Lords Sitting of 8 February 1994

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

Asylum-Seekers: Family Reunions
Lord Hylton Lord Hylton asked Her Majesty's Government:
Whether they are giving priority to cases involving family reunion in Britain, for asylum-seekers generally and for individuals given "exceptional leave to remain" in particular.
The Minister of State, Home Office (Earl Ferrers): My Lords, all cases of family reunion are dealt with as quickly as possible, but consideration is dependent on other competing priorities.
Lord Hylton: My Lords, I thank the noble Earl for his reply. However, is he aware that during the past year at least two asylum-seekers, having been prevented from having a family reunion, committed suicide? Is he further aware that it may take seven or eight years for a person who is granted ELR (exceptional leave to remain) to achieve family reunion in Great Britain? Will the noble Earl persuade his colleagues to study both the Helsinki Final Act and the United Nations Convention on the Rights of the Child so that such cases involving children can be dealt with more quickly?
Earl Ferrers: My Lords, I am aware of the two instances to which the noble Lord, Lord Hylton, referred. Clearly, it is very regrettable when anyone commits suicide, especially in those circumstances. With regard to the convention on the rights of the child, the principle in Article 10 is accepted. It is important that the noble Lord should realise that an asylum-seeker has no entitlement to settle here. Once an asylum-seeker is granted asylum, he is entitled to have his family with him. However, if he is not given asylum but is given exceptional leave to remain, he must then show that his stay here is permanent. That is the reason why such people very often have to wait for about four years before they can bring their family to this country.
Lord Renton: My Lords, is my noble friend aware that although there are genuine compassionate cases, and some perhaps of the kind mentioned by the noble Lord, Lord Hylton, the principle of family reunion has sometimes been regarded as a way of circumventing our immigration system?
Earl Ferrers: My Lords, my noble friend is right. If we allow such persons to bring in their wives and children before they have been admitted as refugees, that would open the way to abuse of the immigration system. That is why even those who have acquired exceptional leave to remain must show that their stay here is of a permanent nature.
Lord Avebury: My Lords, can the Minister say in how many cases it has eventually turned out that a person granted exceptional leave to remain was not entitled to bring his family with him, even though the immigration authorities had so admitted the children improperly?
Earl Ferrers: My Lords, I do not have the information that the noble Lord requires.
Lord Avebury: My Lords, I know—
Earl Ferrers: Well, my Lords, if the noble Lord knows the answer, why did he ask the question in the first place?
Lord Avebury: My Lords, I did so for the simple reason that the Minister is trying to pretend that the immigration rules are being flouted or in some way infringed by people who are being granted exceptional leave to remain. I wanted to demonstrate to the noble Earl a fact of which he is, apparently, unaware; namely, that there are no such instances.
Earl Ferrers: My Lords, I said in reply to my noble friend Lord Renton that if people with exceptional leave to remain were entitled to bring their wives and children to this country, there would be the possibility of abuse of the immigration procedure because very often the purpose of ELR is that such people have already been here for so long that it would be unfair to send them back. I also said that they must be permanently settled here before they bring their wives and children. If that were not so, there would be an abuse of the system.
Lord McIntosh of Haringey: My Lords, perhaps we can turn to an aspect of the matter which the Government will not seek to claim is an abuse of the immigration system. Is it not the case that the Government agreed last year that 1,000 Bosnian heads of families, with their dependants, would be allowed into this country under a special admissions system? Can the Minister tell the House how many of those families have in fact been admitted under the system? Further, can he tell us whether there has been any change in the guidelines since that humanitarian announcement was first made?
Earl Ferrers: My Lords, the situation regarding Bosnia is clearly different. We have tried to be as accommodating as we can with regard to the situation there. However, the Question asked by the noble Lord, Lord Hylton, concerned bringing wives and children into the country in the circumstances he mentioned in his Question. Those are different to the circumstances referred to by the noble Lord, Lord McIntosh.
Lord McIntosh of Haringey: My Lords, the Question refers to asylum-seekers generally. Can I not have an answer to my question about how many Bosnian families have entered the country under the procedures that I have referred to?
Earl Ferrers: My Lords, I shall certainly find out how many Bosnian families have been affected by the

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procedures the noble Lord referred to, although that is not part of the Question on the Order Paper. However, I shall pass that information to the noble Lord.

Telecommunications Directorate
2.43 p.m.
Lord Peyton of Yeovil Lord Peyton of Yeovil asked Her Majesty's Government:
What assurances have been given by the Home Office to the staff of the telecommunications directorate in advance of privatisation.
Earl Ferrers: My Lords, any prospective purchaser of the Directorate of Telecommunications must have the capacity to meet the liabilities and obligations which will be transferred as a result of the sale. It has been made clear to staff that their conditions of service will automatically transfer to their new employment. The new employer must also provide a pension scheme which is broadly comparable with that which is at present provided by the principal Civil Service pension scheme.
Lord Peyton of Yeovil: My Lords, can my noble friend confirm that the terms which were offered by the Treasury to the Civil Service catering organisation have not been offered to the staff of the telecommunications directorate because the Treasury has stood in the way and will not allow that? Is that the case?
Earl Ferrers: My Lords, the circumstances regarding the transfer of the catering establishment to the private sector were different from those of DTELS, as it is called, which is a less competitive business than catering.
Lord McIntosh of Haringey: My Lords, can the Minister tell the House whether this transfer comes under the scope of the Transfer of Undertakings (Protection of Employment) Regulations? If so, can he tell the House what protection is required by those regulations for the staff of the telecommunications directorate and what assurances have been given to the staff?
Earl Ferrers: My Lords, assurances have been given to the staff and any new purchaser is bound to give them conditions similar to those which they have received heretofore. There should be no problem over that.
Lord Peyton of Yeovil: My Lords, I appreciate that my noble friend is in a difficult position. Will he try to persuade the Treasury to explain what the difference is between the staff of the Civil Service catering organisation and the staff of the telecommunications directorate, as that is not obvious to everyone?
Earl Ferrers: My Lords, as my noble friend will know only too well, persuading the Treasury to do anything is always, shall we say, an uphill task. However, there is a difference in so far as catering is a
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much more competitive business than that of DTELS, which is restricted in its sphere of operation and is therefore less competitive.
Lord McIntosh of Haringey: My Lords, the Minister is responding for the Government. He cannot get away with answering a question by saying that getting anything out of the Treasury is an uphill task. It is his Government's responsibility to deal with these matters and to control the civil servants who work for the Government. The Minister answered in general terms my question about the Transfer of Undertakings (Protection of Employment) Regulations. Will he say precisely whether this transfer comes under those regulations?
Earl Ferrers: Yes, my Lords, it does. The noble Lord, Lord McIntosh, seeks to make a trivial point by saying that I am supposed to answer for the Government. He is perfectly right in that I am supposed to answer for the Government. My noble friend asked me whether, as regards this matter, I would persuade the Treasury on his behalf. I merely commented about the difficulties of persuading anyone to do anything of this kind. However, it is a good deal easier to persuade the Treasury than to persuade the noble Lord, Lord McIntosh.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that despite the fact that persuading the Treasury has comparative advantages, his earlier answer was reassuring in that it indicated that at any rate one department of state was going for restraint in public expenditure?
Earl Ferrers: My Lords, I am grateful to my noble friend Lord Boyd-Carpenter. If I have not persuaded the noble Lord, Lord McIntosh, or the Treasury, I am glad that I have persuaded my noble friend Lord Boyd-Carpenter, and that at least is a pleasure for me.
Lord Mackie of Benshie: My Lords, will the noble Earl explain why a less competitive business cannot give the terms given by a more competitive business?
Earl Ferrers: My Lords, it is perfectly simple. The Government's policy is that there should be a clean break on privatisation. A move into the private sector brings benefits and drawbacks which are obtainable in the private sector. If a company goes bust, there is no money for redundancy. In the case of the PSA and FORWARD, the conditions were different because catering is a far more difficult and volatile market. That is why it was considered appropriate to make special arrangements.
Lord Shepherd: My Lords, to enable the House to understand the difference between the noble Lord, Lord Peyton, and the Minister, will the noble Earl lay in the Library the two sets of proposals so that the House as a whole can understand them and decide which side to support in the matter?
Earl Ferrers: My Lords, I did not know that there was any difference between my noble friend Lord Peyton and myself.
Lord Shepherd: My Lords, will the noble Earl answer my question? I asked whether he would lay these papers in the Library so that the House as a whole will understand what the Government are proposing in regard to these two organisations?
Earl Ferrers: My Lords, I am not quite sure what the two papers are, but perhaps I may consider what the noble Lord said and if there are two such papers I can decide on whether they should be laid in the Library.
Lord Shepherd: My Lords, the noble Earl—
Noble Lords: Order!
Lord Peyton of Yeovil: My Lords, I am sorry to intervene again. Is my noble friend aware that there is this difference between us? When he speaks on behalf of his own department—the Home Office—we agree totally, but when he attempts to speak on behalf of that other department—the Treasury—there is quite a gulf between us.
Earl Ferrers: My Lords, my noble friend has been infected by the noble Lord, Lord McIntosh and is now trying to be divisive. I speak on behalf of the Government not on behalf of any department.

Deprivation: Health Spending
2.50 p.m.
Lord Howell Lord Howell asked Her Majesty's Government:
Why the weighted capitation formula is being adjusted, thereby depriving health authorities in areas of deprivation of the funds necessary to treat illnesses arising from such deprivation, and whether they will state the amount of such reductions, which will affect Birmingham, London, Liverpool and Manchester.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, a review of the weighted capitation formula is nearing completion with the prime purpose of improving its sensitivity. It is likely that the recommended formula will include variables linked to deprivation.
Lord Howell: My Lords, that reply is very welcome. Does the noble Baroness agree that the present system is likely to deprive Birmingham of £29 million next year because of the three elements of a ridiculous formula: first, the 1991 census, which is out of date; secondly, an amount of money related to the age of everybody living in the area, ranging from £1,000 for babies and people over the age of 85 to £250 for people aged 45 to 65, a large group in which deaths unfortunately occur; and thirdly, a lunatic accountancy exercise built into the system and called the standard mortality rate which, your Lordships will be interested to hear, consists of taking the actual deaths in the area, dividing them by the expected death rate, multiplying that figure by 100 and then taking its square root? Could there be a more ridiculous and lunatic way in which to finance our hospitals?
Baroness Cumberlege: My Lords, the noble Lord is absolutely right; it is a very complicated formula. Indeed, I believe that Lord Palmerston would have found it simple compared with the Schleswig-Holstein question. It is very complicated. That is why we are trying to simplify it.
Lord Dean of Beswick: My Lords, is the Minister aware that, whatever the system used to apportion resources, the city of Manchester comes right at the top of the list of health deprivation? Expectation of death at birth in Manchester is the highest in the country. Deaths before the age of one are also the highest. In the case of coronaries, among both men and women the expectation of survival is the lowest in the UK. Is it not time that a formula was found to target increasing resources in areas like Manchester which appear on a list of shame I have before me?
Baroness Cumberlege: My Lords, I should like to reassure the House that this year Manchester will receive an increase in funding. I take the noble Lord's point on deprivation. That is why we have commissioned work with York University to see whether we can find a more sensitive formula.
Lord Molloy: My Lords, I acknowledge the replies the noble Baroness has given. She has obviously studied the situation. However, does she not agree that deprivation and the illnesses caused by deprivation are among the saddest examples of what some British people are suffering? People should be protected from deprivation in the first place. Those who are deprived should, more than anyone else, be protected from appalling illnesses. Does the noble Baroness agree that if there is one area where we should not reduce finance it is this particular one?
Baroness Cumberlege: My Lords, there clearly is a link between poverty and health, including housing, unemployment and of course income. But that is true of every country in the world. We are tackling the problem with the Health of the Nation strategy. Some diseases, for example breast cancer, afflict the wealthy population more than the poor. So there are variations.
Baroness Jay of Paddington: My Lords, can the Minister confirm that the work being done with York University on increasing the sensitivity of these very complicated methods of coming to resource decisions will include the very serious concerns of many health authorities in inner city districts about, for example, the problem of the homeless and under-weighted capitation and, even more, the problem of the increasing number of the mentally ill within that population?
Baroness Cumberlege: My Lords, those are all aspects which the University of York is taking into consideration in studying the formula. The university will report to Ministers in March.
Lord Howell: My Lords, will the Minister agree to add to whatever York University does, which we welcome, the proposition that the best way to finance

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hospitals is to start by asking them how many patients they treat every year and proceed to allocate finance on the basis of the work they do?
Baroness Cumberlege: My Lords, with the internal market one of the factors now being taken into consideration is the number of patients who are treated in hospitals. I should say to the noble Lord that hospitals are not the sum total of the health service. We are trying to put more and more money into primary care and the prevention of sickness and ill health. That is where the capitation formula, which is based on populations, is so important.

Doncaster: Youth Employment
2.55 p.m.
Earl Russell Earl Russell asked Her Majesty's Government:
Whether they have anything to add to Lord Henley's Written Answer of 19th January 1994 (col. WA52) to the question of what percentage of those reaching school leaving age in Doncaster in September 1992 registered for youth training, but did not find either youth training or employment.
Viscount Goschen: My Lords, no, but if any young people, or someone acting on their behalf, believe that the guarantee is not being met for them they should bring that to the attention of their local training and enterprise council as soon as possible.
Earl Russell: My Lords, perhaps I may express my sympathy with the noble Viscount that he was unable to discover the answer to my Question. Does the noble Viscount recall on 23rd June last reproving me, quite rightly, for failing to make use of the detailed, accurate and comprehensive information provided each month by the careers service? Will he take note that had he used that information on this occasion he would have discovered that in addition to 6 per cent. of the age group who disappear from the records and 6 per cent. who leave the area, a further 6.4 per cent. register for youth training without finding a place or employment? Was that not a rather incurious approach to a Parliamentary Question? Further, can the noble Viscount assure me that other answers from the department on the youth training guarantee are better researched and more reliable than this one?
Viscount Goschen: My Lords, the point is that the historic information the noble Earl seeks cannot be provided as the monitoring arrangements were not in place at that time. However, I can tell the noble Earl that the situation in Doncaster is very encouraging. On 13th January this year there were only five young people in the Barnsley and Doncaster TEC area who were covered by the YT guarantee and had been waiting for eight weeks or more and there were over 4,000 in training.
Lord Stallard: My Lords, will the Minister accept that I intervene for two reasons? First, I sympathise with the noble Earl in his search for accurate information. We are all becoming very concerned about this lack of
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decent research into Questions. I am myself a victim of a written reply today which might just as well not have appeared because it means nothing. Can the noble Viscount explain to me the answer that the noble Earl, Lord Russell, received on 19th January? The Answer states:
"The information requested is not available".
Information for September 1992 was not available. The Answer continued:
"However, on 9 December, the latest date for which figures are available".
How can figures be available for December while the September figures are not available? Why could not the Government tell us what happened a couple of months before? The matter has just not been researched.
Viscount Goschen: My Lords, the point is that the arrangements for monitoring the YT guarantee were only introduced in September 1992 following an announcement by the then Secretary of State for Employment in July. It took some time for the arrangements to be developed and become reliable.
Lord Henderson of Brompton: My Lords, if this important information was not available at the latter end of last year, will the noble Viscount assure the House that it will be available in future? How otherwise can the Government gauge the validity of their YT guarantee or the House be properly informed?
Viscount Goschen: My Lords, I have explained why the information was not available at that time. I have given the noble Earl, Lord Russell, the present figures and details of the present situation in that TEC area.
Baroness Turner of Camden: My Lords, the Minister will know that we on this side of the House have long been worried about the small minority of young people who fall through the net. They do not benefit from a youth training guarantee; they are not at school and do not have employment. I understand, of course, that there is a hardship allowance arrangement in operation. Can the noble Viscount tell the House how many young people in that position are covered by hardship allowance arrangements? I gather that those allowances are rather hard to obtain.
Viscount Goschen: My Lords, the latest monthly figures indicate that in April 1993 12,521 claims were received under the severe hardship provision, of which 10,759, which is 86 per cent., were successful.
Earl Russell: My Lords, since the noble Viscount was unable to discover the answer to the Question, will he explain why I was able to do so? Perhaps I may also ask him to take note that the cost of doing so was 48 pence. Can he assure us that he does not regard that cost as disproportionate?
Viscount Goschen: My Lords, I believe that I have explained in great detail why the information which the noble Earl sought was not available. Under the present arrangements the information is available for the current situation.
Lord Stallard: My Lords, the noble Earl has just stated that he was able to obtain the information. It was available. It cost him 48 pence to obtain it. Is it the cost which worries the Government?
Viscount Goschen: My Lords, no. The Government are concerned with reliable official statistics.

Photographs and Films (Unauthorised Use) Bill [H.L.]
Lord Harmar-Nicholls: My Lords, I beg to introduce a Bill to amend the law relating to the copyright of photographs and films to protect the privacy of individuals. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time—(Lord Harmar-Nicholls.)
On Question, Bill read a first time, and to be printed.

Statutory Sick Pay Bill
3.4 p.m.
Earl Ferrers: My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Statutory Sick Pay Bill, has consented to place her prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Bill read a third time.
The Parliamentary Under-Secretary of State, Department of Social Security (Viscount Astor)The Parliamentary Under-Secretary of State, Department of Social Security (Viscount Astor) moved Amendment No. 1:
After Clause 2, insert the following new clause:
Power to make further provision as to recovery
.—(1) In Part XI of the Social Security Contributions and Benefits Act 1992 (statutory sick pay), after section 159 insert—"Power to provide for recovery by employers of sums paid by
way of statutory sick pay.
159A.—(1) The Secretary of State may by order provide for the recovery by employers, in accordance with the order, of the amount (if any) by which their payments of, or liability incurred for, statutory sick pay in any period exceeds the specified percentage of the amount of their liability for contributions payments in respect of the corresponding period.
(2) An order under subsection (1) above may include provision—

(a) as to the periods by reference to which the calculation referred to above is to be made,

(b) for amounts which would otherwise be recoverable but which do not exceed the specified minimum for recovery not to be recoverable,

(c) for the rounding up or down of any fraction of a pound which would otherwise result from a calculation made in accordance with the order, and

(d) for any deduction from contributions payments made in accordance with the order to be disregarded for such purposes as may be specified,

and may repeal sections 158 and 159 above and make any amendments of other enactments which are consequential on the repeal of those sections.
(3) In this section —
"contributions payments" means payments which a person is required by or under any enactment to
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make in discharge of any liability of his as an employer in respect of primary or secondary Class 1 contributions; and
"specified" means specified in or determined in
accordance with an order under subsection (1).
(4) The Secretary of State may by regulations make such transitional and consequential provision, and such savings, as he considers necessary or expedient for or in connection with the coming into force of any order under subsection (1) above.".
(2) In section 176(1) (c) of the Social Security Contributions and Benefits Act 1992 (parliamentary control: orders subject to affirmative procedure), at the appropriate place insert "section 159A(1)".
(3) The Secretary of State —

(a) shall lay before each House of Parliament the draft of an order under section 159A(1) of the Social Security Contributions and Benefits Act 1992 (inserted by subsection (1) above) framed so as to come into force on or before 6th April 1995, and

(b) if the draft order is approved by a resolution of each House of Parliament, shall make the order in the form of the draft,

unless before 1st December 1994 he lays before each House of Parliament a report explaining why he does not intend to make such an order.")
The noble Viscount said: My Lords, in moving the amendment, I speak also to Amendments Nos. 4, 5 and 6. These amendments give effect to the proposal persuasively argued by my noble friend Lord Jenkin of Roding, first in Committee and, in an amended form, at the Report stage of the Bill.
My noble friend made the case for a new form of compensation to help employers during periods when they were faced with an exceptionally high level of sickness in their workforce. Instead of the present system whereby small employers are fully reimbursed for the cost of statutory sick pay paid beyond a prescribed period, he would prefer compensation to be paid when statutory sick pay exceeded a specified percentage of national insurance contributions.
My noble friend accepted that I had reservations about the practicability of his idea, especially in the time available before the Bill took effect. He recast his proposal to allow time for consultation with industry before the new scheme took effect in April 1995. If, following consultation, the Government did not feel able to implement the new scheme, they would have to lay a report before Parliament explaining why not. He agreed to withdraw his amendment at Report to enable me to table the amendments we are considering today, which cover all the consequences of my noble friend's proposal.
Clause 3 allows the Secretary of State to provide by order for employers to recover statutory sick pay which exceeds a specified percentage of their national insurance contributions. This power is contained in a new Section 159A to be inserted in the Social Security Contributions and Benefits Act 1992. The new section also compels the Secretary of State to lay an order before Parliament to introduce the new scheme from 6th April 1995. The order would be subject to the approval of both Houses of Parliament by affirmative resolution.
As I explained at Report, we shall be consulting both sides of industry, employers' and employees' organisations, about the merits of the new scheme, including the administration costs. If, following that consultation, the Government did not wish to proceed with the new

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scheme, the Secretary of State would have to lay a report before Parliament explaining why he was not making an order under the new power.
The new section also allows the Secretary of State to repeal the existing small employers' relief scheme contained in Sections 158 and 159 of the Act prior to the introduction of my noble friend's scheme.
The other amendments are all consequential on the new Clause 3. I beg to move.
Lord Carter Lord Carter moved, as an amendment to Amendment No. 1, Amendment No. 2:
Line 54, after ("report") insert ("for debate by both Houses of Parliament").
The noble Lord said: My Lords, the amendment refers to the last two lines of government Amendment No. 1. The government amendment provides that the Secretary of State shall lay before each House of Parliament,
"a report explaining why he does not intend to make such an order".
There are two aspects to the issue. We touched on the matter at Report stage. If the Government do not intend to adopt the scheme in Amendment No. 1, the report will obviously be important. We are anxious to ensure that that report does not just lie on the table. We believe that the Government will welcome debate and that the amendment stiffens that resolution. We cannot imagine that the Government do not wish to have such debate in both Houses. On 1st February, the noble Viscount stated at col. 1193 of the Official Report,
"We believe that a report should be laid before Parliament without requiring formal approval".
We entirely understand that, because the Government will be laying an order. If the report does not require formal approval, we should still like to ensure that it will be debated, because it will be important that both Houses have the chance to examine the Government's reasons for rejecting the scheme. As the noble Viscount said on the same day at col. 1196 of the Official Report,
"It is important that a report is made available for Parliament, and that Parliament should be able to debate that report if it so wishes".
To be fair, I have completed the quotation to save the noble Viscount from having to do so.
For the avoidance of doubt, it is important that the Government's intentions in that respect should be in the Bill. When that important report is brought before Parliament, it should be debated. I beg to move.
Lord Jenkin of Roding: My Lords, I do not wish to repeat what I said at the end of the debate at Report stage. However, those of us who throughout the passage of the Bill supported the amendment to the scheme are immensely grateful to my noble friend, not only for the trouble that he has taken to examine the case both in the Chamber and in his department, but also for his willingness to accept that the proposed scheme is better than the Government's scheme and therefore to table the amendment. I shall not continue because otherwise my noble friend may become swelled-headed, and that would be a great pity. He has done extremely well and we are grateful to him.
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Perhaps I may draw your Lordships' attention to what I regard as the most important single word in the Government's amendment. In subsection (3) (a), the new clause provides that the Secretary of State,
"shall lay before each House of Parliament".
The beginning of the amendment gives the Secretary of State a power to substitute the revised scheme for the existing scheme. Subsection (3) places upon him an obligation to table the necessary statutory instrument,
"unless before 1st December 1994 he lays before each House of Parliament a report",
and so on.
I draw that to the attention of your Lordships because it is rather important. My noble friend has accepted an extremely important point; namely, that there is now an obligation on the Government either to make an order fixing the appropriate percentage of national insurance contributions and all the other ancillary and supplementary measures which would be necessary or to table the report. The Government will not be able to say, "We have a power to do that but we have decided not to". Therefore, we have built into the amendment, and the Bill, an extremely important parliamentary process.
I turn now to the point made by the noble Lord, Lord Carter. When I tabled the amendment on Report I provided for a debate on the report if it recommended that the Government should not proceed with the alternative substituted scheme. In his reply my noble friend indicated that he did not believe that the Government should be obliged to organise a debate on the report. I accept that. It would perhaps be taking the matter too far.
I do not believe that the amendment moved by the noble Lord, Lord Carter, adds anything to the existing procedures of both Houses of Parliament. If the report is tabled, it is open to any Member of either House to use the procedures of the House in order to have a debate.
Last week we had a very good example of how that procedure works when my noble friend Lady Faithfull tabled a Motion to amend a statutory instrument. The same procedure could have been used in respect of a report. My noble friend's Motion was tabled, debated and voted upon. I accept that it may be necessary in another place for a Member who has been successful in the ballot to table such a Motion, but any Member is entitled to raise the matter at the Adjournment of the House. That would not be subject to a vote but the matter would be debated.
I have appreciated greatly the support of the both the noble Lord, Lord Carter, and the noble Earl, Lord Russell, for the main substantive change that we are making. However" were Amendment No. 2 to be pressed to a Division, I am not sure that I could support it. I do not believe that it adds anything to existing procedures. I express my warm appreciation for the way in which my noble friend has handled this matter. I believe that we have made it a better Bill.
Earl Russell: My Lords, I can express the position of these Benches with Orwellian brevity: one amendment good, two amendments better. We are deeply grateful both to the noble Viscount and to the noble Lord, Lord Jenkin of Roding, for the care that they have taken in achieving the amendment. I hope that it will go a long

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way towards protecting businesses which have an exceptional level of sickness. But if the noble Viscount were able to go the extra mile and accept the amendment moved by the noble Lord, Lord Carter, we should be even more pleased.
Lord Boyd-Carpenter: My Lords, I do not believe that the amendment in the name of the noble Lord, Lord Carter, is required. Even with the Bill as it stands, we should have a right to debate the matter. It is superfluous to add that provision. Therefore, I hope that your Lordships will not accept the amendment.
Amendment No. 1 seems to reflect great credit upon your Lordships' House; that it has been possible to debate the Bill and to secure quite considerable changes in it as a result of reasoned argument. It is a very good example of the way in which this House works as a revising Chamber. It also reflects great credit both on my noble friend who moved the original amendments in Committee and on Report and on the Minister for his flexibility and good sense in proceeding as he has.
3.15 p.m.
Viscount Astor: My Lords, I do not believe that the amendment is necessary for two main reasons. Of course either House or both Houses may, if they wish, debate the report, but we should not impose a requirement to do so. Parliament can decide for itself.
The noble Lord, Lord Carter, quoted what I said at an earlier stage in the hope that that would help his argument. However, he was kind enough to complete the sentence in my quotation, which I thought entirely ruined his argument. Therefore, I am grateful to him.
Perhaps I may explain in a little more detail. The report, if there is one—and we must remember that there will be one only if the Government do not go ahead with the new scheme—would be preceded by extensive consultation with industry. If industry and government were satisfied that the scheme was worth while and workable, there would be no report. The Government would introduce the new scheme from April 1995. So, the laying of the report would be evidence that the scheme had been found wanting by industry or government, or both. It may be that all parties, because of some as yet unseen flaw in the new scheme, agreed that it would not work. In that event, Parliament may have little interest in debating a scheme which is agreed by all to be impracticable.
An alternative possibility is that consultation may reveal mixed views about the new scheme. Some sectors of industry might favour it because they stood to gain; others might oppose it because they stood to lose from the repeal of the existing small employers relief scheme. The Government might then conclude that it was unwise to proceed with such a controversial proposal. In these circumstances, it is likely that Parliament will be much more interested in the fate of the new scheme. But there are ample opportunities for Members of both Houses to ensure the question is fully debated. Questions can be tabled, Motions can be put and so on. I am sure that my noble friend Lord Jenkin of Roding would be the first of your Lordships to do that.
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For those reasons, I ask the noble Lord, Lord Carter, to accept my noble friend's advice and withdraw the amendment. There is no need to require a debate. If Parliament wishes to have a debate when it sees the report, it can do so in either House.
Lord Carter: My Lords, the era of open government did not last very long. It is clear that there has been a significant change since Report stage. As the noble Lord, Lord Jenkin, said, his amendment required the approval of Parliament, whereas my amendment requires only the opportunity to debate the report. As the noble Lord said, a Motion may be tabled without the necessity of a vote on it. I was merely seeking to ensure that there would be debate in both Houses on this important report, although it would not necessarily require a vote. It would provide an opportunity to air the arguments on both sides.
It is true that the usual channels could provide time for such a debate. It may be that that could be done more easily in this House than in the other place because, who knows, at the time of the report the Government may be in a period of non-co-operation with the Opposition as regards the parliamentary timetable. We have explored the issue. We could not imagine that the Government would not wish to have such a debate and we felt that that should be placed on the face of the Bill for the avoidance of doubt. However, the Government are prepared to leave the decision to both Houses of Parliament and in the light of that I am prepared to beg leave to withdraw the amendment.
Amendment No. 2, as an amendment to Amendment No. 1, by leave, withdrawn.
Lord Carter Lord Carter moved, as an amendment to Amendment No. 1, Amendment No. 3:
Line 54, at end insert ("and stating what in his view will be the likely effect of such intention on the employment of people with disabilities.").
The noble Lord said: My Lords, Amendment No. 3 deals with the issue of disability, but I should make it absolutely clear that it is a different approach to the discussion which we had at a previous stage of the Bill; in fact, it is a different subject. Our previous discussion concerned the effects of the Bill on the employment of disabled people. Opinions clearly differed about the likely effects of the Bill on the employment of disabled people and I do not wish to cover that ground again. Indeed, the House rejected an amendment on Report to ask the Secretary of State to publish and lay before Parliament a report on the effects of the legislation on people with disabilities. Therefore, this is not an attempt to return by the back-door to that subject.
This is a completely different approach. We know that as a result of the government amendment there will be a great deal of consultation with employers' and employees' organisations to see whether the scheme will work. It would be extremely helpful to the disability organisations if the Minister could give an assurance that in those consultations he will talk to the disability organisations which have a particular view about the employment of disabled people and the effect of the statutory sick pay scheme on them.

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If the proposed new scheme is rejected by the Government, the amendment asks for confirmation in the report to Parliament of what would be the effect of that rejection on the employment of disabled people. For example, it may be argued that the original scheme would provide better employment opportunities for disabled people than the new revised scheme. Therefore, this is merely an attempt to ensure that the Government consult the disability organisations. If they decide to reject the new scheme, they should set out their reasons for doing so in the report. Also, they should say something about the effect of that rejection on the employment opportunities for disabled people.
We are not trying to prove a point about the employment of disabled people. Opinions differ. We merely wish to ensure that the interests of disabled people in employment are taken into account in consultations on the new scheme. If the Minister feels that it would be easier to do that by redrafting the amendment which stands in my name, there is a chance to do that in the other place if the wording is not quite right now.
I emphasise that the amendment is not about the possible effects of the Bill on the employment of disabled people. It is about ensuring that proper attention is paid to that very important matter in the consultations that will take place, and if the Government decide to reject the alternative scheme, a chance to include in the report which sets out the reason for rejection their judgment on the effect of that rejection on the employment of disabled people. It may be that the Government's judgment is that the employment of disabled people is not affected by their rejection of the scheme and that their employment chances are better under the government scheme which is set out in the Bill until April 1995. We merely wish to ensure that the interests of disabled people in employment are fully taken into account in the consultations which will take place. Moreover, if the Minister is able to give an assurance that the consultation process will include discussions with the organisations which are concerned about this matter, that would be a good step forward. I beg to move.
Earl Russell: My Lords, I shall not repeat the arguments of the noble Lord, Lord Carter. I say only that we on these Benches are very happy to support his amendment.
Viscount Astor: My Lords, the proposed new compensation scheme in Amendment No. 1 would help employers when an exceptionally high proportion of the workforce was off sick in the same period. I have to tell the noble Lord, Lord Carter, that such an event has nothing to do with the number of disabled people in an employer's labour force. Your Lordships rejected, as the noble Lord said, his amendment at an earlier stage. The noble Lord has been ingenious in trying to resurrect his earlier amendment. But the report that he now tries to latch onto is on another subject entirely; namely, the small business reliefs. The connection is at best tenuous.
However, I would be happy to give the noble Lord the assurances for which in effect he asks by this
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amendment; namely, that when we consult employers and employees about the new scheme, we shall also be prepared to consult groups that are concerned with people with disabilities. I am happy to give the noble Lord the assurance that we will indeed consult those groups; and indeed, we will talk to anybody who wishes to make such representations known to us. With that assurance, which I suspect was perhaps the original intention behind the noble Lord's amendment, I hope that he will feel able to withdraw his amendment to my amendment.
Lord Carter: My Lords, I am not sure that the Minister understood what I said. He said that this is all about small employer relief. For example, an employer such as Remploy, with a high proportion of disabled people in its workforce, should have a look at the new scheme to see whether it would be better off. It is not merely the employment of disabled people. Certain employers employ a high proportion of disabled people. It could be that in the examination of the scheme such employers would have a point to make.
I was not trying to come back, as it were, on a sidewind on the previous debate. The amendment which the House rejected —and the Minister should get this matter right—involved a requirement to lay a report before Parliament about the employment of disabled people. Amendment No. 3 has nothing to do with that. It concerns a situation in which the Government may decide to reject the new scheme. If they rejected it, it would require them in their report to point out the effect of that on the employment of disabled people, and particularly in the case of employers who have a high proportion of disabled people.
I am disappointed that the Minister has not understood the main purpose of the amendment. But I am certainly pleased about and grateful for his assurance that the disability organisations will be consulted in the process of preparing the Government's reaction to the new scheme. In the light of that assurance, I am prepared to withdraw the amendment.
Amendment No. 3, as an amendment to Amendment No. 1, by leave, withdrawn.
Amendment No I agreed to.
Clause 3 [Corresponding provision for Northern Ireland]:
Viscount Astor Viscount Astor moved Amendment No. 4:
Page 2, line 12, leave out ("and 2") and insert ("to (Power to make further provision as to recovery)").
On Question, amendment agreed to.
Clause 4 [Citation, commencement, financial provision and extent]:
Viscount Astor Viscount Astor moved Amendment No. 5:
Page 2, line 18, leave out subsection (2) and insert:
("(2) Section I comes into force on 6th April 1994; and the other provisions of this Act come into force on Royal Assent.").
On Question, amendment agreed to.
In the Title:
Viscount Astor Viscount Astor moved Amendment No. 6:
Line 3, after ("pay;") insert ("to enable the Secretary of State to make further provision by order as to the recovery of such sums;").
On Question, amendment agreed to.
3.25 p.m.
Viscount Astor: My Lords, I beg to move that the Bill do now pass.
The Bill has provoked interesting debates. I thank the many noble Lords who have contributed to our debates, in particular my noble friend Lord Jenkin of Roding. He has applied his wisdom and experience to great effect. I am particularly grateful to him for showing that he can temper his ingenuity with an understanding of concerns as to the timing and practicability of his suggestion. But what else would one expect from a former Secretary of State of my department?
Noble Lords: Oh!
Viscount Astor: My Lords, I would also like to thank my noble friend Lord Boyd-Carpenter for several pertinent and very helpful contributions during the Bill's consideration. My noble friend Lord Dean of Harptree deserves our thanks for expressing the views of small employers, as does my noble friend Lord Reay for making us aware of the views of the CBI and of industry generally. I am also grateful for the support from my noble friends Lord Lucas, Lord King of Wartnaby, Lady Elles and Lady Seccombe.
The noble Earl, Lord Russell, has entertained us with his often witty and interesting interjections. I may not always agree with his viewpoint but he seldom fails to amuse. On the Benches opposite, I thank the noble Baronesses, Lady Hollis and Lady Turner, and the noble Lord, Lord Carter, for their contributions and I appreciate the very genuine anxieties that they expressed. I hope that I was able to alleviate some of them.
We should also be grateful to the organisations that provided briefing on the Bill, and particularly to Stan Mendham and Nick Goulding of the Forum for Private Business, who prompted my noble friend Lord Jenkin to make the successful effort to help us to focus on the scope for a different method of helping small employers. I also thank the Federation of Small Business, the CBI and the National Association of Citizens Advice Bureaux; and, of course, my officials, who have worked extremely hard to provide a satisfactory amendment, to which noble Lords have agreed. I also thank my noble friend on the Front Bench, Lord Goschen, for his help and his nimble footwork at times when it was necessary.
Although I accept that some concerns remain among noble Lords opposite about employment of those with bad sickness records or those people with disabilities, I believe that this Bill and its associated measures have gained a wide measure of acceptance.
Moved, That the Bill do now pass.—(Viscount Astor.)
Lord Reay: My Lords, the CBI has not sought to oppose the Bill. There is a fairly wide appreciation of the merits of the Government's central argument that absence from work through sickness is exceptionally, and indeed excessively, high in this country; that the Government have a duty to try to do something about that; and that employers have an important part to play in reducing absence rates, in particular through their
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ability to influence the motivation of those whom they employ. At the same time the CBI acknowledges that the Government have sought to increase the responsibility on industry in a way that imposes no extra costs in aggregate on industry by introducing compensating reductions in national insurance contributions.
The CBI had three principal concerns. The first was that the protecting mechanism for small firms should be fairer than that originally proposed in the Bill. That matter is now being taken care of thanks to the skilful and vigorous campaign waged by my noble friend Lord Jenkin of Roding and the admirable judgment, flexibility and initiative displayed by my noble friend the Minister in acceding to the request contained in the amendment to write an alternative system into the Bill.
Secondly, the CBI was concerned, and still is concerned, that the reductions in national insurance contributions should prove lasting and not ephemeral. While reminding itself of the low level of employers' national insurance contributions today compared with what they were in 1979 and of the Government's often proclaimed stance of not adding unnecessarily to industry's costs, industry has no choice but to rely on the Government being true to their original purposes and seeing the importance of keeping the implicit bargain that they have made with industry.
But the principal concern of the CBI is the precedent that this Bill may be taken to set for other social costs, in particular statutory maternity pay (but not only that) which the Government may similarly seek to transfer to industry without the justification that exists in this case. Indeed, the Government have steadfastly refused to give the assurance requested by the CBI that the Government will continue to meet in full the present and future costs of statutory maternity pay when they rise, as they are expected to do later this year, to satisfy the requirements of the EC pregnant workers directive.
Such costs are purely social costs. They should be borne in their entirety by the Government. There is no useful deterrent role for management to play. Indeed, the only practice that is likely to be deterred by transferring to employers part of the cost of statutory maternity pay is the hiring of female staff, a result which many noble Lords I am sure would regard as undesirable.
Therefore, I hope that the Government will resolve not to use the Bill as a precedent for legislation or for regulations which they could argue are similar but which in reality would be entirely different and, I submit, objectionable. In passing the Bill, I trust that this House is not assenting to any proposition that concedes the right or desirability of government transferring social costs generally on to industry.
3.30 p.m.
Baroness Hollis of Heigham: My Lords, the Bill offloads the costs of sick pay on to medium and larger companies. In return, those companies pay a lower national insurance percentage. But their employees, as we saw yesterday, pay a higher one. It is clear that medium and large companies find that trade-off acceptable. But from the beginning the Opposition Benches have had worries on three scores. The first

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concerns the effect on smaller businesses and is led by the noble Lord, Lord Jenkin of Roding. Secondly there is the effect on chronically sick and disabled people. Thirdly, there is the effect on women. In other words, we are confident that employers have had their concerns met. We remain unconvinced that many employees have been equally favourably treated.
We are truly pleased that with regard to small companies the Government were able to accept the amendment of the noble Lord, Lord Jenkin. Not only will small companies now have 80 per cent. of their sick pay reimbursed after four weeks, they will also know that where sickness comes and goes within the four week period they will be entitled to claim reimbursement if their costs are abnormally high. We on this side of the House should like to give credit to the noble Lord, Lord Jenkin, for the agility of his drafting and to the Government for their good sense in accepting such an amendment. It gives us additional pleasure because it also ensures that the other place will have the opportunity to debate the Bill on the back of the amendment, something which it was constrained from doing adequately when the Bill was unfortunately guillotined in that House. So the Bill has done well by employers. We wish that it had done as well by employees, in particular the sick, the disabled and women.
It is clear to us on the Opposition Benches that the Bill may become a charter to sack the sick. At every stage—Committee and Report stages and again today to some extent —we have sought to move amendments to mitigate that effect. Employers are not charities. Over and above the disruption that a chronically sick employee in and out of work may bring to that company, there is now a financial penalty. The employer will have to pay 100 per cent. of the sick pay if it is not a small company. As for those who have already left work because they are chronically sick or disabled, why would any employer, even their own, re-employ them if they bring with them a negative dowry requiring 100 per cent. sick pay to be paid by their employer.
The Minister may say that there is no evidence that that has or will happen. He does not know. Disability groups and the CAB already believe that it is beginning to happen and will certainly occur more in the future. I suspect that they may be right. But they, too, do not know. To our dismay the Government do not intend to find out, preferring instead to rely on assertion, which we on this side can only counter with allegation and anecdote because the Government have refused to permit the disabled the dignity of monitoring their position in the labour market.
On behalf of these Benches I should like to make a mild protest. I understand perfectly well that it is unreasonable to expect the Government to concede any amendments that engage or depart from any significant point of policy. I accept that it is unreasonable to expect the Government to support any amendment that has significant financial implications or any amendments that are clearly party political. The Minister cannot concede such amendments and I rather doubt that we
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could either, were we in his position. We understand that. We must move the amendments and he must resist them. For the most part I would expect the House to support the Minister.
This House does not have the same constraints of whipping as the other place and there is real expertise, compassion and information (in my view much more so than in the other place) on the position of the sick and disabled. Therefore I regret it when amendments which ask for monitoring or reports to Parliament by the Secretary of State on behalf of the sick and disabled or of women cannot be taken on board —the more so when they are of minimum or negligible cost and have no party significance but are of real gain to groups such as the sick and disabled.
Are the Government, who reversed the poll tax in one Parliament, who are having substantially to amend their Railways Bill, who are having to scrap much of their police Bill and who may have to scrap much of their education Bill, so confident that the legislation that they pass will in future not only not need to be amended but not even monitored? That was the thrust of the amendments on the position of the disabled moved by my noble friend Lord Carter and myself and the amendments on behalf of women moved so eloquently by my noble friend Lady Turner.
The Minister, who is always most helpful and pleasant in voice, was not able to accept those amendments at any stage. Therefore, there is no way of knowing the effect that this legislation will have on some of the most disadvantaged and vulnerable people in our society. How then can we legislate more adequately in the future if we receive no feedback from legislation of the past?
The plight of the disabled was left to your Lordships' goodwill and, on this amendment at least, I feel that it went walkabout. We are all reminded of the story of the Whig, Lord Melbourne, who, in 1833, regretted the passing of the rotten boroughs (with the 1832 Reform Act) on which Tory Governments in the past had relied to get through their legislation. One MP said to Lord Melbourne, "You can always count on my support when you are right." "Be damned to that," said Lord Melbourne, "when I am in the right, the question looks after itself. I want your support when I am in the wrong." I believe that your Lordships gave that support to the Government.
I am saddened but nonetheless, like others, I should like to pay tribute to the noble Lord, Lord Jenkin, for his amendment and to the Government for accepting it. I also appreciate the good humour and courtesy of the Minister, from whom, quite unreasonably, we expect nothing less by now. We thank him again for the reassurance that he has just given to my noble friend Lord Carter that there will be full consultation with disability groups on the new scheme.
We thank the noble Earl, Lord Russell, and other noble Lords who took part in the debate. Above all, we thank my noble friends Lady Turner and Lord Carter who eloquently moved the amendments which we believe won the argument but, alas, not the vote.
Earl Russell: My Lords, I am afraid I am too late to congratulate the noble Viscount on piloting through his first Bill for the department where he now serves. The noble Viscount broke his duck yesterday when unfortunately, because of professional duties, I was not able to be here. However, I congratulate him warmly on the way he has handled this Bill, not only in the Chamber but also at meetings in his office where the door was always open. What is more, the noble Viscount's ear was always open: for that I am extremely grateful.
This House has operated on the Bill in exactly the text book manner one would expect. I thank the noble Lord, Lord Jenkin of Roding, for his contribution. The noble Lord is singular; and on this matter the Government side is singular. But our side is plural, and for once we have the majority. I thank also the noble Baronesses, Lady Hollis of Heigham and Lady Turner, the noble Lord, Lord Carter, and many other noble Lords, notably the noble Lord, Lord Reay, who spoke with great weight on behalf of the CBI.
The House has done itself credit. Last night I was reading, in preparation for tomorrow, the debate on the Motion that the Bill do now pass in respect of the Child Support Bill 1991. At that time I said,
"Never can so bad a Bill have been managed so weir.— [Official Report, 16/5/91; col. 1848.]
I repeat that remark now, for this Bill is fundamentally misconceived. The notion behind the Bill of reducing sickness absence is not thought through. Perhaps I may be forgiven for giving an example. I have not given it previously because it had not happened. It happened last Saturday. A supermarket cashier rang in that morning to report sick. She was violently sick when she woke up. Her employer told her not merely to come in, but to stay an extra hour. At least one of those who was talking to her is now ill herself.
Minimising sickness absence is not always sensible. I share the fears expressed by the noble Baroness, Lady Hollis of Heigham, in regard to the effect of the Bill on the employment prospects of those with bad sickness records. I share the fears about sacking the sick. As the Minister is well aware, I fear how regularly employers will pay statutory sick pay. But that is one of the subjects on which I said the Minister's ears are open. I am extremely grateful for that.I shall continue to monitor the subject, as I am sure he will.
I agree profoundly with what the noble Lord, Lord Reay, said, not only about statutory maternity pay, but also about the danger of using the Bill for similar transfers of social responsibilities from employers to industry. I was reading yesterday in the CBI News the reply of the CBI to Mr. Gordon Brown's taxation proposals, with parts of which I agree. I agree profoundly that if we are to compete in the world we should not be thinking in terms of increasing business costs. If we are to achieve that objective, we should learn to distinguish accurately between social costs and industrial costs. The costs we have here are social.
I agree profoundly too with the argument that the noble Lord, Lord Reay, put forward at an earlier stage of the Bill. While it is possible—even if, in my opinion, undesirable—for employers to police sickness absence
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in the way the Bill envisages, when one thinks of employers policing the incidence of maternity among their workforce, the mind boggles at the measures of enforcement which would be necessary. I hope that the noble Viscount will assure us that that is no part of the policy of back to basics.
Viscount Astor: My Lords, I believe I heard the noble Baroness, Lady Hollis, say that small employers will have their 80 per cent. reimbursement of SSP after four weeks, as well as compensation for exceptionally high levels of sickness. I should clarify that the new compensation scheme is an alternative to the existing scheme for small employers' relief. I am not sure whether I heard the noble Baroness correctly but I feel it right to make that point.
The noble Baroness, Lady Hollis, said that your Lordships rejected her amendment. The noble Baroness pushed her amendments to a vote. My noble friend was perhaps ingenious and cunning—if I can put it that way—in the way that he altered his amendments to deal with the anxieties of the Government. That is probably how amendments can find their way onto the statute book.
At the beginning of the Bill's progress through the House I said that this country needs to do better in reducing unnecessary absenteeism at work. We are consistently the worst offenders in the European Community. Sickness absence costs industry between £9 billion and £13 billion a year. By abolishing the 80 per cent. statutory sick pay reimbursement the Government give industry a clear incentive to tackle the problem. At the same time industry will not lose out because of the planned reduction in employers' national insurance contributions in April. I commend the Bill to the House.
On Question, Bill passed, and returned to the Commons with amendments.

Non-Domestic Rating Bill
3.46 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment (The Earl of Arran): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee. —(The Earl of Arran.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 1 [Limit on increase in non-domestic rates for 1994 financial year]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 1:
Page 1, line 24, leave out subsection (4).
The noble Lord said: The amendment is designed to remove special treatment that certain utilities receive under orders established mainly at the time of privatisation. Members of the Committee will be aware that the privatised utility companies—gas, electricity, water and, to come, rail—receive special treatment with regard to the business rate. That special treatment is

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granted to the first three by orders which were made at the time of privatisation and continued in the Non-Domestic Rating Acts of 1992 and 1993. In particular, the special treatment conferred by Article 9 of the British Gas plc (Rateable Values) Order 1989, Article 9(3) of the Electricity Supply Industry (Rateable Values) Order 1989 and Article 9(3) of the Water Undertakers (Rateable Values) Order 1989 are relevant.
The sum total of what happens is that privatised utilities, which are not known for lack of profit and whose chairmen and directors are not known for modesty in rewarding themselves with remuneration, are given special treatment under the business rate; they are not treated in a conventional manner. While it may be perfectly reasonable for such businesses to be given a short transitional period to allow them to adjust to being ordinary plc companies like every other plc in the country, there must come a time when that transitional relief ceases. We believe that it should cease now, for two reasons.
First, the profits of these organisations are growing exponentially. In the year 1992–93 British Gas made a profit of £1,054 million and its chairman, Mr. Evans, received £379,000 in remuneration for that. Its profits are still, as judged by the Office of Fair Trading, monopoly profits. There is a proposal that British Gas should be split up. The same proposition is generally. true of the power generating side of the electricity industry and also of the distributing companies, all of which made substantial profits in the past year and all of which paid their chairmen substantial sums of money. The same is true of the water undertakers. Therefore, the first result of my amendment would be to bring those companies onto the same footing as other companies. They would have to earn the profits they make and the remuneration they pay their senior executives and directors rather than being subsidised by the British taxpayer or, in this case, by other businesses.
The second result of my amendment would be to increase the amount of money going into the pool that local authorities have at their disposal in order to help businesses which approach local authorities to obtain support through Section 49 of the 1989 Act. That can do nothing but good. We support the principle that businesses should be given such relief by local authorities, not least because, under the legislation, we have to face quite properly the step of a revaluation every so often. It is therefore reasonable that local authorities—when we come to them, we shall be discussing small businesses—should be able and willing to give relief to businesses in their area. As a result of the amendment the pool would be increased.
That is the purpose of my amendment. I do not believe that utilities have not grown up. They are now privatised companies operating, as large companies should, alongside other large companies in the market place. These companies, at least in large measure, should be treated in terms of local taxation exactly like any other company with which they are competing. I beg to move.
Baroness Hamwee: I support the amendment. I was waiting for the noble Lord, Lord Williams, to mention the market place. I am glad that he did so at the end of his speech. That, after all, must be the rationale of his amendment. If the Minister seeks to justify the provisions of the Bill, as I suspect he may, I hope that he will be able to assist the Committee as to why the provisions of the market place, to which the Government call on so many other sectors of our society to pay attention, should not apply in this situation.
The Earl of Arran: I listened carefully to what the noble Lord, Lord Williams, and the noble Baroness, Lady Hamwee, said, but I still find it very hard to see what Members of the Committee opposite think industry or the public would gain from the changes in the amendment. Having studied it carefully the Government urge the Committee to reject it.
Clause 1(4) of the Bill repeats for property with prescribed rateable values the changes made for the generality of ratepayers in Clause 1(2). Some of the industries with prescribed values had substantial increases in their rates bills in 1990 as a result of the reforms. So separate transitional arrangements were introduced for them which mirrored those applying to other ratepayers. Members of the Committee opposite wish to delete Clause 1(4) which would mean that some of the utilities could face increases of up to 20 per cent. in their bills under the transitional arrangements.
Because the industries involved are all utility services, that could have a knock-on effect to some household bills. The Government see no merit in that. The extra burden on the utilities' customers could be significant in some cases. For instance, the rates bill of the national grid company in Wales next year would be nearly £1.75 million higher if the amendment were made.
Lord Williams of Elvel: Is the noble Earl saying that by raising the rates bill for utilities our proposal would raise electricity prices? Is he therefore saying that the Government in this measure are subsidising electricity prices?
The Earl of Arran: I am not saying that the Government are subsidising electricity prices. I am stating that in Wales next year the rates bill of the national grid company would be nearly £1.75 million higher if the amendment were made. Equality suggests that everyone should be treated in the same way. On those grounds the Government urge the Committee to reject the amendment.
Lord Williams of Elvel: I am very disappointed by the noble Earl's reply. The argument is as follows. There is special treatment for privatised utilities. That is contained in orders which are continued in the Bill. Privatised utilities have to operate, as they are privatised, in the market place with all other companies which pay their business rates on a conventional basis. Those utilities are exempt from that procedure. As the noble Earl rightly pointed out, if the procedure were applied, their business rate would go up. He mentioned the figure of 20 per cent. in the case of South Wales electricity. How can he then deny that the Welsh

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electricity consumer is being subsidised by the measures contained in the Bill? If the price would go up if they were rated in the normal manner like any other large company, then clearly, by this measure, the Government are asking other businesses to subsidise the utilities.
The Earl of Arran: The noble Lord should understand just a few points. First, why should we punish the utility companies unfairly? Secondly, as I said, there could be a knock-on effect on costs in the form of higher bills. Thirdly, if utility firms, why not commercial firms as well? I said that equality must reign.
Lord Williams of Elvel: Why punish other firms unfairly? They are paying the business rate; they are subsidising the utilities. Money does not grow on trees. Someone has to pay in order to provide the pool for local authorities to give the relief.
The noble Earl has not grasped the point that I and the noble Baroness, Lady Hamwee, were trying to make. These companies are now meant to be grown up. They have to operate in the market place alongside all other major companies which are rated on a conventional basis. By derogating from that procedure in the Bill the Government are forcing other businesses to subsidise the utilities. That is the problem. If the noble Earl says that prices will go up because the business rate for the utilities has increased, I invite him to try to introduce some competition into the electricity industry and so ensure that prices find their own market level. I had thought that that was what privatisation was all about.
The Earl of Arran: There is a fundamental difference between the noble Lord, Lord Williams, and the Government. I cannot agree with what he says. Equality must be the prevalent consideration in these circumstances. I urge the Committee to reject the amendment.
Baroness Hamwee: Can the noble Earl help us as to whether any utilities are not included in the list? Are any to operate in the market place in the way in which the noble Lord, Lord Williams, has been calling for? The noble Earl may not be able to answer that question at this moment but it might add to our understanding of the issue if we were to know the answer before the next stage of the Bill.
4 p.m.
The Earl of Arran: Perhaps I may just add to the comments made by the noble Baroness, Lady Hamwee, and the noble Lord, Lord Williams of Elvel. We are not particularly subsidising electricity companies. We are subsidising the rates bills of all ratepayers facing increases. The money comes from general taxation and not other businesses. As I have already said, it would be wrong to single out the utilities for worse treatment than others.
Lord Williams of Elvel: I was not aware that I was singling out the utilities for worse treatment, I was trying to get equal treatment for them operating as private companies in the private market. That is what I thought privatisation was all about. I was also trying to
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get greater competition and increased productivity, which would occur as a result of proper costs being charged as opposed to subsidised costs—that is to say, costs which are subsidised by businesses. If the noble Earl is absolutely resolute in saying that there is nothing he can do to change things and that the Government have decided what they are going to do, then there is not much point in having an argument in Committee. We can simply stand here and throw bricks at each other. However, that does not contribute to our understanding of what the Government are trying to do in this Bill. I say to the noble Earl that I am not at all satisfied that the Government have listened to the argument or that they have concentrated on the issue. I do not even believe that they have understood it. I should like to return to this issue at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 2:
After Clause 1, insert the following new clause:
("Transitional relief
It shall be the duty of the Secretary of State to ensure that the transitional relief for non-domestic ratepayers provided by this Act, the 1988 Act, the 1992 Act and regulations made under those Acts shall, so far as possible, be targeted upon businesses employing fewer than 10 people.").
The noble Baroness said: This is a probing amendment which we shall not press, but will use to explore the pattern of redistribution as supported by this Bill. As the noble Earl, Lord Arran, made clear at Second Reading, the Bill is necessary because business faced in 1990 both a move to UBR and on to new rateable values. The combination of both meant very substantial changes in firms' rateable bills: two-fifths of all businesses faced either increases or reductions of over 50 per cent. The changes had to be phased in. As we said at Second Reading, we did not object to that, but even the transitional arrangements of phasing in—that is, 20 per cent. of the increase plus inflation —have proved too much for business; so the Government are having to phase in the phasing in or, if one likes, give transitional relief to the transitional arrangements.
This amendment seeks to ask questions about who should be helped in this way and at what cost, and therefore picks up the theme explored by my noble friend Lord Williams in the previous amendment. At Second Reading it was pointed out that in the 1970s there were about 10,000 business failures a year; in the 1980s, there were about 20,000 and in the 1990s so far there have been about 50,000 business failures a year.
As we know, revaluation is not a matter directly for central or local government, but for the Inland Revenue. The readjustment of the relativity between properties since 1990 has moved in several directions. The revaluation of shops and offices has gone up much more sharply than for factories. Under the 1990 revaluation on average the increase for shops went up by 9.6 times and for factories by only 6.1 times. However modestly, that helps manufacturing as opposed to services and retailing, which I believe most of us would consider to be sensible.

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It also altered regional relativity, again in ways which I believe most of us would think was fair. It raised rateable values in the South as against the North, in more prosperous cities as against declining inner city areas. Therefore, the North and North-West had the average of their rateable values fall by about 30 per cent.; in the South-West and East Anglia they were up 10 per cent.; in the South-East they were up 14 per cent. and in inner London and the City the values were up 39 per cent. where there are, of course, heavily rated offices.
But the Government delayed moving on to these new rateable values—again we understand why—by offering transitional relief: with those who stood to gain from the new rateable values complaining bitterly that they were continuing to pay over-inflated rateable values while those facing the increases in UBR were complaining equally bitterly that they could not afford to meet them. So, last year the Government promised that the gainers would gain all and the losers would be protected.
The transitional relief costs for 1992–93, which come in consequence of there no longer being a self-balancing fund in which the losers were offset by the gainers and vice versa, I understand will be £1.3 billion; additional transitional relief for 1993–94 will be a further £550 million and with this Bill there will be a further £100 million. That is a total of nearly £2 billion in revenue foregone by the Exchequer at a time when the UBR raises about £14 billion a year.
We want to know who is benefiting from these huge sums of money. There is a vast public subsidy of £2 billion which is going to business. Who needs it as we enter the next round with the looming revaluation of 1995?
What seems clear in 1995 is that the revaluation then will reverse some of the trends of the 1990 revaluation. It seems that London, the South-West, the South-East and East Anglia will benefit; but Newcastle, Manchester and Sheffield will now see their revaluations going up. We shall also see the other reversal, which will show that offices and retailing will benefit and the rateable values for industrial and business premises and factories will go up.
This Bill both limits the increase facing businesses in 1994–95 by halving the transitional increase for larger businesses from 20 per cent. to 10 per cent., and for smaller properties it will be down from 15 per cent. to 7.5 per cent., as well as empowering the Secretary of State to make regulations for 1995 onwards. That means yet again that winners will take all and the losers will be protected. Effectively, it means that all will gain whether they need to or not and at huge public expense.
In other words, the criticism which we have of transitional relief is not that it is not necessary, but that it is being thrown indiscriminately at the size of the increase and not at the need of a company to receive it. As the Government remind us so often when we are talking about social security, as we did yesterday, and as my noble friend said just a few minutes ago, it is not Treasury money which is being given away but taxpayers' money—our money. I believe that we are
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entitled to see that money targeted when dealing with relief to business in the same way as the Government claim it is necessary to target it when dealing with destitute and impoverished individuals receiving social security.
Hence this probing amendment on the back of which we are trying to argue that relief should be targeted. In this amendment—we may come up with variants of it at later stages—we are saying that, as a rough and ready test of need, we are talking about small businesses. We could have referred to turnover, but we are speaking here of small businesses as shorthand for an attempt to target. Why? It is because, as we all know, small businesses have been the most vulnerable during the recession. The rate of large company failures has, proportionately, been much smaller than that for small businesses. We also know, as the Forum for Small Businesses has informed us on many occasions, small businesses are relatively unfairly rated when it comes to UBR. Small workshops of 1,000 square feet, pay nearly twice as much per square foot in rates as do businesses and factories with over 10,000 square feet.
The zoning system, used for valuing retail premises, favours supermarkets (the large bodies) at the expense of corner shops. As it stands, a healthy chain of multiples with perhaps 500 stores across the country, will get both a full reduction and protection against increased costs, while immediately gaining in other areas, with no evidence of need. So transitional relief is costly—it will be £2 billion in all—and indiscriminate.
The noble Earl, Lord Arran, may come back on this. We do accept that a small business with less than 10 employees is not a perfect guide to the need for transitional relief, but we believe that that, as far as is practicable, is better than throwing money at all businesses whether they need it or not, and many of them do not. After all, the equivalent rebates for houses in the council sector were targeted at individuals. We believe that the same principle of targeting public money at need should apply here. We should not throw money at companies indiscriminately. That is why we have tabled this probing amendment. I beg to move.
The Earl of Arran: As the noble Baroness, Lady Hollis, said, this may be a probing amendment but at the same time we find it a muddled amendment. I shall try to explain why. It would not only require any future transitional relief to be targeted on businesses employing fewer than 10 people but would appear to require us to rewrite history by ensuring that the current transitional arrangements are targeted in that way as well. The details of those arrangements, including the way in which relief must be targeted, are already set out in the Local Government Finance Act 1988. They have therefore already been considered and approved by Parliament. That Act cannot be altered except by specific amendment in fresh primary legislation. This amendment would require the Secretary of State to target existing reliefs in a way which would conflict with the previous rules.
We would have great difficulty in accepting this amendment even if it applied only to future transitional schemes. Targeting help according to the number of

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employees in a business would be quite impracticable. Neither local authorities nor valuation officers have access to this data and would need powers to collect it. A limit of 10 employees seems somewhat arbitrary. Employers might reduce or understate the number of their employees if they saw some financial advantage in doing so. And it is not clear what would happen if the number of employees later changed.
Rates are a tax on property rather than on individual businesses. Our current transitional arrangements target relief on smaller businesses by reference to the value of their property. This value is shown in the local rating list so is readily available to billing authorities. Properties with a rateable value of less than £15,000 in London or £10,000 elsewhere have lower annual increases in bills than larger properties.
There is scope for argument about where the threshold should lie and about the amount of the differential between the limits on increases for different sizes of property. These are matters which we shall certainly consider when we come to make any regulations governing future transitional schemes. But we do not start from the premise that help should be targeted only on the smallest businesses. If rate bills change significantly as a result of revaluation, there is no evidence to suggest that larger businesses will necessarily be able to absorb the full impact of the changes overnight. A duty to target only the smallest businesses would remove our ability to help larger ones. It is for those reasons that I urge the Committee not to accept the amendment.
Baroness Hollis of Heigham: Before the Minister sits down, may I ask him whether he accepts the principle that public subsidy should go only to those who need it?
The Earl of Arran: Perhaps I may advise the noble Baroness that there is a wide range of ratepayers and that those who are facing the biggest increase in bills since 1990 have been concentrated mainly in London and the South East. As the noble Baroness said, the provisions have favoured shops and offices. I repeat that rates are a tax on property, not on profits.
Baroness Hollis of Heigham: With the leave of the Committee, I do not think that the Minister answered my question. Does he believe that public subsidy—that is, Exchequer income forgone—should be targeted at those who most need it or should it be indiscriminate?
The Earl of Arran: It should be very carefully selected, depending on the circumstances in question.
Baroness Hollis of Heigham: If the Minister agrees that it should be carefully selected, would he care to tell me the difference between "carefully selected" and "targeted"?
The Earl of Arran: The noble Baroness is pressing me on semantics. I think that I made my case quite clear when I replied to the amendment.
Baroness Hollis of Heigham: It is easy for the Minister to say that this is a matter of semantics. I asked for targeting, which the Minister said was unreasonable,
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but he believes that public money should go to carefully selected companies, principals, businesses or whatever. I think that it is important to know whether the Minister accepts the principle behind this probing amendment which is that public subsidy should go to those who deserve or who need it. If so, we can come back on Report with what I would call a second-level amendment which could consider how best to deliver that targeting. Therefore, I still need to know from the Minister whether he accepts the principle that "targeting" means the same as "carefully selected", in which case we can work together to ensure that we can deliver that more effectively, or whether he does not.
4.15 p.m.
The Earl of Arran: The point that the noble Baroness cannot quite grasp is that it would be completely impracticable to do as she suggests and to target those with fewer than 10 people in their company.
Lord Williams of Elvel: Do you carefully select them?
Baroness Hollis of Heigham: I am having difficulty in engaging the noble Earl to give a straight answer to what I thought was a straight question. If I may speak to the amendment more generally, I have made it clear that this is a probing amendment. We were seeking to use it to advance the argument that public aid should be discriminating. We decided to do that by choosing small companies, their size being reflected by the fact that they have fewer than 10 employees. I accept the practical difficulties which the noble Earl has enunciated on that. We could have related the provisions to the physical size of the small company, turnover or even profitability. There are many ways in which we could have done it. After all, there are well-established principles for determining hardship relief for business rates. That is not difficult.
What I was trying to extract from the Minister was whether the Government are sympathetic in principle to the targeting of public money. If they are, we can come back to this on Report, perhaps with his support, with an amendment that would more effectively deliver the targeting that we would both like to see for the benefit of all taxpayers. If he does not accept that principle, we are in a different situation. I invite the noble Earl to comment.
The Earl of Arran: Yes, as I have already said, depending on the circumstances we are, of course, sympathetic to the principle that public money should be targeted, but we would have to decide the correct procedure, what the targets are and at whom they are aimed.
Baroness Hollis of Heigham: I thank the Minister for that extremely helpful reply. We look forward to working with him and to ensuring that we can deliver our common objectives. I shall return to this on Report. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
Clause 3 [Non-domestic rating: transitional pooling]:
The Deputy Chairman of Committees (Viscount Allenby of Megiddo): Before I call Amendment No. 3, it may be for the convenience of the Committee if I say that if Amendment No. 3 is agreed to, I cannot call Amendment No. 4.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 3:
Page 2, line 38, leave out subsection (3).
The noble Baroness said: Amendment No. 3, which stands in the name of my noble friend Lord Williams of Elvel and myself, relates to some extent to the previous amendment. As I tried to show in relation to the previous amendment, transitional relief is very costly, but until this year the phasing in of the protection for the losers was offset by the phasing in of the gains—that is, the reduced rate bills—for the winners. It was self-balancing. Therefore, no additional costs fell on either central or local government. As I said, however, in relation to the previous amendment, winners in the hard-pressed North wanted to enjoy their benefits quickly while businesses in the South and East, where the recession was beginning to be felt, wanted their increased rate bills to be phased in more slowly. Therefore, the Government agreed that winners would move to full gains while losers would be protected and that the cost of those changes would be met by central government. That was only equitable given that local authorities faced the capping of their expenditure and problems of gearing.
Now, however, in this Bill the requirement that the Secretary of State "shall" balance funds where necessary is to be replaced by the word "may", leaving open the key questions of whether, if, when and who will pick up any deficit funding if winners are to gain immediately and losers are to be protected. On Second Reading the Minister gave this place an assurance which I am happy to quote. He said:
"I am happy to repeat the commitment given in another place by my honourable friend the Minister for Local Government and Planning that if we use our powers to reduce the burden on businesses in that way we will make up any shortfall using the pool rather than any other mechanism… We are seeking a power rather than a statutory duty because the need to top up any shortfall will occur only if the transitional arrangements are not self-financing. So that it is clear beyond doubt, let me assure the House that if a shortfall to the pool should occur after 1995 because transition was not self-financing, the pool will see that shortfall made up".—[Official Report, 27/1/94; col. 1090.]
I accept the Minister's integrity. Why then alter the wording of the Bill when his statement on Second Reading was consistent with the previous Act's formulation of "shall" and inconsistent with the new clause replacing "shall" with "may"?
I may be accused of cynicism but I remember when GREAs were introduced. Several years ago the Secretary of State assured the other place that such GREAs would merely be a formula for distributing grant and would never be a target for what should be spent or a basis for capping what could be spent. Two years later, that assurance notwithstanding, GREAs
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became a target for what could be spent, and two years after that a version of GREAs became the basis of capping.
With such a track record of undertakings in relation to local government finance given in all honour and then not honoured, the Minister can hardly be surprised that we should like to see his assurances on the face of the Bill. Indeed, given the commitment he made on Second Reading, the obligation is upon him to say why they cannot be. The Minister will say that it is a power and not a duty because it may not happen. If it does not happen, the duty will not be required. We need it on the face of the Bill. So do local authorities which fear that government would reduce, for example, the revenue grant to local authorities shortly before the announcement of transitional relief—it has, after all, been reduced from some 60 per cent. to 47 per cent. in the past few years—and then raise it to what it would have been, alleging that that was repayment of transitional relief.
An ingenious government will seek to export the future costs of balancing transitional relief outwards, if they can, while simultaneously claiming that they have done what they have promised. Parliament's job is not just to receive Minister's undertakings and promises, although we were given them on Second Reading; where possible, it should put those promises and undertakings on the face of the Bill, where they are transparent and where they provide a firm basis for local authorities' and businesses' future financial planning. If the Minister means what he said on Second Reading —and I am sure that he does—he can have no objection to the amendment. I beg to move.
Baroness Hamwee: It may be appropriate if I speak to this amendment, as the amendment in my name—I accept the point about pre-emption —is directed at the same issue. The noble Baroness, Lady Hollis, has quoted the Minister's words on Second Reading. On Second Reading I said that I did not understand the need for the provision in the Bill changing the mandatory provision of the 1988 Act that such and such "shall" happen to a permissive provision that it "may" happen.
I tabled the amendment to delete that change so that I could ask the Minister to explain further the reasons for the word's inclusion in the Bill. I would go further than the noble Baroness, who said that it is proper that the commitment should be on the face of the Bill, and say that since the commitment exists already under the 1988 Act, there is an obligation upon the Government to explain why in the Bill they are changing the 1988 Act.
The Earl of Arran: Again I am a little surprised by the amendment. The noble Baroness, Lady Hollis, made it clear on Second Reading that if we introduced non-self-financing transitional arrangements after 1995, she wanted any shortfall in the non-domestic rating pool made up. Clause 3(3) would enable us to do so, and we have said that we always would. But the amendment would remove that power. We would therefore be unable to make good any reduction in the amount of non-domestic rate revenue available from the pool for redistribution to authorities. We do not believe that authorities would welcome that.

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I would add further to the points taken up by the noble Baroness, Lady Hamwee, that there is an important distinction between the character of the provisions we are seeking for 1994–95 and for future years. For 1994–95, a specific scheme of relief has been drawn up in detail. To ensure its implementation in time we must spell out all the detail on the face of the Bill. For years beyond that we do not know yet whether transitional relief arrangements will be required, although there is a strong possibility that we shall need a scheme following the 1995 revaluation, and still less what form or variety of forms any future schemes would need to take. We are therefore seeking broad powers. The details of any scheme would be set out in regulations which would require an affirmative resolution of both Houses and which would therefore be subject to full parliamentary scrutiny at the time. I hope that I have explained satisfactorily the reasons for urging the Committee to reject the amendment.
Baroness Hollis of Heigham: I thank the Minister for that reply which we shall obviously read with some care. It is similar to the reply given in another place which is equally baffling to the local authority people who have advised me. Perhaps I may therefore press the Minister, as I tried to do on a previous amendment: if he accepts that government will make good any shortfall in any future transitional arrangements that may be introduced—that is what I understood him to accept today and on Second Reading, and he is nodding—we invite the Government to bring back an amendment which would make that clear on the face of the Bill. That would then allay all our fears.
The Earl of Arran: Despite what the noble Baroness said, and I understand clearly what she said, I have given the assurance that she seeks. But we do not regard it as necessary to put it on the face of the Bill.
Baroness Hollis of Heigham: Why not, given that on previous occasions we have had similar cast-iron guarantees which have not been honoured? I am sure that the Minister intends his assurance to be honoured. I do not in the least impugn his integrity, but other Ministers will take his place in the future. If that is the Government's intention, why should it not be made transparent and stated publicly on the face of the Bill? In other words, why should legislation not embody government's intention?
The Earl of Arran: I hope and believe that I have made clear in my answer to the noble Baroness, Lady Hamwee, why we believe that the matter should not be on the face of the Bill. I can add no more other than to say that we do not feel that it should be on the face of the Bill. The noble Baroness, Lady Hollis, has generously said that she trusts me; she must trust what the Government say in this instance.
Lord Williams of Elvel: Does the Minister accept that if the Bill as drafted is challenged in the courts, the courts will have regard to the text of the Bill? That is what Parliament will be deemed to have intended. The courts will probably not have any regard whatsoever to ministerial assurances. That is the tradition of our
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courts. I know that that has varied a little in the past few years, but the tradition of our courts is that Parliament intends what is on the face of the Bill, and ministerial assurances are worth nothing when it comes to the courts. That is why we are so emphatic that this provision should be on the face of the Bill, because when the matter comes to the courts they have only one avenue to take.
4.30 p.m.
Lord Campbell of Alloway: Perhaps I may intervene, with great respect to the noble Lord, Lord Williams of Elvel. Since the decision in Pepper v. Hart, the argument is not quite right. The courts will have regard to the assurance given by my noble friend on the Front Bench.
Lord Williams of Elvel: I am grateful to the noble Lord. He reminds me of the case and he is right about it. However, the question remains: why not have it on the face of the Bill?
Lord Mishcon: I hesitate to rise on a point of law when there is in some ways a contradiction to what was said by the noble Lord, Lord Campbell of Alloway. It is true that the case to which he referred in the House of Lords stated that Hansard can be referred to in order to interpret the words of the Bill and to see whether the Government had a certain intention in regard to the wording. However, nowhere have I seen in the judgment of that case that the courts will enforce an undertaking which appears in Hansard. In view of the noble Lord's serious statement, I ask him to point that out for me. If the noble Lord can quote the paragraph to which he refers I shall be grateful.
Lord Mulley: When I read the report of that case I noted the statement that exceptional circumstances had led to their Lordships' decision.
Lord Campbell of Alloway: Perhaps I may answer briefly the noble Lord, Lord Mishcon. Of course, it is to interpret the words of the Bill, and the assurance that has been given may be referred to in order to interpret the words of the Bill. I cannot see that there is very much more to be said.
Baroness Hollis of Heigham: I am grateful to noble Lords who have taken part in the debate. The point has been made for us very well. If, on the one hand, any commitment given by the Minister in Hansard is to be understood by judges as effectively binding —as indicated by the noble Lord, Lord Campbell—there can be no reason for that commitment to be on the face of the Bill. However, if on the other hand the hesitations raised by my noble friend Lord Mishcon are right—that the courts would not necessarily regard any commitment as binding but merely an interpretive framework within which to understand the clause of the Bill—it is even more important that the Minister's commitment should be on the face of the Bill. If the Minister means what he says—that this is a firm and honourable commitment—and I am sure that he does, I invite him to come back with a more satisfactory amendment. He

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has the resources to draft an amendment in the technical terms that would deliver his commitment into legislation, so that we may all see it for what it is.
The Earl of Arran: I have gone as far as I can. As the noble Baroness says, I have given a firm and honourable commitment in these circumstances. The Government stick to that commitment. With regard to putting it on the face of the Bill, the noble Baroness would be pressing her case too far if she were to try to insist upon that.
Baroness Hamwee: Perhaps I may return to a point that I made on Second Reading. It is helpful for Members of the Committee—certainly for me—and for those in the world outside if legislation were to state clearly what it meant. Today we had other examples of hypotheses with commitments attached to them. I accept entirely what the Minister said about there being a need for a new provision in the Bill because the commitment to make good the shortfall out of the pool applies to circumstances which are not covered by existing legislation. However, perhaps he will take away a request to spell out clearly that new commitment in order to reproduce in the new circumstances the obligation contained in the existing legislation.
The Earl of Arran: I have given that commitment. I listened carefully to what was said by the noble Baroness, Lady Hamwee, and I shall examine carefully the commitment that I have already given.
Baroness Hollis of Heigham: We are still baffled about why the Minister is not willing to turn his commitment, which we respect, into an amendment to the Bill. He has simply said that he does not see it as necessary. We have said that it is necessary. The Minister has not explained why he does not believe that it is necessary and why it cannot be done. If the provision is as harmless as he says it is surely an inoffensive way of making the legislation more clear, available and get-at-able to all the parties concerned. Surely local government finance is complicated enough, as many of us know to our cost and to our peril, without making it even more opaque by having to be understood in the context of statements made in obscure references to Second Reading debates. If the provision were on the face of the Bill, matters would be simplified for all concerned.
We shall withdraw the amendment and come back on Report. We hope that the Minister and his advisers will take on board the point that if the continuing obligation is not enshrined on the face of the Bill he is adding to the opacity of local government finance rather than to its clarity. Surely that is to be regretted.
Amendment, by leave, withdrawn.
[Amendment No. 4 not moved.]
Clause 3 agreed to.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 5:
After Clause 3, insert the following new clause:
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("Special authority report
.—(1) The Secretary of State shall by 31st March in any year lay before both Houses of Parliament a report (to be called the special authority report) on the operation of the provisions of Part II of Schedule 7 to the 1988 Act in the following financial year.
(2) The report shall consider the following matters—

(a) the effect of the provisions on businesses in the area of any special authority where the special authority's multiplier is greater than the non-domestic multiplier; and

(b) the effect on the expenditure of a special authority of any income produced by a special authority multiplier.

(3) Before making a report the Secretary of State shall consult the Corporation of the City of London and any other authority as appear to him to be concerned.").
The noble Lord said: The amendment introduces a new clause which seeks to ensure that the Secretary of State lays before both Houses of Parliament a report to be called the "special authority report" on what I call special authorities. They are authorities which, under certain provisions in the 1988 Act, are not treated in the same way as other authorities. Subsection (3) of the new clause makes it clear that the relevant authority is the Corporation of the City of London.
The corporation has been singled out regularly for special treatment by the Government and some remarkable figures appear. For instance, it is the only local authority in the country which can still levy a local business rate. That came about in 1990 when the Government realised that the introduction of the poll tax could lead to an annual poll tax of some £1,400 per resident in the City and that was felt to be excessive. That levy continued under the council tax in order to avoid a similar situation; that is, a burdensome council tax for the residents of the City of London.
In terms of the revenue support grant, the Government plan in 1994–95 to pay the corporation of the City £1,300 for each local resident. The equivalent figure in Camden is £718, in Southwark £800 and in Barking £498. Therefore, the City is considered to be infinitely more important per resident than Camden, Southwark and Barking. Furthermore, most of the corporation's housing is in neighbouring boroughs such as Islington, Southwark and Lewisham. Yet, while they receive from the Government per home £1,538, £1,611, and £1,290 per annum respectively to manage and maintain their own housing, the City corporation receives per home £2,448 per annum to manage its housing, which often stands right alongside that from the host borough. I do not believe, in any sense, that that is a fair disposition of resources. Of course, I recognise that the City has particular expenses to meet. After all, there are 132 councilmen and women.
A similar level of representation achieved by fewer than 5,000 residents and 18,000 business voters would result in 31,000 councillors in Birmingham. I am sure that my noble friend Lord Howell, is interested in that figure. There are just 18 non-residential electors in the City's Lime Street ward who elect four members. Alperton ward in Brent has 6,311 electors for just two councillors.
I recognise that the City has special expenses to bear with the number of councilmen and women. There is also the procedure for electing the Lord Mayor and the associated ceremonial activities. All that is very expensive. Nevertheless, as the noble Earl will

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understand, I am not trying to cut it down; I simply seek to introduce an amendment which would require the Secretary of State to make a report. Such a report would state exactly what is happening. It would also state the purpose of the funds and how they are used. Finally, before the Secretary of State makes the report, he would be required to,
"consult the Corporation of the City of London and any other authority as appear to him to be concerned".
The amendment seems to me perfectly reasonable. I hope very much that the noble Earl will accept it as such. I beg to move.
Lord Finsberg: I suppose that the speech to which we have just listened might have gone down well when the late Bernard Miles opened the Mermaid Theatre. But to adduce in support of the amendment a fatuous argument about the number of councilmen in the City merely shows that the proposal is really a front for what I have heard over the past 25 years; namely, attempts by the party opposite to abolish the City of London. It would have been much more honourable if that had been put on the face of the amendment. The speech speaks for itself.
The only special authority under the 1988 Act was the City of London. There were very special reasons for that. The City ratepayer, business or domestic, is very well served by the City, as are the inhabitants of Greater London. The noble Lord, Lord Williams of Elvel, made no mention of what is done for the open spaces in London; for example, Epping Forest, Burnham Beeches and Hampstead Heath.
The noble Lord compared the number of councilmen and the population in the City with the situation in Birmingham and said that he understood why the City needed special treatment. The City does not need special treatment for that; it needs special treatment because, as the noble Lord also said, the drafting of legislation for a generality would have produced an impossible situation in the City. The Government recognised that fact in what became the 1988 Act. I hope that my noble friend the Minister will not spend too much time demolishing the argument put forward. It was an argument of straw.
4.45 p.m.
The Earl of Arran: I listened to the argument put by the noble Lord, Lord Williams. I listened with additional care to the points made by my noble friend Lord Finsberg. The amendment would require the Secretary of State to report to Parliament each year on the operation of special financial arrangements which apply to the City of London. The arrangements were introduced under the Local Government Finance Act 1988 for a very specific reason. The City of London has a very high daytime population and large expenditure needs but only a very small resident population. Unlike other authorities, it has so few domestic dwellings that, without special funding arrangements, even a small change in its spending could have a dramatic effect on the level of its council tax. Because of that, Parliament accepted in 1988 that the normal rules for equalising resources could not take account of the City's unique position. The 1988 Act therefore enabled the City to
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continue to set its own local business rate and to keep part of the proceeds in support of its local spending. If, within the limits imposed through the normal capping rules, the City decided to spend more than the amount supported by the special arrangements, it would have to set a local rate higher than the uniform business rate.
The City is a responsible authority and appears to have exercised sound control over its finances. Although it has the power to charge a higher business rate, it has never done so. However, like other local authorities, the City is answerable to its local electorate, not the Secretary of State, for its spending decisions. In that respect the City is again unique among authorities. Although the City has the power to levy its own business rate, City businesses retain the right to vote in local elections. The City Corporation is therefore directly accountable both to its council tax payers and to its local businesses for its expenditure decisions.
For those reasons, we believe that it would be inappropriate for the Secretary of State to have to account to Parliament for the City's decision on the level of its multiplier or the way in which it spends its income. I trust that Members of the Committee will feel able to reject the amendment.
Lord Williams of Elvel: I am grateful to the noble Earl for his response. He has, at least, addressed the amendment and not talked about irrelevancies. The noble Earl said that it was not the job of the Secretary of State to be accountable for the City. I agree. Under the amendment, it is proposed that the Secretary of State should consider certain matters and report upon them. That does not seem a very onerous proposition for the Secretary of State and it does not leave him open to criticism as regards accountability.
Of course, the City Corporation has a very special role in life which has been preserved historically. The Secretary of State may well say that he is not interested in the City Corporation. I believe that that would be a mistake. I am sure that the Secretary of State would probably say that he was interested. I am not asking for the abolition of the City or any such rubbish; I am asking the Secretary of State to put down in writing to both Houses of Parliament what has happened in any particular year and to consider certain matters. That is all.
However, the noble Earl seems determined to fight against it. As always, if I may say so, we have not had a very positive response to any of the amendments which we put forward in a reasonable manner. We hoped very much that the noble Earl might concede on one or two of our amendments. Nevertheless, despite the noble Earl's blank refusal to consider any of our amendments, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Remaining clauses agreed to.
House resumed: Bill reported without amendment.

British Youth Council
4.48 p.m.
Baroness Lockwood Baroness Lockwood rose to ask Her Majesty's Government what plans they have for the future development of the British Youth Council with particular reference to its international work.
The noble Baroness said: My Lords, in asking this Unstarred Question, I should like to refer to the excellent work of the British Youth Council. I must say at the outset that, at a time when we have so much youth crime and hear so much about the misdemeanours of young people, it is good to look at some of the excellent work being done by young people—work which contributes to the well-being of society at both a national and international level.
The British Youth Council is a democratic organisation representing the views of a large number of organisations affiliated to it. The interests of these organisations cover religion, education, politics and recreational and vocational activities as well as covering the activities of some of the more traditional youth organisations such as the scouts. Historically, however, the British Youth Council was established by the Foreign Office in 1948. It began life as the British National Committee of the World Assembly of Youth; that is, the British contingent to a worldwide youth body which developed out of an international conference in London in 1947. The conference brought together youth representatives from all member countries of the newly-established United Nations and was addressed by the then Foreign Secretary, Ernest Bevin. So in effect the British Youth Council was established primarily to represent British young people on various bodies at international level. The committee I mentioned had as its primary function this international work. It is still a major part of the work of the British Youth Council.
Since 1948 the British Youth Council has been the representative organisation for young people in the United Kingdom at world, Commonwealth and United Nations level, and since the 1970s at Council of Europe and European Community level. In the development of its international work over a period of some 50 years a range of activities have been provided. Opportunities have been provided for young people to attend seminars, conferences and language courses and to take part in international meetings. Since 1948 it has been funded by the Foreign and Commonwealth Office. I wish to ask the Government this evening why it is that the Foreign and Commonwealth Office has decided to discontinue the funding of this organisation and how it sees the continuation of these important international activities which have been carried out by the British Youth Council.
We are not talking about an insignificant body. We are talking about a body which has a high reputation in the international affairs of young people. The British Youth Council has been at the forefront of the development of world co-operation among young people of all nations. It has participated in the World Assembly of Youth, and other conferences, throughout the period during which it has received funding from the
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Foreign and Commonwealth Office. There have been bilateral exchanges with other national youth councils going back to the 1950s. The first exchange was with the Indian Youth Council. The British Youth Council has been involved in seminars and conferences around the world on themes such as human rights, anti-racism, international co-operation and development, and it has participated, and still participates, in the CSCE process; that is, the Conference on Security and Co-operation in Europe.
Latterly the British Youth Council has developed links with Eastern and Central European countries through the 1970s and the 1980s. Within the past year the British Youth Council has participated in no fewer than 36 youth activities at international level. That includes the World Assembly of Youth meeting in Malaysia. It has been involved in a fact-finding visit to the Ukraine. It has hosted visits from the Slovenian Youth Council and the Zambian Youth Council. There have been exchange visits with the Danish, Austrian and Portuguese Youth Councils. There have been seminars on anti-racism, in particular an important one that was held in Berlin. There have been courses on international youth structures in co-operation with the Council of Europe.
Every year, through the work of this council, a large number of young people gain new skills and experience. Throughout the past 12 months more than 140 places for activities of an educational and inter-cultural nature have been provided for young people. These have included language courses, training seminars, fact-finding visits, conferences and various political meetings. The BYC has enjoyed a high profile internationally and is now one of the most respected national youth councils in Europe. It currently holds the presidency of the council of European national youth committees and is well represented at EC and Commonwealth level. It is looked to as an international leader in the youth field and over the past 18 months it has received visits from youth ministers from New Zealand, Malta, Spain, Pakistan and Malaysia. In particular, strong links have now been established with the emerging democracies in eastern and central Europe.
All this indicates the excellent work that the British Youth Council has done in the international field. But it also has a high reputation in the national field, as many Members of your Lordships' House and Members of another place are aware, having been associated with, or members of, the British Youth Council. Currently it is funded on the following basis: 30 per cent. comes from the Foreign and Commonwealth Office to cover the international activities; 30 per cent. comes from the Department for Education to cover specific projects nationally; and the remaining 40 per cent. comes from members themselves—that is, the member organisations—from trusts and from sponsorships.
The Foreign and Commonwealth Office grant, which amounts to £42,000 a year, represents just 0.001 per cent. of the FCO's budget for the year 1993–94. That is an insignificant amount to the Foreign Office but for the British Youth Council it is a vital 30 per cent. of its total income. It is the income that finances the kind of activities I have outlined. I understand that the grant will

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be paid in full for the current year, 1993–94, and that in 1994–95 there will be a grant of £15,000, which is, in effect, a transitional payment.
The purpose of my Question is to ask why the Foreign and Commonwealth Office is taking such a mean decision at a time when it is so important to foster international relations and so important to bring members of youth organisations together. The value of that work is recognised by the Foreign and Commonwealth Office. The Foreign Secretary, Douglas Hurd, said on 3rd November 1993:
"The British Youth Council has done and continues to do admirable work".
But he went on,
"Given all the pressures on my budget, however, I have concluded that I cannot continue to support the British Youth Council with Foreign Office funds".
While the Foreign Office clearly recognises and respects the work undertaken by the British Youth Council, it seems to have no awareness of the implications of that withdrawal of funding. Without the funding the youth council's work will collapse in a number of areas.
The Foreign Office suggests that much of the work that is now undertaken internationally can be covered by reimbursement from the European Community. That is not the case. I understand that at present flight costs are paid for by the European Commission in some cases, but that amounts to only 7 per cent. of the youth council's budget for international work. The bulk of its international expenditure is on the participation of young people in the EC, the Council of Europe and other decision-making structures. Those activities are not easily fundable through sponsorship.
There is no doubt that the Foreign and Commonwealth Office has a responsibility to ensure that this work continues. It has indicated to the British Youth Council that the world has changed much since the 1940s and 1950s. Of course it has. We all recognise that. But what has not changed is the need for co-operation and inter-cultural learning and development between and among the young people of the world. Her Majesty's Government must take some responsibility to ensure that this work can continue.
If the Foreign and Commonwealth Office says that this is no longer to be its responsibility, there remains a responsibility on the British Government as a whole. If the Foreign and Commonwealth Office is going to shift the responsibility in the long term, I should like to know what measures it will take to ensure that the British Youth Council has the necessary means to maintain its international work until such time as an alternative arrangement has been agreed.
This is an important matter. It rests on the miserly sum of £42,000 per annum. But the end result of that expenditure is not only good will towards the United Kingdom; it is also the opportunity for the youth of this country to play a leading role in international affairs.
5.4 p.m.
Baroness Hooper: My Lords, I am happy to support the noble Baroness, Lady Lockwood, in pressing this Question. Nobody would disagree that young people should be aware of the issues facing decision-makers in today's world, issues that will affect their future lives
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and enable them to exercise their rights with due regard for the responsibilities that those rights carry with them. That is especially true in the international field. Given ever-increasing communications, as well as our commitments under a variety of treaties and agreements, not least of which are the European Union and the Council of Europe, that means that future generations will increasingly need to know and understand their peers in other countries. Therefore, activity in this area is of great importance since we are contributing to the education and understanding of our future leaders.
The British Youth Council does a good job in raising the awareness and interest of young people. The noble Baroness, Lady Lockwood, outlined its role more than adequately. Therefore, I need not add any great detail, except to say that on the international front I was particularly pleased to learn that, in addition to the many events and involvements outlined by the noble Baroness, in the past year the BYC was represented in the UK delegation to the first Commonwealth Youth Ministers' Conference, that it hosted a meeting of the Youth Forum of the European Communities in Manchester and has participated in a range of bilateral exchanges with other national youth councils. I was also pleased to learn that a previous vice-chairman of the British Youth Council was elected as president of the Council of European National Youth Committees. That must be a good thing and shows our commitment to international understanding and good will.
It is in terms of Europe that the British Youth Council has done a particularly commendable job as a member of the Youth Forum of the European Communities. Again, the noble Baroness outlined its functions very well.
As I know only too well from my work in the Parliamentary Assembly of the Council of Europe, this is an area where the world does not stand still, particularly in the new Europe, which of course includes the countries of central and eastern Europe which are struggling to meet the demands of pluralistic democratic systems and the new openness of their government systems. Therefore, it is money well spent to prepare young people for the tasks and responsibilities that face them.
It is also essential that young people in this country should make and maintain contact with their counterparts in the wider Europe, not only to be able to help them in the present but also to ensure that in the future they avoid making the mistakes that were made in the past. That is particularly important where racism and xenophobia present a danger.
The noble Baroness, Lady Lockwood, was tactful in phrasing her Question in that it refers to plans for future development. In reality, as she explained, what we are talking about is funding. The question of funding is a difficult one. No body or organisation has a right to government funding indefinitely. We all know that often successful voluntary organisations are seen to be the victims of their own success in that the Government feel that once they are up and running they should be able to find funding elsewhere. I recognise that there is a need to review existing programmes regularly and also that there are always changing priorities for any government.

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I know that many other voluntary youth bodies are concerned and uncertain about their future in the same way.
No doubt I shall be corrected if I have it wrong, but I believe that it was Disraeli who said that it is upon the education of our children that the future of our country depends. I hope therefore that in reaching their decision on future funding the Government will give full consideration to the record of achievement which the British Youth Council can point to, as well as to the importance of its task. I trust that the views expressed in today's debate will have an influence on government thinking. I look forward to hearing the Minister's reply.
5.11 p.m.
Baroness Williams of Crosby: My Lords, there is little that I can add to the eloquent and informed speeches of the noble Baroness, Lady Lockwood—the House will be grateful to her for raising the issue of the future of the British Youth Council—and the noble Baroness, Lady Hooper, who has drawn on her experience of the European Union and her work in the Council of Europe and elsewhere.
I wish to make three points. I hope that the Minister will consider carefully what is said because the sums involved are tiny and, in my view at least, the return that we gain for those sums is immensely greater than the investment made.
First, the British Youth Council represents an amazingly broad spectrum of youth organisations. It involves virtually every religious organisation, including the Union of Jewish Students, the British Council of Churches, the Catholic Youth Service, the Young Christian Workers and many others. Indeed, it covers virtually the whole spectrum of religious belief in this country and draws together organisations in an interdenominational commitment to work for young people.
Secondly, it draws together the political parties. The various parties have contributed to the British Youth Council and work within it. Indeed, at the present time Members of this House and of another place, including at present at least three Ministers, have been closely associated with its work.
No one can point to the British Youth Council as representing a particular religious or political opinion as against those of other groups in the community which have something to contribute. I refer your Lordships to some of the organisations which belong to the council: the National Federation of Young Farmers Clubs, the Student Christian Movement, the Student Tory Reform Group, the Union of Jewish Students and Young Christian Workers. I could go on. The organisation represents every constructive, hardworking and constitutionally minded youth organisation in the country. The remark of the noble Baroness, Lady Lockwood, that we ought to be supporting constructive work among young people rather than discouraging it was an extremely well taken point.
The organisation has a small budget and, as the noble Baroness pointed out, is dependent upon one third of its budget, £42,000, coming from the Foreign Office and a
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substantial further contribution from the Department for Education. However, one of the striking facts to underline is that the British Youth Council in most cases has access only to project related funds. The Department for Education's £50,000 in the budget is entirely for project related spending. It therefore cannot be used for the purpose of representation at international conferences or on international organisations. Only the Foreign Office money can be used at the present time for that purpose. That is why it is so important that a relatively small sum should not be withdrawn.
I believe that the Minister and the Foreign Office should carefully consider the timing of the proposal. At present we are seeing a stormy, difficult and in many ways problematic move towards democratic societies in countries as different as those in central and eastern Europe, South Africa, the Maghrieb and in other parts of the world. The striking facts about many of those countries, specifically South Africa and the Maghrieb, is that their populations are overwhelmingly young. To take the example of one country, Algeria, where a battle for democracy continues, I think I am right in saying that more than half its population is under the age of 18. The same is true of South Africa. Yet the very organisation which is accepted worldwide as representing the voice of this country, its traditions and contribution will be silenced at the moment when we are experiencing the struggle for democracy in those young countries. I cannot think of a worse time suddenly to silence a voice so representative, broad and strikingly tolerant as that of the British Youth Council.
One of the associates of the British Youth Council is the Northern Ireland Youth Council, an interdenominational body. At a time when Her Majesty's Government are involved in delicate negotiations seeking to bring about a new settlement in Northern Ireland, that body is of immense value. In all its work, that organisation represents the ability of different denominations and faiths to work together.
I hope that the Minister will listen closely to the points made in this brief debate and will recognise that it is not a partisan debate but one infused with and driven by the desire to see this country represented in the fora of the world, in particular those related to young people—the most volatile group and at the present time the most open to influence. I hope that the Foreign Secretary will reconsider the decision. I suspect that the matter may not even have reached his desk before the decision was finally made.
5.16 p.m.
Lord Northbourne: My Lords, I put my name down to speak to the Question asked by the noble Baroness, Lady Lockwood, because I was a member of Sub-Committee C of the Select Committee on the European Communities in your Lordships' House at a time when we took evidence in connection with young people in the Community. We were much impressed by the evidence given by the British Youth Council.
I ask the noble Viscount one question. Why this cut? Why this cut rather than some other cut of £42,000? I have seen Her Majesty's embassies across Europe. The Foreign and Commonwealth Office sees fit to spend

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very large sums of money on establishing British prestige across Europe, and in my view rightly so. Surely £42,000 could be found somewhere within that budget. The sum must be less than the cost of keeping a third secretary in post. Surely there is a third secretary tucked away somewhere in Ruritania who could go so that we can keep this project which is important for the prestige of the British people, British youth and British youth work within Europe. I speak only of Europe. The noble Baroness, Lady Williams, spoke of the work of the council in a wider context, which is equally important. It is the voice of this country in the youth councils of the world.
I can envisage only four possible reasons why the Government are considering cutting the grant. Three are good reasons and one is bad. Perhaps I may first consider the good reasons. The first is that the job is not an important one. I have tried, as others will, to contend that it is an important one. The second is that if the job is important, the British Youth Council is not doing it well. If that is the reason, I suggest that it should be told so, and, if necessary, the grant should be given to others so that they can do it well. The third reason is that, if the grant is withdrawn, the task will continue to be done. That would be a good reason, but I believe that the onus of proof is on the Minister to show that that would occur.
The fourth and bad reason is that the cut may be an example of the philosophy which runs something like this: if cuts must be made, make them at the easiest place; cut the grants to external organisations and maintain the jobs for the boys at the centre. The Government have pilloried local authorities for doing just that. I believe that it would be very wrong if they allowed that to take place in one of their own departments. Therefore, I ask the Minister to tell the House in his reply whether the reason for the cut is for one of the three good reasons or for the fourth reason.
5.20 p.m.
Lord Ponsonby of Shulbrede: My Lords, I rise to support my noble friend Lady Lockwood. In many ways, I do not have very much to add to the eloquence of many noble Lords who have spoken already in the debate.
We have heard that the British Youth Council has received support for the past 40 years. I believe that it was only in November of last year, with no warning at all, that it was told that its support was to be completely withdrawn. That was a peremptory withdrawal, although I believe that it has been reviewed to a certain extent so that the council is being given some time in which to consider obtaining alternative funding from other sources.
The transitional amounts to which my noble friend Lady Lockwood referred are sufficient only to pay the affiliation fees to the Council of Europe and will not meet any of the revenue costs; namely, the day-to-day running costs of the British Youth Council. The council is already putting in hand measures to make some of its staff redundant in the light of that impending cut.
I was amused by the final point made by the noble Lord, Lord Northbourne, when he referred to local
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councils making cuts. I have some experience of that and I must say that they are carried out in a similar manner. A local authority may say that a group is doing excellent work but that the authority itself is under pressure. That is a euphemism for saying that it needs to save money. The authority then gives no further justification for the cut. That is an extremely unsatisfactory argument. If the FCO is under pressure, then it must be making choices. I believe that it is incumbent upon the FCO to justify those choices. It is not sufficient to congratulate an organisation on the one hand and to cut its funds on the other.
I wish to conclude by quoting the words of Raja Gomez, who is a former director of the Commonwealth Youth Programme. He said:
"I hope that BYC will be able to maintain its high profile in the coming years. If not, an important part of British and Commonwealth contributions to the youth community in the world at large and Europe, in particular, could be lost".
We should think about the message that we are sending, in particular to Europe. I have heard from a number of interested parties that it is causing a certain amount of dismay on the part of our European partners that we are making that cut in funding at a time when we are supposed to be moving towards greater co-operation with Europe. I hope that the Government will see fit to review their decision about the funding for the BYC and will return to the House with the results of their deliberations.
5.24 p.m.
Baroness Brigstocke: My Lords, I too rise to support the noble Baroness, Lady Lockwood. I speak as chairman of the English Speaking Union of the Commonwealth, which is trying to promote international friendship and understanding through the use of the English language. It does that by means of scholarships, exchanges and a wide programme of events. Our youth programme in particular fosters links all over the world.
Of course I understand the Government's duty to monitor rigorously any grant that they make and I applaud their determination to get value for money. But I question their judgment in this instance.
I wish to say a few words about value for money. The sum involved is £42,000 for 1993. I understand that that would be roughly the cost of two middle-ranking secondary school teachers who between them might have an influence over, at most, 500 teenagers.
That is the money; what about value? What value does the British Youth Council give in return for its grant? It affords access to Europe and beyond to all the youth organisations-in the United Kingdom. The noble Baroness, Lady Williams, gave the names of several of those organisations. The list is endless: local groups and clubs, scouts, girl guides and boys' brigades. The council is the youth council for the United Kingdom in international fora. It has represented the UK on the youth forum of the European Union, as it now is, and the Council of Europe since the 1970s and on that of the Commonwealth and the United Nations since 1948. It is through that council that its member organisations have access to education and training opportunities that many would never have dreamt of. For example, it may well

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be that a member of the Boys' Brigade is more likely to be awarded a place on a course than, for example, the president of the National Union of Students.
The English Speaking Union is very grateful to the British Youth Council. The ESU is now setting up exchanges in Eastern Europe; for example, in Poland and Hungary. Last April the director of that programme was enabled, by the British Youth Council, to attend a training course on how to organise international youth events and exchanges. It took place at the European Training Centre in Strasbourg. The cost of the 10-day course and the accommodation was funded by the Council of Europe. The ESU gained access to that course through the British Youth Council.
The ESU is starting to bring over young people from Eastern Europe; for example, as a researcher for a Member in another place or to work in the BBC or an oil company. Educationists and industrialists are always talking of the need to let young people, the workforce of the future, become fluent in languages and to be aware of the world beyond. It seems incomprehensible that we should cut that small grant which provides many extremely important educational and training programmes.
As a teacher, I should like to think that what I teach in the classroom is the most important element in a pupil's education; but it usually is not. What is most important is what goes on outside the classroom. In the United Kingdom we are devoting a great deal of money, resources and legislation to giving our children the best possible education and training opportunities. Foreign travel and training are a crucial element of that and the British Youth Council gives excellent value for the small amount of money it receives from the Government.
In conclusion, I should like to read your Lordships a short excerpt from a letter that I received yesterday from Professor Gabor Fodor, who is a professor at the University of Sciences in Budapest at its department of philosophy. He is also president of its human rights committee. In this instance he is talking about the English Speaking Union exchange programme but what he says applies equally to the British Youth Council. He writes:
"I am convinced that international initiatives such as yours will greatly contribute to the formation of a more skilful and responsible political leadership of the future".
5.30 p.m.
Lord Hayter: My Lords, would it not be fun if we could wave a wand and if noble Lords and noble Baronesses who are to speak today allowed instead their eldest son—or, as the noble Lord, Lord Diamond, would say, their eldest daughter, were she available—to speak for them. The Foreign Office would know what youth really thinks about a move made against continuing support that has been given for so long.
I thought at first that the sum must be £4 million; if so I could understand the Foreign Office view. But it was not. It must therefore be £400,000; it was not. It was
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£40,000 —which, as most noble Lords who read their newspapers know, cannot quite support four girls at Roedean. So why have the Government done this?
Perhaps the Government feel that they have done enough: that there is full employment for youth in this country; that all are adequately housed one way or another; that all are educated, particularly for Europe; and that every child can speak one or two European languages as well as its own. The Foreign Office can therefore look back with pride over the past 40 years and say, "We have done enough," and we would understand.
What in fact has happened? I shall not go into statistics on the employment side. We know that youth is often on the bottom rung. On the matter of housing, I quote:
"Clustered around the despairing aspect of urban life is a growing underclass of vagrants of whom one-third are between 14 and 29. No caring society can be content when an increasing number of its young live in such circumstances".
Those words were spoken by Mr. Heseltine in 1990 and are pretty well true today.
I turn to education. Like my noble friend Lord Northbourne, I sat on the European Communities Committee in relation to young people in Europe. The noble Lord did not say it; I shall. The more I heard about the education given in this country compared with that in Europe the more ashamed I felt. It is fantastic that among the young in the UK general awareness about Europe and its opportunities is lower than elsewhere anywhere in Europe. As for ignorance of languages, we are all aware of the friend from Denmark who can speak English so much better than we can and who can speak German and French as well. Again, we are very ashamed.
There are exchange visits. It is vitally important that our young people should know what Europe is like and what the Commonwealth is like before it breaks up. That is part of education. There is need for co-ordination. The same committee on Europe asked the Government to give evidence. Our report stated that some 15 to 20 government departments were represented. The reason for that curious figure is that sometimes one element was represented, sometimes another. There were officials from a wide range of government departments.
The report specified that 10 out of the 12 European countries have a Minister for youth. The UK and Italy do not have one. Noble Lords should not think that I am getting at the Government. At the last general election no party made any reference at all to co-ordinated policy so far as youth is concerned.
The catalogue of mistakes can only be solved, and has partly been solved, by the British Youth Council. I lost count of the arious associations embraced by the British Youth Council. I got up to 78 in its annual report and then gave up.
I make four general points. First, investment in youth is always worth it. Secondly—and I look around the Chamber as I say it—we are all getting older. It is perhaps selfish but it is also common sense to realise that we depend on our youth and will do so more the older we get. Thirdly, this is a competitive world. It is vitally important that the youth of our country should be

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educated and go into vocational training and also that they should be educated about Europe. Fourthly, we are in Europe and we have to make the best that we can out of it.
It is my guess that the youth of this country would never forgive the Foreign and Commonwealth Office if, having established the British Youth Council in 1948, it gave up support for it today. I do not want to exaggerate the position. I am sure that much of what the British Youth Council does in this country will continue—perhaps at a lower level, but it will continue. However, it cannot undertake the wonderful work that it has been doing unless it has support. My question to the noble Viscount is a very simple one. Would he agree with me (I do not think that he will) if I re-write the remark of the Foreign Secretary in November 1993, which has been referred to, to read, "The British Youth Council has done and continues to do admirable work. Given all the pressures on my budget I must make economies elsewhere and will continue to support the British Youth Council."
5.36 p.m.
Lord Dormand of Easington: My Lords, I shall be interested to hear whether the Minister has any criticism at all of the work of the British Youth Council. If he does not, I assume that the sole reason for withdrawing the grant to the council is that the Government cannot afford to give such a sum. I repeat a point made many. times. We are talking about £42,000 in the current financial year. That is a tiny fraction of the Foreign and Commonwealth Office budget for 1993–94. We have had some splendid examples from previous speakers. We were told that a third secretary would command that sort of money, as would a couple of middle range teachers. I find it impossible to believe that we are seriously debating whether a government department can provide such a sum. I am no financial expert, but if the noble Viscount can arrange to let me loose on the FCO accounts, I guarantee that I would find £42,000 without hurting anybody at all.
The noble Baroness, Lady Brigstocke, made a very important point about value for money. I would have thought that this Government above all would support that. But, with great respect, I say that that is not really sufficient. If, for example, we had been debating a sum of £100 million, then the Government would be bound to take that into consideration. But we are not talking about that kind of money. We are talking about what the Americans would call peanuts. That is my contribution to the various names that have been given to it. It becomes even more ludicrous when it is set in the context of the manner in which some other sums of government money are being spent. Last week, some of us questioned the Government on the expenditure on advertising for grant-maintained schools. That sum was £200,000. Some of us would say that that expenditure is on a policy which by normal criteria has failed miserably. We need not go into that matter now. But that is what many of us think. And one could give other examples.
Let us contrast such expenditure with the work done by the British Youth Council over the years. It has been
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comprehensively spelt out, not only by my noble friend but by other speakers, and I shall not repeat it. The British Youth Council was established by the FCO in 1948 and has received grant-in-aid since the 1950s.
At that time I was a voluntary youth worker. I had established two youth clubs and spent much of my spare time running them. At that time my colleagues and I felt that the FCO's action in establishing the BYC was not only a major step forward but far sighted and enlightened. It was certainly regarded as a great boost to the work being done in the youth service at that time. I remember that I was very proud indeed because I was very active in the Labour Party and it was a Labour Government who had introduced it. But I do not want to introduce a political element into the debate because, to their credit, the Government have continued with the splendid work that has been done since 1948.
If anything should be regarded as international in character it is surely work that is done by and for youth. It gives great satisfaction to many people that the British Youth Council is held in such high regard throughout the world. It may be said that it is looked upon as a leader in the international youth field. Previous speakers have already mentioned that in detail.
Recently I asked the council whether it was doing anything in regard to the new situation that has arisen in the former Soviet Union and eastern Europe. It seemed to me that this was not just a golden opportunity but an essential step to take if we were to help those emergent democracies in their very difficult task. The answer was that strong links had already been made. That was very good news indeed. But obviously such co-operation is now in jeopardy. It is a platitude to say that those young people are the adults of tomorrow but in today's dangerous world we forget it at our peril.
I had a virtually parallel experience of what we are discussing tonight when last year I led a parliamentary delegation to Mauritius. The delegation was concerned to learn that the British Government had stopped helping the young people of Mauritius to come to Britain to study. Every Minister from the Prime Minister downwards pressed us to try to have that decision reversed. They said that the value of such links to Britain—not only to their own young people but to Britain—could not be overrated. It was even more frightening to learn that the vacuum created by that withdrawal of help has been and is being filled by France, which is not even a Commonwealth country. I am a fervent supporter of the Commonwealth. If British Youth Council visits to Commonwealth countries are curtailed or even stopped, as appears will be the case if the grant is stopped, it will be a serious setback for further relations with the Commonwealth.
I should be glad if the Minister in his reply would indicate whether any representations have been received on this matter from the Commonwealth Secretariat. If not, I earnestly request that discussions take place as soon as possible. As parliamentarians, I trust that we all welcome the fact that the British Youth Council brings the issues most affecting young people onto the political agenda. The current level of youth unemployment is twice that for the over-25s and the Government's youth training guarantee is manifestly failing in some parts of

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the country. Those are just two of the important issues which have been raised by the British Youth Council in the past year.
I would not accuse the Government of wanting to stifle the council's legitimate actions in such matters, but they must know that the reduction of an already restricted budget must inevitably affect its work. One of the strengths of the British Youth Council is that it works in close co-operation with other organisations dealing with youth issues. They have all been mentioned tonight and it is worth repeating that fact. I am sure that the Minister not only recognises that but approves of it. In that way its work has undoubtedly been made more effective.
I also hope that the Minister recognises that there is a self-help aspect in the BYC organisation. I am glad to see that the Minister nods and I assume that he agrees with me. The Government quite frequently say that people come with a begging bowl without making any efforts on their own behalf. That certainly does not apply to the British Youth Council. As he probably knows, the council undertakes a range of activities to raise money for its work. However, it is quite impossible for it to raise sufficient for even its basic needs. Nor should that be expected, because of the nature of its work. That is why it properly receives money from the Department for Education and the Prince's Trust. I understand that the noble Baroness mentioned that during her contribution.
The BYC has said that without the FCO's grant its international work will collapse—"collapse" is the BYC's word. It sounds rather dramatic but when one considers that there will be a massive reduction in worldwide opportunities, with the removal of BYC as a leading member in the international field and much lower participation in its work in western, central and eastern Europe, then perhaps collapse is not too strong a word in the context of this special activity.
I conclude by asking whether there can be anything more important than the development of our youth. Investment is a word that is frequently used in both Houses of Parliament, sometimes without having its real meaning placed upon it. That cannot be true when we refer to young people. To a considerable degree we can guarantee that there will be a return on the money and resources allocated to our youth. This debate should have been about increasing the sum granted to the BYC, but we are discussing the ending of the grant. There might have been some tiny justification for a reduction had we been discussing a very large sum of money. That is a point which I made earlier. It cannot be justified when we are talking about £42,000. I hope and plead that the FCO will think again on this matter.
5.47 p.m.
Lord Tordoff: My Lords, I offer my credentials to speak on this subject as a former honorary president of the BYC, a job that I gave up two or three years ago. I used to say that I was the Saga Holidays' representative on the council of the BYC. I enjoyed my time there, which I found very stimulating. It was a very impressive organisation. I have no doubt that the noble Baroness,
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Lady Lockwood, will be extremely pleased, as will the BYC, at the support that she has received from all around the House this evening on this important subject. We, and the BYC in particular, are all grateful to her for raising it.
There cannot be much to add after having listened to people with so many different credentials from so many different parts of the House speaking on this subject. But perhaps I can just speak about my experience. I have to admit that there were good years and bad years at the BYC; but then the BYC is a democratic organisation and the people who are elected to the top of that organisation are not necessarily of the same calibre year on year. I should, however, like to pay tribute this evening to the work of the General Secretary, Mr Graham Hitchen, who has done a superb job of running the organisation since he took over a few years ago. At that time it was in considerable difficulty as a result of a reduction in funding by the Department for Education, which pulled the rug from under it in the same way that the Foreign Office is now doing, only rather more precipitately. Since then, as we heard, the Department for Education has been giving project funding; but all the core funding went at once with virtually no warning. At that time the BYC was crassly handled by that department of government.
At that time I attended a number of meetings and spoke to officials from the Foreign Office who came along to their annual or six-monthly meetings. I quizzed them and asked whether there was any suggestion that the Foreign Office would withdraw its funding. They said that there was no suggestion of that at all. They were delighted with the work that was done and said that it was very good value for money. They said that the Foreign Office had no intention of reducing its funding. It did not reduce its funding but kept it static for the next three years, which meant that there was a reduction in real terms. Nevertheless, the Foreign Office has continued to pay the kind of money that we have been discussing.
Now, suddenly, things have changed. I feel a little sorry for the Minister because it is not his department and he is being shot at from all sides. All I say is that I hope he will be able to go back to the Foreign Office and express in clear terms—as I am sure he will—the strong passions that the matter aroused in your Lordship's House this afternoon. Incidentally, he could offer £42,000 from his own defence budget, which I do not think he would miss. However, I doubt that he will do that.
What is to happen? We are told that there is to be sponsorship and we must look for sponsors. Does anybody have any idea of the kind of sponsors that should be sought? Perhaps British American Tobacco or the Honda car company could be asked. One can imagine delegations attending international conferences wearing those labels and seeking television rights for showing them. The idea of obtaining outside sponsorship for a delegation of British youth going to international conferences is bizarre.
One feels the sticky hands of the Treasury behind all this. We know that in the past there have been references from certain extreme ends of the Conservative Party,

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particularly the Young Conservatives, to the British Youth Council as being a rather Left-wing organisation. I should like to say that that is no longer true. I wonder whether the Chief Secretary of the Treasury still regards it as being a communist organisation when we see previous leaders include such people as the noble Lord, Lord Hayhoe, Mr. Alan Haselhurst, Mr. Nicholas Scott and Mr. David Hunt—all well-known revolutionaries perhaps in the eyes of the Chief Secretary to the Treasury !
One can joke about those things, but it is a serious matter. Are the youth of this country to be represented at international meetings in the future in the way in which they have been in the past? If so, who will attend and who will pay for it? Or shall we send civil servants instead? That will be far more expensive. Shall we not send anybody? That would be even more expensive.
As has been stated throughout the length and breadth of the Chamber this afternoon, it is quite clear that this country —never mind the Government—has been receiving extremely good value for money in funding that aspect of the British Youth Council. I should like to quote a little more from the letter mentioned by the noble Lord, Lord Ponsonby of Shulbrede, from Mr. Raja Gomez, who is now director of administration of the Commonwealth Parliamentary Association, although he says in his letter that he is not speaking as an official of the CPA. He says:
"I am happy to place on record a personal statement of my understanding of BYC's international work and the importance of adequate funding to the maintenance of that work. These comments are, of course, based on my close relationship with Youth Councils and similarly placed organisations during my tenure of office as Director of the Commonwealth Youth Programme (1984–1992)".
Mr. Gomez says that it is BYC's international work which took it to the front line of youth affairs. In other words, it is its international aspect that gave it its strength for what it does in this country as well as what it does abroad. He says:
"This is recognition indeed given the very great strength, especially in terms of resources backing them, which many European Youth Councils possess, especially those of Scandanavia"—
which, of course, provides huge funding compared with what comes from this country. Mr. Gomez goes on to explain some of the things that he has seen. As we heard recently, BYC's representative to the Youth Forum of the United Nations played an extremely important part in the meeting held in Vienna which he attended, and he endorses what was said earlier this afternoon. He continues:
"I am aware that BYC's position in youth affairs has resulted in [its] becoming a regular port of call for Ministers and Chief Executives from a variety of Commonwealth and non-Commonwealth countries".
Who will receive those visitors in the future when BYC cannot afford to buy them a cup of tea or provide offices in which to receive them? There are so many aspects to the matter. People come in from outside; people go out from here; information is passed into our youth movement. That is perhaps another important aspect that was not stressed enough in our discussions this afternoon; that is, that part of the education process is on an inward basis. The noble Baroness, Lady Brigstocke, probably came closest to the point. There is
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a lot of flow of information from the youngsters who are learning all the time what it is to be part of an international community; who are learning how to be the leaders of our youth organisations and eventually of our other organisations.
I mentioned some of the people who in the past were associated with the BYC and who are now in politics. Of course, there are others, not only in politics but in industry and the professions. They first had their taste of standing up and debating, meeting and learning, through the activities of the BYC and its international contacts. I cannot believe that the Foreign Office is so stupid as to totally cut off funding; but that is what is happening. Can the noble Viscount tell the House why? I hope that he does not come back with a collection of platitudes saying what a wonderful organisation it is but that the Government cannot afford to pay for it. That simply cannot be true.
5.57 p.m.
Baroness Turner of Camden: My Lords, we are indebted to my noble friend Lady Lockwood for introducing a debate on this important and serious topic. I had the pleasure and privilege of serving on sub-committee C of the Select Committee on the European Communities, along with several other noble Lords who have already spoken, when she was in the chair. We produced our report—Young People in the European Community— in 1991 and it was debated by your Lordships. However, the situation of young people does not seem to have improved since then. If anything it is giving rise to even more concern. I agree with everything that was said in that respect by the noble Lords, Lord Hayter and Lord Northbourne, both of whom were members of the Select Committee.
I agree also that the committee was impressed at the time by the evidence given orally by the British Youth Council. Its membership seemed to us to be very representative of young people. They made a point of the fact that it is an organisation for young people run by young people. In fact, if anything, they were rather critical of the European Youth Forum because that organisation tended to be run by professional youth workers and European politicians. The BYC is an affiliate of the European Youth Forum and at the recent meeting it was said that its delegation was the only one in which everyone was under the age of 26.
In 1991, when we asked the BYC at the oral hearing what its members thought was the major problem for young people in Europe, the answer was unequivocal: it is unemployment. During the past year the BYC has produced a publication which has been widely praised, called The Time of Your Life. In that publication the BYC sought to identify some of the problems faced by today's young people. In particular, it focused on unemployment. It told us in 1991—and things have not improved since then—that youth unemployment is twice the national average. It told us that 150,000 young people between the ages of 16 and 19 experience homelessness; that 72 per cent. of under 24 year-olds earn less than the Council of Europe's "decency

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threshold". Even those young people from the more disadvantaged areas of society who are employed are often in low paid, dead-end employment.
The BYC provides a forum for discussion and debate of issues concerning young people. In addition, it performs an extremely useful lobbying function through which the views of young people can be communicated to government and to Members of Parliament. Indeed, the Prime Minister himself has spoken highly of the BYC, saying:
"I am well aware of the valuable work of the British Youth Council in representing our young people".
As we have heard from a number of noble Lords, the BYC has a very high profile internationally. It was clear from the submissions made on behalf of the BYC to the Select Committee that the council was well aware of the challenge of the single market. Its representatives expressed great concern that young people in the UK were under-informed about the EC compared with young people in other EC countries. They felt that our young people would lack the appropriate skills to be able to benefit from the opportunities which the EC might eventually offer. As a result, the BYC has been concentrating on training activities and has been running a series of international training and education events—run for and by young people—and has produced a series of publications aimed at providing the information and resources needed.
In 1991 the BYC identified what we on the European Communities Committee at that time came to regard as the "vicious circle" syndrome—at least as far as the most disadvantaged young people are concerned. First, there is the deprived home background, often as a result of parental break-up and/or family unemployment; then come poor levels of attainment at school; then unemployment on leaving school with low academic attainment; then homelessness if the young person has left home—sometimes willingly, sometimes because the family refuses to continue to provide a home; continued unemployment because of the lack of an address; and deprivation, from which it appears impossible to break away.
The BYC has attempted to highlight these problems and has campaigned for something special to be done to enable such young people to break out of this vicious circle. The BYC, however, is well aware of the fact that the problem is of international dimensions. It has sought through its international contacts, particularly in Europe, to develop an international strategy to try to cope with the seemingly intractable difficulties. Over the past 12 months, as we heard from the noble Baroness, Lady Lockwood, the BYC has organised or participated in 36 youth activities at international level. Through the BYC more than 140 educational and other inter-cultural activities have been provided for young people in the past year. These have included language courses—which are very important, as a number of noble Lords have emphasised—training seminars, fact-finding visits, conferences and so on.
The BYC has received funding from the Foreign and Commonwealth Office since 1948 but it has never been very much. At the moment the £42,000 which we are
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debating today is simply peanuts. In fact, it represents 30 per cent. of the BYC's income. It is a lot to the BYC but in terms of grants available from the Government it is very small indeed. A number of noble Lords have mentioned the wide range of support for the BYC from Church organisations and sports organisations. There is also the involvement of trade unions. My own trade union, MSF, is a member of the BYC. It has received support and information from the BYC which has enabled it to establish its own youth section and to bring out its own youth charter, with a good deal of emphasis on training and opportunities for young people. The BYC has a number of associate members, including Save the Children Fund, of which I am a council member. It has a great deal of support from all areas of society and from all kinds of organisations.
However, the cutting of the very tiny grant will have a devastating effect on the work of the BYC. The organisation has said that it will result in the collapse of the BYC as a leading player in the international youth field and with that a much lower profile for the UK within international youth structures. There is likely to be a far lower emphasis on European and international issues within youth work in the UK and a considerable decrease in liaison and partnership with youth organisations in eastern and central Europe. This latter point is very important. Many of the states in eastern and central Europe are currently passing through a high degree of social turmoil. It is necessary for them to build democratic structures from scratch. I have had something to do with that on the trade union side and I know just how difficult it is. Help from organisations with experience of democratic structures and organisation, such as the BYC, is very important in assisting new organisations to get off the ground. With its very long history the BYC is admirably placed to do this kind of work. Instead of being able to develop such work it is having to face a cut in its minuscule grant. This is occurring at a time when a diminution of funds is most inappropriate.
I am informed that there seems also to be a reduction of funding generally in regard to voluntary youth organisations in London. I am told that the reason is that partnership arrangements between the Department for Education and the London Boroughs Grants Committee, the development grant and the National Voluntary Youth Organisation schemes all cease or are due for review or renewal after three years. The London Council for the Voluntary Youth Service expects reductions of around 66 per cent. over the period 1993 to 1997. I raise that point in this context because, although it has nothing to do with the BYC, I wonder whether there is a general drive to reduce the amount of funding for youth work. If that is the case it is extraordinarily shortsighted. What will happen? Who will do the work? Where will the funding come from for the necessary work in the future? I await with interest the Minister's response.
6.7 p.m.
The Parliamentary Under-Secretary of State, Ministry of Defence (Viscount Cranborne): My Lords, I want to begin by thanking the noble Baroness,

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Lady Lockwood, for raising this important Question and thanking all other noble Lords who have spoken in the debate. For the Government Front Bench spokesman it is perhaps painfully obvious that this subject concerns your Lordships very greatly. I have certainly been much struck, as so often when listening to your Lordships, by the depth of experience of this matter in this House. I think in particular of the noble Lord, Lord Tordoff, my noble friend Lady Brigstocke and other noble Lords —the noble Lord, Lord Tordoff, because of his past distinguished connection with the BYC and other noble Lords in the context of their connection with the work of Sub-Committee C, which reported on this and other issues.
I wish to associate Her Majesty's Government and myself with the encomiums made on the admirable work undertaken, both nationally and internationally, by the British Youth Council. That work was referred to by all noble Lords but perhaps particularly by the noble Baroness, Lady Lockwood, and my noble friends Lady Hooper and Lady Brigstocke. As the noble Baroness, Lady Turner of Camden, pointed out, only recently my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs paid a similar tribute in another place.
At the outset I should like to answer directly the question addressed to me by the noble Lord, Lord Dormand of Easington. As far as I am aware, no Commonwealth representations have as yet been received on this matter by the Foreign and Commonwealth Office. It may well be that there are some in the post but none, so far as I am aware, has yet been received.
Perhaps I may very rapidly speak my own book. I hope that the suggestion made by the noble Lord, Lord Tordoff, that my department should contribute the sum of money concerned (£42,000) was no more than a joke, and in poor taste. As your Lordships will be aware, even that relatively minimal sum might be the straw that broke the camel's back of even our budget. As the noble Baroness, Lady Lockwood, acknowledged, the Government have indeed provided financial support for the international work of the British Youth Council for many years and for its predecessor, the British National Committee for the World Assembly of Youth, since 1948.
My arithmetic is certainly a victim of the British education system, but perhaps I may point out to the noble Baroness that £42,000 out of £165,923, which is represented as the income of the British Youth Council in the year 1992–93—perhaps this is carping—is a little nearer a quarter than one third of the total. However, I reassure your Lordships that the decision to phase out this funding was taken clearly, after serious consideration of the issues involved. In answer to the representations made by your Lordships this evening, I should like to come back to that in a little greater detail in a moment.
There has been a particular foreign policy reason for funding the BYC's international activities in the past. We felt that it was important to ensure in particular that properly representative and democratic—this is a point which has been made many times about the nature of the
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BYC —youth organisations were present to exert a moderating influence in certain international youth fora. But it has perhaps become a truism to say that times have changed. The Berlin Wall has fallen and totalitarian regimes no longer hold the power which they once did in the countries of the former Soviet Union and eastern Europe. Happily, the BYC's role in that regard must change as well. The noble Baroness, Lady Turner of Camden, in particular pointed out the importance of the work of youth organisations in eastern Europe under current circumstances.
The nature of the work has changed. We therefore had to conclude that to continue funding on the former basis was no longer justifiable. That at least in part addresses the point made by the noble Lord, Lord Ponsonby. I believe that he said something like, "We congratulated while at the same time withdrawing".
Nevertheless, there is no reason why the BYC should not be able to continue much of its activity in the European Community and in the Council of Europe youth fora. That is a part of its work to which again the noble Baroness, Lady Turner of Camden, gave considerable emphasis. After all, as I believe has been pointed out in your Lordships' House this evening, both organisations will continue in part to pay for them to do so.
The British Youth Council receives government funding through the Department for Education scheme for grants to national voluntary youth organisations to promote the personal and social education of young people. It also receives some additional and most welcome assistance from private sponsors, in particular, as I believe the noble Lord, Lord Dormand, pointed out, from the Prince's Trust and the Baring Foundation, to give but two examples. Its activities cover a wide range of issues from homelessness, to unemployment, the environment, education and so on. Noble Lords who have spoken this evening know a great deal more of the detail than I do and therefore I shall not weary your Lordships by repeating something which you already know well.
The relationship between the Government and the BYC has parallels in most European Community member states, again as the noble Baroness, Lady Turner, pointed out. I believe that there is a varying degree of government funding of those activities. The BYC, in common with other youth councils in member states, enjoys that support. Understandably, it jealously guards its independence and the mandate that it receives from its member organisations. Her Majesty's Government welcome the valuable work of the British Youth Council in promoting the active citizenship of young people, a role which in my view your Lordships have rightly stressed during this evening's debate.
Therefore, I believe it is right that, as part of the scheme of grants to national voluntary youth organisations, my right honourable and honourable friends in the Department for Education have awarded the BYC grants amounting to £161,585 for three years to the financial year 1995–96 for various purposes. The department has also provided a capital grant of £15,000 towards the refurbishment of the BYC headquarters.
Lord Tordoff: My Lords, I am sorry to interrupt the noble Viscount. But does he not accept that the funding of which he has just been speaking is specifically directed to projects designed by the Department for Education and that it cannot be used for core funding —for instance, for providing staff for international activities?
Viscount Cranborne: Yes, my Lords. I hope that I made it clear to your Lordships that this funding was provided with a view to helping the national, as opposed to the international activities, of the BYC.
Therefore, I believe I can assure your Lordships that the phasing out of the government's funding for the BYC's international work in no way implies withdrawal of the government's approval of what it does, particularly domestically. I am glad that both the noble Lord, Lord Ponsonby, and the noble Baroness, Lady Lockwood, recognised that there was an element of phasing in that withdrawal.
The BYC has itself described its international work as an extension of its work at the national level. I believe that the noble Lord, Lord Hayter, in particular referred to that relationship. Her Majesty's Government are indeed well aware of the range of activities which the BYC undertakes on behalf of its members in the international field, which again was referred to by a number of speakers this evening, in particular by the noble Baroness, Lady Williams of Crosby. We recognise that the BYC has a role to play in representing its membership in the youth fora of the EC and the Council of Europe.
As I said a moment ago—and perhaps I may quote my noble friend Lady Hooper—things do not stand still. The European Commission has recently proposed a new and considerably enlarged phase of the Youth for Europe programme, which is one of its major programmes for young people. At the moment the Government are taking part in negotiations referring to that particular programme and its increased funding. When the extent and scope of that programme become clearer, which will probably be later this year, the Government, in the form of my right honourable friend the Secretary of State for Education, plan to set in hand a review of the roles and responsibilities of the various agencies concerned, including the BYC, with a view to developing a new programme in order to avoid any unnecessary and wasteful duplication of effort, particularly when, as I am sure noble Lords are aware, there are a number of other agencies concerned with work in this field. At least in part that addresses the question put to me by the noble Lord, Lord Northbourne, who asked: why this cut?
The BYC is aware of the proposed review and I understand that it has welcomed it. I am sure that the noble Lord, Lord Tordoff, can confirm that that is true. As I understand it, the review will explore the form of relationship which may be most appropriate between the Government and the BYC, including funding. I understand that the BYC, like the Government, recognises that its financial relationship with the Government now needs to be reviewed. In that context I believe that the initiative of the noble Baroness, Lady
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Lockwood, is particularly timely. The views of so many of your Lordships with experience in this field will be taken into account in the course of the review.
My impression is that the relationship between the Government and the BYC is extremely good. That impression has been echoed in what many of your Lordships have said. I believe that at a recent meeting with the BYC leadership it was clear that all concerned intended to work together co-operatively and constructively in the future, particularly in the context of the review to which I have just referred.
I should like once again to thank the noble Baroness, Lady Lockwood, for providing the opportunity for what has proved to be a most timely and useful debate. As usual, your Lordships' concern and appreciation have been eloquently and knowledgeably expressed. I hope that in at least some small measure your Lordships have been reassured that the Government most certainly continue to value and support the work of the British Youth Council. However, that does not mean that the relationship must remain set in aspic, unresponsive to the changes in the world which the BYC rightly aims to continue to serve.

London Underground
6.20 p.m.
Lord Ezra Lord Ezra rose to ask Her Majesty's Government whether they consider that the funding of London Underground is sufficient to maintain the system and prevent further deterioration of its physical assets.
The noble Lord said: My Lords, on 8th July 1992, I asked whether sufficient was being done to maintain and improve the underground railway system of London. I have no hesitation in raising the issue again some 18 months later and I am grateful to those noble Lords who will be speaking later.
When I originally raised this issue, I drew attention to the ageing of the assets of the Underground and to the accumulated lack of investment which had prevented those assets from being adequately maintained and refurbished. I took some comfort, however, from the announcement in the Autumn Statement of 1991 that higher levels of funding would be provided. I asked the Minister, the noble Viscount, Lord Astor, for an assurance that,
"those higher levels of funding announced for London Transport last year"
—that was in 1991—
"were more than just a pre-election boost and that they will be sustained at the level necessary to allow the essential work to be properly planned and executed over the years". —[Official Report, 8/7/92; col. 1249.]
The reply that I got was that the Government were working with the Underground to produce a strategy for the next 10 years that would bring about the decent modern metro that we all wanted to see.
The 1991 Autumn Statement provided that £634 million would be available for the core business in 1994–95. Regrettably, this was substantially modified in the 1992 Autumn Statement and the corresponding amount now likely to be available is £448 million,

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which represents a 30 per cent. reduction. Perhaps I should add that this issue has been referred to many times since.
The Government have maintained, in answers to Questions raised in this House by the noble Lord, Lord Jay, and others, that the funding levels now represent a record. Whether they are a record or not is not the main issue. The crucial issue is whether the funds are adequate for the task, and clearly they are not. Given its replacement value, the Underground system requires, in constant prices, £250 million per annum to keep it in a stable, non-deteriorating condition. However, over the past 30 years the average has been about £170 million at constant values. This shortfall has created a backlog that has raised the amount needed merely to maintain the existing system in its now unsatisfactory condition to an annual investment of about £600 million per annum. Thus, while grant levels are generally higher than in earlier years, they are inadequate to deal with the backlog.
As I have stated, for 30 years there has been under-investment in the assets of the London Underground. In many cases, these assets are now life-expired and increasingly unreliable. Let us consider the track situation: 30 per cent. of the track is in an unacceptable state (this is up from 22 per cent. only five years ago so it is deteriorating rapidly) and many stretches are subject to speed restrictions to protect safety. There are currently 44 times more speed restrictions on the London Underground than on the Paris Metro and 15 times more restrictions than on the New York subway, which itself is generally regarded as an ageing system. Embankment slips have doubled in the past five years and the number of broken rails is up by 85 per cent. For example, a landslip at Burnt Oak closed part of the Northern Line for two weeks last months. That is just one recent example.
Let me turn next to signals. The average age of signals on the network is 30 years and that is 10 years older than in either Paris or New York. Failure rates due to signals are 50 per cent. higher than in those cities. The number of failures is up by 30 per cent. over the past five years.
Pumps are an important part of the system. Three million gallons of water a day seep into the Underground as the water table rises. This water has to be pumped out to enable the system to work. However, half the 635 pumps need replacing. One-third of incidents causing serious delays in 1992–93 involved flooding. For example, in May 1992 the Central Line service was suspended at the line's west end for six hours and in November of that year Gants Hill was closed for seven hours. Those are random examples.
I have dealt with only some of the many categories of asset forming part of the London Underground. Many other instances of failing assets could be cited; for example, no one will have forgotten the Central Line power failure of November 1993, which was severely exacerbated by the age of the cabling.
This situation makes it abundantly clear that the present funding of the London Underground is inadequate. In 1992–93 the Underground invested £767 million in its existing network. In 1993–94 the figure
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was £558 million. Next year, 1994–95, it will be £470 million. These figures include government grants and sums generated by London Transport. The Autumn Statement of 1991 indicated that the Government intended investment in the Underground to be maintained at the 1992–93 level for some years. But, as I have shown, this was subject to a cut of 30 per cent. in the ensuing Autumn Statement. London Underground has done much to improve the performance of its management and staff in very difficult circumstances and should be congratulated on that. However, with inadequate levels of investment, failures of assets will increasingly cause delays to passengers, disrupting London's business life and doing much damage to London's image abroad.
A situation of this sort cannot be put right overnight. But what is certainly required is a more adequate level of funding over a period ahead—say, for at least 10 years. I have a suggestion to put to the Government. In the 1993 Autumn Statement the Government indicated that funding of £541 million would be available for the core business in 1996–97. The management of London Underground estimates that this could imply investment of £650 million (including its own resources) in the existing network. At this level of investment, the backlog of neglect could begin to be dealt with and improvements made. That would be in contrast to the present situation in which a continuing decline in the assets has to be managed to minimise disruption.
If the Government are serious about London's status as a world city, capable of attracting international investment and creating wealth for the UK economy, they should consider advancing that level of investment by one year (to 1995–96), which is a modest proposal, in order to allow a start to be made on delivering a decently modern metro, something to which they say they are committed. That level of investment in real terms should be sustained for at least 10 years. What the Underground has suffered from in the past has not just been a generally inadequate level of funding, but substantial annual variations as well. That uncertainty has prevented any form of effective planning. The Government now have an opportunity to put that right and to revert to the intentions indicated in the Autumn Statement of 1991. I hope that in replying the Minister will give us the assurance that London badly needs.
6.31 p.m.
Lady Gardner of Parkes: My Lords, I am grateful to the noble Lord, Lord Ezra, for letting me know that this debate was to take place as I might otherwise have missed it. I was lucky to arrive here in time because when I telephoned to ask what time the debate would start I was told that it was thought that it would be about 7 o'clock. I just made it. It is a most interesting topic. We all know that London Transport has been going now for 60 years. I agree with the noble Lord's comments that the Underground system's ageing infrastructure is worrying.
I have been actively involved in dealing with London Transport's Private Bills in your Lordships' House. There was one Bill relating to safety measures which imposed a great additional financial burden on London

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Transport. That was after the King's Cross fire. It had to provide easy exits from stations. We had a great debate about balancing safety against the preservation of historic buildings. Sometimes it was necessary to make an opening in an historic building that we should have preferred not to have seen touched.
I was involved also in the Jubilee Line. I am pleased that that is now going ahead. The Bill took a long time to go through all its stages in both Houses of Parliament. The project seems to have taken an eternity to get going afterwards. It is now happening. I have one great unhappiness in relation to that project: I hear that a station will not be constructed at Greenwich. I still hope that we will hear good news about that and that some means will be found to finance it. The financing of Greenwich station was the subject of an agreement between, I believe, British Gas and London Underground Limited.
I am interested not just in London's transport but in tourism in London. Greenwich is an area in which many people live and work. It is also a tremendous tourist attraction. I have no personal interest in Greenwich but I have taken my Australian visitors there repeatedly over the years. It makes no sense to have the Jubilee Line extension without a station at Greenwich. Greenwich is not an easy place to get to, but it is worth a visit and it could become a greatly enhanced tourist attraction.
London Underground Limited is always short of money. It is having to delay many schemes. It is having to delay the revitalisation of the Northern Line. The power failure which the noble Lord, Lord Ezra, mentioned, and which we all read so much about, could, ironically, have happened to the most modern metro system. It was caused by a small break in a cable. The cable was 70 years old. That power failure affected 20,000 people. London Underground Limited handled the matter well at the time. No accidents occurred and no injuries were caused to people during that failure. However, a great deal of inconvenience was caused and it is estimated that LUL lost £2 million.
London Underground Limited has ideas about how its money should be spent. It has listed key projects with which it is proceeding and for which the money has been earmarked. All the existing rolling stock on the Central Line will be replaced. There will be 85 new trains by 1985. The programme is costing £750 million. Twenty of those trains are now in service. There will be new signals which will allow shorter intervals between trains. That is important at times of congestion. LUL is having a station fire safety programme; engineering works on the Metropolitan Line; station refurbishment on the southern section of the Northern Line, which is needed; the preliminary works now being undertaken on the Jubilee Line extension; the Piccadilly Line will have refurbished trains; part of the Northern Line's rolling stock will be refurbished; and there will be new escalators at Bank, Leicester Square and Green Park. However, other projects such as the new escalators at Notting Hill and other stations will have to be put on hold because there is not enough money for them.
The underground system is a little like the health service in that whatever money there is it is never
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enough, because the system could always be greatly improved and updated. When I visit Australia I see a brand new underground system. It is attractive and practical, and it is not carrying anything like the same number of people. Here, congestion on the Underground at peak hours is a major factor. I come in on the Piccadilly Line from where I live in London. We could often use one of those small Japanese men with a bar to push people into the train during the morning peak hours. I have seen that done in Tokyo, where the trains run almost continuously. It is a traditional practice. We, too, could use a man to push the passengers into the trains. It is difficult to carry the number of passengers that LUL does, and whose passengers are well satisfied with the system.
Of course, we would like the trains to be less congested but without flexitime and the staggering of hours of work I do not see how LUL could increase the number of passengers carried on trains that are already full to capacity. More money would be an advantage. I served on the GLC and we took over responsibility for London Transport. We never had enough money for it even though we were precepting on all the people of London. There was always a shortage of money. The system was always in deficit. LUL is to be congratulated on how well it has managed its fare structure, on the service it is providing, and on managing to put money into new projects and improvements.
I am also pleased that LUL is interested in the public's attitude to it and on what it should spend money. It has announced a consultation period which will last from February to the end of March. It had a similar consultation period in 1991 during which it received 1,700 replies. It would like many more replies this time. Among the questions it is asking are: how can Underground services be enhanced and how much of the problem is caused by congestion? In view of my earlier remarks, the question about congestion is an interesting one. It is asking also which new lines and infrastructure should be particular priorities. It is a good thing for the public to comment on such matters because it is easy for planners sitting in a remote building to decide that their priority might be project A whereas the priority of those using the service might be project B.
I do not for one moment underestimate the need for more money, but even more important than more money is the knowledge of how much money one is to receive and when, and to have that information for a longer period ahead. One of the big problems facing London Transport—I include LUL in London Transport—is that in planning major contracts, and everything it is doing is major, it has to be able to plan a long way ahead and to know that it has the money not just for today's work but for the following year and the year after that. It is essential to know that the money is guaranteed for three to five years ahead when one is planning a project of the magnitude of the London transport system. I thank the noble Lord, Lord Ezra, for introducing the subject tonight and for mentioning it to me.
6.40 p.m.
Lord Jay: My Lords, I thank the noble Lord, Lord Ezra, for raising this crucial issue. I support his cogent case for a more adequate allocation of government funds in support of urgently needed maintenance, renewals and improvements for London Underground. The Government can no longer deny that they have made cuts. The facts and figures are on record. The allocation for the present year, which the Government laid down in 1991, was cut in 1992 by 30 per cent. In the 1993 Autumn Statement the external financial allocation for London Transport as a whole was cut from £880 million to £720 million.
It is essential to get the priorities right for transport in London. The urgent priority is to overcome the immediate arrears of maintenance and renewals on the Underground. They are causing serious and chronic delays to millions of people, mainly those travelling to and from work. Daily we are told—when we can hear the communicators on an Underground station—that a specific delay is due to a points failure, signalling faults, lack of trains or lack of drivers. Escalator failures are a particularly exasperating interlude and can be serious for the elderly or handicapped.
My memory goes back only to 1917, but I believe that delays on this scale never occurred before the Government took over London Transport in 1984–85. They did not occur to this extent in 1940 during the months of the Blitz. They are plainly due to sustained under-maintenance and under-manning during the past 10 years since this Government took control. At their worst, they can threaten safety and on one or two occasions they have done so.
I agree with the noble Baroness, Lady Gardner, that London Transport's management cannot be seriously blamed for the delays. London Transport has continuously pressed the Government for more adequate maintenance funds. One can say cautiously that, despite the shortage of funds, there have been recent signs of improvement in services. However, 2.5 million people travel every day on London Underground. Consequently, any £1 spent on eliminating such delays would achieve more than £1 spent in any other way on transport in London; indeed, on transport anywhere in the country.
There is interesting evidence of a possibly unconscious bias in the Department of Transport. In estimating the need for a motorway, high points are given for the saving of time by travellers, and even higher points if they are thought to be high-earning travellers. On the other hand, no corresponding weight is given for eliminating loss of time for the millions who travel on London Underground every day. They include many tourists, in particular during the summer months.
Of course, we shall in time need new lines, but the first priority should be to get the existing lines running properly. The main effort should be concentrated there instead of being postponed again, as we saw in the Autumn Statement. I agree that among the various proposed new lines the Jubilee Line has the strongest
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case. It is uneconomic to have a major Tube line terminating in central London, and many new links will be created by the line that is proposed.
CrossRail, though effective in many ways, and at least less uneconomic than the Channel Tunnel, will still be highly expensive in resources and will not carry a single passenger in the present century. We must not allow talk of wonderful future plans to divert attention or resources from the need to correct existing faults and failures. The medium-term necessity is for more adequate capital expenditure on public transport in London, as the noble Lord, Lord Ezra, convincingly argued this afternoon.
I hope that the Government will take this seriously and adopt the immediate step which the noble Lord, Lord Ezra, proposed. They must overcome the false economies which are always involved in postponing maintenance, which merely means that it will cost a good deal more later on.
6.46 p.m.
Lord Carmichael of Kelvingrove: My Lords, we are grateful to the noble Lord, Lord Ezra, for raising the Question. In his usual efficient way he put the problem in a nutshell in the words of the Question. He asked the Government:
"whether they consider that the funding of London Underground is sufficient to maintain the system and prevent further deterioration of its physical assets".
We are aware of the problem that that could raise.
It is interesting to note that the two Ministers on the Front Bench are the only ones who do not have an intimate and long familiarity with London Transport. I am sure that since we all became Members of this House we have used the Underground frequently, and I have always had an interest from afar.
The noble Lord, Lord Ezra, was succinct in his arguments and put forward a magnificent array of statistics to show the problems of London Transport. It will be interesting to hear the Minister's alternative statistics to show where the noble Lord went wrong. Perhaps later we can compare them to see who was more correct. I understand that there are approximately 250 miles of London Underground network. A great deal is Victorian or Edwardian; that is a fact which always fascinates me.
London Transport's spending for the coming year has been cut by £64 million. I understand that from the reduced budget it must fund the work on the Jubilee Line, which will leave even less for the vital investment in and maintenance of the existing line. Is it true that last year's underspending of about £300 million, which was caused by the delays in obtaining the go-ahead for the Jubilee Line, has not been allowed to be carried forward but has been taken away from this year's budget?
Everyone who uses the Underground complains about the state of the infrastructure, and now London Transport's budget will be short by about £350 million. It was told that this year it would receive the money that it was promised last year—and that was after the black day last November when the Central Line went dead and

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passengers were stranded in the trains. Some had to walk along the track through the tunnels and others were trapped in lifts because of the power failure.
Unless I have misread the reports, I believe that the noble Baroness is probably wrong. I understand that there were actually two cable breakdowns. The first was put right fairly quickly; indeed, in less than half an hour one of the cables was repaired. However, at 8 a.m. a more extensive failure caused severe problems on the Central, Metropolitan and District Lines.
The Underground cables are, therefore, in a quite desperate state. No matter how much time the engineers spend on them, it is merely patching them up and something can go wrong a little further on. Some of the cables are up to 70 years old. London Underground would like to start a programme of progressive renewal but it is just not being given the resources to do so. Even after that dreadful experience for thousands of commuters and visitors, only one week later the funds promised to London Transport were cut.
The Financial Times reported that Mr. Denis Tunnicliffe, the General Manager of London Underground, said that it was quite true that modernisation of the Central Line amounted to £750 million and should be finalised by 1995—that is a good thing and something about which we should be very glad —but he also pointed out that there were 30 years of underspending to make up. As well as that, up to £800 million which was promised in 1991 has since been reduced by more than £200 million per year.
The basic infrastructure of track, rails, reliable power supply and safe tunnels is not immediately obvious to the average traveller, but when an event such as last November's breakdown occurs, the public suffers, business suffers and the visitors to Britain are shocked that we have let the world's first, and probably still the most famous, Underground railway become so neglected.
One quarter of the signalling is more than 40 years old. Some trains have been running for 25 years. One third of the escalators are more than 40 years old. Incidentally, the escalator that I use is quite often out of service. I have a slight obsession: I have counted the steps several times and there are 96 of them. Fortunately, however, the upward escalator is always working. I sometimes wonder. Perhaps it relates to one of those boyhood memories from when I used to visit London many years ago. In those days the wooden escalators did not seem to be out of order as often as the present steel and aluminium ones. Is it perhaps a question of cutting corners or being forced by spending cuts to cut the cloth in a different way?
As the noble Lord, Lord Ezra, said, train speeds have had to be reduced on some lines because of the state of the track. But even more worrying is the fact that there is in some cases a problem of metal fatigue in the trains themselves, some of which are 30 years old. That also forces a cut in travel speed.
If and when we get out of the recession and the level of rush hour commuters gets back to normal, the strain on the whole system—not least the stations themselves—could lead to greater discomfort for passengers and in
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some cases serious accidents. I have taken friends returning from London to Victoria Station in the early morning rush hour. It is almost impossible to move on the District Line platform. The queues are about eight people deep and the trains are absolutely laden; you can see the white faces of the passengers inside when they see the mob outside who are obviously going to try to get in. There could be a serious accident unless we do something about enlarging the platforms. I know that it is expensive, but it would help if we could have an extra carriage put on each train.
Catching up will take time and money. What London Transport needs more than anything—and this is said by almost everyone who speaks about it—is regular, reliable funds. If the funding was to come from the Government that would be the best way. London Underground could then rely on continuity. But there are other ways of raising money for urban transport. One was suggested in the Financial Times on November 29th. If the Minister has not read the article, I am sure that it will be in the files. It was entitled "A mega bond for London". It was merely a suggestion, but that was how the Bay Railway in Boston was funded, and the San Francisco railway was developed in much the same way.
It seems to many people who are closely involved in London Underground that unless an effort is made to catch up on renewal and refurbishing, we shall have the awesome prospect of a serious breakdown. I trust that the Minister is well aware of that. I hope that he will bear it in mind and be able to console us with his answers.
6.56 p.m.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Mackay of Ardbrecknish): My Lords, in my short time in your Lordships' House I have noticed that the noble Lord, Lord Ezra, returns from time to time to the subject of London Underground. I suppose that this will be the first of many occasions upon which we shall discuss the matter across the Floor of the House. The noble Lord, Lord Carmichael of Kelvingrove, pointed out that it was a little odd that two Members from Scotland were to wind up the debate on London Underground. Both of us are well aware of a superior underground, although slightly smaller, that exists in Glasgow. Indeed, I know that we both use it. Moreover, the noble Lord very nearly has a title which is the same as that of one of the underground stations on that line.
I believe that I can claim—as, no doubt, the noble Lord can—a certain familiarity with the London Underground. I was wondering whether to say that I know just about every tree and park on the Underground system from Heathrow or whether to say that I know just about every piece of graffiti on the walls. I have now referred to both of them. I believe that I know that part of the London Underground and, indeed, the Northern Line which, I gather, has something of a reputation, reasonably well. I must tell the noble Lord, Lord Carmichael, that walking up the stairs is far better for you than walking down. Moreover, the health people give you a rule of thumb, "Walk upstairs and take the

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escalator down because it does not do you any good to walk down the stairs anyway". However, I know what the noble Lord means. I shall return to the subject of escalators.
The noble Lord, Lord Ezra, rightly pointed out that London's Underground network is the oldest and, indeed, the most complex in the world. Anyone who tries to work out the Underground maps will probably be able to verify that. I often wonder what happens to people who are colour blind. How do they find their way around the complexities of all the different lines? As I said, it is a complex and old system. Therefore, it is not surprising that it should have problems.
In their 1991 response to the Monopolies and Mergers Commission, the Government acknowledged that decades of under-investment needed to be put right. But, as the noble Lord, Lord Ezra, admitted, the decades of under-investment cannot be put right overnight. We acknowledged the scale of the task ahead. That can be seen by the hugely increased scale of investment going into London Underground. I believe that any fair-minded examination of investment year on year would conclude that there was a considerable gearing up of annual investment during the second half of the 1980s and a further and very significant gearing up in the 1990s.
London Underground investment over the past three years has been at a higher level than at any time in the previous two decades. The budget settlement provides that it will be on a strongly rising trend over the next three years and, taken together with London Underground's own contribution, will be close to £700 million in 1996–97.
I have done a little arithmetic. It was inevitable that we would be told the Underground is under-funded now whereas yesteryear—the noble Lord, Lord Jay, kindly went down this road, so enabling me to use the argument—everything, I suppose like the summers, was endless sunshine from the beginning of May to the end of September. The truth is that when one looks at the record over the years, one realises that "under-investment" is a kind word to apply to the 1970s.
In the five years from 1975 to 1979—I cannot think for the life of me why I picked those five years but some noble Lords may be able to guess the reason—the total core business investment at 1993–94 prices was £561 million, an average of £112 million per annum. We should compare that with the past five years when the total figure was £2.281 billion—an average of £456 million every year. Indeed in 1992–93, in that single year, investment was £649 million. The noble Lord, Lord Ezra, used that high figure, not to applaud the Government for their recognition of the needs that required to be addressed, but rather to lambast us for dropping back from that high figure. One of the difficulties that arises when government decide to give a major boost in any financial year to any item of expenditure is that that becomes the baseline on which everyone judges us thereafter instead of looking at the preceding year or the preceding two years before that baseline and noting—as one can in the case of the
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London Underground—that our investment today is still markedly higher than it was in the years before that great boost occurred.
Lord Ezra: My Lords, I did say that I was much encouraged by the Autumn Statement of 1991, but the trouble was that in the very next year the Government cut the figure by 30 per cent. That is the whole issue. One year one receives a sum that is apparently sufficient, but the next year it is taken away. On that basis planning is very difficult.
Lord Mackay of Ardbrecknish: My Lords, the noble Lord almost makes my point that the special boost given in that year is used as the baseline whereas I believe that one should look at the running totals and note the considerable increases in investment—I have already mentioned the figures—that have occurred over the past 15 years or so. Taking the five-year period we are in —the past two years and the next three years as detailed in the Budget—total core investment will be around £2.5 billion, which is an annual average of £505 million. That is not far off the total achieved for five years under the parties opposite, either separately or jointly.
It is easy to focus on what is not being done and to ignore the progress which is being made. In fact, a great deal of work is currently in hand, to update and upgrade the existing network. Noble Lords who have spoken mentioned many of the projects that are in hand, but I was not surprised to note that they all would have liked the projects to proceed quicker and to go further.
London Underground's single largest scheme is the £750 million Central Line modernisation, with 85 new trains, new signalling, and uprated power supplies. The scheme will deliver a 16 per cent. increase in capacity —I know that will be welcomed by the noble Lord, Lord Carmichael—and a 12 per cent. reduction in journey times. The new trains are already starting to appear on the network and the programme will be completed in 1995.
A £300 million programme to refurbish half of all Underground trains is already well under way. Refurbished trains, which many customers think are new, are already a familiar sight on the Circle Line, the Victoria Line and the Bakerloo Line. Last year, Angel station was reopened after a £72 million rebuild; Waterloo ticket hall is being upgraded in preparation for the arrival of Channel Tunnel services, and Bank station is being modernised. To a longer timescale, London Underground has in process a £1 billion programme of track replacement; signals are being updated (for example, at Edgware Road); and essential safety improvements are being implemented at stations throughout the network.
But, of course, there is much more to making the trains run on time than simply putting money into the system. Better management has an important role to play. The Underground is a cleaner, better-run system than it was 10 years ago. Of course, there is still more to be done, but on the whole it is a system that is better managed and more responsive to customers' needs than it has ever been before.

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The Government have played their part in facilitating this change. We have responsibility for setting London Underground quality of service objectives covering many aspects of service, such as reliability, cleanliness, information and other aspects. London Underground is currently meeting eight out of the 12 objectives which it was set in 1993. New objectives will be set in 1994.
London Underground has also taken major steps down the road of improving efficiency. Its Company Plan, a wide ranging programme of safety, quality and efficiency improvements published in 1991, was endorsed by the Government. In that plan the number of grades of Underground staff was reduced, resulting in a more flexible, skilled and customer-oriented workforce. Efficient operation is essential if the maximum possible use is to be made of the funds available for investment, so improvements on this front are very much to be welcomed.
It would be, I will admit, misleading if I were to paint too rosy a picture and I do not think your Lordships would totally believe me. On the subject of escalators, they do break down, but I hate to tell your Lordships that in the best organised societies mechanical things can fail and they need to be maintained. What we are trying to do—I believe we are succeeding—is to set targets for London Underground. In 1993–94 we set a target that 89 per cent. of escalators should be operational at any peak period. The latest available figure shows that 92 per cent. are available and operating. Therefore the target we set is being exceeded. We believe that that shows some progress has been achieved. No doubt we will set new targets as I fully appreciate the importance of escalators and lifts in the stations where they are available.
I ought to mention the power failure on the Central Line on 24th November, as that caused a great deal of disruption and anxiety for many people. We now know that the power failure was caused by two defective cables at Lots Road power station. Because the fault was intermittent in nature, and was only triggered when fully loaded trains were running over the network, it was extremely difficult to isolate. These cables have now been replaced. London Underground has been asked to provide a full report into what went wrong, what lessons it has learnt from what happened, and what further action it will be taking to ensure that this kind of problem does not occur again. We expect to receive this report in a few weeks.
I wish to mention the Jubilee Line, as my noble friend Lady Gardner of Parkes referred to it. She said that it was not just a case of discussing the existing lines. She said that it was the future plans for extending and expanding the system that are important. The £1.9 billion Jubilee Line extension is a considerable achievement. It will be a considerable achievement for British engineering when it is opened. It is the first major new Underground line for a generation and it will be one of the biggest construction projects in the country. My right honourable friend the Secretary of State for Transport announced that the project was to go
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ahead on 29th October. My right honourable friend the Prime Minister drove the first pile at a ceremony at Canary Wharf on 8th December.
I believe that the extension will constitute a major asset to parts of south and east London which are not currently well served by public transport. It will mean improvements to the existing Jubilee Line, with a completely new set of trains. Its construction will create 22,000 new jobs across the United Kingdom. Over £1.2 billion-worth of contracts have now been let by London Underground. The project has resulted in over £600 million-worth of civil engineering contracts and a similar amount of electrical and mechanical work. It is a big project and I am sure that all noble Lords who have an interest in underground railways are looking forward to 1998 when the extension is due to open and we shall all be able to ride from Waterloo to Canary Wharf in 10 minutes or from Canada Water to Bond Street in 14 minutes.
My noble friend asked me about the possibility of a station at North Greenwich. I am sure my noble friend is aware that we are currently discussing with British Gas, who are the owners of the site, the prospects for a private sector contribution to the cost of this station. I am afraid I cannot speculate how successful we will be, but certainly we are involved in discussions to assess whether we can have a station at North Greenwich.
Looking further ahead, there is the prospect of CrossRail, which is currently under discussion in another place. We are convinced that there are substantial benefits to be gained from the kind of private sector collaboration that we have had for the Jubilee Line and that we are looking forward to with CrossRail.
I acknowledge that much remains to be done on London Underground, but it is inevitable that there will always be more to be done than we can afford at any one time. Demands on the public purse are, of course, infinite and it is self evident that public expenditure must be controlled. I understand that even the party opposite accepts that that is the case, at least for the moment. It is a simple fact of life that all governments have to control their expenditure and to weigh up the various pressures on them and the various demands for expenditure, not just from one department to another but within departments and, in the case of transport, from the various methods of transport and the other parts of the country which also require investment in their transport systems.
London Underground's decently modern metro—as it calls it —is an attractive concept and a worthwhile aspiration. While we should not fool ourselves that a fully modern network is achievable overnight, we shall continue to work with London Underground to ensure that the funds which are available are put to the best possible use to make sure that we have a good service for the fare payers and that we have a good deal for the taxpayer and for the welfare of the city of London. I believe that our commitment can be seen, in that in each of the next three years, taking the core business funding as outlined by my right honourable friend the Chancellor and the funding for the Jubilee Line and for CrossRail, the Government intend to invest almost £1

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billion in London's Underground. By the time we reach the third year-1996–97—we shall be investing £987 million.
I am grateful to the noble Lord, Lord Ezra, and other noble Lords who have spoken for raising the issue and introducing me to parts of London Underground beyond those parts which I have seen as a passenger. While there is much to be done, I believe that the Government have a splendid record, one which certainly easily stands comparison with the record of previous governments who have, if anybody has, penny pinched with investment in London.
Lord Sefton of Garston: My Lords, before the Minister sits down can he tell us when we will receive the final instalment of the £400 million?
Lord Mackay of Ardbrecknish: My Lords, I am not sure which £400 million the noble Lord has in mind.
Lord Sefton of Garston: My Lords, I am referring to the £400 million which the developers should have paid for the line from Canary Wharf.
Lord Mackay of Ardbrecknish: My Lords, I understand that the noble Lord is referring to the Jubilee Line. The money from the private sector investors in the Jubilee Line will be paid to the Government over the next 25 years, in instalments which have been agreed.
House adjourned at thirteen minutes past seven o'clock.