex B, that the United Kingdom potato prices were £6,000 per tonne due to an error: it interpreted 100 for one. It is an understandable error like those that I make every day, but it does not exactly inspire confidence in MAFF's report.
When Sub-committee D questioned Mrs. Attridge of the Ministry, she clearly failed to understand the role of the Potato Marketing Board's consultative committee. She stated:
"It does not build in an element for exports or at least [has] not done so up until now".
I should not like to say what I put by that. Suffice it to say that that just is not so.
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I realise only too well that my noble friend Lord Howe believes that I have got my knife into the Ministry of Agriculture. I made it quite clear to my noble friend in a letter that I have no objection to much of MAFF's overall strategy, including incidentally the hated IAC and BSP schemes. It is the small print that lets MAFF down. I suggest that it has done so again in this matter. I strongly commend the article in The Times of 6th May by Sir Peter Kemp, a former prominent civil servant. It was headed:
"Mandarins are not the only fruit".
Ministers should shuffle advisers too.
So much for the errors in the evidence. Perhaps what worried me most was Sub-committee D's misinterpretation of Article 39 of the Treaty of Rome. It appears to have neglected the words:
"ensure stability of the market and a fair income for producers".
The report does not address that vital matter. Indeed, the report from Nottingham, to which noble Lords have already referred, on page 112 states a categoric no. That view, as my noble friend Lady Carnegy said, is supported by COPA, COGECA, ECOSOC and of course the European Parliament. In common with those organisations, I cannot accept paragraph 50 of the Select Committee's report which states that our potato marketing scheme would be incompatible with a European Commission scheme. It is just that the United Kingdom does not want to negotiate such a scheme.
So I have to conclude that this was a poorly thought out report, based on poor and incorrect evidence, reflecting the gospel coming from the Minister, which could result in throwing out the baby with the bath water. It seems to be saying, "We have a less than satisfactory situation, so let more chaos reign".
I have to end on a constructive note. I suggest that your Lordships accept the Government's view in 1989 which was expressed as follows:
"to retain the basic elements of the existing scheme in view of the need to maintain stability in the potato industry at a time of major adjustment in the arable crop sector generally".
I entirely agree. I hope that the Commons will take such a view and, more importantly, I hope that my noble friend Lord Howe will confirm that those sentiments expressed by the Government in 1989 are still held by the Government.
6.47 p.m.
Lord Middleton: My Lords, as one who had formerly grown potatoes for a good many years under the aegis of the Potato Marketing Board, my first reaction on hearing that the Commission was to introduce an EC potato regime was to have misgivings similar to those voiced by my noble friend Lord Stanley. However, having had the privilege of rejoining Sub-committee D under the chairmanship of my noble friend Lord Selborne just in time for our inquiry, and after hearing the evidence, I took a different view. It is one that is wholly in accord with our conclusions on pages 12 and 13.
The Commission clearly regards this as a single market measure in that it is aimed at dismantling national support measures which act as restrictions on

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trade. There is a strong case for preventing member states from operating national schemes which distort the Community market in potatoes.
As my noble friend Lord Selborne reminded us, in Great Britain, the PMB, with its potato marketing scheme, controls the area of potatoes grown by means of a quota system. It supports the market by contract buying and by operating an intervention system.
My noble friend Lord Stanley thought that we had overstated the quota issue. Sub-committee D has been consistent during the years I served on it and before in opposing quotas in principle. In previous reports we have argued against the use of output controls both on economic and on practical grounds. We have said that the quota system is not in the interests of consumers, manufacturers or the agricultural industry as a whole.
When we wrote our report on the reform of the CAP, we said:
"Quotas distort markets, create artificial shortages of commodities and impede restructuring in agriculture … we believe that in the long term quotas should be progressively phased out".
In a debate in this House on 10th March this year, my noble friend Lord Selborne spoke very effectively on this question of supply controls and their malign and potentially damaging influence on food production.
It was not unexpected that most producers and producers' organisations wanted to keep the potato marketing scheme. The overwhelming weight of producer opinion wanted to retain a national quota system whose purpose was to act as a cushion against violent price fluctuations. One witness summed the matter up when he said that the PMB and its ability to control quotas equalled stability. That perception of the benign effect of the potato marketing scheme was not supported by any figures. To the contrary, the figures supplied by MAFF, which were referred to by my noble friend Lord Selborne and which appear in graph form on page 25 of the report and on page 14 of the evidence section, show that British prices of main crop food potatoes fluctuated in very much the same way as prices in other member states but that British prices were consistently higher. The Potato Marketing Board, in the brief which it sent to Peers—
Lord Mackie of Benshie: My Lords, is the noble Lord saying that to have higher prices for potatoes in this country is a bad thing?
Lord Middleton: My Lords, I will deal later with the, again, malign effect of higher prices on the penetration of our market. To that extent, I believe that they have had a bad effect.
The Potato Marketing Board, in the brief which it sent to Peers in anticipation of this debate, disputes MAFF's figures. It claims that producer prices are fully competitive with continental prices. But again it does not supply any figures of its own—or if it has supplied them, I have not seen any. It backs its claim by referring to the negligible quantity of ware imports. Great Britain has an in-built protection against imported ware. Because of their weight and hulk, raw ware potatoes cost about £30 a tonne to transport into this country. So one would not expect much competition from that source. Therefore I find that
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explanation unconvincing. There is the graph on page 15 of the Nottingham University report. to which my noble friend Lord Selborne referred. He has dealt with that point, so I shall not repeat what he said. We find other examples of the disadvantages of supply and price management when we consider the potato market in Great Britain. I should like to expand a little on what my noble friend said about penetration of our home market.
The processing of potatoes by manufacturers is a very important outlet for growers in this country. In 10 years the take-up from the United Kingdom crop has risen from 20 per cent. to 30 per cent. of the total output. It is a growth industry. Yet under our quota system the potato industry appears to be unable to satisfy increasing consumer demand for processed potatoes. Imports of processed potatoes have risen by a factor of four in the past 10 years in terms of tonnage. While 10 years ago 10 per cent. of the processed chips, crisps and so on consumed in the United Kingdom were imported, the figure is now nearly 27 per cent.
Surely we ought to be perfectly capable of satisfying the whole of our domestic demand for raw and processed potatoes, except perhaps for the out-of-season earlies, from our own fields. It does not say much for a system that exerts close control over both output and quality if this growing penetration of our market can be allowed to happen.
In its brief to Peers, the Potato Marketing Board says that the reason for the admitted import deficit in processed products in Great Britain is insufficient or inadequate processing capacity. My noble friend Lord Stanley repeated that tonight. The Nottingham University report recently commissioned by the PMB, to which my noble friend Lady Carnegy referred, is equivocal on the subject. The section on the processing industry says:
"Whether the import deficit is due to a production or a processing bottleneck is an important question.
"In other words the import deficit may be due to constraints imposed on processors by the P.M.B. through the P.M.S., or to lack of processing capacity and marketing ability in the British processing industry".
So that does not get us very much further.
However, MAFF told us in its evidence that in Great Britain processors found that the quota system made it more difficult for processors to be assured of their supplies and that quotas. by restricting production, gave a higher average price of their raw material. That was borne out by the representative of the Potato Processors Association, who said:
"the potato marketing scheme has been disadvantageous to us —particularly in the way it operates in this country … This has resulted in potato prices being generally higher in this country than in most other E.C. countries and in our finding it is more difficult to obtain potatoes of the right quality, variety and value for our processing plants".
He went on to say that there was at present in Great Britain sufficient processing capacity to take over a proportion of the imported tonnage but that new plant built to satisfy the home market would be more likely to be placed on the other side of the Channel. He blamed the potato marketing scheme. He said:
"If the present scheme stays … I believe that it will adversely affect investment here in the United Kingdom".

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Finally, he quoted a Dutch person as saying to the secretary of his association:
"I hope to goodness your potato marketing scheme stays. It is the greatest advantage that Dutch processors have in helping them to exploit the UK market".
The Dutch look like following the example of the Danes, who captured more than 40 per cent. of our bacon market, which our home pig industry had ample capability but not the wit to satisfy in full.
Those are some of the reasons which lead me to agree with the conclusion in our report; namely, that a free market in potatoes would lead to a more competitive industry, where efficient British producers would not only increase their share of the home market but should also aim to penetrate markets abroad. I shall be very unpopular with my farming friends for saying so, but I fear that our producers cannot do that within the restrictions of the potato marketing scheme.
6.59 p.m.
Lord Monk Bretton: My Lords, I do not grow potatoes now. Like my noble friend I am an ex-grower. I hasten to add also that I do not have any quota. However, unlike him, during debate on the Agriculture Bill I said quite a bit in support of the Potato Marketing Board. Though I am now better informed (I hope), I do not recant what I said then. Indeed, I find the subject an extremely complicated one. I can understand the anxieties there must have been among members of the Select Committee over the matter.
One at once picks up that prices are higher in the UK. The question is whether we are comparing like with like in the kinds of potatoes which we are considering. I do not believe that we really know. Something else on which we must keep an eye is the great asset of the Dutch—their land. It is their greatest asset in the potato industry. We need not give up heart because of that, but to some extent we must remember that factor.
If the potato marketing scheme quotas are abolished, the insurance provided by support buying must go also; the one supports the other. I therefore find it difficult to accept that abolition of quotas will not result in greater fluctuations in price and in the acreage planted. The scheme at least kept acreage planting more constant.
It follows that if we are not careful and make a wrong decision, investment in potato growing, which is extremely important, will be discouraged. There will be a danger that instead of quota abolition stimulating production and reducing import penetration, the reverse could arise. That is pointed out in the Nottingham report. It is said that the potato marketing scheme is against the consumer interest. To a small degree that may be so. However, to date it has encouraged investment by growers which, in the long run, has been to the advantage of consumers.
There is evidence that we endure greater yield variation per acre than some other parts of Europe. Some of that could perhaps be cured by relocation or irrigation. It would be a good thing if and when that comes about. If we go on as we are it will probably
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happen anyway. But as regards potatoes for processing, we have greater difficulties over ensuring quality. We have difficulties in obtaining the right sugar content and that is climatic. It may be alleviated by better varieties, but that is in the long term. The importance of our seed industry is again illustrated.
Many processing varieties of potato are useless for other purposes if rejected. One is then back to the need for a support scheme over the problem of quality risk in producing processing potatoes. Of course, the potato marketing scheme provided that when a processing crop was unsatisfactory. Without that insurance through the levy, producers will carry the whole burden in such cases.
I should like to mention our market. In processing there is a tendency for it to be in the hands of internationals. Unlike Holland, we have one processor with 60 per cent. of the capacity. For the rest of the market we have to keep an eye on the increasing power of the supermarkets—very much a UK phenomenon. I have said a good deal about that in this House on several occasions. Therefore the position of the United Kingdom growers is more bleak than anywhere else unless they have strong marketing. The road ahead does not spell that it is safe to rely on laissez-faire. There are too many oligarchies around for that. Most growers feel that some form of direction is needed for the industry.
It must be said that we were able to solve some of our marketing problems in the absence of strong co-operatives as in Holland by means of the potato marketing scheme. European growers all want something similar—greater stability if they can obtain it. They could not achieve that before the advent of the European market, as we could, because of their cross-border trade and their market being less isolated than ours. Hence the controversy over the new EC proposal in COPA and in the European Parliament. That controversy is something that should not be lost on us.
I suggest, if possible, that we do not abolish or disrupt the potato marketing scheme. Unless there is something strong enough to take its place I fear that abolition of quotas would be a serious blow to the industry in this country. It is not the same situation as is the case with milk, where at least for the moment quotas are a protection for British producers. The potato situation is considerably less safe. It is essential to pay more heed to growers' views. As far as I am aware the majority of them are in support of the PMS and I believe that also applies to the majority of the acreage. One should definitely take all those points into consideration before being ready to accept the recommendations made by the Select Committee.
I fear that we could lose more ground to the Dutch and others by scrapping our marketing system without establishing a co-operative like theirs. Our quota system —certainly as claimed by the Potato Marketing Board—is capable of adjustment to accommodate more processing. That would come about when processor over-capacity in Holland, which is the position at the moment, is more fully

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used. The quota scheme is now much more like co-ordinated production planning and there seems to be a need for that.
I am sure that in Holland one will find that loyalty to one's co-op is strong. Dutch producers plant with an eye to the market. They have discipline and show it. Their approach is not unco-ordinated laissez-faire; it is a thoroughly co-ordinated affair. I do not believe that a laissez-faire approach in this country would work. I believe that our system, with modification from time to time, is best retained and built upon. It would then be capable of producing a sound basis for producer and processor investment to get the right production in the right places. It may not produce stability of supply because of weather, yield and quality. But it will produce stability in acreage planted. That in itself is extremely useful.
I believe that there is another moving target in addition to the EC scheme; that is, the Potato Marketing Board. It has evolved considerably. It is probably well capable of evolving further and we should abandon it only after a great deal of thought. We may do so at our peril.
7.9 p.m.
Lord Lyell: My Lords, first, I thank my noble friend Lord Selborne and the members of his committee for all their hard work in producing the report we are discussing today. Your Lordships will know of the Angus mafia, as explained by my noble friend and neighbour Lady Carnegy. My noble neighbour who has yet to speak—the noble Lord, Lord Mackie of Benshie—grew, and for all I know is still growing, potatoes in his new area. My noble friend Lady Carnegy is still growing on the lovely lands of Lour, but perhaps not in her own capacity.
I have to declare an interest, in that I have quota but allow some of the giant processors to grow on Kinnordy land. I, and I believe all potato producers in Angus in Scotland and elsewhere, will pay tribute to the very hard work of the Potato Marketing Board over nearly 60 years. I believe it is agreed that that operation has provided the stability which is, to put it politely, demanded by my fellow Scots, be they producers of ware or, above all, seed potatoes.
I thought fit to speak in this debate in a fairly humble capacity only at the weekend. For that reason I did not receive all the fascinating reports from Nottingham University. I saw some reference to them and received something by fax this morning. What struck me was paragraph 47 of the report of the Select Committee. I should like to quote from the report of my noble friend Lord Selborne. The report suggests that significant fluctuations in production since 1985 are noted. However, that is also the case in Europe. Paragraph 47 goes on to mention that demand is inelastic and that has produced considerable variations in producer prices. Evidence was given by Mr. Black, who I believe was the representative of the National Farmers' Union of Scotland. He said at page 49, Q108, that, although demand might have been inelastic, he was continuing to sell potatoes. I do not know whether those potatoes were ware potatoes for the pot, fresh potatoes or potatoes for processing. He
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said that he had sold pre-packed supermarket potatoes last year for £150 per tonne. At the same time of year this year he is selling presumably the same type of potatoes to the same supermarkets for £55 per tonne. Yet he says that prices in the supermarkets have remained the same. I find that most interesting. We find that demand is inelastic and that prices will go up or down, yet prices at the farm gate can be one third of what they were last year but not change in supermarkets.
What amuses me considerably is another comment in paragraph 47 of the report. Mention is made of the same fluctuations in prices in other member states. This arises very much in the context of the Potato Marketing Board's quota. I refer to the end of the paragraph:
"the main effect of the potato marketing scheme is that potato prices in Britain fluctuate around a higher mean".
I have heard that once most distinguishedly from my noble friend Lord Selborne. I do not know whether when he and I took O-level or elementary mathematics at Eton 37 or 38 years ago we covered things like higher mean figures. We were concerned with simple figures.
Perhaps I may take my noble friend and your Lordships to Appendix 6 on pages 38 to 40. The appendix deals with the prices of potatoes for processing in Britain. The figures purport to be in support of the case made by the potato processors. We have heard a great deal from all who have spoken that it is the Netherlands potato industry that is our greatest competitor. It is the greatest supplier to the market. Whatever "higher mean" may mean, I invite your Lordships to look at what appear to a simple Angus man to be simple figures. Referring to page 38, in 1987/88 the annual average within the band above —that is to say, column (A) under "Great Britain" (for the purposes of these calculations Northern Ireland is excluded)—was £64.56 per tonne as against £42.97 per tonne in the Netherlands. At the bottom of page 38 in 1988/89 your Lordships find that the figure is £60.61 per tonne as against £54.79 for the Netherlands. If we look at page 39, we find that for the past three years, according to figures produced by the processing industry in support of their case, average prices per tonne in 1989/90 have been £112 in the Netherlands versus £90 for Great Britain; in 1990/91, £83 against £75 and in 1991/92, £79 against £78. The processors tell us that the quota scheme of the Potato Marketing Board is not acceptable and produces higher prices. These figures come from the processors who want the scheme done away with because they say that that will assist the housewife and the industry.
My noble friend Lady Carnegy raised a point relating to the seed potato industry in Scotland. I await the thunderstorm from my noble friend and neighbour Lord Mackie. Perhaps he will allow me to allude to one or two points made in evidence. I refer particularly to the evidence of Mr. Melrose, who was speaking for the seed potato industry in Scotland. Your Lordships will see that on page 70, at 187, Mr. Melrose points out that the seed potato industry needed a lead time of perhaps seven, eight or even 10 years before the material found its way eventually to

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an English or perhaps Scottish farm and into the ware and production cycle. I seem to remember using a similar argument for the protection of long lead products a fortnight ago when arguing for the pharmaceutical industry.
Nevertheless, I believe that what Mr. Melrose presented to the committee had some force. He stressed the export opportunities for the Scottish seed potato industry overseas. Over the weekend my mind wandered to places like Russia, Poland and other large potential markets for the Scottish seed industry. Coupling the seeking of those overseas markets with the long lead time, it was his belief, and, I understand, that of the farmers' union in Scotland, that the current scheme with quota, warts and all, provided stability, and that that was what the seed industry was seeking.
I should like to turn briefly to paragraph 48 of the report and couple that with the wise evidence of Mr. Pooley. The committee accepted the point made by the Scottish seed potato growers; it went a good way to accepting the points made by the industry. Mr. Pooley in evidence stressed on page 81, at Q240, that the scheme should not cover breeders. He felt that breeders were major entrepreneurs and that any scheme proposed as a result of the recommendations of the committee, or from elsewhere, should not necessarily cover breeders of Scottish seed potatoes.
I am very interested in paragraph 47 of the report. I hope that noble Lords and my noble friend on the Front Bench will consider the three examples given on pages 38 to 40. Perhaps my noble friend on the Front Bench or my noble friend Lord Selborne can tell me why it is thought that the potato marketing scheme as it exists in Great Britain at the moment produces a higher mean. I accept that I have taken average prices in the three most recent years, comparing the Netherlands with Great Britain. However, those figures are presented by the processors. I wonder whether I or the processors have got them wrong. It seems that some of the evidence does not necessarily demonstrate the inefficiency of the quota.
That said, I should like to thank my noble friend Lord Selborne and his committee and all the experts who have produced a very readable and lucid report. I believe that it is of immense importance to the potato industry and also to the seed potato producers and experimenters in the great county of Angus.
7.19 p.m.
The Earl of Perth: My Lords, I apologise for not having put down my name earlier but I did take the necessary safeguarding steps in order that I might speak in the gap on the speakers' list.
First, I must declare an interest. It is not a very large interest but all the same I grow potatoes. This year I wish that I did not and I think that most growers of potatoes are of the same opinion. Indeed, it occurs to me that it may be rather a bad time to introduce change—a radical change—because we do not know what will come about if we do away with the Potato Marketing Board, go into the deep end of no restrictions of any kind and take our chance with the rest of Europe.
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Perhaps I would not mind taking our chance with the rest of Europe if I felt that the Government could guarantee that we would all be treated in the same way. However, I have heard again and again today that in one way or the other there have been subsidies to almost all the other countries in Europe. The noble Earl, Lord Selborne, said that even if there is a general scheme of things there is no guarantee that other countries will not continue to support their industries. All they have to do is to report it. Knowing the position of the British Government, I am afraid that they certainly would not support their industry. We would be in the position of having got rid of our Potato Marketing Board, whose cost, incidentally, is almost entirely borne by the potato growers and not by the Government—they have helped a very little this time.
So the first thing that occurs to me is that, if there is to be a change, we must be sure that from then on we have a level playing field. Otherwise, we shall find the same kind of thing as happens at the present time in other areas of farming whereby other European countries somehow seem to get around the rules. One of the arguments in favour of the change was that the system as it stands is very untidy and that only two commodities are not covered as a whole. That is about the worst argument I have ever heard. What does being untidy matter if the system works?
I find this a very difficult subject. As has already been pointed out, we ought to enjoy an advantage in the ware potato market because it costs £20 or, as some other noble Lords have said, £30 a tonne to bring potatoes from Europe to this country. But I am worried by the fact that prices do not seem to affect consumption. I say that very forcefully in relation to this year. Many potato growers have seen the price drop by 80 per cent. but that does not increase consumption.
Lord Mackie of Benshie: My Lords, has the noble Earl noted that the 80 per cent. drop has not been reflected in the supermarket?
The Earl of Perth: My Lords, I entirely agree. That is another way of saying what I was trying to say. The fall in the price does not mean that consumption will increase. I am not entirely clear about the reason for that. It may well be, as the noble Lord, Lord Mackie of Benshie, said, something to do with the system of great supermarkets in this country which we do not find in Europe.
Another thought occurs to me. The report tells us how the countries of Europe, particularly Holland, have very successful co-operatives. What guarantee do we have that getting rid of the Potato Marketing Board, which in a sense is a co-operative, will result in more successful co-operatives in this country straight away? There is a risk in getting rid of our Potato Marketing Board entirely and being at the mercy of co-operatives, which take a long time to develop.
What are my conclusions? It is a very difficult subject and we have heard the views of those who have studied the subject carefully. Two points arise. First, we should be certain that the other governments will not be able to help out their own producers unless we

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can too. I am clear that we will not if the Potato Marketing Board disappears, because the Government will not be prepared to help out in the same way as others. I do not blame them, but that is what one has seen again and again.
Secondly, if we are to do this, is there no way in which the Government can do it gradually? To take a plunge into icy water at a time of uncertainty is a mistake. If the Government wish for change, I beg them to do so in a way that can be gradual. Once one stops the activities of the Potato Marketing Board altogether it will be difficult, if not impossible, to bring it back again. If the Government are determined to go forward I hope that they will do so gradually. I do not know what I mean by that but I do know that it is very necessary.
7.27 p.m.
Lord Marlesford: My Lords, I crave the indulgence of your Lordships to say a few words in the gap in support of my noble friend Lord Selborne, on whose sub-committee I had the honour to serve. I declare an interest as a potato grower and an identity of interest with the noble Lord, Lord Perth, in that I too expect to make a loss on my potatoes this year despite the Potato Marketing Board and the quota system.
I should declare straight away that I am a free trader by instinct. Perhaps that has something to do with 17 years at the Economist. But that does not mean that I do not see the advantages of fixed and rigged markets from time to time. The ERM is a lovely idea if it produced a stable currency network, and a single currency might also be very nice. In certain areas market intervention works well. We have milk quotas which have been successful. That is because they apply throughout Europe. What in my opinion would be wholly unacceptable to the British farmer and to the British potato producer is constraints on the acreage of potatoes that may be grown by British farmers with no such constraints on farmers in other countries of the European Community and completely free trade in potatoes. The cost of transporting potatoes is a relatively unimportant factor—compared to milk.
I understand why the Potato Marketing Board should be mounting a bit of a campaign against our report. I studied Karl Marx for long enough to understand how people react on such matters. Equally, I can understand why some farmers will be apprehensive at the loss of the potato marketing scheme on the old adage of "holding firm to nurse for fear of finding something worse". In my area of England, Suffolk, I do not believe that I shall be unpopular with my potato growing neighbours for saying that I believe that the potato marketing scheme should go. The committee attempted to get evidence of this alleged widespread support for the scheme and we did not find it.
I believe that the crucial factor is that the Potato Marketing Board and its potato quotas have not in fact increased the stability of the potato price. The reason has already been referred to. It is in our report and also in Section 6.3 of the Nottingham University report—the inelasticity of the demand for potatoes. This also explains the point raised by the noble Earl,
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Lord Perth. There is a limit to the number of potatoes which the supermarkets can sell. On the whole, for the people in this country money does not limit the quantity of potatoes which they buy. They buy the number they want to eat.
If, due mainly to the weather or sometimes imports, there is a big fluctuation in the supply of potatoes, the supplier will be paid less by the supermarket. The supermarket goes on selling at the same price because it can get the same price. If the supermarket cuts its price it would not sell more. It probably has an idea of the price which people are prepared to pay. So when the price to the producer falls the supermarket does not have to cut its prices. That is the explanation of the apparent paradox of the noble Earl, Lord Perth.
We in Britain, as they do in Holland, have very good producers' co-operatives. I am a member of one, Anglian Produce, which I believe is the biggest in Britain. Co-operatives try to regulate the market to help farmers by telling the potato growers when to lift and when not to. Thus they reduce the perennial rip-off of the potato growers by the supermarkets and processors.
Potatoes have always been, and I believe will continue to be, one of the most speculative crops that farmers can grow. I do not believe that our prospects will be adversely affected by the scrapping of the potato marketing scheme. I support the report. I also support my right honourable friend the Minister for Agriculture. I believe he has a healthy scepticism of assumptions about attempts to regulate which do not really work.
7.33 p.m.
Lord Mackie of Benshie: My Lords, I too must thank the noble Earl, Lord Selborne, for putting his case with great clarity. But I regret to tell him that it has failed to convince me. I was quite shocked at some of the things in the report. When I came to paragraph 47 I could hardly believe what I read:
"The Committee note that these price fluctuations are not more pronounced in other Member States and therefore agree with MAFF and the Potato Processors' Association".
That is a combination including both the devil and the deep blue sea. The report goes on to say that the main effect of the potato marketing scheme is that potato prices in Britain fluctuate "around a higher mean".
What we have seen already is that a higher mean must be good for the potato growers of Great Britain. As the noble Lord, Lord Stanley of Alderley, said, one of the objectives of the CAP is to give the farmers of this country and Europe a reasonable standard of living. I cannot see why the committee should believe this combination of MAFF and the potato processors—one driven wholly by self-interest and the other by doctrinaire assumptions which are becoming more and more unpalatable to the voters of this country.
I then read paragraph 49:
"The Committee take the view that a free market, in potatoes would lead to a more competitive industry, where efficient British seed and ware producers would increase their share of the home and export market. The Committee therefore support the abolition of the Potato Marketing Scheme".

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Paragraph 51 is even worse. It states that the committee supports the abolition immediately, whether there is a scheme produced by the CAP or not.
These are arguments which I would like to contradict. I shall start with the core of the argument both from the ministry and the committee. It is that in a free market we would supply all the extra consumption of processed potatoes, whether crisps, par-fried chips or anything else which the British public have taken to. That is the core of the argument from both the Government and the committee.
When one looks at the admirable report from Nottingham University it puts the processors on the spot. The processors have a very good method of getting their supplies. They contract for 50 per cent. which gives them the core. Then they realise on fluctuations in the market, which is downwards mostly, so that they fill up the rest of the requirement and do not have to contract for the lot. That is the first thing they do. It may be good commercial practice but it is not particularly good practice for the industry in Britain.
Then the report continues by giving some more interesting features. One of them is that in the great processing industry 10 of the members have 95 per cent. of the business in Great Britain. The largest single business has 60 per cent. That may or may not be a good thing, but it is a significant factor when it comes to any surplus potatoes in this Country and the price which farmers may get for them.
I am delighted that the report shows exactly what kind of return is being obtained on the money. It is far greater than that achieved by any other section of the food industry. In 1991 McCain Foods was knocking off 26.5 per cent. on the return, Walkers Crisps 54.6 per cent. and Bensons Crisps 40.5 per cent. Good luck to them. That is absolutely ideal because they are making money. No business or industry can prosper without making cash.
Then we come to the great restrictions on a competent industry; namely, that the potatoes required cannot be grown in this country. That is simply not true. A number of things can be done. The first is that an extra quota can be available and applied for by the processors if they want to contract it out to farmers. Surely that is the efficient way to produce good crisps; namely, to contract out to farmers all their needs and insist on the quality that they require. The farmers are perfectly willing to do it. The record growers grow to good records. The Burbank potato was grown for the people who wanted it for their particular job. Surely to make one's suppliers happy and give them a price that gives them a return—not necessarily of 50 per cent. on their capital but a decent return—is the way to build up an industry that will have the confidence of the consumers who will buy its products.
One of the other things that the report shows clearly is that when it comes to the end price to the consumer the price of the potato hardly matters. Although we all knew that, it is nevertheless an extraordinary revelation which the report quantifies.
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Those facts show that what the Minister should be doing is looking at the energy, application and enterprise of the processors. They are the people who must contract and get the farmers to grow what they want, but instead of doing that here they prefer to invest in Holland. I do not know whether they think that they can get a bob or two more there, but I know that, if they want to get a good hold on the potato market in this country, the way to do it is to make a proper bargain with the suppliers on both price and quality. If that is its argument, the processing industry has completely failed this country, and it would be well to look at the Potato Marketing Board's suggestions in this area.
There is no question but that the problem of the primary producer still deserves our attention. It has not been solved. He is always at the mercy of market forces, especially when it comes to potatoes. Potatoes can grow well one year but badly the next. I must admit that I remember with great joy that in 1974, 1975 and 1976 potatoes went to a ridiculous price. Although that knocked consumption back in this country, it was not an inelastic effect. Those years were followed by some of the worst years for potatoes in the history of the industry. Obviously, this year is appalling and a great many people will lose a great deal of money. However, the producers are willing to have another go and, under the umbrella of the potato marketing scheme, fewer will go under than would have been the case with another scheme. That will guarantee supply to the consumer.
There is no question about it—one cannot stabilise the price of a volatile crop such as potatoes but one can help it. One can give the producers confidence, and that is what the potato marketing scheme has done. I implore the Government not to spoil the whole thing. I implore them not to rush for a free market position but to take a look at who is really to blame for the lack of production for consumption of the newer varieties of potatoes in this country. I do not think that it is the grower; I think that it is the industry and perhaps the Government. Anyhow, I like the way the report is set out; I like the colour of the label; but I reject its contents.
7.43 p.m.
Lord Carter: My Lords, like other noble Lords who have spoken in this debate, I should like to thank the noble Earl, Lord Selborne, for introducing it. I thank him and his committee also for choosing to examine this subject which, as we know, is timely and of great interest. The Agriculture Bill is now at Report stage in another place. From reading the report of the Committee stage there, it is clear that the Government are determined to revoke the potato marketing scheme and to wind up the Potato Marketing Board whether there is a European Community requirement to do so or not. That determination will certainly be strengthened and supported by the conclusions of the Select Committee.
I have to say immediately that in my opinion the committee reached the wrong conclusions. It received some wrong evidence from the Ministry of Agriculture, Fisheries and Food. It received a wholly

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predictable, parti pris stance from the Potato Processors' Association. In my view, it conducted a less than thorough economic analysis of the actual market situation.
I should like to deal at the outset with two extremely important matters which are germane to this debate. The first relates to MAFF's evidence to the committee. I do not apologise for repeating remarks made by the noble Lord, Lord Stanley of Alderley. As your Lordships will know, I served on Sub-committee D for over five years and I regret now that my Front-Bench commitment as the Opposition spokesman on agriculture and rural affairs means that I can no longer serve on it. Never in my time on that committee can I remember a government department producing evidence so riddled with error as that given by MAFF to your Lordships' committee. First, MAFF got the statistics hopelessly wrong. How on earth can a government department produce statistics for a parliamentary committee showing that UK exports of potatoes have declined when in fact they have increased? The ministry's figures for the five crop years 1988 to 1992 were wrong by 21 per cent. That led directly to the committee reaching the wholly erroneous conclusion (in paragraph 49 on page 12) that the British potato industry is less competitive than that of France, Holland or West Germany.
Secondly, MAFF mixed up calendar years and crop years—a misunderstanding which is so blatant in farming terms that it beggars belief. Thirdly, it got its figures wrong on production in Holland. Fourthly, it could not tell the difference between one kilogram and 100 kilograms, producing prices in Annex B on page 14 which completely baffled me and others when we tried to work out what on earth the figures meant. I spent many hours on that last week and feel extremely sore about it. Fifthly, MAFF used a common measure of Eurostat prices, which were multiplied by ecus, and thereby produced a price series which bears no relationship to reality and is a mere statistical figment. It is statistically meaningless. Sixthly, it misunderstood the market intervention system which is operated by the PMB. Seventhly, it incorrectly described the method by which the joint consultative committee calculates the target area.
The kindest thing that one can say about the evidence given by MAFF to the committee is that it has all the hallmarks of the clock which struck 13—one not only doubts but completely disbelieves that which has gone before and that which comes afterwards. When the noble Earl, Lord Selborne, responds to the debate, could he tell us whether it is intended to produce an erratum sheet or something that will indicate to those who read the report (because it is now in the public domain) the serious errors in MAFF's evidence?
The second important point concerns the report prepared by Nottingham University, An (Un)Common Potato Regime for Europe, which has been quoted. In my view, it is a great pity that the report was not available to the committee. If it had been, I suspect that the committee might well have reached a rather different conclusion. I was extremely disappointed to see that Mr. John Gummer attempted
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to rubbish the report in another place by pointing out that it was commissioned by the Potato Marketing Board—the same point was made by the noble Baroness, Lady Carnegy of Lour —thereby tending to call into question the academic integrity of its authors. I hope that the noble Earl, Lord Howe, will not repeat Mr. Gummer's statement, particularly as my noble friend Lord Peston was one of the authors of the report and anyone who calls into question his academic integrity does so at their peril.
I should point out that over half the research and development that was commissioned by MAFF in 1991–92–a total of £123 million—was commissioned from external organisations. Are we to understand that all the external reports prepared for MAFF are no longer to be regarded as independent simply because MAFF pays for them? Any such suggestion would raise questions from the National Audit Office. Equally, that would cast doubt on the reputations of the researchers and the academics involved. I understand that the academics involved in this report were never approached by PMB staff at any stage before publication. The only PMB comments that were made on the initial draft related to factual inaccuracies in the text. I understand also that the Potato Processors' Association never responded to calls that were made to it and thus lost its chance of direct involvement in the study.
As we know, the committee decided to report on potatoes because the European Commission is proposing to introduce a potato regime and the Government are taking powers in the Agriculture Bill to wind up the potato marketing scheme. Taking the European Commission first, I do not think that I have seen a more blatant example of European Commission ideology in practice than that which was stated by Mr. Roberts, the deputy director general, in his evidence on page 54—this has already been alluded to—when he said:
"One of the reasons why we want to have a potato regime is simply that it is one of only two major products that are not covered by the common agricultural policy, the other one being alcohol, and in that sense it has been an untidiness for many years".
It is not a question of whether the potato market is failing the producer or the consumer; not whether there is some great distortion in the market requiring Community intervention; not whether the European taxpayer and consumer is being held to ransom as in the rest of the CAP. No, it is untidy, and so we must do something, but we are not entirely sure what and so we will do very little.
If the agricultural directorate spent less time tidying up that which offends very few people and more time attempting to deal with the £6 billion of fraud within the EC, which is mostly in the CAP, its time would be must better spent. Mr. Spitz, also from the Commission (page 57) said:
"I should stress the fact that market forces prevail at least on the continent. Even if some governments such as the French or the Italian occasionally take some measures, we should not over-estimate their effect".
Denmark, Italy, France, Spain, Portugal, Luxembourg and Holland all have schemes of one type or another for helping the potato producers. I do not believe that that point was brought out fully by the

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committee. It is crucial. If there is a lightweight regime will those national aids all be swept away? The Government and the committee tell us that the PMS and the PMB will have to go, but does anyone believe for a moment that all the other member states will fall meekly into line and stop helping their potato producers? The committee apparently does not mind, because in paragraph 51 it recommended:
"If, for any reason, there is a failure to agree on the Commission's proposal, Britain should not continue to impose unilateral market controls".
If there is no regime, all those other countries will presumably be able to keep their national aids, but ours have to go: we have to wind up anyway.
The Government's enthusiasm to wind up the PMS, which is backed up now by the report, has a simple objective: to ensure that potato processors can buy their UK potatoes more cheaply. It was clearly stated by Mr. David Curry, in Committee in another place when, after referring to the consumption of fresh potatoes, which was about 34 ounces, and the consumption of crisps and frozen chips, which was about 4 ounces, he said:
"Processed potatoes, in whatever shape or form, probably account for more than a third of the market. The heart of the argument is whether, when we consider the overall interest, the scheme still accommodates those changes".—[Official Report, Commons, Standing Committee F, 4/5/93; col. 187.]
Although it was in the evidence, nowhere does the committee report draw attention to the fact that the frozen chip sector is dominated by one multinational with 60 per cent. of the domestic processing capacity and five firms which control nearly 90 per cent. of the capacity. I was not in the least surprised to see that the PPA in its written evidence said (page 65) on its fourth point:
"It therefore strongly opposes:—any form of production quota system—any form of price support or intervention. It believes free market forces are likely to produce the desired effects most speedily".
With one processor controlling 60 per cent. of the market and five firms controlling 90 per cent., I bet it believed that free market forces were likely to produce the likely effects most speedily. Curiously, the committee did not attempt to question Mr. Richard Harris of the PPA about the degree of concentration in the potato processing industry and, not surprisingly, he did not attempt to volunteer the information.
The committee says in paragraph 47 that it accepts the evidence of MAFF and the PPA that the PMS has not brought about the stability that most growers perceive. I have already pointed out that the MAFF evidence on prices is statistically worthless and that the PPA has a particular point to make. It is a great pity that the committee did not have the benefit of the rigorous statistical analysis contained in the Nottingham report which shows that the range of British potato prices is much narrower than it is for continental potato prices and British potato prices are not more expensive than those in Europe. Also, although GB potato yields are more variable than those in other European countries, price variability is in fact lower. So there is more stability in the market, and that can only be the result of the operation of the PMS. That is an important point. Indeed, it is crucial
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to the committee's conclusions. It seems to me that the committee was over-persuaded by the incorrect evidence of MAFF and the predictable evidence of the PPA and that of Mr. Robin Pooley of Anglian Produce and did not seek a full econometric analysis of the available statistics.
Lord Marlesford: My Lords, does not the noble Lord think that the Anglian Produce charts which are produced on pages 82 and 83 of the report demonstrate big fluctuations?
Lord Carter: My Lords, they demonstrate fluctuations, but if one looks at the mean, they also show how stable the market is if one takes the weighted average. If one takes any period, with all the differences in the quality of potatoes, there will be a wider range of potato prices. The market is notoriously cyclical. One should look at the weighted average. If one refers to Mr. Pooley's evidence, I believe that he said that if one wants to look for evidence of stability in the market, then one should look at the weighted average.
As I say, Mr. Pooley's evidence obviously impressed the committee greatly. I am not in the least surprised by that because I know Mr. Pooley. However, what struck me when I read his evidence was his description of a vibrant and thrusting industry which is investing heavily, is co-operating with its European counterparts and is generally performing well. All that has been done while the PMS has been in existence. I suspect that that has helped Mr. Pooley and others considerably to plan their marketing because they knew that the market was underpinned by the PMS.
The other important point upon which the committee touched in its questioning of Mr. Harris of the PPA, was the role of the joint consultative committee. What seems extraordinary is that, despite the constant protestations of the processors that they cannot obtain the quantity or quality of the potatoes that they need at a competitive price; they never seem to have used the JCC to correct that position. That was a point brought out by Mr. Tipping in Committee in another place. He put it well. He asked:
"Am I right to remind the Committee that, at the joint consultative council, there has never been disagreement about the amounts and types of potatoes grown? Is not it the case that there has been no substantive disagreement during the past three years and that the Potato Processors Association is well represented on the joint consultative committee? I believe that it holds three of the 18 places on that committee. It is strange when consensus is not achieved".—[Official Report, Commons, Standing Committee F, 4/5/93; col. 188.]
When the point was put to Mr. David Curry he had no answer, but the Nottingham report comes somewhere near the answer when it points out that the dominant position of some processors has encouraged them to believe that sophisticated contracts are unnecessary when their market power can be brought to bear.
At the moment the PMS and PMB exercise a degree of countervailing power and the JCC fulfils an important role in producing market stability. Without them, the producer of processing potatoes would be in a much weaker position. The Nottingham report

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suggests that there is already a considerable exercise of market power in the processing sector. That cannot be ignored, as the committee appears to have done.
We have heard a great deal about the success of the Dutch in that respect. It seems to me that as they over-invested considerably in processing capacity in recent years there has been a great deal of cheap processing Dutch capacity as a result and they have been able to export at marginal cost. That is now changing. It is noteworthy that the processors are now starting to invest in this country.
An independent survey of registered GB growers conducted by Public Attitude Surveys Limited in March of this year shows that 71 per cent. of growers support the GB scheme representing 76 per cent. of the planted area. The majority of British potato growers both by number and acreage want to use their own money (at no cost to the taxpayer) to produce stability in a notoriously cyclical market where potato processors are an oligopoly but where there is a mechanism (the JCC) which could produce the quality and quantity they want if they cared to use it. But of course they will not use it so long as they have a complaisant government who have swallowed their arguments hook, line and sinker and are prepared to hand over British potato producers, completely unprotected, to a market where five firms control some 90 per cent. of capacity; where the European Commission can produce no better argument for a potato regime than that Europe looks untidy without it; where ECOSOC and the European Parliament have found the proposed EC regime wanting and have proposed amendments to it; and where we have a situation which lives and breathes subsidiarity. I do not apologise for repeating the statement made by the noble Lord, Lord Stanley of Alderley. He told us that only three years ago in 1989 the Government decided to retain the basic elements of the existing scheme in view of the need to maintain stability in the potato industry at a time of major adjustment in the arable sector generally. What has changed in three years?
Another conclusion is that of the report of the University of Nottingham. It states:
"Most importantly, the analysis of the Potato Marketing Scheme concludes that removal of the Scheme would reduce prices and production in Britain. As many as 40% of growers might lead the industry in the medium term in response to squeezed margins on variable and fixed costs. As much as 500,000 tonnes of output could be lost and 7,000 producers might leave the sector. Certainly, removing area control would allow other growers to expand but the analysis suggests that the likely increase in plantings would be relatively small. The effect of this on agricultural and rural employment and on import demand for potatoes and processed potato products would run directly counter to the stated objectives of the UK Government. The adjustment to a 'free market' in potatoes would not be painless".
I have the greatest respect and regard for the noble Earl, Lord Selborne, and for his committee. However, in this case I believe that the Select Committee and the Government have got it wrong.
The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Earl Howe): My Lords, for a subterranean vegetable the potato has recently adopted a fairly high profile. It seems like only the other day that we were engaged in a
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stimulating debate on potatoes in the context of the Agriculture Bill. Now here they are again cropping up, if I may say so, under the aegis of the European Communities Committee report on the proposed common organisation of the market in potatoes.
Before dealing with the detail of the report I wish to congratulate my noble friend Lord Selborne and the committee on what I consider to be a most thorough and excellent piece of work. They took evidence from the widest spectrum of interests in the industry; for instance, from those who favour the retention of our potato marketing scheme whether or not there is a Community regime to those who wish to see its central provisions done away with. The evidence given is fully and clearly recorded. It is to the credit of the committee that, faced with a plethora of information, it has emerged with a set of recommendations in the clearest of terms. I do not say that merely because I happen to agree with the thrust of the recommendations. Surely it is in everyone's interests, whether or not they agree with the report, to have the issues so thoroughly analysed and such clear conclusions reached.
During the Agriculture Bill we discussed at length the implications of the Commission's proposals for our potato marketing scheme. It was clear then, as the committee's report accepts, that our scheme would be incompatible with the regime as drafted. At that time I presented various arguments to demonstrate why, if the regime were introduced, the loss of our scheme would not be the tragedy that many predicted. Having taken evidence from a wide range of experts in the field, your Lordships' committee has come to the same conclusion. Indeed, it has gone further in saying that, whether or not there is an EC regime for potatoes Britain will be better able to compete in Europe without the constraints of the potato marketing scheme.
Before I deal with the detail of the report, which the Government welcome, perhaps I may bring your Lordships up to date with events since we previously debated the subject. The House will recall that in December Ministers asked for work to be done on incorporating marketing standards into the proposals and agreed to take decisions once the opinion of the European Parliament had been received. Work has been proceeding and proposals incorporating marketing standards are now before the Council. The European Parliament has also delivered its opinion, which is basically favourable, although it contains several suggested amendments. The most notable allows a member state to retain its national arrangements, including quotas and intervention, should it so request. To attempt to allow such special pleading must surely be nonsense in the context of a single market.
In another place the Government have made it clear that we shall not be pressing for the retention of the quota and intervention elements of the potato marketing scheme in the context of a Community regime. That position is supported by the report of your Lordships' committee. We are prepared to accept a regime which sweeps away the various support measures that exist throughout Europe and allows our

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producers, whom we regard as the best, to compete on equal terms with their counterparts on the Continent. The regime is likely to come before the May Council for a decision. Of course, I cannot prejudge the outcome. Some member states still believe that a regime is not needed while others wish to see a heavier regime in the classic mould, with market support and intervention buying. Clearly, we wish to avoid such a heavy regime. In that we have the support of the Commission and the majority of other member states.
We agree with the committee that the primary objective of the regime should be the prevention of national schemes which distort the Community market. That answers one of the points raised by the noble Lord, Lord Carter. It is important to realise in this connection that various support measures, some more informal than others, operate elsewhere in the Community. However, nowhere else are there quota restrictions such as operate in Great Britain. All these arrangements would fall with the introduction of the common organisation of the market, thus achieving our long stated objective of—I shall not say a level playing field—a level seed bed for our producers.
Lord Carter: My Lords, I am grateful to the noble Earl for giving way. It is an extremely important point and the House will be grateful that he has brought it up to date. Is the Minister saying that if the Council of Ministers decides to adopt a regime such as that proposed by the European Parliament in which intervention is allowed we shall have to do away with ours and allow other countries to keep theirs if they wish?
Earl Howe: My Lords, I think it highly unlikely that the Council will agree to the proposals of the European Parliament in that respect. As I said, in the context of a single market it makes no sense to have national schemes; it is simply a contradiction in terms.
Another theme which ran through our debates on the Agriculture Bill was the dire effects which several noble Lords believed would follow the ending of our scheme, in particular the destabilisation of the market. That issue was raised by several noble Lords today. I tried to reassure your Lordships—I am not sure to what effect—that the prophets of doom were not necessarily right. Therefore, I am glad to see that the committee, having examined the matter in considerable detail and taken evidence from all sides of the industry, has reached the conclusion that the prophets of doom are wrong. The committee certainly appreciates the need for stability in the market but it is of the view that the potato marketing scheme has not achieved any greater degree of stability than occurs in other member states. Rather, it has meant that prices in Great Britain have fluctuated around a higher level than in other comparable member states. The Government agree with that analysis. most important indicator of the effects of the scheme in our view is the fact that the UK industry's share of the high added-value growth market in processed products far from being stable is in steady decline.
Your Lordships' committee is of the opinion that the abolition of the potato marketing scheme would
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lead to the UK industry becoming more competitive and reversing the trends of growing imports and declining exports. The Government share the committee's concern for the long-term future of the industry. The Government hope that more liberal arrangements will enable our growers, with all their advantages of expertise and technological advancement, to produce what the increasingly sophisticated market wants. We regard the freeing up of the market as a much-needed opportunity for us to repatriate the hectarage of potatoes which has been lost to the processing industry on the Continent, particularly in Holland.
The committee also concludes that a successor body to the Potato Marketing Board will be needed to carry out functions such as research and development, market promotion and the collection and supply of statistics. As your Lordships will be aware from our previous debates, the Government are also keen that those activities should continue. The Agriculture Bill now in another place provides specifically for the establishment of a successor body to carry out those activities if that is what growers want.
Those are the principal conclusions of the committee. Perhaps I should comment also on some of the other points which it made. As regards quality standards, the committee believes that those would be difficult to agree on and impossible to enforce. It suggests that a free market will dictate its own standards. The Government are not quite as pessimistic as the committee since they believe that, so long as such standards are restricted to the minimum necessary to ensure that growers' and consumers' interests are protected and applied only to fresh potatoes for direct consumption, they could be applied throughout the Community with advantage. I am happy to tell your Lordships that the majority of member states agree with that approach and it seems likely that provisions along those lines will be included in the eventual regulation.
The committee would prefer the Commission to evolve a common language of potato quality, although it recognises that that has been attempted unsuccessfully in the past. While the Government agree with the principle behind that idea, we consider that to be more a commercial matter between the producer and the customer, although under a common regime it is highly likely that such a language will evolve in any case.
I note that the committee believes that the proposals for grant-aid for the setting up of new producer groups may bring more coherence to planting and marketing strategies in some parts of the Community. The Government's view, which we expressed to the committee, is that those proposals will not directly affect the UK. The kind of group envisaged is not typical here and would not fit well with our marketing structure.
The committee supports the proposed system of import licensing which is intended to afford some measure of protection from disruption by third country imports. In general the Government do not welcome the principle of import licensing and agree with the committee that the practical problems of

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transporting fresh potatoes, together with the restrictions of the common customs tariff, already afford some considerable protection. It is likely that disruption would occur only as regards premium products such as early potatoes. There are well-established patterns of trade in such potatoes under tariff concessions and the Government hope that any measures would not be used to influence that traditional trade. We shall also seek further clarification on the financial implications of setting up a licensing system.
I now turn to some of the points raised in the debate. Your Lordships will forgive me if I do not cover all the points raised. I shall endeavour to write to noble Lords on the substantive points which I fail to cover now. I turn first to the noble Lord, Lord Carter. He became rather exercised about the MAFF evidence to the committee and thereupon proceeded to cast aspersions on its conclusions based on that evidence. He said that one part of the MAFF evidence was statistically meaningless. I disagree with him about that particular example.
Lord Carter: My Lords, why?
Earl Howe: My Lords, I am coming to that. The noble Lord drew to our attention table I on page 14 which contains a list of comparative prices which refers to ecu per kilogram. It should have referred to ecu per 100 kilograms. That mistake—and it is a mistake—makes no difference to the central tenet of the argument.
Lord Carter: My Lords, that is not what I was saying was statistically meaningless. The use of Eurostat prices takes no account of the various differences in grades and qualities and the way in which the potatoes are measured. Moreover, the value of ecus changes all the time for reasons completely unconnected with potatoes. That makes the statistics meaningless. I was not referring to the mistake to which the noble Earl referred, although I agree that it caused confusion. What is statistically meaningless is the use of the Eurostat prices and their multiplication by ecus.
Earl Howe: My Lords, we must agree to differ on that because I believe that that table presents a very revealing picture of the differences in prices between member states.
My noble friend Lord Stanley made various allegations against the evidence given to the committee by MAFF and, indeed, against the committee report itself. I find it difficult to respond in a way in which he would like me to because I agree with hardly a word of what he said. He spoke of serious errors in the export figures. There is only one figure involved which is an error in so far as it is a provisional figure which has now been updated. More fresh potatoes were exported last year, but that does not alter the inexorable rise in processed potato imports.
My noble friend went on to comment on the factual accuracy of MAFF officials' evidence. I agree that
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there are some mistakes in it, partly because of printers' errors which are difficult to legislate for and partly for other reasons.
Lord Stanley of Alderley: My Lords, what printers' errors?
Earl Howe: My Lords, for example, the printers' error that I mentioned in reply to the noble Lord, Lord Carter.
Lord Stanley of Alderley: My Lords, when I mentioned the question of ecus, I took exactly the same view as the noble Lord, Lord Carter. It was an incidental error. I merely said that it cast a reflection on the accuracy and carefulness of the MAFF evidence. I fully understand that mistake and am not worried about it.
Earl Howe: My Lords, I believe that my noble friend does himself and his case a disservice by concentrating on minutiae. The committee took a more statesmanlike view and clearly considered that the evidence given by MAFF carried some weight.
I agree with my noble friend that there are now special, if limited, arrangements for exports, but the House may like to note that those arrangements were introduced last year when the joint consultative committee decided to allow just short of 300 hectares, out of a total of 156,000 hectares, for export. It is not difficult to imagine what our Dutch competitors thought of that.
Lord Mackie of Benshie: My Lords, has the noble Earl seen a figure reaching a total of nearly 4,700 hectares allowed for various purposes, including manufacture?
Earl Howe: No, my Lords, I have not seen that figure but I am grateful to the noble Lord for bringing it to my attention.
My noble friend Lord Stanley and the noble Earl, Lord Perth, referred to subsidies given by other member states and asked whether the UK would undertake to match them. The whole point is that there should be no such aids or subsidies once there is an EC regime of the kind which is currently envisaged. It is by means of such a regime that fair competition is ensured. The way to achieve a level playing field is to stop other countries supporting their producers. If there is no EC regime, there cannot be a level playing field.
The Earl of Perth: My Lords, this is a vital point. Is the noble Earl saying that the Government would not accept any European regime if there was not total satisfaction that there should be no intervention by any nations in whatever form that may take?
Earl Howe: My Lords, the Government have said repeatedly that they are committed to seeing a level playing field for potato producers within Europe. That means achieving fair competition for our own producers. We are backing our own producers. We shall not see them disadvantaged in whatever regime is agreed to. We shall fight for our own producers in Brussels.
Lord Stanley of Alderley: My Lords, I am sorry to interrupt my noble friend again, but I have a helpful point to make. If what he just said is in fact the case, obviously the Government do not support paragraph 51, which was mentioned by the noble Lord, Lord Mackie, and the noble Lord, Lord Carter. That is a very vital point.
Earl Howe: My Lords, I shall need to look at paragraph 51 again to remind myself of its contents. I think that I had better write to the noble Lord on that point.
Conversely, if we have a single market, as we now do, it is absolutely crazy to run a protectionist regime when one has no protection oneself. As I said, we must allow our industry to compete on level terms. If I may say so, what my noble friend Lord Stanley failed to do was to address himself to the two central conclusions of the committee: first, that the potato marketing scheme is disadvantageous to Great Britain as opposed to potato producers; and, secondly, that an EC lightweight regime without the potato marketing scheme in Great Britain would be in our best interests. In particular, my noble friend did not explain why he felt that it would be a good thing if all the producers in other member states were allowed to produce as many potatoes as they liked, while only producers in Great Britain were prevented from so doing. My noble friend Lord Marlesford made that point very tellingly.
The noble Earl, Lord Perth, advocated a gradual period of transition if we have to make a change. The EC proposal provides for transitional measures. We have written to the chairman of the PMB and others asking for their views on what sort of transition would be appropriate. We shall take account of views once they are received.
My noble friend Lord Lyell spoke about the evidence given by MAFF that potato prices had fluctuated around a higher mean than in other member states. There is no doubt that prices, as a whole, fluctuate around a higher mean. However, where potatoes for specific purposes are in short supply, they will command a premium. Dutch high-quality potatoes for processing attract high prices. This year, for example, UK processors are hoping to buy in Holland even when thousands of tonnes of UK potatoes are being bought into intervention.
The noble Lord, Lord Mackie, asked why anyone should doubt that prices fluctuating around a higher mean benefited producers. I do not doubt that fact in a narrow sense. No doubt producers are delighted to have a higher price for their crop. But is that advantageous for the country? I do not think that that question has been answered. The noble Lord, Lord Carter, mentioned the PMB poll, in which 71 per cent. of those polled favoured the continuation of the scheme. The amazing thing about that poll is that 29 per cent. of producers who, by his argument, have an interest in the status quo do not favour a continuation of the scheme.
My noble friend Lord Monk Bretton said that fluctuations in production lead to a reduction in investment. We already have fluctuations in production. There is no reason why gearing production more
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closely to market demand should lead to greater fluctuations or less investment. Various speakers mentioned the report prepared by Nottingham University. When I saw the name of the noble Lord, Lord Peston, on the study, I must confess that my ears pricked up. I know him to be someone who thinks matters through in a sane and sensible manner. However, even Homer nods. I am afraid that what we have here is a report which pulls together several different pieces of work, without realising or acknowledging their inconsistency with one another. The analysis of the British potato marketing system and the economics of the processing industry in the paper is, I believe, flawed. In particular, its conclusion that a lower UK price would lead to increased imports confounds normal economic wisdom.
Conventional economic analysis indicates that the removal of the quota system would increase domestic production and the lower price brought about by the increased domestic production would reduce imports, so that more of GB demand would be met by domestic production. The argument that removing a quota which restricts production in Great Britain would lead to a worsening trade gap, is not well founded. There is already free access to the UK market and prices are determined by supply and demand. A fall in price would be brought about by an increase in UK supply, but that in turn would lead to foreign exporters sending less rather than more to the UK market. I cannot, therefore, accept that removing constraints from UK industry would lead to a worsening of the trade gap.
As I said, the Government welcome the committee's report, which recognises—
Lord Mackie of Benshie: My Lords, before the noble Lord proceeds to his peroration, I wonder whether he would be good enough to comment on the central point of my argument—namely, that the gap created by the increase in consumption of processed potatoes in this country was not the fault of the growers. It could not have been foreseen by them; it should have been foreseen by the industry.
Earl Howe: My Lords, the gap in processed consumption is as much down to the growers as to anyone else. They are simply not growing what the market demands and they are not growing the quality demanded by the market. That is why the processors are buying in Holland. It is not that there is no quantity in Great Britain; indeed, we all know that there is. The quality and standard of potatoes is not good enough. Once producers are not cushioned by a scheme of the kind that we have at present, I suggest that it will concentrate their minds wonderfully to produce what the market actually needs and wants. I give way to the noble Lord, Lord Peston.
Lord Peston: My Lords, I shall write to the noble Earl in due course and explain the economics of my paper. However, he cannot simultaneously argue that British producers are not producing what the market wants and then say that, by subjecting them to a more

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ruthless and competitive regime, they will actually do even better. That is about as absurd an argument as I have ever heard.
Earl Howe: My Lords, I do not know about a more ruthless and competitive regime—
Lord Peston: I am sorry my Lords; I should not have joined in at this point. I shall write to the noble Earl on the matter.
Earl Howe: My Lords, I am advocating that the shackles that the industry now has to contend with should be removed, thus enabling it to compete and to grow as many potatoes as it feels that the market will take.
Lord Mackie of Benshie: My Lords, the noble Earl has not answered my point. Why do they not offer contracts for the whole of the production that they need from this country? They are already getting the quality for half, so why do they not offer it for the lot?
Earl Howe: My Lords, I agree that that question should be directed at the processors. Perhaps that is a productive avenue to follow. However, I note that the report prepared by Nottingham University contained no contribution whatever from the processors.
Lord Carter: My Lords, they were invited.
Earl Howe: My Lords, as I said, the Government welcome the committee's report, which recognises the significance of the challenges and opportunities which an EC regime will offer both to our growers and to the rest of the industry which they supply. I hope that the prophets of doom whom I mentioned earlier will be convinced by it. The committee has shown a clear concern for increased competitiveness and market awareness, which the Government applaud. I believe that the direction being determined by the Council of Ministers, together with the provision in the Agriculture Bill, will deliver the opportunity for our growers to compete more effectively than ever before. As I said before, I am absolutely sure that those growers, whose expertise is second to none in the world, will make the most of that opportunity when it arrives.
Lord Carter: My Lords, before the noble Earl sits down, there is one extremely important point that I should like to make. I must apologise for not speaking earlier when the noble Earl reached the point in his speech. It is the matter that was raised by him and by other speakers and which is also mentioned in the report. If we keep a quota and other countries do not have a quota scheme—and the noble Earl said that there is no other country in Europe with such a scheme—then the imports will flood in. That is the argument. Why then have they halved the tonnage during the past five years from 230,000 tonnes to 116,000 tonnes while we have had the quota scheme and no other country in the Community has?
Earl Howe: My Lords, the imports have flooded in in terms of processed product as some speakers have
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said. That is the growth area of the market. It is the area where there is high added value and where our own processors are potentially losing out.
Lord Carter: My Lords, it is clear that, if we had a quota scheme and no one else did, the imports would flood in. During the past five years of the scheme's operation, imports of main crop potatoes have halved.
Earl Howe: My Lords, we could probably carry on arguing about this point all night. However, I shall take note of the noble Lord's comments and of his entire speech. I shall write to him on those points that I have failed to cover properly.
8.30 p.m.
The Earl of Selborne: My Lords, this has been a highly controversial debate and we were never in any doubt that it would be anything other than that. As many noble Lords have been at pains to point out, our report is highly controversial. I believe I am the only person who has detected one or two common themes emanating from all corners of the House. I believe we have agreed that it is not satisfactory to be in a position where one member state can distort the market to the disadvantage of another member state. I therefore entirely agree with the comments of the noble Earl, Lord Perth. We must ensure that we reach a situation where, if we cannot achieve a level playing field—that is clearly always impossible—we can at least stop the present abuse. That abuse was mentioned in the excellent report of the noble Lord, Lord Peston, and Nottingham University. The report referred to export rebates and other measures that are being provided in some member states who are exporting within the Community. That position is totally unsatisfactory.
The Select Committee addressed the issue of whether we need a common regulation for potatoes. We decided that we did need such a regulation. Noble Lords clearly hold widely divergent views on whether the present potato marketing scheme is good or bad. I believe something will have to give. As has been suggested in the European Parliament, one can write in a provision to the new order to suggest that some present scheme should be allowed to continue, or one can decide to move into a freer market for better or for worse.
It is not surprising that views have been so widely divergent in your Lordships' House this evening when one realises that producers themselves appear to hold widely divergent views. I believe we were told that about 70 per cent. of producers were in favour of the board and about 30 per cent. were against it. I find that statistic rather surprising. We have also heard about the processors. I believe the noble Lord, Lord Mackie of Benshie, referred to them in terms of the deep blue sea. I fear consumers did not receive quite as good a hearing as I would have liked. The written evidence we received suggested consumers did not favour the retention of the potato marketing scheme. However, we received much conflicting evidence. I drew up a chart as we were taking evidence to see which side was winning. However, the sides were fairly even.

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Noble Lords have a great deal of expertise in the matter of potatoes and they have displayed it fully today. At the end of the day neither I nor anyone else can persuade noble Lords to change their views on the potato marketing scheme. Noble Lords will have to decide that for themselves. However, Britain has many natural advantages as regards growing potatoes. We have economies of scale. My noble friend Lord Stanley reminded us quite correctly that we have a distinct market sheltered by the Channel and that we consume a great quantity of potatoes. We prefer to have a wide range of potatoes. All those factors are a strong base from which to produce potatoes. If, bearing all those factors in mind, we lose market share then something is wrong. Unlike the noble Lord, Lord Carter, I prefer to look at a longer timescale than five years. I become impatient with fiddling around with the minutiae of figures. Ultimately, we should be considering the import tendencies of processed potatoes. Some noble Lords will feel that the Potato Marketing Board has alleviated what is clearly an unsatisfactory situation. However, some Members of the Committee felt it did not have an impressive record and that perhaps we should try something else.
On Question, Motion agreed to.

Distance Selling: ECC Report
8.34 p.m.
Baroness Lockwood Baroness Lockwood rose to move, That this House takes note of the report of the European Communities Committee on Distance Selling [16th Report, H.L. Paper 51].
The noble Baroness said: My Lords, I think perhaps there might be more unanimity in the debate on the report we are now about to consider. Sub-committee C of the European Communities Committee, under my chairmanship, carried out a short inquiry at the end of 1992 into the proposal for a Council directive on the protection of consumers in respect of contracts negotiated at a distance.
The Commission's draft directive proposes a general framework for such protection and an accompanying recommendation provides for this to be supplemented by self-regulatory measures. The Select Committee's 16th report on distance selling was published in February of this year and the Government's response to this report, for which I must thank the Minister, was received last month.
Distance selling is a relatively new term. It is being used to cover all situations where a contract is concluded without the simultaneous physical presence of buyer and seller. Mail order selling is the most familiar example of distance selling but new developments prompted the Commission's proposal for a directive in this area. These new developments are, first, the completion of the internal market and, secondly, the development and increasing availability to consumers of simple electronic means of communication.
Distance selling, or distance purchasing, typically takes place within the consumer's own home. I doubt
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whether many noble Lords do much of their shopping by means of telephone, television, fax and home computer. However, these new forms of distance selling are already a reality for a few and there is potential here for rapid growth. Already, according to the Commission's explanatory memorandum, it is estimated that in Germany, France and Great Britain between four and five per cent. of all non-food trade takes place through the traditional mail order system.
The fourth Community programme on consumer protection—the three-year action plan for 1990 to 1992—included the proposal for a directive on distance selling. That plan said that cross-frontier solicitation using television and new communications technology would stimulate demand for cross-frontier purchasing and that the full benefit of the internal market would be achieved only if its citizens were prepared to purchase goods and services available anywhere in the Community.
In carrying out our inquiry the committee kept clearly in mind the traditional benefits of freedom to contract. We were aware that over-regulation can, by stifling enterprise, damage the interests of the consumer as well as those of the supplier. But in a Community-wide market where information, organisation and economic muscle are so unevenly distributed between the supplier and the consumer, the committee believes that some balancing mechanisms are required. The committee also kept in mind the proper application of the principle of subsidiarity in relation to consumer protection. We were therefore looking for the minimum Community action consistent with giving the consumer essential protection and promoting the confidence of consumers to shop across borders.
Evidence was received from 20 organisations which are listed in Appendix 2 at page 17. In this evidence there was wide support for the principles of consumer protection underlying the proposed directive. There can be little doubt that consumers, when they are solicited to make a purchase, need to be given information about the service or the product that is adequate in quality, quantity and timeliness. Equally, there can be little argument that in order to safeguard the consumer from undue pressure from the buyer, and from impulse buying, there needs to be a cooling off period. Again, I think there can be little argument that where the consumer suffers from non-performance of a contract, redress needs to be readily available. Further, the increasing use of payment by credit card, where the number of the credit card is given but the card itself is not presented, is easily open to abuse and requires particular consideration.
In addition, important questions of privacy arise from some distance selling techniques. Automatic telephone calling and what is called cold faxing—unsolicited material coming in on one's own fax and one's own paper—are particularly intrusive and, we believe, objectionable. Inertia selling is another technique which needs to be carefully controlled and against which the consumer requires legal protection. In virtually all member states there is some legislation against this. Nevertheless, according to the Commission, inertia selling practices continue to exist.
On all those issues availability of effective redress for the consumer and adequate means of enforcement of the contract were matters which we were anxious to see provided and our views are expressed largely in paragraphs 46 to 54, to which I shall refer later. It is easy enough to set out desirable principles such as those I have mentioned. It is more difficult to apply those principles to particular situations and to make precise rules which strike the proper balance between necessary consumer protection and excessive regulation. The ideal would be a regulatory framework which is not over-prescriptive or a costly burden on traders but a simple, flexible system with a generally light regulatory touch combined with effective sanctions and a means of redress.
The committee was also anxious that there should be no levelling down of the standards of consumer protection already available in this country as a result of the adoption of the proposed directive. We believe that the directive should provide a minimum framework of protection and that each member state should have the right to set higher levels of protection if it so wishes.
Another desirable feature of the situation in this country at present is the extent to which the traditional forms of distance selling, such as mail order, are well controlled by self-regulatory bodies such as the Advertising Standards Authority and others. We were very anxious that that situation should continue and be built upon in the newer areas of distance selling.
In paragraph 46 of our report we make some recommendations about the extent of information to be provided to the consumer and say that there should be no duplication of provision which would be an unnecessary burden on the provider.
Concerning privacy, in paragraph 47 we are opposed to the consumer having to be the unwilling recipient of mail shots, telephone canvassing or cold faxing. As to the cooling-off period, in paragraph 49 we say that where practical all forms of distance selling should be subject to a cooling-off period of a minimum of seven days from the receipt by the customer of the goods or from the beginning of performance of an essential part of the service.
We believe that inertia selling is an unwarranted imposition on the consumer which should be prohibited. However, we recommend in paragraph 51 that the proposed directive should be amended so as to permit the common and convenient practice of supplying on approval at no extra cost to the consumer a close substitute in place of an ordered article.
We strongly support the intention of Article 12 to protect the consumer from misuse of the credit card. However, we believe that the drafting is so loose as to invite possible fraud by the customer. We suggest that tighter drafting is required to maintain a just balance between the card holder and the supplier.
As to the security of advance payments, we say in paragraph 53 that we see it as critical for the development of distance selling markets across the Community that the consumer should have confidence that any advance payment will not be lost if the
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ordered item or service is not received. We believe that schemes similar to the mail order protection scheme should be generally available and that it is right that the trades concerned rather than the Government should be expected to put suitable arrangements in place. We therefore welcome the fact that the Commission has addressed the issue in the non-mandatory recommendations rather than in the proposed mandatory directive. However, we believe that those voluntary arrangements are of such importance that we recommend that the Commission should review the situation in three years' time.
On the question of redress and enforcement we believe that it is often the case in this country now that an individual consumer lacks the information, resources and, perhaps, perseverance to pursue a complaint about distance selling to the point of obtaining adequate redress. We believe that there are considerable additional obstacles to be overcome where a cross-border transaction is involved. We also believe that there is an obligation on the individual trader and on trading associations as well as on statutorily backed enforcement agencies to respond to those needs.
However, we did not go so far as some of our witnesses would have liked in supporting the right of consumer organisations to initiate representative action for redress. The committee took the view that consistent standards of enforcement and the avoidance of needless litigation would be best served if only those bodies required to act in the public interest were able to bring actions on behalf of the consumer. We suggest that in this country the Office of Fair Trading seems well placed to carry out that function. We attach great importance to publicity being given to all available means to those operating the system of enforcement.
I am encouraged by the generally positive response of the Government to the report on distance selling. However, there is one matter on which I should like to press the Minister to think again; namely, whether financial services, including investment, banking and insurance services, should remain within the scope of the directive.
In the evidence we received from the Commission's representative it was stressed that the requirements of the directive were the essential minimum that should apply to all sectors of distance selling, including financial services. The point was made that many of the requirements of the directive were already adopted as good practice by the most reputable firms and were embodied in codes of practice by the best trade organisations. The Commission considered that the great potential for the increased cross-border selling of financial services would be realised only if consumers had confidence to buy outside their own country's jurisdiction. We suggest that that confidence would be lacking if financial services were excluded from the scope of the directive.
That general line of argument for the inclusion of financial services within the scope of the directive was supported by consumer groups as well as by the

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Director General of Fair Trading. He saw advantage in a simple horizontal measure which would apply across the board to all sectors of distance selling.
On the other hand, from the banking and financial organisations we heard the argument that the directive's provisions were inappropriate or unworkable or risked confusion with other legislation if financial services were to remain within the directive's scope. I have to say that the committee was not persuaded by those arguments which, we believe, take insufficient account of the intentions underlying the drafting of the directive.
Article 15 expressly provides that other Community legislation specific to particular situations, including financial services, will be unaffected by the directive. We believe that the drafting of Article 11(4) is intended to disapply the cooling off provisions where the peculiar circumstances of financial markets make them inappropriate. We accept that clarification and refinement of the text of those provisions and others which impact on financial services is required. However, the committee was firmly of the view that all forms of distance selling should remain within the scope of the directive.
I ask the Minister therefore, when she replies to the debate, whether she could not go rather further than she did in her formal response to the committee when she said that although no final decision on the matter had yet been reached by the Government she remained inclined to the view that financial services should be excluded.
Finally, I should like to thank all members of Sub-committee C for their help and support during the inquiry. On behalf of all the members, I wish to extend our thanks to our clerk, Mr. John Goddard, for the application and support he gave to the members of the committee during the inquiry. I also pay tribute to the co-operation we received from those who gave evidence to the committee. I beg to move.
Moved, That this House takes note of the report of the European Communities Committee on Distance Selling [16th Report, H.L. Paper 51].—(Baroness Lockwood.)
8.52 p.m.
Lady Kinloss: My Lords, the committee of which I was privileged to be a member was indeed lucky to have the noble Baroness, Lady Lockwood, as chairman. She guided the committee with her usual kindness and skill. I agree with the committee in its opinions and report on distance selling. It would seem that now is the time to have a body set up with the resources to ensure that justice is done both to the consumer and the trader.
In a world where technology is increasing so rapidly, as the noble Baroness, Lady Lockwood., said, there are at present many means of distance selling across borders such as telephone, television, fax and home computers, among other electronic methods. The new technology for distance selling is different from the mail order purchase. With the latter one can study a catalogue and decide whether or not to
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purchase a particular item. But if an order is made by electronic means, the purchaser may not be fully aware of what the purchase is like.
In its written evidence the Consumers' Association does not consider that the prior consent, which appeared in earlier drafts of the directive, is necessary for most current forms of distance selling. However, it believes that prior consent is appropriate for any forms of distance selling which cost the consumer money. One instance could be cold faxing to a recipient who has not asked for information but who has to bear the cost of the paper.
Paragraph 23 of Part 2 of the report suggests that the consumer should have the right not to receive certain types of solicitation such as automatic telephone calls or faxes. The Commission's explanatory memorandum suggested that that could be assured either by an opt-in or opt-out regime. Opting in would require prior consent from the consumer; opting out would allow the consumer to refuse certain types of solicitation. How would the consumer have the opportunity to refuse a cold fax if he were unaware of the cold fax being sent until he has received it? The Consumers' Association regarded an opting-in requirement as unnecessary except where the costs would fall on the consumer as in the practice of cold faxing. It therefore suggests that Article 4 should be amended to add after consumer's privacy, "and economic interests". Perhaps that would be one way of safeguarding consumers, not only from probably unwanted goods but also those which cost them unnecessary money.
Article 8 of the directive on inertia selling does not consider it necessary to prohibit companies from sending unsolicited goods or services to consumers. However, it does recommend that it should be made clear to consumers that they do not have to return or pay for unsolicited goods and that that right should be written into the material accompanying the product. That is fine for products considered under Article 8 of the directive. However, as I have already mentioned, faxing of unsolicited information where the recipient has to pay the costs of the paper is not covered under Article 8 as worded. Perhaps it would be covered under Article 4 if it were amended as suggested by the Consumers' Association.
I wish to speak on one other matter: payment by credit card. It seems to me that that form of payment can be open to abuse in all sorts of ways, and witnesses were certainly varied in their approach to the question. In my mind the key question is whether that form of payment is being abused, in what way and by whom. One would need very clear indications of wrong doing before considering how to counter it. That is the matter which both the Government and the Community should watch until or unless action becomes necessary. The committee believed that tighter drafting was needed in Article 12 to achieve the desired effect while maintaining a just balance between the card holder and the supplier. I look forward to hearing what the Minister has to say when she replies.
8.56 p.m.
Baroness David: My Lords, I should like to thank the noble Baroness, Lady Lockwood, for chairing our committee most ably and for introducing the debate today. On these occasions one always wonders what is left to be said after a comprehensive explanation such as we have just had. Perhaps the role of the other members of the committee—I am one—is to underline and emphasise certain points that the chairman has made and to say about which particular aspects one feels strongly oneself.
There is no doubt about the need for such a directive in the light of the fast-changing world of new technology and the clear evidence which already exists that there is abuse and mischief. I much enjoy the use of the word "mischief" which apparently seems the right word to use in this context. It is interesting to see for how long there has been pressure for the directive. In fact it was in 1972 that the Commission decided to institute a specific policy for consumer protection. There seems to have been strong pressure since 1987 to take legislative action. That was the year that TV shopping arrived in Europe. It was also in that year that the notion of distance selling appeared for the first time in member states' texts.
Most states have produced some laws to deal with the situation and to protect the consumer and the trader. There has certainly been a good deal of self regulation. That has been conspicuously successful in many areas in this country. But it is not enough when there is bound to be a huge increase in cross-border trading with the single market. There must be adequate protection for both the buyer and the seller of goods and services.
In their response to the report, the Government stated that they would have preferred to rely on the self regulatory regime but accept that with the coming of the single market, the industry may see an increase in trans-border sales which it may be appropriate to regulate at the Community level. I am sure that that is right. The Government agree, as we recommend, that there should be a review within five years of the adoption of the directive. That seems eminently sensible when the future is uncertain.
I believe that it is accepted that the Commission intends the directive to be a minimum measure and that member states will be allowed to introduce and make certain more stringent legislation if they so wish. The Government wish that to be explicitly stated in the directive so that the existing levels of protection in the UK will remain. Article 15, which states,
"Nothing in this directive shall preclude the application of provisions specific to techniques, products, or services under other Community instruments",
could be extended, I imagine, to cover that position.
The question of whether financial services should be included or excluded from the scope of the directive has to be discussed. The opinion of the committee—and certainly I support the committee strongly in it—is that they should be included. The Consumers' Association thought that the financial services sector generated a considerable volume of complaint. I considered the evidence of those supporting the inclusion of financial services, particularly the Office
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of Fair Trading, a good deal more convincing than that of the Securities and Investments Board which was not in favour. Sir Bryan Carsberg, the director general of OFT said in evidence:
"I think that financial services and indeed other kinds of services may particularly lend themselves to selling at a distance and are often the sort of selling that cause more problems than transactions in goods".
Again, he said:
"There are gaps at the moment in the provisions that apply to services".
Later, there is the sentence to which the noble Baroness, Lady Lockwood, has already referred.
"It makes sense to have a single, horizontal measure like this which offers a bare minimum of consumer protection … which can be applied across the board".
I shall be interested to hear whether the Minister still holds the view taken in the response that these services should be excluded.
Inertia selling (paragraphs 27 and 28 of the report) will, I am sure, be spoken of by a good many people. It is to me an intolerable practice. Although there are specific provisions in nearly all member states, inertia selling goes on. There are sales practices which proceed on the basis of failure to reply implying consent. I find that intolerable. I am glad that both the Minister and the Commission took the view that it was a serious imposition on the consumer and saw merit in widening the scope of the current domestic legislation along the lines suggested in the directive.
The Consumers' Association thought outright prohibition unnecessary. I would he tougher. It is an absolute intrusion on privacy, to say nothing of the waste of paper and packaging. It surely should be possible, as my noble friend Lady Lockwood said, to devise a law which would not prevent the supplying of a close substitute in place of a requested article, on approval, returnable at the consumer's option and at the supplier's expense.
Another point closely linked to the last point is the right to privacy. The Government said in their response that the question of an individual's right to privacy is an issue which should be dealt with elsewhere and not in the directive, although they agree that the consumer should not be an unwilling recipient of mail shots, telephone canvassing or cold faxing. I would favour, as the explanatory memorandum suggested, the consumer's right not to receive certain types of solicitation, such as automatic telephone calls or faxes, by either an "opt-in" or an "opt-out" regime. Opting in, as has already been said, would require prior consent by the consumer to the particular form of solicitation. Opting out would allow the consumer to refuse to receive certain types of solicitation.
At the risk of a slight digression, having expressed my objection to being approached by telephone, etc., I have sympathy for those people who have to do the telephoning and have to ask people to buy. I wish to ask the Minister what assurances she can give us that the terms of employment for those engaged in such activities achieve two ends: first, that they comply with European employment directives; and secondly, that they satisfy the requirement, on which the UK should insist, for the protection of vulnerable workers who are in the main casual or part-time.

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A final word on credit cards. Their use by people, both in person and on the telephone, is increasing all the time and there should be safeguards, particularly where a card itself is not presented at any stage of the transaction. But it is right that we should point out that the drafting of Article 12 is so loose as to invite fraud by the consumer and that tighter drafting is required. Here, both we and the Minister are as one. I look forward very much to hearing what she has to say.
9.4 p.m.
Lord Lyell: My Lords, I hope that the noble Baroness and my noble friend on the Front Bench will permit me to intervene for two minutes, above all to express my appreciation for the clear, interesting report which has been presented tonight by the noble Baroness, Lady Lockwood. We thank her for all the hard, detailed work and the evidence that the committee heard, as well as the conclusions that it came to.
I wish to draw noble Lords' attention to two paragraphs on page 13 in the opinion of the committee and two points which came to my notice and particularly impressed me. That is the "well-conducted self-regulation"—in the phrase of the committee—of the Mail Order Traders' Association, carefully watched over by the Advertising Standards Association and, as a backstop, the Office of Fair Trading. It seems that the voluntary regulation which was presented by the mail order traders and the mail order protection scheme which was outlined by the noble Baroness, Lady Lockwood, backed by the Office of Fair Trading was "an essential backstop" which exemplified that desirable arrangement.
In the limited amount of trade which I have carried out, now known in "Eurospeak"—at least north of the Border—as "distance selling", I have never encountered any problem. Indeed, I am startled at the terms of credit that one is able to obtain, quite apart from the range of goods that are presented.
I was impressed also by paragraph 39 in the opinion of the committee, which allows each member state to set and enforce its own consumer protection arrangements. I strongly support that thrust by the committee. Page 31 of the evidence, paragraph 147, quotes Mr. Tamlin's evidence of the mail order traders. He points out that the code of practice which he launched jointly with the Office of Fair Trading in November 1978 has proved to be the standard for all codes of practice and arrangements that have been stressed throughout the report. It seems to me to be a perfect example of our own consumer protection being the standard which we hope the other member states will be able to reach. With that said, I commend the report and congratulate the noble Baroness. I wait to hear whether my noble friend has any comments. If not, perhaps he will write to me.
9.8 p.m.
Lord Thomson of Monifieth: My Lords, the noble Lord, Lord Lyell, and myself were the first Members of this House to speak who were not themselves
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members of the sub-committee. I should like to join with the noble Lord in paying tribute to the quality of the report that has been produced. It was a unanimous report.
I am bound to say to the Minister that I am a little disappointed by the slightly lukewarm tone of the submission from her department and of some of her evidence. Perhaps this debate will help to encourage her in her enthusiasm for this particular proposal from the Commission.
I suppose that I should declare some sort of past interest as a former chairman of the Advertising Standards Authority, and indeed of the IBA in its role as a regulator of television advertising. I read their evidence with particular personal interest. My goodness, how the tide of technology has surged forward over the past few years. I was fascinated by the evidence from Mr. Prendergast, the director of consumer policy service at the European Commission. He talked about "some Terry Wogan of France trying to sell his wife diamond rings on the television". Presumably the same thing could be done with selling unit trusts.
One has been aware over some years that some people have been going on about the possibility of a brave new world of armchair shopping; of housewives doing all their shopping by sitting at home pressing the buttons on their modem. I am pretty sceptical about all that. I think that the new telecommunications forms of distance selling will undoubtedly grow. But I rather suspect that most of us go shopping not only in order to buy things but because we rather prefer the hurly-burly of the market-place and the shopping street to the somewhat sterile situation of sitting at home watching a television screen. Nevertheless, the case is made out that with these new developments—and above all with the advent of the single market—we need some kind of proper broad framework of Community regulation.
The directive raises in vivid form the problem of how far the Community should go in harmonising consumer protection. That is perhaps the background of the noble Baroness's limited enthusiasm for the new developments. I agree with her to the extent that, in the past, in my experience the enthusiasts—I would almost say zealots—in the European Commission and the European Parliament have tended to go too far in terms of harmonisation in the field of consumer protection, and indeed in other fields. In my time the classic case was the directive on motor lawn-mower noise. I was then the commissioner for regional development in the Community. I was conscious that in Greenland, of course, no igloo was complete without a motor lawn-mower. And in Sicily, at the other end of my parish, one needed a motor lawn-mower on the golden sands. But my goodness, there was enthusiasm for a directive on motor lawn-mower noise. It was very easy to take the mickey out of that enthusiasm, but when one looked more closely one discovered that there was a certain vested interest in a directive from certain manufacturers—in Germany, for example—as a disguised form of protection for a national industry. To complete that bit of anecdotage, the legend went around the

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Commission at that time that there was an extremely zealous official who wanted to extend the draft directive on motor lawn-mower noise to have harmonisation of the hours at which anybody throughout the whole Community could use a motor lawn-mower. One of my colleagues, on asking him about the matter, said: "Do you happen to have a next-door neighbour who gets up early on a Sunday morning?". He said, "How on earth did you find that out?".
There is a problem of getting the balance right. For my part, I am greatly encouraged by the evidence of this draft directive—I hope that I do not put too much weight on its proposals—that the Commission is now concerned to make something of a reality of that dreadful word "subsidiarity". In this case, the Commission, and indeed your Lordships' committee, have got the balance about right with, as the noble Baroness, Lady Lockwood, has explained, some characteristically sensible and constructive suggestions for improving the proposal. On those suggestions, we on these Benches strongly agree with the proposal of the committee that financial services should be included. They are a peculiarly sensitive area, where the dangers of impulse buying are quite considerable once one gets into the field of telecommunications.
I agreed also with the committee when it went to the other side in terms of consumer interest and suggested that, as it stands, the proposal on credit cards invites fraud by the consumer and needs modification. It was right in its remarks about the importance of Article 13 and the long-stop role of the Office of Fair Trading in these matters in the United Kingdom. I felt that it was right also in saying that these technologies are changing fast and that business activities associated with them are changing so fast that it may be right to write in the need for a review after perhaps five years.
The basic formula endorsed by the committee is a wise one. I urge the Government to welcome it more positively than they have done so far. It seems to be about right for the new and still limited but growing problem of distance selling and would be the right approach for a whole range of harmonisation issues. I hope it is evidence that the Commission is now taking subsidiarity seriously. It may even manage to invent an even more civilised word for it.
9.15 p.m.
Lord Peston: My Lords, it is an excellent report. It is sensible and informative. It tells us a great deal about problems and therefore I found it extremely useful. The point of departure seems to be paragraph 15 of the report where the committee tells us that we must look to the future on matters of this sort. The noble Lord, Lord Thomson of Monifieth, used the word "technology" in his remarks. Technology is now changing so rapidly that one can hardly keep up with the possibilities.
To take one of my favourite subjects, a great deal of buying computer hardware and software nowadays is done by distance selling. It is an area where some of the problems addressed by the committee emerge very strongly. But it will not be long—indeed it is already
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happening—before one will simply buy computer software on a network which will be downloaded in exchange for one's credit card number. In other words, there will not be any physical activity in the sense of a product actually arriving. There will be a great deal more of that type of buying occurring and the committee was right to ask us to look to the future. It was right also to remind many people in retailing and so forth that some of the cosy world which they have been used to will be changing rapidly, not only because of the single market but also because of what the noble Lord, Lord Thomson, drew to our attention; namely, changes in technology.
I was pleased with the committee's report in relation to my second point. There was a danger that there would be opposition to distance selling. My view is that the reverse is true; in fact it is a good thing. I hope that nothing happens in the way of intervention by government that prevents welcome developments in distance selling. My favourite anecdote in that regard is that at least one of my friends is extremely keen on distance selling. He is an insomniac and stays just about this side of bankruptcy by spending all night ringing up any number he can find and ordering this or that product. I do not quite go that far. However, in many areas I find distance selling to be a boon.
That takes me on to the point raised by the noble Lady, Lady Kinloss, and others in relation to credit card payment. I agree that there can be problems. My experience, and I am sure that of most other consumers, is that the ability to quote a credit card number down a phone in order to buy various items is useful. We do not want to see any intervention either by the Community or our own Government that would seriously limit that. It happens to be an extremely useful device.
I should like to make two points more broadly on the European experience. One is that it is varied. In discussing different parts of the Community we must bear in mind the scale of distance selling, which differs considerably both with respect to goods and sales. It occurs much less in some countries than others. I shall come on to financial services but there are considerable differences on financial services and distance selling in different countries in the Community.
But it is up to the individual countries as to whether or not they like the service. Here again I agree with the committee and noble Lords who have spoken that, for once, the Community seems to have the balance about right. I speak as a supporter of the Community but not an uncritical one. Its bias has been too much in favour of having a directive rather than not. On this occasion it is just about right in terms of saying, "Let us level up to a good standard but do nothing to stop countries having a better standard if they so wish".
That leads me to two matters. I forgot to give the noble Baroness notice of this question. I take it that where a country under its laws limits trade in particular goods or services it will not be possible to break that by distance selling. The example I have in mind is one of the better bits of the Education Reform Act 1988 which prohibits the sale of bogus degrees in

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this country—we were becoming the bogus degree centre of the world. The single market does not expose us to that problem, but I take it that our legislation on bogus degrees will apply to distance selling so that we do not get into a situation of "Give me your credit card number and you can be a PhD of the university of you-name-it by return". I should like to have some reassurance on that point.
As far as redress is concerned, my view is that it should be as simple as possible. One cannot overcome the matter where caveat emptor has to be the right principle. I go back to my favourite example. I am a devotee of computer magazines. Some people buy a great deal of computer software and hardware from firms advertising in those magazines. Frequently, they do not get the product for which they have sent money because the companies concerned are, to say the least, perhaps trading with slightly more optimism than they ought to be. In such cases the sensible thing to do is always to pay by credit card and not cash. It is very hard to persuade consumers that they ought to be careful. If it looks as if you are getting something for nothing, you are almost certainly not. That is why we need the directive as well as the principle of caveat emptor. I hope that we will never go in the direction of saying to consumers that they take no risks themselves. Consumers have to realise that the world has a certain hardness in it.
That takes me to where I fear I disagree with the Government, as have other noble Lords. I read the evidence of the noble Baroness to the committee very carefully. I did not take her evidence to mean that she did not believe that consumer protection in the area of financial services was unimportant. Her view was that that could be provided in other ways. Like other noble Lords, I am bound to say that I disagree. I make two points about financial services. First, the decisions that one takes about life and endowment policies are very much bigger than if one buys a piece of software that does not work. In the latter case, if it does not work you may shrug. It has cost a few pounds, or perhaps even £100, but you can live with it. But if as a result of distance selling in particular—though it is not just distance selling—you make a mistake about a faulty life insurance policy, you are carrying a very heavy financial burden for a long time. That is why consumer protection is so important and why I and other noble Lords ask the Government to think about supporting the directive on the inclusion of this area rather than going against it.
My view of redress is that it should be as simple as possible. My idea is that it should be the same redress that one gets at Marks and Spencer. One buys something, takes it home and does not like it. One takes it back and they credit one's account—full stop. There is no argument about it. What we have here to provide redress is largely the small claims court. I like the small claims court, but even that involves a great deal of work and, for a lot of consumers, an effort that is beyond them. Therefore, I hope that on the subject of redress the Government are still thinking in this area and more generally that they should go for the
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simplest possible system that in the end amounts to, "I do not want it. Take it back and give me back my money".
To conclude, my purpose is two-fold: first, to support the committee and, secondly, to hope—and there is reason to think that I am right to do so—that the Government will respond positively and sympathetically; particularly in the financial services field in so far as the Government have given one word on this but that it will not be their last.
9.25 p.m.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Baroness Denton of Wakefield): My Lords, tonight's speeches have been most helpful and have matched the quality of the report produced by the committee. We in this House should be very proud that reports of such quality come from our committees. The chairman, the noble Baroness, Lady Lockwood, and members of Sub-committee C are to be much congratulated. It comes as no surprise to hear members of the committee praise the noble Baroness's chairmanship. Certainly, from giving evidence, I would feel exactly the same way.
I am sorry that the noble Lord, Lord Thomson, should describe my reception as lukewarm. That is not something I am normally accused of, and I have no lack of enthusiasm for the value of the work that the committee has produced and the efforts that have gone into the report. As the noble Baroness, Lady Lockwood, said, in many ways the report is in line with government thinking. Where it is not it has given us useful food for thought—and, I would suggest, food that is rather more digestible than we heard potatoes were.
I start with some background to the proposed directive, after which I shall outline the Government's current position on the proposal and try to answer most of the points raised in the debate. In bringing the proposal forward the Commission is anticipating the completion of the single market and the development of new distance selling techniques, particularly by electronic means. The Commission predicts that this will lead to a considerable expansion of the market for distance selling across borders within the Community. It considers that there will be a corresponding need for a Community framework of common minimum levels of consumer protection for such transactions. Several noble Lords mentioned the speed of change in this area and recognised that this was a rather less prescriptive directive than we have seen in many previous instances.
The Government are not entirely convinced that the Commission has proved its case for such a directive at the present time. There is much work to do on the directive, so the timescales, I suspect, will come together. That is not to say that there is no case for the directive. Cross-border distance selling is clearly an area with tremendous potential for growth. There may well already be unreported elements of consumer dissatisfaction. We also accept that self-regulation, though it may work well in the United Kingdom—I am always proud to quote the way in which it works

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here—may not be effective when it comes to cross-border transactions. Our consultation with industry indicates that certain sectors have considerable reservations about the proposal, in particular on financial services. So far as concerns the sale of goods, however, the proposal has received qualified approval. The Government are not opposing the proposal in principle and take the view that the right course is to negotiate constructively. I hope that is not too lukewarm. It is meant to be positive.
Our reservations stem primarily from the fact that the meaning of much of the directive, particularly in the area of definitions and exemptions, is uncertain and could prove extremely difficult to translate into satisfactory provisions in the United Kingdom law. There is considerable need for clarification. It is no benefit to the consumer to have an uncertain situation. In addition, it would appear that the directive was drafted with goods in mind. Its provisions do not in places read across readily into the field of services.
The noble Baroness, Lady Lockwood, asked that I look again at the views I gave to the committee on financial services. The Government remain of the view that financial services should be excluded from the scope of the directive. However, to pick up a point made by the noble Lord, Lord Peston, that is not to say that we do not believe that there are issues there that should not be dealt with. As consumer affairs Minister, I am very concerned that in the area of financial services there should be adequate protection. That is most important. But we do not believe that this directive is the appropriate place.
Perhaps I may explain the reasons why we take that view. As I said, the proposal has been drafted with the simple sale of goods and the supply of services in mind. Services generally and financial services in particular do not fit well or easily into that framework. For instance, not only the cooling off period, which has been mentioned, but also the position of intermediaries in financial services do not fit in easily.
Further, there is no good consumer protection argument for including financial services within the scope of the directive. The financial services sector is already subject to detailed regulation at both national and Community levels. That includes a substantial body of consumer protection measures of the kind in the proposal but tailored to the specific needs of the sector.
The proposal is a broad, horizontal measure and not a suitable instrument with which to regulate financial services which present very particular problems. If financial services are to be further regulated to benefit the consumer—as I have said, I suggest that there may well be need—we believe that it would be better achieved by building on the vertical and service specific measures already in force or currently being developed.
I am pleased to say, however, that except on the issue of the inclusion of financial services, the opinions and recommendations of the committee are very much in line with the Government's own thinking. Perhaps I should say that the Government's own thinking is very much in line with the work, opinions and recommendations of the committee. We understand
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that the directive is intended to be a minimum one. That means that member states will be allowed to introduce and maintain more stringent legislation if they so wish. That will avoid any danger that some of the existing levels of protection afforded consumers in member states might have to be lowered when the directive is implemented. The current proposal for the directive does not explicitly state that, and in Brussels I shall be asking for the point to be clarified.
I agree that the information provided to the consumer should be given only once, although we have not come to a view on whether this should be limited to hard copies. Indeed, I am concerned that the provisions in Articles 6 and 10 of the proposal may be too onerous in that they could force the supplier to give some information twice. That is another point that we shall address in our negotiations.
We are doubtful about the inclusion of provisions regarding an individual's right to privacy. That again is an issue that 'could be better dealt with elsewhere and not in a proposal for distance selling. The Government agree with the committee that the consumer should not be an unwilling recipient of mail shots, telephone canvassing or unsolicited faxing. We would not go so far as to support a proposal that the consumer should have to give prior consent before being solicited, the one exception being where the consumer suffers economic loss because of solicitations such as unsolicited faxing. The noble Baroness, Lady Kinloss, rightly pointed out that we have moved from the original drafting in this area to a more satisfactory situation. We shall certainly give careful consideration to the question that this might be solved in Article 4. We shall bear that very much in mind in our negotiations.
The Government agree with the committee also in supporting the provisions for a seven-day cooling-off period and a 30-day time limit for performance where no time limit is stipulated. Similarly, we are in agreement with the committee's views on the provisions regulating unsolicited goods which threaten to prevent suppliers sending on trial goods similar to those ordered even though, as the noble Baroness, Lady Lockwood, pointed out, that practice is common and generally beneficial to the consumer.
The Government, the committee and noble Lords who have spoken this evening understand the need for safeguards against the abuse of credit cards, and everyone is concerned that the current provisions in the proposal are too heavily loaded in favour of the consumer. The Government consider that any need for safeguards in this area could be better dealt with elsewhere.
I note that the committee is content for the security of deposits and other advanced payments to be dealt with in the recommendation, but suggests that the situation should be reviewed within three years. The Government do not support compulsory protection for deposits, which would be onerous and expensive, but in practice I am pleased to say that a good deal of protection is provided by the existing self-regulatory regime. Most people have experienced good practice.
Although the Government are still considering the issue, we are inclined to agree with the committee that

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the right to bring representative actions should be restricted to bodies required to act in the public interest, as this will yield consistent standards of enforcement and reduce unnecessary multiplication of litigation. The issue raises difficult questions of jurisdiction and consumer redress which obviously need serious and further consideration.
The noble Lord, Lord Peston, referred to the simplicity of redress. I agree wholeheartedly that it has to be as simple as it can securely be for the consumer. There has been much improvement in the small claims court procedure. France has an arbitration system which is similar but less formal, and I understand that the practice in Ireland is also less formal. That may be something that we can examine, because, if there is no simple, straightforward redress, the benefit to the consumer is necessarily limited. I am pleased to assure the noble Lord that the normal rules of the Common Market regarding prohibitions on the sale of particular goods or services on the ground of public policy will apply in the case of distance selling, so there will not suddenly emerge a market for bogus degrees. That should reassure the noble Lord and his colleagues about the future.
I agree with the noble Lord, however, that there is a great need to strengthen the provisions governing the education and financial services area. I have increasing anxieties about people buying insurance policies because they get a free alarm clock. There is a need for "buyer beware" to be stressed in many cases.
The noble Baroness, Lady David, referred to the protection of workers. I should emphasise that what we are considering is a consumer protection and single market measure and that, although I am not necessarily disagreeing with the noble Baroness's point, I am not convinced that this is the place to address it. If it would be helpful, however, I shall certainly look at the issue and write to the noble Baroness about it.
We have all expressed dissatisfaction about inertia selling in all its forms in this area. I suspect that the whole of your Lordships' House will welcome the contribution made by my noble friend Lord Lyell. He rightly drew attention to the fact that there should be a safety net for consumers and said that this directive does not propose to lessen support for the consumer in our own country.
I was interested to learn of the Community experiences of the noble Lord, Lord Thomson. I agree wholeheartedly that it is beneficial that the fashionable word now instead of "harmonisation" is "subsidiarity". It could be better said, however.
We talked about self-regulation and the advantage we enjoy in this country. Some cross-border arrangements already exist. For example, the European Advertising Standards Alliance has been set up. In the direct marketing field itself there is now a European Federation of Direct Marketing. It is early days yet, but I am pleased that the foundations for a cross-border system of self-regulation are beginning to be built. That is by far the most effective means of providing protection for the consumer. Legislation often means merely that the sharks know in which
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direction to swim to avoid it. If the industry can look after itself and have as its own priority the protection of the consumer, we can look forward to a much happier situation.
I apologise if I have missed some point. I shall read Hansard carefully and answer any points that I have not covered. It may be helpful if I give an update upon where we have reached in the negotiations in Brussels. The proposed directive has completed a first reading in the Council working party. However, there have been only two short working party meetings so far this year. Further meetings are unlikely under the Danish presidency. Many member states maintain study and consultation reservations on the proposal, and a few member states question the need for the directive. Others are more enthusiastic but, nevertheless, have expressed reservations about it to varying degrees. A number of member states are in favour of the exclusion of financial services. Currently, there is sufficient support for the formation of a blocking minority on that issue, should that ever be necessary.
The UK's negotiating priorities are to clarify uncertainties in the present drafting. There is much more work to be done, a point to which the committee drew attention, to ensure the exclusion, at least, of financial services. Provided that those anxieties can be met, we hope that a directive acceptable to the UK can be negotiated. There can be no doubt that the committee has contributed a valuable input into the whole subject. We appreciate that and express our gratitude to the committee for the work it has done. I am sure that the Commission too will appreciate the input that the committee brings to the discussions.
9.43 p.m.
Baroness Lockwood: My Lords, as I rather suspected, and said at the beginning of the debate, there has been wider agreement on the contents of the report in this debate than there was in the previous debate. I am grateful to all those who have taken part.
I was grateful to the noble Lord, Lord Lyell, for his support. The whole question of self-regulation is a British import into the Community. There was considerable resistance at one time to the idea of self-regulation, but this is one of the areas where we have been successful in importing our system, and that is all to the good.
I had a great deal of sympathy with the noble Lord, Lord Thomson of Monifieth, who spoke of his amazement at finding someone selling diamonds by Minitel in France to someone in another country. Some members of the committee had a similar reaction. It may be a question of generation, with he and I being of the same generation. The younger generation takes quickly to the whole idea of electronic gadgets. I suppose that it will be natural to the younger generation. That is why it is so important to have a directive on the subject across the Community. I agree with my noble friend Lord Peston that it should be as simple as possible. That was part of the committee's concern and is behind many of our recommendations.
I am sorry that the noble Baroness, Lady Denton, was unable to agree with the committee as regards

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financial services. Indeed, in her speech she went further than she did in her official response when she stated that the matter was still open. However, in her speech she said that she remained of the view that financial services should be excluded. I am sorry about that. Perhaps, during the negotiations, comments may be made which will persuade her and some of the other countries which believe that financial services should not be included. The committee saw that as one form of distance selling. It does not matter whether one is selling goods or services, or whether the goods are financial or otherwise. The committee accepted that
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there is already a good deal of protection in the financial service sector which would not be affected by the draft directive.
There we are; there is a slight difference of opinion. I hope that as a result of the negotiations which the Minister mentioned, we shall emerge with a satisfactory directive which will protect both the seller and the purchaser.
On Question, Motion agreed to.
House adjourned at thirteen minutes before ten o'clock.