Lords Sitting of 31 January 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 Southwark.

Life Sentence Prisoners: Escapees
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
Whether they have investigated the escape of Stanley Greenfield and Anthony Pilditch while serving sentences of life imprisonment for murder, and in particular the reasons why these persons were able to escape as the result of temporary release from prison.
The Minister of State, Home Office (Earl Ferrers): My Lords, the two escapes from escort have been fully investigated. Staff disciplinary hearings are being conducted, but they are not yet complete.
Lord Boyd-Carpenter: My Lords, is it not clear that the placing of these two men in a position from which they could escape was a grave error of judgment? Can I be assured that this will be brought home to the officials concerned?
Earl Ferrers: My Lords, I do not believe that it was a grave error of judgment. These two people were not on temporary release, but they were out in the community. That is allowed as part of the system which permits a person to familiarise himself with outdoor conditions. It so happens that on both occasions the gentlemen went to the lavatory, which is not an unusual thing to do. It was from there that they absconded.

National Curriculum
2.38 p.m.
Lord Skidelsky Lord Skidelsky asked Her Majesty's Government:
Whether the time allowed for modifying the national curriculum and assessment system in the light of Sir Ron Dearing's report and the associated advisory arrangements are adequate for the task.
The Minister of State, Department for Education (Baroness Blatch): My Lords, yes. We have every confidence that the School Curriculum and Assessment Authority will meet the timetable recommended in Sir Ron Dearing's report.
Lord Skidelsky: My Lords, I thank my noble friend for her reply. Nevertheless, does she agree that to allow only three months to dismantle a system which took five years to set up smacks of insane haste? In practice, it is likely to lead to incoherent curricular and testing arrangements, driven through at very high speed by the officials of the authority, which will not command
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public confidence, will not work, and will therefore not bring about the peace between the Government and the teachers which we all want.
Baroness Blatch: My Lords, I understand my noble friend's anxiety. The exercise is, in fact, slimming down the existing orders and modifying the existing 10-level scale. It is responding to the wishes of the teachers that the system should happen very quickly and that the system should be in place by 1995. Sir Ron Dearing has given his word that the work can be done. Each subject order is being done simultaneously which will help enormously.
Baroness David: My Lords, surely, the advisory groups have a great deal of work to do? Can the Minister say that they really have time? Considering all the other mistakes which have been made about the curriculum over the past few years, would it not be sensible to give a little more time, as the noble Lord, Lord Skidelsky, asked? Have the Government given any consideration to the suggestion made by the Labour Party that the Scottish system of assessment should be introduced, which emphasises the professional judgment of the teacher and the interests of the individual child rather than the publication of school league tables?
Baroness Blatch: My Lords, I made the point in response to my noble friend that it is a slimming-down exercise of what is already there. It is a simplification of the 10-level scale system which is in existence. It is as a direct response to the anxieties of the teachers that this change should happen very quickly. The work is being done simultaneously across all subject orders. Although it is a tight timetable, Sir Ron Dearing is confident that it can be done and I believe that we must take him on trust. Certainly, the teachers are very involved. As regards the noble Baroness's second question, if she wishes I can give her a copy of Sir Ron Dearing's report because he does address that. very question. He says that the Scottish system would not be appropriate in England.
Lord Elton: My Lords, should we not welcome the willingness of the teachers to pursue this matter swiftly, which is replacing something that will not work with something that they say will work and at a speed which means that there will be no gap between the two and that the children will suffer the least possible disadvantage?
Baroness Blatch: My Lords, I thank my noble friend for those comments, which are absolutely right. Not only is the work being carried out simultaneously, but there are also committees which are charged with the overview to make sure that the whole of this work comes together as a manageable package for teachers. To that extent, I am confident that it can be done in the time. It is the teachers' wish that that should be so.
Lord Cledwyn of Penrhos: My Lords, can the noble Baroness say why the Scottish system is not suitable for England?
Baroness Blatch: My Lords, Scotland does not have a national curriculum in the way that England does. The systems are very different and start from a different

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base. For example, in Scotland there is very much more central prescription in the sense that it is a much more manageable system. It does not have, for example, 25,000 schools comprising about 19,000 primary schools and 5,000 or so secondary schools. The more detailed reasons are in the Dearing report. He gave very serious consideration to that aspect and he dedicates a whole annex to it.
Baroness David: My Lords, are the parents to be involved in the advisory groups? Perhaps the Minister can inform me whether parents are involved as well as teachers and others?
Baroness Blatch: My Lords, I can assure the noble Baroness that they are involved. Mrs. Margaret Morrissey, who is the chairman of the National Confederation of Parent Teacher Associations, is involved. I understand that some of her colleagues are involved, too.
Lord Skidelsky: My Lords, perhaps I may draw my noble friend's attention—
Noble Lords: No, ask a question!
Lord Skidelsky: My Lords, I am sorry. May I ask my noble friend to consider the fact that a number of members of the advisory committees have said that owing to the timetable they fear that they will be used as rubber stamps for policies that the officials wish to drive through?
Baroness Blatch: My Lords, no, I am not aware of that. The work is only just under way. We shall have to await the completion of that work, but the advisory committees are working extraordinarily hard and will be the only source of advice for Sir Ron Dearing when he comes to finalise the work.

Gibraltar: 2nd Banking Directive
2.43 p.m.
Lord Merrivale Lord Merrivale asked Her Majesty's Government:
What action they have taken affecting the Financial Services Commission in Gibraltar since implementation by the Gibraltar Government of the 2nd Banking Directive adopted by the Council on 15th December 1989.
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, we notified the European Commission on 15th November 1993 that the Government of Gibraltar had made the necessary changes to Gibraltar law for the transposition of the 2nd Banking Directive (89/646/EEC) in so far as it relates to incoming EC credit institutions and Gibraltar banks. Discussions are continuing with the Gibraltar Government with a view to ensuring the effective implementation and discharge of Community obligations in the Gibraltar financial services sector.
Lord Merrivale: My Lords, I thank my noble friend for that Answer, but am I right in saying that the UK
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position is that Gibraltar is Community territory as far as the other 11 member states are concerned? Therefore, is it not reasonable that the Gibraltar Banking Supervisor should be empowered to inform the Supervisor of a host state that a bank that is established in Gibraltar wishes to set itself up in that member state?
Baroness Chalker of Wallasey: My Lords, this is a slightly complicated matter. The 2nd Banking Directive establishes so-called banking "passports" between member states. As Gibraltar is a separate jurisdiction within the UK member state for these purposes, the EC legislation governing the UK's relations with other member states does not automatically apply to the UK's relations with Gibraltar. We are investigating this. There is a further Banking Advisory Committee of the Community in March. When we implemented the 2nd Banking Directive by regulations under the European Communities Act 1972, it was doubted that there were sufficient vires to establish a passport regime between the UK and Gibraltar in those regulations. When parliamentary time allows, we shall bring forward the necessary primary legislation. The whole matter is under discussion at this time.
Baroness Blackstone: My Lords, may I ask the Minister a simple and uncomplicated question? Can she tell the House what effect the directive has had on the economy of Gibraltar?
Baroness Chalker of Wallasey: My Lords, to the best of my knowledge, it has had very little effect on the economy of Gibraltar up to the present time. We are seeking to ensure that there is proper regulation of financial services in Gibraltar. It is with that in mind that the discussions continue with the Chief Minister of Gibraltar.
Lord Peston: My Lords, as we have a little time, may I ask the Minister whether she will educate us? Is it not the case that any bank that is eventually accepted in Gibraltar can then open up anywhere else in the Community? Is not that the case? If it is the case, the question of how well the banks are supervised in Gibraltar is a serious matter; if it is not the case, the matter is less serious.
Baroness Chalker of Wallasey: My Lords, what I sought to say in reply to my noble friend Lord Merrivale was that the legislation which governs our relations with other member states does not automatically apply to the UK regulations with Gibraltar. Therefore, the passporting of banking services in one member state, which allows its banks to operate in another member state, does not automatically allow financial services or banking that are begun in Gibraltar to operate in another member state. The noble Lord may know that Luxembourg refused to recognise the Gibraltar licensing system. Others may do likewise.
Lord Peston: My Lords, that is why I asked the question. As we are meant to do these things on a European Union basis these days, it is still not clear what determines what happens in such circumstances. We seem to hear the unilateral view, "We do not recognise this", which rather puzzled me the first time

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that I came across it. I thought that that could not happen. I thought that "passports" meant "passports". Is the noble Baroness saying that they do not mean passports any more?
Baroness Chalker of Wallasey: My Lords, we are clear that Gibraltar-based banks and building societies are eligible to take advantage of the right to passport to other member states in the single market, but other member states do not so agree. At present there is a discussion going on. But if any banking or financial service in Gibraltar is to take advantage of the passporting, the regulations must ensure that the banking or financial service is properly founded and on the same basis as it would be in the United Kingdom itself.
Lord Hailsham of Saint Marylebone: My Lords, did I understand my noble friend's earlier answer aright: that this can be put right by primary legislation in the United Kingdom Parliament? If I am right about that, can we not have a rather more rapid programme for parliamentary time, by agreement between the parties, than she seemed to indicate?
Baroness Chalker of Wallasey: My Lords, there is a difference of opinion between the Chief Minister of Gibraltar, who has one legal opinion, and Her Majesty's Government, but we have said that we will bring forward primary legislation, if necessary, at an appropriate time. We shall do so as soon as we can, but plenty of discussions are going on at the present time. We want arrangements in Gibraltar, which we are now discussing with the Government of Gibraltar, to ensure that there are the necessary standards of regulation and security in Gibraltar. That can help us to ensure effective implementation and discharge of Community obligations in the Gibraltar financial services sectors. But that will require primary legislation.
Baroness Elles: My Lords, does my noble friend agree that the strength of the 2nd Banking Directive of 1989 is that it is the member states who are to give authority for a bank to be set up within the member state, and thereafter a passport can be given from that bank? Surely it must depend upon the United Kingdom's view of what is the position in Gibraltar rather than anyone else's.
Baroness Chalker of Wallasey: My Lords, my noble friend is right. That is why I spoke about how the necessary arrangements would be introduced to enshrine sufficient standards and regulations in Gibraltar. That, as I understand it, will be the responsibility of the British supervision. Until that has happened, the next step forward cannot be taken.
Lord Elton: My Lords, do I infer from my noble friend's reply to my noble and learned friend Lord Hailsham that the protection available to British investors in Gibraltar is not the same as it would be if they were to invest in this country?
Baroness Chalker of Wallasey: My Lords, I am not sure whether my noble friend is referring to one problem that we have, which is mortgage indemnity, which
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forms an important part of the financial sector. We are not ready to extend arrangements to Gibraltar until we are fully satisfied about the supervisory and regulatory systems there. That implies what he said in his question.
Baroness Blackstone: My Lords, I am sorry to pursue this matter, but we do have a great deal of time. Will the Minister tell the House how the French Government deal with similar issues in relation to Monaco?
Baroness Chalker of Wallasey: My Lords, 1 am afraid that the noble Baroness will have to ask a French Minister, because I cannot tell her from this Box at this moment.
Lord McIntosh of Haringey: My Lords, does the Minister agree that this has been a model of questioning in your Lordships' House? We have extracted information as questioning has proceeded. Is that not in contrast to a good deal of the way in which your Lordships conduct Question Time?
Baroness Chalker of Wallasey: My Lords, the ability of the person answering at this Dispatch Box to give clear advice often depends upon the Question asked in the first place.

Business
Viscount Ullswater: My Lords, at a convenient moment after 3.30 p.m. and after the Report stage of the Social Security (Contributions) Bill, my noble friend Lord Strathclyde will, with the leave of the House, repeat a Statement that is to be made in another place on BMW's acquisition of Rover.

Social Security (Contributions) Bill
2.53 p.m.
Report received.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 1:
After Clause 1, insert the following new clause:
("Report by Secretary of State
The Secretary of State shall publish and lay before Parliament a Report on the impact of the increase in the main primary percentage under section 1 of this Act upon contributors to the National Insurance Fund who pay primary Class 1 contributions but who do not pay income tax.").
The noble Baroness said: My Lords, the amendment seeks to monitor, and ask the Secretary of State to report on, the poverty of those in low-paid work: those 500,000 workers, mainly women, who pay national insurance and earn over £57 a week, but who earn too little, nonetheless, to pay tax. In other words, they are earning between £57 and £66 a week, if single, or less than £100 a week if they are a lone parent or married: 500,000 people earn too little to pay tax but they pay national insurance. Currently they pay 2 per cent. on their earnings up to £56 a week and 9 per cent.—soon to be 10 per cent.—thereafter.
We accept fully, as was said in Committee, that the increase from 9 per cent. to 10 per cent. represents a few pence for a single person or 38p a week for a lone parent

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or couple. The increases are not large, although the total national insurance contribution on the earnings of someone who earns too little to pay tax still represents some £5 a week on income of, perhaps, £90 a week. That is a significant sum.
It is because that group is the point at which several worrying trends in taxation, earnings, and social security expenditure come together that we move the amendment. It is moved in the hope that the Secretary of State will report to Parliament. What are those trends? First, that the pay of the low paid has been falling. Today's Independent carries a report from the Greater Manchester Low Pay Unit which shows that the average pay for low paid younger people fell by nearly 7 per cent. between April 1990 and April 1993; and that, whereas 28 per cent. of jobs in 1990 for them paid less than £1.50 an hour, it is now 42 per cent. of jobs for those at 16 years old. The low pay unit reported a year ago delivery drivers earning 1.75 an hour; warehouse handlers £1.86 an hour; security guards £1.65 an hour; garage mechanics £1.81 an hour; shoe repairers £1.88 an hour; and clerical workers £1.75 an hour. The follow up report of six months ago showed sales assistants at £2 an hour; cleaners £2 an hour; switchboard operators £2 an hour, and so on.
On such pay, those people will not pay tax, but if they work more than 30 hours or so a week they will be paying national insurance. All the evidence shows that the abolition of the wages councils is pressing down that low pay even lower. It is being pressed down to income support levels. On their behalf, we want those trends —the deliberate consequences of deliberate government policy in abolishing the wages council—to be monitored. That is the first reason for wanting the report.
The second reason is that our concerns are reflected also in another worrying development reported in the latest edition of Social Trends, which was published last week. We all knew, and we discussed it in this House, that the income of the bottom 10 per cent., after housing costs, has fallen in real terms since 1979 while the income of the rest of us, as the noble Lord, Lord Boyd-Carpenter, said in Committee, has risen by an average of 35 per cent. We knew that the bottom 10 per cent. had seen their real incomes fall. What Social Trends told us last week was that it is not just the bottom 10 per cent. but the bottom 20 per cent.—some 11 million people—who have seen their income, after housing costs, fall by 3 per cent., and a third of them are in full or part-time work. While the national average has increased by 35 per cent. and the top fifth by over 50 per cent., the bottom fifth has fallen by 3 per cent. in real terms.
The country has become wealthier while inequality has grown. There has been no trickle-down of wealth. Our prosperity has been accompanied by, and perhaps has even been carried by, the poverty of those people.
Thirdly, we have a public policy interest in wanting the report. The Government, in this Bill and others, have been reducing the incidence of national insurance on employers while increasing it on employees. The Government will say, and I am sure that they are right, that that is in part to finance statutory sick pay by
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employers, but we all know, as we saw in "The Money Programme" on Sunday, that the costs of sick pay will be exported rapidly out to the DSS when employers sack their sick. So, at the very time when employers have a permit to drive down the wages of the lowest pay, they are also enjoying a reduction in national insurance for them, a deficit which is picked up by the low paid themselves.
There is a fourth reason for wanting the report. It is because the low paid are so poor that they are not paying tax that the state has to supplement their income by family credits. Like the old Speenhamland system, employers know that low pay will be partly offset for families by higher state benefits. At the very time that we require fathers rather than the state to support their children, the abolition of the wages councils will allow employers to reduce their wages, knowing that they will be made up by the state. There is therefore for us all a key interface between wage levels, state benefits and family poverty. We need to monitor it properly, and the amendment would secure that.
The final reason for wanting the report is that this group of people—that is, the 500,000, mostly women, who are earning too little to pay tax but are paying national insurance—is experiencing some of the most regressive effects of the Government's fiscal policy. If the Government had increased direct taxation by one penny, which all of us earning above the personal allowance would have paid—that is above £66 per week as a single person and £100 per week in marriage—that would have brought in £360 million less than by raising national insurance by 1 per cent. The difference is that that £360 million extra is paid by the poorest who are too poor to pay income tax—and the amount is capped for those earning more than £22,000 per year.
So that group of 500,000 people, mostly women, who are earning too little to pay tax but are paying national insurance earn only low pay which is falling lower, their hours of work are increasing, they have lost the protection of the wages councils, their incomes have fallen in real terms since 1979, and their national insurance benefits will be cut should they be sick, disabled or unemployed. Yet they are being asked to pay more in national insurance so that the better off pay less in direct taxes. That is unfair. In order to monitor those deeply disturbing trends we have tabled this amendment and ask the Secretary of State to report to Parliament on the developments of that group. I beg to move.
3 p.m.
Lord Boyd-Carpenter: My Lords, it is obvious from the speech that we have heard that the amendment has little to do with the Bill. It is designed to enable Members of the Opposition Front Bench to discuss what they feel strongly about, in particular the abolition of wages councils. We discussed the abolition of wages councils at great length only a short time ago and I do not believe that either side of the House convinced the other. I remain convinced that we were right to abolish the wages councils.
The point is that the issue does not arise in this Bill at all. The amendment is simply an attempt to write into the Bill a certain amount of propaganda on behalf of

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noble Lords opposite, in particular the Front Bench, which have little to do with the Bill and its working. Therefore, it would be an abuse of our procedure to put the amendment into the Bill.
Lord Tordoff: My Lords, I rise in support of the amendment and in total opposition to what has been said by the noble Lord, Lord Boyd-Carpenter. The amendment makes no reference to wages councils. Admittedly, in speaking to it and in giving the background, the noble Baroness, Lady Hollis, properly drew attention to the changes in social security contributions. But to suggest that the amendment is an abuse of the process is totally wrong. It is a necessary amendment to ensure that Parliament and the rest of the country can see the impact of what the Government are doing in this field. I support it.
Baroness Elles: My Lords, I agree with my noble friend Lord Boyd-Carpenter. The amendment tabled by the Opposition relates to one area only. Surely, if one wants a report, one wants to consider all contributors and the effect on the whole economy. Several reports relating to such matters are published regularly by the Government and if specific information is required Ministers can be asked to reply to Questions tabled in this House and in another place. Therefore, the amendment appears to be totally otiose and I hope that the House will reject it.
The Parliamentary Under-Secretary of State, Department of Social Security (Viscount Astor): My Lords, your Lordships will be well aware that the present system of earnings-related national insurance contributions was introduced in 1975. The structure and contribution rates for employees, and also for employers, have changed a number of times since then. The present two-tier contribution structure for employees, which we introduced in 1989, is particularly helpful to those with lower earnings because the first £57 of weekly earnings is subject to a contribution rate of just 2 per cent.—and that is not changing from April.
This means that low-paid workers pay proportionately more of their contributions at the initial rate of 2 per cent. Therefore, someone on £100 a week, which is about the level at which a married man starts to pay tax, will continue to pay contributions at only 2 per cent. on his earnings up to the lower earnings limit of £57. The increase of 1 per cent. in the main contribution rate applies only to those earnings above £57. Thus the increase in contributions from April will be only 36 pence a week.
For a single person the tax threshold is about £66 a week and the maximum increase in national insurance contributions at that level of pay will be 2 pence—I repeat, 2 pence.
The contribution payable in these two cases will be £2.04 and £5.44 respectively. The House may wish to note that as a percentage of pay, these contributions represent 3 per cent. and 5.4 per cent respectively. Under Labour these people would have paid 6.5 per cent. of their pay in contributions; that is £4.29 and
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£6.50 respectively. The single person would have been paying more than double under Labour than we now propose and the married person £1.06 more.
The noble Baroness, Lady Hollis, has commented on the effect of the contribution increase on people earning about £6,000 a year; for example, a nursing auxiliary. That level of pay is, of course, subject to tax even for someone with the married person's allowance and is not therefore strictly within the terms of the amendment. However, from next April such a person would pay about 6 per cent. of their pay in national insurance contributions. This compares to the 6.5 per cent. of earnings which all contributors paid under the Labour Government when they left office.
There is a further point which your Lordships should not lose sight of when considering the effect upon the low paid. People paying contributions at a relatively low level compared to higher paid people are earning the rights to the full range of pensions and other benefits —for example, widows' pensions, sickness and invalidity benefits, unemployment and maternity benefits—as well as going towards the state earnings related pension. For the single person it really is very good value to be earning a pension for £2 or less a week.
It is, nonetheless, worth emphasising that many of the people concerned will be second wage earners for whom it is convenient to work part-time in order to supplement a main wage.
The amendment asks for a report on the effects of the increase on contributors who do not pay tax. I have explained that the effect on the lower paid will be marginal. We already provide Parliament with full details of the financial effects of contribution changes, by means of a report by the Government Actuary. This, will be published next month. As my noble friend Lady Elles said, we publish a full report, which is important. An extra report is totally unnecessary, as my noble friend Lord Boyd-Carpenter said.
This Government have protected the low paid by the re-structuring of national insurance, which we introduced, and we shall continue to do so. I hope, therefore, that the noble Baroness will be prepared to withdraw her amendment.
Baroness Hollis of Heigham: My Lords, I thank noble Lords who have taken part in the discussion. I was a little disappointed in the Minister's reply. It appeared that he was replying to a speech made in Committee, when perhaps his notes did not arrive in time. At no point today did I mention the figure of £6"000 or discuss people earning £6,000. I did so in Committee but today I gave the hourly pay rates of people from whom wages council protection has been withdrawn.
As that argument was made in Committee, I accept the figures which the Minister gave today and that the increases are modest, even though for someone earning £90 per week a £5.50 contribution in national insurance is a significant sum. I also wish to challenge the Minister's comments about the full range of benefits, which was a point made in Committee. Those benefits are being cut.
Like the noble Lord, Lord Tordoff, I do not understand the nature of the Government's opposition.

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If, on the one hand, the Minister is saying that the information is already available in a wide range of reports and therefore that the report is—I use the word of the noble Baroness, Lady Elles—otiose, then it involves little effort and cost to bring it together in a targeted way.
However, if that information does not exist and it cannot be brought together in an easy way, then that should be done so that we know what is the impact of the Government's changes, which have a knock-on effect on us all as regards fiscal and benefits policy. If we have the information already, then it is not expensive to provide it. If we do not have it, we should do. We need to know. That is the basis of pressing for the amendment; namely, so that we know in future how the import of those contributions will bear on the lowest-paid members of our society at a time when all the other information that we have suggests that their poverty is worsening relative to the rest of us.
I shall look at the Minister's reply. Perhaps on Third Reading he will reply to the speech that I have made on Report.
Viscount Astor: My Lords, perhaps the noble Baroness will permit me to intervene. I replied to the speech that she made this afternoon. However, I had looked very carefully—as I imagine she hoped I would do—at what she said in Committee. Therefore, I was able to amplify what she said in Committee. Finally, perhaps I may put the noble Baroness straight on one matter. She keeps announcing that contributions are going up and benefits are being reduced. That is not the case. This proposal increases national insurance contributions by 1 per cent. in 1994–95. I emphasise that in 1994–95 there will be no reduction in benefits.
Baroness Hollis of Heigham: My Lords, do I take it from the noble Viscount's statement that the Secretary of State for Social Security is misinforming Parliament when he draws attention to the cuts in benefit and the savings which will come from altering the jobseeker's allowance and invalidity benefit?
Viscount Astor: My Lords, the noble Baroness is mistaken, and she should read rather more carefully what my right honourable friend the Secretary of State said. He said that we are proposing changes to invalidity benefit but those changes will not take effect until 1995. The Social Security (Incapacity for Work) Bill, currently in another place, introduces a benefit which has a more objective test for incapacity. For example, our proposals for a single new benefit, the jobseeker's allowance, does not come into effect until 1996.
Baroness Hollis of Heigham: My Lords, we are well aware of when the benefits are due to be introduced. The point is that those alterations will result in a reduction in their value and will ensure a saving for the Treasury. That has been made perfectly clear in question after question and debate after debate in another place. I am surprised that the Minister suggests that that is not the case. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 2:
After Clause 1, insert the following new clause:
("Statement of change in contribution and benefit levels
The Secretary of State shall, on request, but not more than once in each financial year, supply every contributor to the National Insurance Fund with a statement of the change (as against the level at 5th April 1994) in the level of his annual contributions consequent upon section 1 of this Act and of any change (as against the level at 5th April 1994) in the rate of, and in the period of entitlement to, the benefits from the National Insurance Fund for which that contributor might qualify.").
The noble Baroness said: My Lords, in Committee my noble friend Lord Carter moved an amendment to ensure that contributors receive an annual statement of the increase in contributions together with information on any changes in the value of the benefits to which they are entitled.
The reason for the amendment was that we believed that individuals are entitled to know what they are paying and if there is an increase, what that increase will buy. Contributors to private insurance schemes will expect to receive that information.
If one looks at what the Minister said in Committee at col. 840 of Hansard, he seemed to find the objective of the amendment laudable, although he opposed it on the ground that it would be administratively difficult. He also gave lack of up-to-date computer facilities as a reason for resisting the amendment. He indicated that a fair amount of information is already made available, particularly in the pensions area. He said that a retirement pension forecast is made available to contributors. Of course, we are concerned with general benefit entitlement, including unemployment benefit. As my noble friend Lady Hollis has already said, we are anxious about the prospect that that will be reduced by the prospective jobseeker's allowance which will be paid for only six months as of right and thereafter on a means tested basis, as the Minister has agreed, from 1996.
I wonder also for how long it has been the practice to tell contributors what are their pension forecasts and how they are arrived at. I ask that because in recent years I have been approached by women nearing retirement who are devastated to learn that they will not be entitled to the basic retirement pension until their husbands reach the age of 65. As many women are younger than their husbands by two or three years and retire at the age of 60, it will be seen that that is a cause of some concern to them.
The problem is that those women took the married women's option many years ago and decided to rely on their husband's insurance. I told them that it was foolish to do that; but many simply did not realise what would happen. They tell me that had it been made clear to them earlier, they would have opted to pay the full amount. That is just one example of people not understanding what their contributions will or will not buy. For most people, deductions from salary are merely accepted. They know when they are increased, but they often have no idea why or what they are buying in the way of social insurance benefits.
Of course the married women's option in regard to pensions is a thing of the past but the Government may be considering other options in regard to social insurance for the future.
I had the impression in Committee that the Minister was quite sympathetic to what we seek. The wording of this amendment is altered slightly so that it says:
"The Secretary of State shall, on request, but not more than once in each financial year, supply every contributor to the National Insurance Fund with a statement of the change".
The Minister may have considered this matter further since Committee. If he does not accept the wording of the amendment, perhaps he will take the matter on hoard and do something about it. I beg to move.
3.15 p.m.
Lord Tordoff: My Lords, at first sight, I was unenthusiastic about the amendment; but the noble Baroness, Lady Turner, has convinced me that certainly the second half of the amendment has great merit. It is true that many people do not know what their benefits are buying in the long term. This amendment is extremely helpful in prompting them to find out. Therefore, I support the amendment.
Viscount Astor: My Lords, the amendment before the House would now make a statement available to contributors on request. As the noble Baroness said, it is slightly different from the amendment moved in Committee.
However, the first part of the amendment which deals with a statement of contributions as opposed to benefits would still, in my view, be of very limited value to people, providing as it does for a statement of the change in the level of people's contributions as against the level at April 1994. That will be an unhelpful piece of information, which might amount to a few or many pounds depending on the person's earnings, periods of employment and so on, and not necessarily related to the 1 per cent. increase in national insurance at all. It would tell people nothing which they cannot deduce for themselves by looking at their pay slip or end of year P60.
Of course, if people seek a statement from my department of their contribution records, we are only too willing to provide it as a matter of good service. The Contributions Agency has produced its own charter, as part of the Government's Citizen's Charter initiative. That is widely available and reviewed regularly.
The requirement in the amendment is to provide on request a statement of any change in the rate and period of benefits available from the National Insurance Fund, but I feel once again that that would not be especially helpful. In my view people want to know to what, exactly, they may be entitled.
As I explained in Committee, there are already existing measures to advise contributors of their entitlements under the national insurance scheme. The Contributions Agency issues over 3 million annual notices following the end of any year to those contributors whose contribution record is insufficient to count towards their basic retirement pension. The statement provides details of contributions paid and gives contributors the opportunity to pay voluntary
1120
contributions to bring the year up to the qualifying level and thus secure benefit entitlement. In addition to that administrative arrangement, the Benefits Agency also provides a retirement pension forecast service to contributors: they can request a forecast by completing an application form obtainable at local social security offices. The forecast gives details of the pension entitlement based on the national insurance record held. It states the number of qualifying years required in the future to obtain the maximum pension which can be achieved, and offers advice on the payment of additional contributions, if required.
If there is more information which people need, their enquiries can be dealt with on an individual basis, either by letter or by our special Freeline telephone inquiry service. Of course, there is also a very wide range of explanatory leaflets available covering every benefit in detail. I agree entirely that people should be able to get information about their entitlements and that we should inform them where there is a risk that they will lose out on qualifying for benefits. 'We already haw substantial administrative arrangements towards meeting those aims.
The noble Baroness asked me a few questions about married women with a reduced rate pension and election. The reduced rate option was abolished in 1977, except for those women who had exercised the right to retain it. The January 1977 and February 1978 editions of the leaflet National Insurance 1, for married women, publicised the introduction of home responsibilities protection, drawing attention to the fact that the latter was not available to those who retained their non-paying election. The same message is repeated in current editions of the leaflets which mention HRP.
The noble Baroness also referred to pension entitlement. The service to provide a future pension estimate has been available for at least six years on a formal, structured basis and also, before then, an individual calculation would be made on request. I should emphasise that the service is provided on request. It is for contributors to ask for a forecast. As I said, the Contributions Agency is considering how far the issuing of statements should be developed. We are also considering the possible issue of a fuller statement but have yet to evaluate the costs or benefits of such a move. It might include more details of people's prospective benefit entitlement as well as their contribution record.
I hope I have been able to give the noble Baroness some reassurance. While I sympathise with her intentions, I trust that my explanation will provide her with sufficient information to show that we are going a long way to produce substantially what she requires.
Baroness Turner of Camden: My Lords, I thank the noble Viscount for that explanation. As he indicated, there is now a great deal more information available than used to be the case. I am very glad to learn that in the pensions area in particular consideration is being giving to developing the issue of statements and information generally. There really was a problem as regards some older women who opted for the married women's option many years ago. Thankfully, that is

1121
now a thing of the past. As I said, they opted for that option many years ago and it was not until they were approaching retirement age and began to think about pensions (as most people do) that they suddenly realised they would have to wait until their husbands were 65 before they could collect their pension. That was a problem of the time. I am glad that steps are apparently being taken to deal with the matter.
I accept what the noble Viscount said with regard to the wording of my amendment. However, I still feel that there is a case for writing into legislation somewhere the requirement that contributors should have, on request, a statement informing them of the contributions that have been made on their behalf and of the benefits to which they are entitled. I believe that that is a very reasonable request to make.
Lord Avebury: My Lords, would the noble Baroness consider adding to that request a provision that requires the department concerned to give such information within a given space of time? People are asking for statements on their entitlement but not receiving them for many months. I have personal knowledge of a colleague who asked for a statement on his retirement pension for which he is still waiting.
Baroness Turner of Camden: My Lords, that is a most useful intervention. There is not much point in having the information unless you receive it at the appropriate time; for example, when you are making decisions about retirement, and so on. In view of the points made in today's debate, we would like to take back the wording and re-examine it with the purpose of perhaps producing something a little more appropriate and apposite which even the Minister may feel able to accept. I sense that the noble Viscount is very sympathetic to our arguments this afternoon, just as he was to the viewpoint expressed in Committee. Accordingly, I beg leave to withdraw the amendment. However, we shall look most carefully at all the points made in debate with a view to advancing something a little more acceptable on Third Reading.
Amendment, by leave, withdrawn.
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 3:
After Clause 1, insert the following new clause:
("Annual Report to Parliament
The Secretary of State shall publish annually a report to Parliament setting out the yield from the increase in primary Class 1 contributions payable as a consequence of the provisions of section 1 of this Act.").
The noble Baroness said: My Lords, the above is a similar amendment to one which we tabled in Committee. I said then that we wanted to look at what was said and, perhaps, return to the matter if we felt that it was not entirely acceptable. We are suggesting that the Secretary of State should publish annually a report to Parliament setting out the yield from the increase in primary Class 1 contributions payable as a consequence of the provisions of Section (1) of the Act.
As we have seen from the statement in the Bill headed, Financial effects of the Bill:
"Clause 1 will increase contributions to the National Insurance Fund by some £1.9 billion in a full year."
Clearly, that is a very substantial amount of money. In our view, it should be possible for Parliament to consider in a formal way each year whether such a large yield is still necessary and whether, indeed, the Treasury should begin to make a bigger contribution.
As we all know—and, indeed, we said so in Committee—when the system was first inaugurated it was believed that Beveridge had in mind that there should be a fund on a tripartite basis with the employers, employees and the Treasury making a contribution. As time went on the Treasury contribution eventually disappeared, although I believe that it is now being reinstated.
We are dealing with very large sums of money and an increase becoming payable by large numbers of employees at a time when those same employees will also have to consider a further tax burden. I know that we do not discuss tax in your Lordships' House and we have repeatedly been told that this is not a tax. However, for employees it is additional money that will be deducted from their pay packets. At a time when large numbers of people are having to pay a substantial increase in taxation all round, there surely is a case for a separate accounting as regards social security contributions.
Therefore, despite the noble Viscount's response to a very similar amendment in Committee, we think it quite reasonable to require that the Secretary of State should publish annually a report to Parliament setting out the yield from the increase. That would give Parliament the opportunity to decide whether such an increase is still required and whether further contributions might more usefully be made from the Treasury. I beg to move.
Lord Boyd-Carpenter: My Lords, I wonder whether the amendment is really necessary. I am quite sure that noble Lords on both sides of the House will insist on very full information being given by the Government on the working of the national insurance system; indeed, they always have and they always will. Whether it is necessary to entrench such a provision in the terms of the Bill seems to me to be most doubtful. I am all against cluttering up the Bill with additional provisions unless they are really necessary.
So far, I have not encountered any indication that your Lordships' House—or, indeed, the other place—has not been kept fully informed of almost every detail of the complex financial arrangements of the national insurance scheme. Therefore, to pick out such a provision and put it into the Bill seems to me to be unnecessary.
Perhaps I may refer to another point made by the noble Baroness. She suggested that the Exchequer contribution should be higher, but I noticed that she referred all the way through her remarks to payment by the Treasury when of course what she meant was payment by the taxpayer. It is important that we should be clear in our minds that the Treasury is not sitting on an enormous, easily acquired fund but that if it is desired to shift something from the contributors it would have to be shifted onto taxpayers. If we are not clear about that, we shall deal with the matter under a happy sense of illusion.
3.30 p.m.
Viscount Astor: My Lords, this is an identical amendment to the one moved last week. As I explained to the Chamber then, there is an existing statutory requirement for a report by the Government Actuary to be laid each year with the affirmative resolution orders which set the rates of benefits and contributions for the coming year. These reports describe expected changes to contribution income and benefit expenditure in considerable detail, and they highlight the financial effects of changes in structure or rates. Because the orders are subject to the affirmative resolution procedure in both Houses, there is an opportunity for your Lordships' House to debate the changes in detail.
In Committee I also mentioned the requirement for the Government Actuary to undertake a five-yearly examination of the National Insurance fund and report on the extent to which it may be expected in the longer term to bear a proper relation to demands in respect of benefit. This is also a statutory requirement and the report must be laid before Parliament. The last such report was presented in July 1990, so another will be due before too long. The last quinquennial review, as it is known, ran to some 70 pages and took account of legislation enacted in the period 1980 to 1989. It then looked in great detail at the possible effect on contribution rates of maintaining the national insurance scheme over the next 60 years.
The report by the Government Actuary on the benefits and contribution orders will be laid before your Lordships next month. It will need to give full details of changes which have occurred to the contributions system and will set out the yield deriving from them. This will include the financial effect of the 1 per cent. increases, which is exactly what this amendment is seeking.
The noble Baroness, Lady Turner, mentioned the Treasury contribution. However, it is already set at a maximum of 17 per cent. of annual spending on benefits. We must keep a limit on the extent to which the taxpayer—my noble friend Lord Boyd-Carpenter was right to point out that we are discussing the taxpayer here—underwrites the spending on benefits. The fund must be principally funded by contributors if this is to be a contributory scheme. The grant will, of course, be set out in the Government Actuary's report next month.
However, this amendment would also require reports in respect of 1995–96 and each subsequent year separately to identify the yield deriving from the 1 per cent. increase. I feel that this would be an unnecessary burden and, as my noble friend Lord Boyd-Carpenter pointed out in Committee, it is a figure which any noble Lord could obtain by tabling a Question in advance of the annual debate on the contribution re-rating order. Furthermore, the noble and learned Lord, Lord Simon of Glaisdale, pointed out in Committee why this amendment is unnecessary. As your Lordships know, the noble and learned Lord is always prepared to propose the affirmative instrument where he thinks it is necessary.
We already have ample statutory requirements for the provision of information concerning the National
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Insurance Fund to Parliament and it would not be helpful to oblige the Secretary of State to provide, on an ongoing basis, a particular piece of information which would soon cease to have any relevance and, as I have said, would have to identify separately the yield deriving from the 1 per cent. increase.
Baroness Turner of Camden: My Lords, I thank the Minister for his explanation, although of course I find it a little disappointing. I am not surprised that both the Minister and the noble Lord, Lord Boyd-Carpenter, should have said that the amendment is not necessary. Perhaps the whole Bill might not have been necessary had the Government not decided to forgo a substantial sum to the National Insurance Fund by giving people bribes to get into the personal pension field. However, they did so and it seems to me that that was done at a large cost to the taxpayer.
My understanding of the position is that we have this Bill as part of a social security package. It does not stand on its own. We shall deal with the Statutory Sick Pay Bill tomorrow, and there may be other social security measures in the pipeline. It was because we understood this Bill was part of a social security package which the Government were arranging that we felt there was a case for treating it differently and for arguing that there should be annual reports to Parliament as regards the amount of yield from this increase. However, I fear that there is no point in pressing the amendment this afternoon. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
In The Title:
[Amendment No. 4 not moved.]

Health and Personal Social Services (Northern Ireland) Order 1994
3.35 p.m
The Parliamentary Under-Secretary of State, Northern Ireland Office (Baroness Denton of Wakefield): rose to move, That the draft order laid before the House on 9th December be approved.
The noble Baroness said: My Lords, I bring to the House today an order which plays an important role in the development of health and social services Northern Ireland. The purpose of the draft Health arid Personal Social Services (Northern Ireland) Order 1994 is to enable health and social services trusts in Northern Ireland to carry out certain statutory functions which at the moment are the legal responsibility of the health and social services boards there.
The order is a local solution to a local problem. It may be helpful to the House if I comment briefly on the background to it and the present organisation of the services in the Province. In Northern Ireland health and personal social services were integrated into one structure in 1973. We have therefore had an integrated service for over 20 years. During that period the services have been provided by four health and social services boards. This integrated system has served Northern Ireland well through 20 turbulent years, and the people of the Province are quite justifiably proud of this unique

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service. The draft order seeks to preserve this integration and to enable services to continue more or less in their present form. It is needed only to remedy a weakness in the existing law and not because the present services are deficient in any way.
The Government's reforms for health and social services provide for the separation of the purchase and provision of services. The Health and Personal Social Services (Northern Ireland) Order 1991 redefined the role of the four boards as being responsible primarily for assessing the needs of their populations and commissioning services to meet those needs. Their direct management role in the services was removed and general management was introduced at unit level. The order provided for units to be established as health and social services trusts, fully independent of board management but wholly—I stress the word "wholly" —within the statutory sector.
However, although the 1991 order enabled trusts to be established and allowed boards to contract with them for services, it did not permit trusts to carry out certain functions associated with those services except for mental health functions, for which specific provision was made. These functions flow from a range of existing legislation such as the Children and Young Person's Act 1968 and the Disabled Persons (Northern Ireland) Act 1989. Some are sensitive powers involving the restriction of civil liberties, for example taking a child into care. This legislative weakness prevents some units such as those providing personal and social services from becoming fully operational as trusts and the order is concerned with putting that right.
In bringing forward the order we aim to provide a legal framework for the discharge of functions by trusts which ensures clarity about where responsibility lies and secures full accountability for the work undertaken by trusts. Within that framework the order enables boards, with the approval of the Department of Health and Social Services in Northern Ireland, to delegate certain statutory functions, which will be specified by the department, to health and social services trusts. The functions involved were set out in the explanatory document published with the proposal last summer and a draft copy of the regulations dealing with them was placed in the Library when the order was laid on 9th December. The order allows trusts to carry out those functions and makes provision for schemes to be agreed between trusts and boards on how the functions are to be carried out.
Since the proposal for legislation was published last June many people have voiced anxieties about its effect on services, particularly in relation to those for children. Some have expressed doubts about the accountability of trusts within the new arrangements. Questions about fragmentation and inequality of provision have been raised. My noble friend and predecessor and, more recently, I have considered very carefully the anxieties raised and have devoted much time and effort to listening and then explaining the issues. I think it is fair to say that many of the anxieties expressed stemmed from a misunderstanding of the role of trusts, and perhaps I can clarify that point.
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Health and social services trusts are state bodies, established firmly within the health and personal social services in Northern Ireland. They are fully accountable for all that they do and are closely monitored both by the department and by the boards. They are not independent companies and are bound by the same guidance and directions that govern the operation of health and social services boards at present. Like my noble predecessor, I recognise that people have anxieties and I appreciate their concerns. They are genuinely held, but they have not been ignored. Regardless of which side of the debate we are on, we have one interest in common—the welfare of children and other vulnerable groups in our society. For that reason the shadow trusts and boards concerned have been working very hard to establish procedures which will ensure that those who are entrusted with the discharge of statutory responsibilities at local level will be clear about their role and fully accountable for all that they do.
For my part I have been concerned to get to grips with the issues involved since I took up my new post. I have met with representatives from the British Association of Social Workers to hear at first hand its concerns. I have visited units which are preparing for trust status and talked with people who are directly involved in providing services and who are preparing the ground. From my conversations with managers and professionals alike, and on the evidence that I have seen, I have no doubt that the schemes being developed between boards and trusts will address clearly and comprehensively the key issues that have been raised. Under the terms of the draft order they will have to be approved by my department.
There are two other important issues which, although not technically part of this legislation, are intended to underpin it. First, those trusts which will be providing personal social services will need to have access to expert advice and guidance in providing those services and carrying out the functions I have mentioned. To ensure that they have we are making it a legal requirement for any trust providing these services to appoint a qualified social worker as an executive director. At the same time the department will be asking all health and social services boards to appoint a director of social services if they have not already done so. Guidance on the roles and responsibilities of both posts will be issued.
Those changes, taken together, represent a significant strengthening of the structures involved in personal social services in Northern Ireland. Perhaps I should point out also that chief executives of trusts have gone to great pains to build in safeguards for existing social work structures, both organisationally and professionally, within trusts.
Perhaps I may briefly say a word or two about three other changes to Northern Ireland health and social services legislation which are contained in the order. First, the order amends existing law on the audit of health and social service bodies. The law in that area is no more than adequate at present and the order is designed to modernise and strengthen it. Secondly, it amends the law on the registration of pharmaceutical chemists by requiring people seeking registration to

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satisfy prescribed conditions as to character, health and other matters. This will bring Northern Ireland legislation into line with that in other countries. Thirdly, the order repeals an existing provision in relation to the employment of nurses which is no longer needed because of the changes in the way nurses are recruited and trained.
The proposals before the House present no threat to the welfare of patients or clients. They are no threat to standards. They are no threat to vulnerable groups. Rather, they are concerned with ensuring that our services are structured and organised in such a way as to maximise their capacity to respond to people's needs quickly and effectively. I am confident that the trusts which the legislation will affect by focusing on the needs of local people will be best placed to make that response in meeting both health and social welfare needs. I beg to move.
Moved, That the draft order laid before the House on 9th December be approved.—(Baroness Denton of Wakefield.)
3.47 p.m.
Baroness Faithfull Baroness Faithfull rose to move, as an amendment to the above Motion, to leave out from ("That") to the end arid insert ("this House calls on Her Majesty's Government to withdraw the draft order laid before the House on 9th December 1993; and to re-lay it in a month, having considered whether it should extend to social services.")
The noble Baroness said: My Lords, in moving the amendment standing in my name on the Order Paper perhaps I may, first. thank my noble friend the Minister for explaining the order. Perhaps I may also welcome her to her post as Minister for Northern Ireland.
I should like to thank my noble friend and her predecessor, my noble friend Lord Arran, for the time that they have given to explaining the Order in Council to me. Alas, I have been unable to agree with their explanations, particularly as they have not accorded with the views of social workers working in the statutory sector who are members of the British Association of Social Workers. Nor have they accorded with the views of social workers in the voluntary sector, which consists of some outstanding voluntary organisations, among them Barnardo's, which I know well.
I have moved the amendment in this form because an Order in Council must be accepted in total or totally rejected. That is different from the position relating to primary legislation when Bills before your Lordships' House can he debated, discussed and amendments moved to improve the Bill. The amendment therefore takes the form of providing a month for further consultation and discussion. The amendment is in accordance with standing rules and orders and has been approved by the Clerk of the Parliaments.
My noble friend the Minister has done much to explain the order. At present the social work service is covered by four health and personal social services boards. The health and social services were amalgamated some years ago, as the Minister said. I have to say that at that time I disagreed with the amalgamation. The
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social work service is responsible for carrying out the implementation of the children Acts dealing with delinquency, care and protection, and the prevention of suffering, the chronically sick and disabled persons Acts, the mental health Acts, adoption Acts, and work with the education service. Within each of the health and social services boards at present there is a director of social services and a staff of social workers divided into units.
Under the Order in Council before your Lordships' House today, the health and social services board will continue with a director of social services. However, as the Minister said, 12 trusts will be formed to carry out the work which at present is the duty of the four health and personal social services boards. The grass roots social workers will be given the opportunity of moving to the trusts.
What is the exact ethos and purpose of this change? The Minister has stated that it is to provide a mechanism for purchasing and providing, but she has given no other reason. She said that the work at present being undertaken is being done well. If it is being done well, why change the system? Why move the service in particular as that will be costly? If the work is not being done well, can the Minister give examples of malpractice? Can she give examples of where the work is not being done well which would justify a change? Am I right in thinking that the present four health and social services boards will continue in their present form?
In her opening address the Minister spoke of accountability. I am still not quite sure exactly to whom the trusts will be accountable. Will it be to the four personal and social services boards, the Department's executive board, and then the Minister? Should there be a mishandling of a case—for instance, the death of a child; a sexual abuse case not properly dealt with; people in an old people's home not cared for—who would be responsible? Would it be the trusts, which are non-statutory bodies? Would it be the hoard which is not doing the work? Would it then be the Minister who is two steps away, divorced from the work? Even in the Minister's outstanding speech the position has not been made clear.
I understand that the members of the 12 trusts will be appointed by Her Majesty's Government. As has been stated, the trusts are non-statutory bodies. Am I right in thinking that the chairman of each of the 12 trusts will be paid £15,000 a year, and each of the five board members £5,000 a year? Will an experienced and qualified social worker, a director of social services as the Minister stated in her speech, be paid a salary as an executive member? There will then be the clerical and administrative staff. I estimate that the trusts will be far more costly than the present system. Is that riot so? Has the new system been costed against the present system? Do we know the extra costs and whether the change will be worth them?
I am not clear how non-statutory community trusts can carry out work under Acts and orders. The Minister has referred to that aspect; and I look to the noble Lord, Lord Williams of Mostyn, to clarify the legal position.
Roughly speaking, the 12 trusts will cover an area the size of Kent, with approximately the same population. How is consistency of work between the 12 trusts to be carried out? From a social worker's point of view, consistency is important. If you have a child wanting to be adopted and do not have an adopter for that child, you ask another area for help with adopters. If there is no consistency of practice, there will be difficulties.
If the purpose is to give a better service to the vulnerable of the Province, it must be proved that the present system is not efficient and effective. Are we wise to agree to a new, bureaucratic and expensive machine without clear answers to those questions?
I have kept my speech short; I hope that I have made it clear. I believe that the people of Northern Ireland are entitled to a first class service for the vulnerable in their society. I do not believe that the present system has failed. I do not understand how the new system will give a better service. The only reason given by the Minister is the introduction of the purchaser-provider principle. I suspect that that does not give a better service. I beg to move.
Moved, as an amendment to the above Motion, to leave out from ("That") to the end and insert ("this House calls on Her Majesty's Government to withdraw the draft order laid before the House on 9th December 1993; and to re-lay it in a month, having considered whether it should extend to social services.")—(Baroness Faithfull.)

Rover: Acquisition by BMW
3.58 p.m.
The Minister of State, Department of Trade and Industry (Lord Strathclyde): My Lords, it may be a convenient moment for me to repeat a Statement made in another place by my right honourable friend the Minister for Industry. The Statement is as follows:
"With permission, Madam Speaker, I should like to make a Statement about BMW's acquisition of Rover.
"This morning, British Aerospace announced its decision to accept an offer from BMW to acquire its wholly-owned subsidiary Rover Group Holdings Ltd.
"BAe bought the Government's shareholding in Rover Group in July 1988. In accordance with assurances given at the time of the sale, BAe has helped transform Rover into one of Europe's most efficient vehicle manufacturers. Many factors have contributed to this, notably the management of Sir Graham Day, Mr. George Simpson and Mr. John Towers; the receptiveness of the Rover workforce and of Rover's suppliers to changing demands; and the close involvement and valued support of Honda. BAe has played a major part, and put in very substantial capital investment which has averaged £200 million a year.
1130
"BAe wants to concentrate on its role as a world player in the defence and aerospace sector, and has been giving consideration to the future of its shareholding in Rover.
"Late on 26th January, BAe received a formal bid from BMW to acquire Rover Group Holdings Ltd. It was for BAe to take the commercial decision about how to respond to that bid. In particular it has to have regard to the interests of its shareholders, whose approval at an extraordinary general meeting is still a condition to the deal. But BAe immediately informed us of the bid and, in the absence of the President of the Board of Trade on an overseas visit, I met the chief executives of both BAe and BMW to discuss their plans.
"But the reality is that BAe owns two cash-hungry businesses: Rover and its defence and aerospace activities. BAe could not invest as much as it wanted in both businesses. The sale to BMW will therefore allow BAe to pursue plans for the turboprop and regional jet businesses in Prestwick and Manchester. This is good news for the UK's aerospace industry.
"For Rover, the new relationship with BMW offers some significant opportunities. BMW have stated that they will: maintain Rover as a separate enterprise with its own manufacturing plants and its own design and development capabilities; be able to offer better access to the very substantial funds needed for investment in new models; encourage Rover to build on the progress it has made in developing long term relationships with its suppliers; and be able to offer Rover additional export opportunities which should increase volumes.
"BMW have also stated that they hope that Rover will be able to maintain and to build on the existing links with Honda. These intentions are set out in more detail in a letter which BMW have sent to my right honourable friend the President of the Board of Trade. I am today sending a copy of that letter together with a letter from BAe confirming their strategy to all Members of the House. And I am placing copies in the Library.
"BMW is one of the most highly regarded car and engine manufacturers in the world. The fact that BMW is making this very substantial investment in Britain is evidence of the dramatic improvements in competitiveness that have been achieved by the British vehicle industry. BAe and BMW believe that this deal can significantly strengthen Rover, and consequently the UK vehicle industry as a whole. This should be welcomed by our vehicle industry and all those who work in it."
My Lords, that concludes the Statement.
4.1 p.m.
Lord Peston: My Lords, I thank the Minister for repeating the Statement made in the other place. The first question to ask—and perhaps it ought to be asked by Peers who sit on the Conservative Benches—is why a Statement on this subject is being made at all. I hasten to say that I did not believe in the Conservative economic policies of the 1980s; but anyone who believed in them might ask is this not simply a private

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transaction between two businesses? Where do the Government get to poke their nose in? Perhaps the Minister will tell us. He quoted his right honourable friend the Minister for Industry as saying:
"I met the chief executives of both BAe and BMW".
Can the noble Lord tell us why his right honourable friend met the chief executives of those two companies? What was his purpose? What could he have done? What was involved?
It is interesting that we understand that the formal bid came on 26th January. Can the noble Lord tell us whether that was the first time his department had heard anything about the matter? Was the bid made and then his department told but it knew nothing about it earlier?
I ask those questions because this is in a sense a considerable test of whether the Government believe in their own economic policies. As I have pointed out on many occasions, they never appear to. This is a startling example of what we are asked to respond to. In particular, I should like to know what was and is the locus of the Minister's department and his right honourable friend the Minister of State for Industry in all this.
We have not had the Statement for more than a few minutes but I am genuinely puzzled about what it tells us. I look at it and can see nothing in it at all. When the Minister replies, perhaps he may tell me what he thinks the Statement tells us that we could not have picked up by looking at Teletext at approximately this time. Is there anything in the Statement? Is there what professors of English literature call "a hidden message" which needs re-interpreting so that eventually we understand what is going on?
The Statement is right to talk about the excellent performance of Rover. I would put it the other way round: I believe that there has been a brilliant achievement by Rover's workforce, assisted to some extent by the management. Whichever way one cares to put it, the outcome is the same. Since there is still a trade union element at Rover—I do not know whether there is one at BMW—I should like to know whether the workers were consulted or is there any suggestion that they will be'? I see that quite rightly the shareholders will be consulted; but I wish to know what has happened about consulting the workers.
The Statement says:
"BMW have stated that they will",
do four things, and they state them. Then we are told that there is a letter which we can read subsequently in the Library which spells it out in more detail. Will the Minister confirm that "stated that they will" is simply a statement of intention: "if we can, we will do these things"? In no sense is the statement a guarantee; it is simply that: "if we maintain Rover as a separate enterprise" means: "we will try to maintain Rover as a separate enterprise if we can"; "we will offer better access to funds if we can"; "we will encourage Rover to build if we can and we will offer Rover additional export opportunities if we can". In other words, if BMW do none of those things, they do not do them; it is simply in the commercial interests of the company not to do them. Can the noble Lord tell us what is the point of "the best intentions" statement?
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A minor matter is that some of the Rover success is connected with Honda. There is no Honda statement. Can the noble Lord tell us whether there is any danger that the Honda connection will be damaged by this? I take it—and I certainly hope—that there is none. I am not the kind of person who would dream of driving a BMW. It is the kind of car that always cuts in on one from the inside. But I recognise that BMW is quite a good car manufacturer. I hope that I do not have to make that point, having already said how excellent the Rover achievement is. I do not wish to denigrate BMW at all.
However, I am led to the point that British Aerospace has taken a commercial decision and that is what the Statement is meant to tell us. On elementary arithmetic, considering what BAe paid for the company originally and what it will receive for it now, it looks as though it will have quite a good return. At the time of the sale I believe that the noble Lord was here, as I was, and will recall that some noble Lords—and certainly my noble friend Lord Williams of Elvel—pointed out that, given the sweeteners, BAe obtained an extraordinarily good bargain.
Do the Government now regret that they sold off Rover at quite such a low price? And, more to the point, that they sold it off without any contingent element such as "If you sell it on for a considerable profit, the taxpayer will be able to recoup some of that money"? Have the Government any regrets regarding that?
One last, slightly technical question. One of Me better points or reasons for the Rover success, I hope the noble Lord will agree, is that it put much effort, both before this privatisation and subsequently, into improving the education and training of the workforce. I think the noble Lord will agree that that is the key to success anyway. What was called "the Rover learning board" put in a tremendous effort from top to bottom, it took the matter of training and retraining very seriously. Has there been any talk with BMW that such excellent work will continue in the new Rover/BMW?
I do not wish anything I say to undermine the fact that we all wish success to the new enterprise. It is not my intention, in asking questions today, in any way to suggest that a disaster would please me. I go further to say that although at the moment I believe that. British Aerospace is a loss-making business and that it will be glad to obtain the money, we would like to see. British Aerospace starting to make money again. That is not the problem. In a way, the real problem is that the mistake took place some years ago and today we have to let bygones be bygones. I repeat my point that one of the bygones is that these are not public enterprises anyway.
Lord Ezra: My Lords, I should like to say that I am very pleased we have been given the opportunity to comment on this important industrial development. Whether or not it demonstrates, as the noble Lord, Lord Peston, pointed out, that the Government are pursuing their industrial policies, we should welcome this opportunity. On the face of it, this arrangement seems to have many attractions and we join in congratulating Rover on its great achievements in recent years—indeed to the point at which I, for one, have decided that when the time comes for me to buy another car it will

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probably be a Rover, though perhaps I should see what happens to the company in its marriage to BMW before finally deciding.
The important aspects in this arrangement are the assurances and the statements that we are told BMW has made. It is of vital importance to this country that Rover remains here and develops here. As I understand it, that is one assurance which has been received and I think we need to have that fully confirmed by the Minister. On top of that, we need to make sure that the company's research and development capability will be encouraged and expanded here.
We need to be sure that within these various assurances suitable safeguards will be provided to those employed in the company. I take it that their contracts of employment and the assurances given to them will be continued, but we would like to know that that is so.
I believe that this linkage between this very successful enterprise in Britain's motor industry and the very successful German enterprise, BMW, can be of very considerable European significance. I am pleased that if a new relationship had to be made between Rover and another motor company it should be a European one, because it is, of course, mainly the European market that we have to develop. I welcome the arrangement on those grounds.
I conclude by saying that I hope this arrangement, which is of course an acquisition, will nevertheless work much more on the basis of a partnership between two very successful companies in the motor industry.
Lord Strathclyde: My Lords, I believe it is customary for me to reply directly to the noble Lords who have just spoken. The noble Lord, Lord Peston, started by wondering why a Statement should be made. He made an extremely good point. This is a deal between two private companies and therefore Parliament should not be involved. But of course that is to forget the history of Rover, British Leyland and the enormous commitment that the taxpayer has made to these companies in the past and also the very real interest that people have in these affairs. That is why we decided to issue a Statement to inform Parliament of what is happening between the two companies. Therefore, I can confirm to the noble Lord, Lord Peston, that there is no hidden message in this Statement. There is no great Government secret. Indeed, he may well have found out all he could by Teletex or the newspapers, but he would not have had the opportunity of questioning the Government unless there had been a Statement.
For that reason, my right honourable friend the Minister for Industry met the chief executives, not because he believed he could change their minds or even would want to do so, but to understand the thinking that had gone on in their minds so that he could find out at first hand exactly what decisions had been made.
The noble Lord, Lord Peston, asked whether we had heard about this agreement for the first time on 26th January. I can confirm to him that we first heard of the firm bid by BMW on the 26th January. But, of course, the DTI is firmly in contact with all sectors of British industry and I can tell the House that there have been a
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number of informal contacts with British Aerospace since February 1993 about the future of Rover, as a result of which we have been informed of key developments.
The Statement today outlines certain assurances that have been made by BMW, and again I can confirm to the noble Lord, Lord Peston, that these are statements of intent. Of course they are not guarantees. BMW are not in the business of providing that kind of guarantee nor would British Aerospace expect that. However, they are firm statements of intent, and I have to wonder why BMW would invest such an enormous amount of money in this country if it did not have every intention of staying here. I can confirm to the noble Lord, Lord Ezra, that BMW has given a guarantee to the workforce that there will be no changes. It is my belief that they will work hard to continue to make sure that Rover is a great company based here in Britain.
Some mention has been made outside Parliament, and again today by the noble Lord, Lord Peston, about the connection with Honda. Honda owns 20 per cent. of the Rover Group, and now BMW owns 80 per cent. It is perhaps not surprising that Honda is not entirely delighted with the events of today but the collaboration over the past 15 years between Honda and Rover has been mutually beneficial to both companies, and I can only assume that that collaboration and that good relationship will continue.
Turning now to the question of financing, the noble Lord, Lord Peston, asked whether BAe had not made quite a good return out of this deal. It will be up to the shareholders to decide whether or not it is a good return, but from the figures I have seen British Aerospace bought the company for some £150 million. Although it is being sold for £800 million BAe has, of course, been investing at the rate of £200 million a year to improve the quality of the product that Rover offers. There is no regret on the part of Her Majesty's Government for having made the sale in 1988. It was the right decision then for the sake of our industrial future, and I believe that the announcement which has been made today will also be good for the future of our industrial infrastructure.
The noble Lord, Lord Ezra, commented about the European nature of this bid. I agree with him that it is clearly good news for the whole of Europe that a major vehicle manufacturing company from Germany, providing a quality product—probably one of the best motor companies in the world—should get together with this British company which has a record, or at least a heritage, of providing quality goods, well designed at reasonable prices. That is the kind of merger we can all support and I believe that it will be in the best interests of both companies and, in particular, of their workforces.
4.18 p.m.
Lord Jenkin of Roding: My Lords, I wonder if I might press my noble friend a little more on the position of Honda. I was one of the Ministers who, over a period, helped to secure the negotiations which led to the Honda/Rover deal; and I was delighted when my noble friend said that it has indeed been very fruitful. I believe

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that to be the case and that the Honda expertise, both in management and in technology, has been of inestimable value.
However, is my noble friend aware that it is therefore a Little disappointing to hear that the first reaction of Honda was one of some dismay that it had happened? Is one justified in putting this in the context of the very substantial volume of Japanese investment which has come into this country and which I, the Government, and I believe all parties, have been delighted to see since it contributes considerably to our economic growth and industrial progress? Was Honda given any advance warning? What steps have been taken to protect the intellectual property which Honda and Rover have shared? Is Honda likely to be happy to find itself sharing this with BMW?
On the whole, the deal is a very satisfactory one and I share my noble friend's enthusiasm. It is very good to see a big German company investing a large sum in this country, but in the case of our relations with a big Japanese company like Honda, I should like to feel satisfied that it is not going to feel "done down" in some way. If that were to be so, I do not think it would be very good for the future of Japanese investment in Britain.
Lord Strathclyde: My Lords, my noble friend is right to remind us of the enormous amount of investment made by the Japanese during the past few years. We welcome that kind of inward investment into the United Kingdom and hope that we shall see Japanese investment for many years to come. Indeed, one of the most active and successful aspects of that investment has been in the motor industry from Nissan, Honda and Toyota, which brought a substantial uplift in the number of vehicles that we now manufacture in this country.
In reply to the noble Lord, Lord Peston, I said that Honda was not entirely delighted by what happened, and there are a number of reasons for that. I can confirm to my noble friend that Honda was consulted. As I understand it, there have been ongoing discussions between British Aerospace and Honda for some time in regard to the future of its shareholding. Honda was therefore well aware that there was a substantial discussion regarding the future of Rover and could not have been surprised at today's announcement.
I cannot answer questions in relation to intellectual property. It will depend on the arrangements in place between Rover and Honda and how that relationship is affected since the ownership changed from British Aerospace to BMW. But overall I can confirm to my noble friend that we hope that the hard-working relationship built up between Honda and Rover will continue for many years to come.
Lord Cledwyn of Penrhos: My Lords, while I wish the new arrangement every success, I feel that this is a sad day for Britain. A country which produced motor-cars over a long period with great success, after this new arrangement will no longer have control over a single motor-car company. Is not that the case? Does not the noble Lord feel ashamed that he represents a government which has been in office for 15 years and which leaves this country the poorer for it? Can he say whether any motor-car-producing firm comes under
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British control today? If the answer is in the negative, it is a state of affairs about which he and his Government should feel extremely ashamed.
Lord Strathclyde: My Lords, I am saddened by the words of the noble Lord, Lord Cledwyn. I recognise that he voices a great deal of natural patriotic feeling towards British-owned companies. However, his sentimentality in this case is misplaced. In the modern world of cross-ownership and multi-nationals, it is sometimes difficult to see whether a company is British, French or German. Any company may have shareholders based in different countries. It is the shareholder who ultimately owns the company.
My view on the matter is simple. A British company is one based in Britain which employs British people who pay British taxes. That is a definition of a British company. On that basis there will be no change to the composition of Rover as a British company after today's announcement.
Lord Clark of Kempston: My Lords, does not my noble friend agree that it is unfair to criticise the purchase price paid by British Aerospace a few years ago while at the same time ignoring the massive investment that it later put into the Rover Group? Does he not also agree that, while we warmly congratulate the workforce at Rover, one of the reasons for the decimation of our motor industry is that the trade union legislation allowed people like Mr. Robinson—known as "Red Robbo"—to kill the motor industry? Does he not further agree that if the trade union legislation had not been changed, neither Honda, the Japanese, the Americans nor the Germans would have invested in the motor industry in this country?
Lord Strathclyde: My Lords, I agree with my noble friend Lord Clark that British Aerospace has made a substantial investment over the past five-and-a-half years. That is one of the reasons BMW felt that it was worth its while investing in Rover. It is hard to believe that BMW would have bought British Leyland back in the 1970s, when it was bedevilled by the problems mentioned by my noble friend. He is right also about the legislation. After 15 years of Conservative government, that is one of the many problems that we have solved.
Lord Dormand of Easington: My Lords, has there been an indication as to whether there will be a reduction in the workforce?
Lord Strathclyde: My Lords, BMW confirmed that there will be no change in the workforce.
Baroness O'Cathain: My Lords, I agree with the noble Lord, Lord Cledwyn, that today is a sad day for those of us who have worked in the British motor industry. But is it not true that BMW has been experiencing setbacks due to the economic situation in Germany and in turn has reduced its labour force by 20,000 over the past few months? What guarantee do we have that that will not happen here and that BMW do not see this as an opportunity of taking out a strong competitor?
Lord Strathclyde: My Lords, if BMW is taking out a strong competitor, it is finding an expensive way of doing so. It is extremely unlikely that that is the kind of operation in which a successful company like BMW would wish to be involved. The answer is much more simple. BMW saw that in the West Midlands and other areas where Rover is based, there was a workforce which was well trained, well educated, keen to improve the quality of its product, selling better and offering the kind of value-for-money for which German companies have been well-known in the past. Unfortunately, due to a variety of reasons Germany finds itself with economic and financial problems. Today's announcement shows a great step forward in the industrial network of Great Britain and a great future for vehicles manufactured in the United Kingdom.
Lord Marlesford: My Lords, I find myself in agreement, as I often do, with the comments made by the noble Lord, Lord Peston. Nevertheless, can my noble friend try once and for all to quash the fallacious thoughts that remain on the Opposition Benches—which one is surprised to find in this House, especially among people as distinguished, and by me esteemed, as the noble Lords, Lord Peston and Lord Cledwyn —on matters such as the price for which something is sold being lower than the price for which it is subsequently sold? A shareholder buys a share because he thinks it will go up in value; an investor buys a company because he believes that he can make more out of it than the present owners. Is it not true that it does not matter who owns economic and industrial enterprises, provided that they are in this country and providing employment, prosperity and wealth for the people of this country?
Lord Strathclyde: My Lords, I do not always agree with what is said by my noble friend. But I can disagree with nothing that he said very clearly, eloquently and rather better than I said it earlier.
Baroness Dean of Thornton-le-Fylde: My Lords, perhaps I can press the Minister a little harder on the employment undertakings. When one looks at employment and the research and development assurances sought by the unions, the responses sum up to me what I would call a "definite maybe". When BAe acquired Rover there was a lot of discussion in relation to employment. There has been a remarkable turn around by this company with a remarkable effort by the workforce. Indeed, only last year when the question of their future was raised, the employees were given assurances by BAe that the Rover Group was part of the core business of BAe. One can therefore understand the shock that they felt.
There must also be concern about the markets in which these great companies compete. Many of the models produced by both companies are for similar market customers. Clearly there is concern about that. I press the Minister to give some stronger assurances or for an indication of what consultation will take place with the trade unions on the assurances in regard to future employment, because this is a complete takeover of a major British company.
Lord Strathclyde: My Lords, all I can say to the noble Baroness, Lady Dean, is that I am not in a position to give assurances. That is not my role as a Minister in the Department of Trade and Industry or as a Minister of the Government. It is for the workforce of Rover to decide with their new owners exactly what the employment levels will be. That will depend upon the success of the company. I believe that it will be very successful. BMW has agreed to many of the matters currently carried out by Rover, including a new deal announced in April 1992 called Rover Tomorrow—the New Deal. The key principles of that deal were that no employee would be laid off, that employees who wanted to work with Rover would be able to stay, and so on. That is the basis of an agreement which has held Rover in good stead, and I very much hope that it will continue.
Lord Bruce of Donington: My Lords, the noble Lord will be aware that my noble friend Lord Cledwyn is not alone in voicing misgivings about this latest corporate move in Europe. The noble Lord has been very careful to say that he cannot possibly give any firm assurance that binds the future actions of this German company. No doubt he has had a statement of intent. Your Lordships will be aware that on many occasions over the past 15 years statements of intent of all kinds have been made by all kinds of people but in the event have not always been honoured.
The noble Lord said emphatically that the most important factor was that Rover would remain a British company with its operations, staff and management in this country, and that it would be subject to all British laws. He indicated that ownership was quite irrelevant to the whole matter—an argument which he may at a later stage regret having used. It is not the case that the Stock Exchange market comprising a whole series of individuals has taken over the ownership of Rover; a corporate body, which is subject to its own shareholders, has carried out the takeover.
We do not know to what pressures BMW will be subject in future. It is not subject to British laws. We do not know what commercial pressures it has to resist or support. We do not know what its financial position is likely to be under any future financial regime either in Germany or Europe. In short, we are allowing this company to enter into the realm of deals in the field of corporate capital, not among individual shareholders. It is a very sad thing that in this modern age a powerful corporate entity, as distinct from a whole mass of individual shareholders, has been allowed to take over and effectively control operationally and in every other way, as corporate shareholders can, the company's future operations. I venture to predict that the day will come when the country as a whole will deeply regret that this step has been permitted.
Lord Strathclyde: My Lords, I deal first with the premise of the noble Lord, Lord Bruce of Donington, that a corporate investor has taken over Rover. The same position has obtained for the past five-and-a-half years. It has been owned by another corporate investor: British Aerospace. Before that, it was owned by the most obvious corporate investor: Her Majesty's Government.

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It is a long time since individual shareholders have been able to control Rover. It may be that if many years ago these companies had not been nationalised we would have had a far more successful motor-car industry than we have today.
I believe that the noble Lord, Lord Bruce, misheard what I said. I hope I did not say that ownership was irrelevant. I believe I said that ownership was now international. One cannot tell whether a company is British or foreign-owned because of the way international capital works through international stock exchanges. I believe that that argument is still true, although I will be delighted to debate it with the noble Lord at some other time.
As for the commercial pressures that will be brought to bear on BMW, I believe that such pressures are the same all over the world. It has to make a profit. If Rover produces a profit because of the excellence of its product, there is no reason why motor-car manufacturing in this country should be threatened. What about all the other overseas companies that own manufacturing entities in this country? Ford, Peugeot, and General Motors make cars in this country, and do so with great success. Many British companies with headquarters and staff in this country own some very important companies overseas. I know that the noble Lord, Lord Bruce of Donington, basically believes in free trade. I am sorry that he just does not like this announcement.
Lord Sefton of Garston: My Lords, I ask the Minister whether he recalls that on the previous occasion this issue was raised in the Chamber the Government were asked what they intended-to do to prevent the transfer of British Leyland and the manufacture of the 125 aircraft into foreign hands. If the Minister cannot remember, I will remind him that the reply of the Government was that in both cases it was a matter for the company to decide. In view of the possibility of British Aerospace beginning to negotiate for the sale of the plant manufacturing the 125 aircraft at Chester, can the Minister give an assurance that the Government will do their best to dissuade them from selling off parts of our aircraft industry?
Lord Strathclyde: My Lords, I return to the same basic concept that these matters are best decided by individual companies. That is as true for this announcement as it is for the rest of British industry.
Viscount Ullswater: My Lords, I see from the Clock that we have spent 20 minutes on this matter. I believe that we should continue with the Northern Ireland order.

Health and Personal Social Services (Northern Ireland) Order 1994
4.38 p.m.
Debate resumed.
Lord Fitt: My Lords, first I should like to welcome the noble Baroness to the Dispatch Box on the Government side. This is the first occasion on which she represents and speaks on behalf of the people of Northern Ireland. I apologise immediately for not
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hearing the first few minutes of her speech. I was riot here because I acted on the belief that Northern Ireland business was not usually conducted at half past three in the afternoon but usually very late in the evening.
I have been very closely involved in Northern Ireland for many years, and over recent days I have been very closely involved with people in Northern. Ireland on the ground in relation to this order. We shall debate another order this afternoon in relation to Northern Ireland airports. That order contains 71 articles and a number of schedules, yet the order which the noble Baroness now presents contains only six articles and two schedules but is by far the more important of the two orders to be debated this afternoon.
When the subject of Northern Ireland is debated, it is unusual to see so many noble Lords in the House. Normally, when Northern Ireland is discussed, it is left to four or five people to speak to it. I have listened to the speech of the noble Baroness. I am quite certain that many noble Lords who have heard it will be very confused about the situation as regards health and social services in Northern Ireland and the way in which they operate at the present time.
Since the abolition of the Stormont Parliament in 1972, health and social services have been operated since 1973 as an integral body. In other parts of the United Kingdom the services have been developed in one or two areas, but they have been delegated to local authorities in Northern Ireland. I fully support that concept. These services have been given to people in constituencies where there has been local or central government. They should be given to places where there is public accountability.
In Northern Ireland we have an aversion. I believe that that aversion can be supplemented by an aversion on this side of the House to the word "trust". That word is loaded with implications for Northern Ireland. It gives rise to the spectre of quangos, to jobs for the boys and that people are only interested in their own personal and political advancement in giving service on these quangos. Therefore, one must have reservations when one talks about the creation of trusts in Northern Ireland or of giving more power to them.
I have spoken to people in Northern Ireland within recent days and hours. I have been acquainted with the facts that trusts were created in Northern Ireland in 1991 by Order in Council from both Houses of Parliament. These trusts are now in existence. I did not want them to be there. I am opposed to them and to the way in which they operate here and in many other parts of the United Kingdom.
I believe that the speech of the noble Baroness, Lady Faithfull, was very germane and compassionate. She is motivated with a great concern for events as they have transpired in Northern Ireland. But she compared Northern Ireland with Kent, which is not realistic. Northern Ireland is not like Kent. The people of Kent do not have the problems which exist in Northern Ireland. I remember at one time a former Prime Minister saying that Northern Ireland was as British as Finchley. Over many years that has proved just not so.
I have spoken to people in the trusts' section in Northern Ireland. From the observations which they

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made to me, I am convinced that they are not motivated by their own personal position. They have worked for the 1991 legislation and found it to be effective. From contacts which I have in Northern Ireland I believe that it has a health and social services organisation which is second to none in the United Kingdom. There are many things which Northern Ireland can do far better than they are done in other parts of the United Kingdom.
I believe that the order we are debating today is to extend to some extent the position of health service trusts in Northern Ireland. As I say, I am very reluctant to support any further powers or authority being given to the trusts. However, they have been in existence since 1991; and I have been told that, in the absence of this legislation, it may bring about a total disintegration of health and social services in Northern Ireland. One element would go one way and the other the other way, if this legislation is not put into effect.
I do not have a strong position on this. I would find it very difficult to go into one Lobby or the other today. Before bringing this order to the House, did the Government have consultations with all sectors involved in this legislation? Did the Government speak to the social workers on the ground, to the people in charge of the various homes in Northern Ireland and to the people who will be administering all the activities of the trusts? From what I have been told, I do not believe that is so on one side; yet on the other, I have been told that adequate consultation has taken place.
Northern Ireland is totally different from other parts of the United Kingdom. I hope that I live long enough in this country, or wherever it may be, to see political structures being created in Northern Ireland. Whether it is an assembly, or whatever political structure it may be, I hope that the functions of these trusts of other sorts of quangos (that awful word!) will be given into the hands of people who are elected in Northern Ireland. That is where real confidence in the operation of this order would lie.
I do not blame the Government for having to promulgate this legislation. I do not blame the Members of this House or of the other place. I would have liked this order to have come before the other place. There we could have seen and heard the remarks of people who live in Northern Ireland in the constituencies which will be affected by this legislation. I hope that the Northern Ireland representatives in this House and in the other place will endeavour to do everything they can to ensure that there will be created in Northern Ireland political structures whereby this kind of quango or trust operation can be put into the hands of elected representatives.
As I have said, I do not feel strongly one way or the other; but given the fact that the 1991 legislation created trusts in Northern Ireland, they appear to be operating. If there is any delay in the coming into being of this order which would be disadvantageous to the operation of the 1991 order, then I would find it very difficult to oppose the Government on this issue.
4.48 p.m.
Lord Skelmersdale: My Lords, it comes as some surprise to be able to follow many of the thoughts of the noble Lord, Lord Fitt, to which he has just given expression. This is the first opportunity I have had publicly to congratulate my noble friend Lady Denton on assuming her new role, to say nothing of her ambition, as Under-Secretary in the Northern Ireland Office. As she said, she succeeds my noble friend Lord Arran whom I also congratulate somewhat ironically, given my particular situation, as he is the first Minister for something like eight years to have returned from Belfast and remained on the Front Bench of your Lordships' House. All credit to him too—I believe that this answers one of the questions asked by the noble Lord, Lord Fitt—for having tramped the highways and byways of Northern Ireland, spoken with professionals within the shadow trusts and found no objection there at any rate to the proposals in the order.
It is inevitable in any department of state, especially in the peculiar circumstances of Northern Ireland, that, on arrival, an incoming Minister will find his or her predecessor's unfinished business on the desk. It happened to me, when I arrived at Dundonald House, in the shape of competitive tendering in the health service. It happened again when I left my successor, the honourable Member for Richmond and Barnes, the legislative hurdle of the Health and Personal Social Services Order 1991 to which reference has been made today. I left all the preparatory work, I thought, completed, following what had seemed an endless series of meetings that I held over 12 or 13 months. That exactly parallels the situation in which we find ourselves today.
I fear that, like the noble Lord, Lord Fitt, I must delve briefly into history. There were two major effects of the introduction of direct rule in 1972: one good; one bad. I suspect that I take issue with my noble friend Lady Faithfull on both, although probably not with the noble Lord, Lord Fitt. Let me take the bad one first. Quite simply, local government, as we know it in Great Britain, was slaughtered. It was left essentially with the three Ls —litter, leisure and lights—and with a sadly growing need, cemeteries, as its only truly and wholly functional responsibilities. Housing went, as did education, effective planning, and health and personal services. Small wonder then that fewer and fewer able people over the past 20 years have been attracted to local government. Unless the situation is corrected, we shall find Members of Parliament being drawn more and more from other sectors of Northern Ireland society. That is not necessarily a bad thing. But it means that their political background will be the poorer. It also means—perhaps this is another answer to the noble Lord, Lord Fitt—that quangos are the only answer to providing services in Northern Ireland, and the more locally, the better. That will at least attract more people of the calibre of those who formerly served in local government.
The good result of direct rule was that the health service and personal social services came together under the DHSS and ultimately the boards. I am on record as

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saying something with which my noble friend Lady Faithfull profoundly disagrees: namely, that this is a step that we could—and, indeed, should—emulate this side of the water to our certain advantage. Think, my Lords, of the medical, and sometimes even surgical, hospital beds that are blocked because the social services have no impetus to provide places in the community. The likelihood of that happening in Northern Ireland is very much reduced when both services are under the same control. I challenge my noble friend Lady Denton to say that she has no intention of advising the Secretary of State to split them —otherwise I would vote against her without a qualm. In those circumstances and in her position, I should have resigned, so deeply do I feel about the issue.
In Northern Ireland, people pride themselves on doing things a little better and a little later than we in Great Britain. The pace of life is a little slower but is none the worse for that. It does not prevent immediate and often forceful debate on how a particular matter should be pursued. As my noble friend said, the need for the order has come about because, in the words of the DHSS proposal, while the current legislation enables hoards to contract with health and social services trusts, it does not commit them to delegate the discharge of certain functions which by law are conferred on boards or delegated to them by the department. That does not matter where hospitals are concerned, but it does matter when we are considering personal social services trusts. That is an admitted weakness of the 1991 order. In effect, the existing legislation does not allow the latter at all, so the order provides in Article 3 for a board (with, and only with, the approval of the department for a trust) to provide for such relevant functions of the board as are specified in a scheme to be exercisable by a trust. My noble friend will correct me if I am wrong, but if it is not in the scheme, it simply will not be done. It cannot be done. Some trusts are already up and running in a shadow form, as we have heard. That is allowed, as I understand it, as they are still units under the direct control of the boards. But they were formed and, indeed, acquired members on the understanding that they would become fully fledged on 1st April this year.
Given the peculiar circumstances of health and social services in Northern Ireland, to which both the noble Lord, Lord Fitt, and I have referred, and given the need to involve local people at all levels in them, there has to be an extension of trust status to personal social services. I have not heard—and clearly, the noble Lord, Lord Fitt, has not heard—any complaints of hospital trusts in Northern Ireland. Not one. It seems natural that a logical extension of the same modus operandi to social services is desirable and necessary. It was, after all, the primary reason for the health service reforms that boards should purchase care and that others should provide it —not only statutory services, but charities as well.
I have recently become chairman of the Stroke Association, a medium-sized medical charity confined to England and Wales, and it is my experience that the health service reforms have meant that more and more health authorities are buying the services that we provide. It therefore surprised me to receive a letter from
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the chief executive of Child Care (NI), commenting adversely on the order as long ago as 2nd June last year. Those comments led in due course to a meeting, organised by my noble friend Lady Faithful, within this building. Concerns were expressed and later addressed to my noble friend Lord Arran, to which he listened carefully as one would expect. The net result was his decision announced on 22nd July to extend the consultation period and thereby the introduction of the order which we could realistically have expected in late November or early December. Instead, as we heard from my noble friend Lady Denton, the order was not laid until December.
The legislation has already been delayed once. Why again? I was alerted by Child Care to the problems that it saw. If it remains worried, I am surprised that it has not contacted me again, seeking to persuade me to speak against the order. It has not. What I find most mysterious of all is why the Government are being asked to delay for only one more month. I know that my noble friend Lady Denton has tried to explain and I hope that she will do so in slightly more detail when she replies. Does she really expect that the problems that she foresees can be addressed in that time? How real are my noble friend's concerns? As we know, the boards will, with, and only with, the approval of the department, arrange a scheme for the discharge of functions by a particular trust. It seems to me that that covers everything that needs to be covered. It will set out the functions that are to be discharged, how the trust will discharge them and, most importantly, the accountability arrangements between the two. Nor is that all. The department will have to approve the scheme before it is put into effect. The same people will be doing the same jobs for the same client groups. There will even be a trained social services person among the trustees. That was not a requirement of board membership under the 1991 order.
There is, however, one question that my noble friend must answer. It concerns the worst forebodings of my noble friend Lady Faithfull. I note that Article 3(5) refers to any amendment or revocation of an authorisation. My question is: who by? Perhaps I may be permitted a supplementary question. If the answer to the original question is, "The board and the trust acting together", does it again have to be approved by the department? If the answer to the second question is, "Yes", I shall have no hesitation in supporting the Government this evening.
4.58 p.m.
Lord Hylton: My Lords, I apologise for having been late for the beginning of our consideration of this order. I did take the trouble to consult the Government Whips' Office and I am sorry to have to say that in the end the forecast that I was given proved to be about three-quarters of an hour, if not a whole hour, out. It was incorrect.
I should like to join all noble Lords in welcoming the noble Baroness, Lady Denton of Wakefield, to her new responsibilities. I am sure that she will find—if she has not found this already—that the people of Northern Ireland are probably the most warm-hearted in the whole world.

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I should also like to congratulate the noble Baroness, Lady Faithfull, on moving what I believe is known technically as an "O'Hagan amendment" to a statutory instrument, after our mutual friend, the noble Lord, Lord O'Hagan.
The Northern Ireland voluntary groups which are concerned with child care are, I know, disturbed about two things. They are disturbed, first, about continuity; and, secondly, about future accountability for certain statutory services. NIACRO, an association of which I have the honour to be president, while less directly involved in those matters, is in general agreement with the child care practitioners. We all wish to see the closest possible links between health and social services for the sick, the handicapped and the infirm so that community care can become a living reality. It does not, however, necessarily follow that services for the protection, adoption and fostering of children should have to follow the same pattern of organisation. I think that most people would agree that there is a difference in kind between those whose health needs therapy and those who are well but require social protection.
Ministers or elected councillors should be responsible directly for decisions arising on the protection of children. They should not be allowed to shelter behind appointed quangos. I understand, too, that a new children's order is in preparation. Is it not therefore right to introduce that into a stable administrative structure rather than into an untried system of trusts? Her Majesty's Government have a major duty to explain why they think that 13 trusts are likely to work better than four area boards. Does the unlucky number of 13 relate in some way to the number and distribution of hospitals, or, on the other hand, is it conceivably based upon 26 local government districts at two per trust?
If the Government are seeking to discover for England and Wales whether the trust model is appropriate for social services, we would all agree with the noble Lord, Lord Fitt, when he pointed out that Northern Ireland has its own special problems of sectarianism and intimidation and is not a suitable experimental area for the whole of the United Kingdom. If, on the other hand, the Government wish to find out what will work best in practice in Northern Ireland, then they should mount one or two carefully monitored pilot projects within that jurisdiction. On those grounds, I support the amendment and strongly urge Her Majesty's Government to think again.
5.2 p.m.
Lord Holme of Cheltenham: My Lords, perhaps I, too, may thank the Minister for her statement. I must apologise for not having been in my place, but the flexi-management of business this afternoon caught me on the hop. Perhaps I may say also how much Members on all sides of the House welcome her to her new responsibilities. She has certainly been thrown in at the deep end this afternoon, but I imagine that it is some measure of her colleagues' confidence in her that she starts with the most difficult task of all, which is to do what we rarely see in this House, and to talk about an amendment putting back an order.
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Perhaps I may also welcome the noble Lord, Lord Williams of Mostyn, to this small club of Northern Ireland regulars. As the noble Lord, Lord Fitt, said, this is not the time of day at which we normally meet. We are not usually at peak time. We usually lurk in the twilight shadows of the dinner hour, late at night, or at some time approaching the weekend. We should not be spoilt by this, with such a well-attended House, but it gives us a chance to air some of the problems of legislating for Northern Ireland, as we in this House do.
There is a duty on Parliament, and therefore on this House, when we govern Northern Ireland, as we do (at arm's length) to ensure that legislation is appropriate and that it is based upon local consultation and consent. One could argue that that should be true of all legislation, but it is especially true of Northern Ireland legislation, nearly all of which is by Order in Council. That is why we, on all sides of the House, should thank the noble Baroness, Lady Faithfull, for having brought forward the amendment this afternoon and for having made us think hard about whether the order accurately represents local opinion, which the noble Lord, Lord Skelmersdale, believes that it does.
There is a regrettable tendency, which we have seen in relation to Northern Ireland legislation over recent years, to apply GB legislation to Northern Ireland willy-nilly. Of course if we were to emerge from strand one of the talks, which we all hope will be resumed shortly, with proposals for devolved government in Northern Ireland, and with power sharing between the communities, many matters, including, I hope, the way in which health and social services are organised, should be matters for that devolved government. Therefore there is a responsibility on us when considering this order to think whether, were there such devolved government, this is what the people of Northern Ireland would wish to decide for themselves.
I must say that, although I hear what other noble Lords have said, I have heard some of the widespread misgiving and opposition in Northern Ireland that the noble Lord, Lord Fitt, mentioned. That has come not just from the public service unions, and one might expect them to have a particular position to argue, but from some other health and community care professionals. We must bear in mind that the Northern Ireland integrated system, as it was in the past, has been admired widely. Many people in Europe have studied it, and want to imitate it. But there is an obligation upon us to remember the old maxim:
"If it ain't broke, don't fix it".
Perhaps I may ask the Minister four questions. I understand that there are shadow trusts in existence waiting to operate from 1st April. Is it part of the Government's argument that we should legislate to give power to such bodies? If it is, it seems to me to be a chicken and egg justification. Before we legislate for them, we must be persuaded that there is a good reason for their existence. My second question is: how much will the members of the trusts be paid, and how, given the report of the PAC last week, will they be appointed? It is of the greatest importance that the appointments

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reflect the community in Northern Ireland in a broad way, rather than be of those who are likely to agree with the thrust of the Government's policies.
Thirdly, there is the question to which other noble Lords, including the noble Baroness, Lady Faithfull, have referred. It is the question of accountability. There are provisions for accountability for health boards to the department's management executive and to the courts in the last resort. But am I right in thinking that the trusts are in fact a sub sub-agent of the Minister? To whom should the client or patient complain? In the last resort, how is accountability to the people of Northern Ireland taken into account? It seems to me that this legislation takes executive powers two steps further away from them.
The final point upon which the Government could, and should, reassure us is that Northern Ireland is not being used in any way as a testing ground for radical new organisational theories. There is a good case for testing. I wish the Government were as keen on test marketing as they are on market testing. There is a need in government for pilot tests. But the one place to which they should not be applied willy-nilly is to the whole of the Province of Northern Ireland. That is the last place where new organisational theories should be tested by the Government.
I shall listen with great care to the Minister's reply. I am bound to say from these Benches, where we have great misgivings, that, unless the Minister can be especially reassuring, we are inclined to support the amendment tabled by the noble Baroness, Lady Faithfull. It is relevant that the order has come here first rather than to the Commons where there are elected representatives from Northern Ireland. That should weigh with us all when we decide what attitude to take.
5.8 p.m.
Lord Williams of Mostyn: My Lords, perhaps I too may welcome the Minister to her hot seat. It is not a seat of responsibility that anyone envies her at this time, but she knows, as well as I do, that she is always a special favourite in your Lordships' House because of the courtesy and candour with which she responds to questions.
Noble Lords: Hear, hear!
Lord Williams of Mostyn: My Lords, perhaps I may add a word about the work that her predecessor the noble Earl, Lord Arran, carried out. In our brief acquaintance in this area he treated me with every courtesy. I think that I can betray a personal confidence on this occasion. He enjoyed his time in Northern Ireland enormously and left with a great deal of personal regret, and many in Northern Ireland regretted his going to different pastures. I also thank the noble Lord, Lord Holme of Cheltenham, for his generosity in welcoming me to the Dispatch Box.
Having listened with care to the gentle way in which the amendment was introduced, I believe that it is a devastating critique of the order. Many of the questions asked by the noble Baroness, Lady Faithfull, are
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extremely important and if the response to them is not fully to our satisfaction we intend to support her amendment.
The powers which are to be given to trusts are extensive and deal with mental health, child protection and community care assessment. The fact that the services are administered by boards which are not fully accountable in the way in which we would hope is a great loss.
I agree with what was said by the noble Lord, Lord Skelmersdale; that it is a significant blot on the Northern Ireland political landscape that the local authorities ties have so few significant powers that they are virtually derisory. I agree with his analysis of the consequences, which are both adverse. The first is that there is a feeling of remoteness and non-accountability in daily affairs, which is important as a component of social and political public life. The second is that, as the powers and duties which the local authorities have are virtually derisory, those who should be drawn to public service for altruistic purposes and people of high quality turn their minds away from serving on those authorities. Again, that is to the detriment of the public body and of the public bodies.
I agree with the noble Lord, Lord Hylton, that not every service which is provided by government, quangos or statutory creatures is alike. If one is dealing with something as fundamental as the civil liberties of children, who during the past 25 years in England and Wales have not been well served, there should be a more direct line of accountability than a trust, a board and eventually a Secretary of State. It is deeply troubling that a part of the United Kingdom is intended to have its affairs regulated in such an "unlocally" accountable way.
Furthermore, is it appropriate to contemplate that as many as 13 trusts—I agree with the noble Lord, Lord Hylton, that there are 13 but there may be 12—shall serve a population a little in excess of 1.5 million? That appears to us to be a classic recipe for further bureaucracy, further possible inefficiencies and certainly a non-productive spending of public money. We on this side of the House question whether this is an experimental model for England and Wales as well as for Northern Ireland. It may be that the Minister will give us assurances which put our suspicions at rest.
I realise that my knowledge of Northern Ireland is limited and I hope that what I say will be taken on the basis that I recognise my ignorance. We have received a substantial number of representations from different organisations which are deeply anxious about the effect of the order. UNISON, for instance, has a large number of employees—approximately 24,000—whom it represents in Northern Ireland. It is entitled at least to our respectful attention if not necessarily to our automatic acquiescence. The organisation is deeply worried. The Northern Ireland Public Service Alliance is also worried and objects to the order. After all, the order deals with the civil liberties of children and we have not served them well. One has only to think for a moment or two of events in Cleveland, the Orkneys and Staffordshire. Children are desperately vulnerable and often their vulnerability is neither expressed nor recognised.

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As was indicated by the noble Lord, Lord Holme, we must bear in mind what, on a hopeful view, may be the future governance of Northern Ireland. It would be a shame if so many powers were given away to trusts when many Members of your Lordships' House believe that a degree of democratic accountability and its return to Northern Ireland is long overdue.
Serious doubts have been expressed by a number of Members of another place. They were expressed as recently as 20th January in the deliberations of the Northern Ireland Committee. They come from all parts of the political spectrum and I hope that nothing will be heard from us tonight that will apply any partisan approach to the problems. They are far too serious for that.
At page 14 of the committee's report the Reverend McCrea stated:
"There is a genuine and general anxiety that the Government have been and are carrying out a systematic dismantling of the health service".
At page 13 the Reverend Smyth stated:
"We believe that the scheme will add unnecessary costs and take money from the care of patients and clients".
At page 26 Sir James Kilfedder stated:
"What has happened to the accountability of the bureaucrats to the people? Accountability is what democracy is about".
At page 11 Mr. O'Brien stated:
"It is improper for powers under mental health, child protection and community care legislation to be handed over to" —
and for the accuracy of your Lordships' record I include my words—to be handed over to non-locally accountable trusts. At page 17 of the report the Reverend McCrea stated:
"Accountability will be totally lacking".
If there is no significant, explained, rational defence of the order Members on this side of the House are minded to vote for the amendment. Deep questions of accountability are involved. I well understand the historical imperative that has caused Northern Ireland to be governed in a certain way since 1973 and no one overlooks that. No one overlooks the difficulties referred to by my noble friend Lord Fitt. However, we must not attend too much to difficulties which may be overcome. We must not overlook our responsibilities to children, whose care and protection will be devolved to bodies which are not locally accountable. They will be accountable at the end of the long chain, as described by the noble Lord, Lord Hylton.
Having troubled your Lordships for a while on these issues —and they are deep issues—perhaps I may give an example. I understand that the chairman of a trust will be nominated by the Secretary of State and will have a contract for one year only, which will be terminable in effect at one week's notice. That is no recipe for proper accountability and it is no recipe for the independent functioning of bodies as important at these.
Whatever one's political views, one notes that the Public Accounts Committee and all the headlines that we have recently read point to the question of whether, despite the deficiencies of locally-accountable bodies,
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they are much better stewards of public money and public trust than anonymous, unelected and unaccountable quangos.
5.19 p.m.
Baroness Denton of Wakefield: My Lords, I thank all noble Lords who welcomed me to my new position. I regard the appointment as a privilege, even this afternoon. I thank in particular the noble Lord, Lord Williams of Mostyn, for his kind remarks and look forward to working with him in the coming months. I also thank the noble Lord for his remarks about my predecessor. My noble friend Lord Arran has left footsteps which are comforting but difficult to follow. He greatly enjoyed his time in the department. The warmth of my welcome by the people of Northern Ireland has been second to none.
This order is important and we have had a comprehensive and wide-ranging discussion on it. The quality of the contributions is a credit to your Lordships. It reflects the concern for those at risk in our society. I assure your Lordships that I share that concern. As the Minister responsible I am confident that the order and the changes that it will facilitate will be to the benefit of the people in Northern Ireland. I should not bring the order before your Lordships unless that were so.
I hope that your Lordships will forgive me if I take a little time to answer the debate. Many questions have been asked and I know that noble Lords are looking for answers. I thank my noble friend Lord Skelmersdale for giving the House the benefit of his considerable experience in this area. I hope that in due course I may follow in the footsteps of my noble friend Lord Arran and return to another office on the Front Bench, but not for many years.
I know that I can count on my noble friend's support because I can assure him that I do not intend to undo the valuable work and achievements of the past 20 years by splitting health and social services in Northern Ireland. I assure my noble friend also that any amendments or revocations of authorisations must be approved by the department.
I was pleased that the noble Lord, Lord Fitt, took part in our discussions. I agree with the noble Lord that it is nice to see Northern Ireland business coming before the House at an early hour. I hope that I am setting a precedent today which can be followed in the future. I agree also with the noble Lord that the health and social services in Northern Ireland can be described rightly as second to none. We should be extremely proud of them. That is something that I have inherited.
The noble Lord expressed reservations about trusts. Many of the questions and concerns which arose during consultations were not about the integration of health and social services but about reservations in connection with trusts. Having met the people concerned working in the shadow trusts, I share the noble Lord's impression that those people are of a high calibre and are committed to providing services at a local level.
The consultation, which is so important in Northern Ireland because of the system of orders, has been wide, extensive and extended. We have reacted in many ways to what we have learnt. I agree with the noble Lord,

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Lord Fitt, that we should have preferred the order to go first before the other place. However, perhaps I may suggest that the noble Lord's colleagues in the other place have prevented that. But I am delighted to confirm that the debate on health services in the Northern Ireland Committee on 20th January, as the noble Lord, Lord Williams, pointed out, gave the Northern Ireland Members of Parliament the opportunity to express their anxieties and views about this issue. Therefore, we have direct input from those Members of Parliament who are most concerned.
The noble Lord, Lord Hylton, is looking for continuity. Of course that is vital when dealing with vulnerable groups. I propose this order because it guarantees continuity. The weakness of the present legislation is that it prevents it. I fear that lack of continuity is all that the amendment offers us. That worries me greatly. I assure noble Lords that we do not seek to be innovative as regards the order. We are merely bringing forward an order which allows the practice of the past 20 years to continue. To those noble Lords who suggest that there should be a pilot scheme, I would say that the integration of health and social services has been piloted for 20 years. That cannot be put forward as a future problem.
The noble Lord, Lord Holme, spoke of the importance of consultation, which we all recognise. He expressed the fear also that we might be following Great Britain, willy-nilly. I have not received that impression, even in my first few weeks. Integration has been well placed, well practised and much admired for many years.
The opposition has arisen partly because of the issue of trusts. We need to progress and build. I assure the noble Lord, Lord Williams, that members of the shadow trusts have been appointed from the community based on their skills and involvement with that community. We have discussed the limitations on local authorities and we believe that it is beneficial for the trusts to devolve, as nearly as possible, to the local communities. That is what the trusts do.
One of the benefits in Northern Ireland is that because of its size, communication is easier, both up and down. I hope that that gives us opportunities to explain what we are doing. I hope also that it means that we are able to listen to anxieties which are raised. It is important—and I believe that the order achieves it—that these matters are dealt with locally.
My noble friend Lady Faithfull made comparisons with Kent. She asked why we need 11 trusts concerned with personal social services in such a small area. I was pleased by the answer that the noble Lord, Lord Fitt, gave because the problems in Northern Ireland are special and different. We should react not to what is taking place in Great Britain but to the needs of the Province. That is the aim of the order.
The noble Lord, Lord Williams, asked how we intend to ensure that there is no repetition of the tragedies that occurred to children in Cleveland, Staffordshire and the Orkneys. I should not wish to argue that now, but a possible suggestion is that the integration of the health and social services may prove to be a benefit in that regard. I am sure that it helps when people are closer to
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the community. We are well aware of the risks which may be involved in Northern Ireland but I believe that experience has shown that social workers and other employees in the health service carry out. their duties according to the needs of their clients—children, old. people and all who are less fortunate than ourselves.
The non-executives on the trusts receive £5,000 per annum. The chairmen receive between £15,000 and £20,000 depending upon the responsibility, size and nature of the budgets. I am sure that the noble Lord, Lord Williams, will be delighted to hear that the appointments of chairmen are for four years.
Lord Williams of Mostyn: My Lords, my question related to the chief executive rather than the chairmen.
Baroness Denton of Wakefield: My Lords, I apologise. I shall return to that. The noble Lord, Lord Hylton, asked whether the order should be postponed until the proposed children's order is implemented. That order is concerned with children's welfare and protection and not with how health services for children should be organised. The schemes now being developed will clarify and formalise existing procedures and relationships between boards and trusts. I believe that that will help rather than hinder the implementation of the children's order because the canvas will be in place, honed and practised for the benefit of this order.
I turn now to the speech made by my noble friend Lady Faithfull. Perhaps I may first acknowledge her great experience in the field. I also understand why people with concerns should turn to her for comment and assistance. But my noble friend asked what was the ethos and purpose of the change. It is to preserve the unique and integrated structure of the health and personal social services in Northern Ireland. My noble friend asked why, if there are no problems, we are changing the system. It is because we have had no cases of problems and because we want to continue with what is already in place that we are bringing forward the order. As I said in my opening remarks, the order is not about improving things which are wrong; it is about continuing and ensuring that services can continue more or less as they are. The boards will be able to concentrate on what they are responsible for—that is, assessing need and ensuring that there are services available to meet it.
My noble friend is worried about accountability. Accountability is to boards, to the department and then to me. That position does not change. There is another line in the structure. There is a line to the social work person on the board of the trust; a dotted professional line, which is of benefit in this case. If something should go wrong, the trust as the statutory body—and I stress the words "statutory body"—at the grass roots will be fully accountable and responsible. I accept that my noble friend has concerns in that area. In her speech she linked them to the so-called "non- statutory" nature of trusts. However, I must say, with respect, that she is wrong in that view. Trusts are wholly statutory bodies established under the Health and Personal Social Services (Northern Ireland) Order 1991. That is a fact which should cause no confusion in your Lordships' House.

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My noble friend also frequently mentioned the costly nature of trusts. Such costs are common whether for hospital or community trusts. Moreover, chairmen and board members are remunerated at levels which I have already identified. We believe—and there is evidence to show this—that the benefits and the greater cost effectiveness flowing from trust status will far outweigh the question of compensation to those who take on the responsibilities. Perhaps I may also point out that if the compensation was worked out at an hourly rate it would certainly not justify anyone applying for the job on account of the money. It is visibly commitment which drives such people. The order is not about introducing a purchaser-provider split. That was introduced in 1991.
My noble friend perhaps overlooked the key role of the purchaser. Each board will be responsible for ensuring equity of provision and common standards in key areas. The Government's regional strategy sets objectives and targets for the HPSS as a whole. The boards are charged with securing them and trusts with providing them in a locally sensitive manner. They do not set the agenda, they respond to it.
I can tell the noble Lord, Lord Williams of Mostyn, that the terms of an executive contract are a matter for the trust involved. The tradition in Northern Ireland is not to adopt aggressive management approaches. Too much should not be read into individual contracts. Nevertheless, I shall register the fact that I have heard what the noble Lord said.
My noble friend Lady Faithfull has tabled an amendment to the Motion which seeks to defeat the purpose of the order as it was laid before the House. The amendment proposes that we spend another month considering whether we should enable trusts to discharge a range of statutory duties and responsibilities and to provide or secure personal social services associated with them. There is no value in deferring consideration of the matter for a further month. Since the number of units of management delivering community care and childcare services expressed an interest in moving to trust status over two years ago, the administrative and professional staff from my department have worked closely with staff from boards and trusts to devise arrangements which will safeguard and facilitate the development of personal social services in the future.
I have discussed those arrangements fully with the staff involved and have had an opportunity to speak to managerial and professional staff in the trusts about them. As a result of those discussions, I am satisfied that the arrangements that have been devised are sound and enjoy the support of the staff at trust, board and departmental level. Delay for another month would not lead to any change in the situation. It would be impossible for us to consult further and deeper than we have. On the contrary, perhaps I may suggest that delay would only serve to undermine the morale of those many staff who have worked so hard to reach this stage and would, perhaps, cast some doubt over the continued integration of our health and social services. That would
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be undesirable and, indeed, could jeopardise the implementation of the community care reforms and possibly the forthcoming children's order.
I know that there are social workers in statutory voluntary bodies who have expressed concerns about the proposals. However, I also know from my discussions since I arrived in this post that they do not wish to see the disintegration of the service and the separate administration of personal social services. The integrated service which we have in Northern Ireland has been in existence for over 20 years and has brought great benefit. We should not consider any measure which could damage it. I suggest that the amendment would do so. The order that I am asking the House to approve will facilitate the continuing development of the integrated services by freeing the boards fully from their direct management responsibilities and enabling them to concentrate on their role as commissioners of services for their populations.
I hope that noble Lords will forgive me for taking a considerable amount of time to cover the points that have been raised. The order is an important one. In the interests of the people of Northern Ireland—that is, the vulnerable, the professionals who help them and those of us with the responsibility for seeing that our services are of the very best—I hope that I have been able to convince my noble friend Lady Faithfull, and others, that pressing the amendment will not bring benefit but will increase and extend uncertainty. It will offer rejection to the many committed people in Northern Ireland working continuously to build and improve our services. I hope that my noble friend will allow us to go forward. I commend the order to the House.
5.38 p.m.
Baroness Faithfull: My Lords, I thank my noble friend the Minister for giving the House a full explanation of the order. I hope that noble Lords will forgive me if I stray a little outside the matter and touch on a wider issue which was brought forward by the noble Lord, Lord Williams of Mostyn. He said that accountability is what democracy is all about. Perhaps I may just say at this stage that we hope the time will come when the political situation in Northern Ireland will be such that there will be more accountability on the part of the ordinary people of Northern Ireland. I hope that I shall be forgiven for saying so.
My noble friend the Minister gave a very clear picture of what she believes is in the order. However, I found it very difficult to follow. It seems to me that she has two conflicting statements which do not accord with one another. On the one hand, she said that the work done under the present system is good. She congratulated the social workers and the people in Northern Ireland who are responsible for giving a good service. But, on the other hand, she said that this order will help them to continue to provide a good service. If they are already providing a good service, and my noble friend hopes that will continue, why not leave the situation as it is instead of altering the position?
Baroness Denton of Wakefield: My Lords, I thank my noble friend for allowing me to return to this subject.

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The work that is being done is first-class because everyone is working together. Without this order, they cannot continue to work together.
Baroness Faithfull: My Lords, I thank my noble friend the Minister for those comments. However, I should point out that the people who will have to work under the provisions of this order are the grass-roots social workers. I have been to Belfast and I greatly enjoyed myself there. I have met social workers from both the statutory and the voluntary sectors in Northern Ireland as well as in this country. They do not feel happy about this order. They do not feel they will give of their best under this order. My noble friend has asked why we should delay the order for a month. My noble friend has taken up her new office just when this order is being introduced. She has met the social workers, but with all her persuasive ability she has not been able to persuade them that the order is the right thing for them. Yet they are the people who do the work. I consider that by delaying the order for a month it would be possible to help the people who do the work on the ground to understand the position.
My noble friend the Minister has said that the trusts are keen to do this work, and they have been put in a position to do it. However, they will not actually do the work. They will oversee the work and they will be responsible for the work but they will not actually do the work. I consider there is a juxtaposition of feelings and thoughts here which do not accord with our going forward with this order.
I still cannot see how the purchaser/provider system will make for better social work. I do not understand that matter. Perhaps if the order had been delayed for a month I could have understood the position. I may be slow, and perhaps if I had had a little more time I would have understood the position. However, I do not understand it. I believe the noble Lord, Lord Skelmersdale, approves of the trusts—we shall have to disagree on that matter—but, equally, he approves of public accountability.
The noble Lord, Lord Holme of Cheltenham, put the case very well. I believe he has understood the order and the feeling of discontent about it. Of course the trusts are content as their staff will have jobs and they will be paid. However, I must return to the matter of costs. In this country we are constantly being told that we must cut costs. These trusts will cost a lot more than the existing provision. Yet the social workers on the ground are seeing their services cut in terms of what they can do for the vulnerable people in their areas. They then see that trusts will be set up which will be costly. The social workers cannot understand how that system will give a better service. I could go through every comment made by every speaker in this debate but I shall not do so.
Noble Lords: Hear, hear!
Baroness Faithfull: My Lords, I am sorry noble Lords do not want me to comment on what they have said. I was in close touch with social workers last night and I cannot see how the order will improve the present service which my noble friend the Minister acknowledges is a good one. I wish to test the opinion of the House.
The Deputy Speaker (Lord Murton of Lindisfarne): My Lords, the original Motion was, That the draft Health and Personal Social Services (Northern Ireland) Order 1994 laid before the House on 9th December be approved; since when an amendment to the Motion has been moved to leave out from ("That") to the end and insert ("this House calls on Her Majesty's Government to withdraw the draft order laid before the House on 9th December 1993; and to re-lay it in a month, having considered whether it should extend to social services.") The Question is, That this amendment be agreed to.
5.45 p.m.
On Question, Whether the said amendment shall be agreed to?
Their Lordships divided: Contents. 88; Not-Contents, 111.

Division No. 1

CONTENTS

Acton, L.

Jenkins of Hillhead, L.

Addington, L.

Lauderdale, E.

Airedale, L.

Lawrence, L.

Archer of Sandwell, L.

Longford, E.

Barnett, L.

Lovell-Davis, L.

Beaumont of Whitley, L.

McIntosh of Haringey, L.

Belhaven and Stenton, L.

Mackie of Benshie, L.

Blackstone, B.

McNair, L.

Bonham-Carter, L.

Mar, C.

Boston of Faversham, L.

Mason of Barnsley, L.

Brightman, L.

Mayhew, L.

Butterfield, L.

Mishcon, L.

Carmichael of Kelvingrove, L.

Monkswell, L.

Cocks of Hartcliffe, L.

Moran, L.

Craigavon, V.

Morris of Castle Morris., L.

David, B.

Newall, L.

Dean of Thornton-le-Fylde, B.

Nicol, B.

Donoughue, L.

Palmer, L.

Dormand of Easington, L.

Park of Monmouth, B.

Ennals, L.

Pitt of Hampstead, L.

Faithfull, B. [Teller.]

Plant of Highfield, L.

Falkland, V.

Prys-Davies, L.

Foot, L.

Redesdale, L.

Gladwyn, L.

Richard, L.

Gould of Potternewton, B.

Rochester, L.

Graham of Edmonton, L.

St. John of Bletso, L.

Greene of Harrow Weald, L.

Sefton of Garston, L.

Grey, E.

Serota, B.

Halsbury, E.

Shannon, E.

Hamwee, B.

Shaughnessy, L.

Hanworth, V.

Shepherd, L.

Harris of Greenwich, L.

Stoddart of Swindon, L.

Haskel, L.

Taylor of Blackburn, L.

Henderson of Brompton, L.

Taylor of Gryfe, L.

Hilton of Eggardon, B.

Thomson of Monifieth, L.

Hollis of Heigham, B.

Tordoff, L.

Holme of Cheltenham, L.

Turner of Camden, B.

Hooson, L.

Waverley, V.

Howell, L.

Wharton, B.

Hughes, L.

White, B.

Hylton, L. [Teller.]

Williams of Elvel, L.

Hylton-Foster, B.

Williams of Mostyn, L.

Jay of Paddington, B.

Winchilsea and Nottingham, E.

Jeger, B.

Wise, L.

NOT-CONTENTS

Addison, V.

Boardman, L.

Alexander of Tunis, E.

Borthwick, L.

Archer of Weston-Super-Mare, L.

Boyd-Carpenter, L.

Arran, E.

Braine of Wheatley,

Astor, V.

Brougham and Vaux, L

Astor of Hever, L.

Butterworth, L.

Birdwood, L.

Cadman, L.

Blatch, B.

Campbell of Alloway, L.

Blyth, L.

Carnegy of Lour, B.

1157

Carnock, L.

Marlesford, L.

Chalker of Wallasey, B.

Merrivale, L.

Chelmsford, V.

Mersey, V.

Chesham, L.

Middleton, L.

Clanwilliam, E.

Miller of Hendon, B.

Clark of Kempston, L

Milverton, L.

Colwyn, L.

Morris, L.

Courtown, E.

Mottistone, L.

Cranborne, V.

Mountevans, L.

Crickhowell, L.

Moyne, L.

Cumberlege, B.

Munster, E.

Davidson, V.

Murton of Lindisfarne, L.

Dean of Harptree, L.

Norfolk, D.

Denham, L.

Norrie, L.

Denton of Wakefield, B.

O'Cathain, B.

Dixon-Smith, L.

Orr-Ewing, L.

Dundonald, E.

Oxfuird, V.

Elibank, L.

Pearson of Rannoch, L.

Elles, B.

Pender, L.

Elliott of Morpeth, L.

Perry of Southwark, B.

Elton, L.

Rankeillour, L.

Ferrers, E.

Rees, L.

Fraser of Carmyllie, L.

Renwick, L.

Gardner of Parkes, B.

Rippon of Hexham, L.

Glenarthur, L.

Rodger of Earlsferry, L.

Goschen, V.

Rodney, L.

Gridley, L.

Romney, E.

Haddington, E.

St. Davids, V.

Hailsham of Saint Marylebone, L.

Skelmersdale, L.

Harmsworth, L.

Southwark, Bp.

Haslam, L.

Stewartby, L.

Henley, L.

Strathclyde, L.

Holderness, L.

Strathmore and Kinghorne, E. [Teller.]

HolmPatrick, L.

Hood, V.

Sudeley, L.

Jenkin of Roding, L.

Swansea, L.

Johnston of Rockport, L.

Tebbit, L.

Kenyon, L.

Thomas of Gwydir, L.

Lane of Horsell, L.

Torrington, V.

Leigh, L.

Trefgarne, L.

Liverpool, E.

Trumpington, B.

Long, V.

Ullswater, V. [Teller.]

McColl of Dulwich, L.

Vivian, L.

Mackay of Ardbrecknish, L.

Wade of Chorlton, L.

Mackay of Clashfern, L. [Lord Chancellor.]

Wakeham, L. [Lord Privy Seal.]

Macleod of Borve, B.

Westbury, L.

Mancroft, L.

Whitelaw, V.

Resolved in the negative, and amendment disagreed to accordingly.
5.53 p.m.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, the Question is, That the original Motion be agreed to.
On Question, Motion agreed to.

Airports (Northern Ireland) Order 1994
5.54 p.m.
Baroness Denton of Wakefieldrose to move, That the draft order laid before the House on 9th December be approved.
The noble Baroness said: My Lords, the order represents the first piece of Northern Ireland airports legislation to be brought forward since the Aerodromes Act (Northern Ireland) 1971. There has been a shift in the Government's airports policy during that period and that is now reflected in the proposal before the House. I shall return to that point in more detail.
The order also provides for the modification of existing airports legislation in Northern Ireland so that
1158
the rights of airport operators are more in harmony with those of their Great Britain counterparts. The most significant feature of the order is Part V in which the provisions clear the way for the privatisation of Belfast International Airport. I propose to comment first on that important area.
To return to my opening remarks, noble Lords will be aware that, in line with the policy of exposing public utilities to the challenge of market forces, all government-owned airports in Great Britain were privatised in 1987 when the former British Airports Authority became BAA plc. The remarkable commercial progress of that company since its transfer to the private sector stands as a testimony to the success of the Government's policy. Now Belfast International is the only remaining government-owned airport, and with its consistently good trading record over the past decade it is an obvious candidate to be allowed to follow the earlier example of airports such as Heathrow, Gatwick, Glasgow and Edinburgh.
In contrast to the privatisation of the British Airports Authority, however, Northern Ireland Airports Limited, the public company which operates Belfast International Airport, will be privatised on a trade sale basis. During the consultation period there was a degree of lobbying to float the company by means of a public share issue but that was discounted, primarily on the grounds of additional cost and lesser proceeds.
I mentioned earlier that the opportunity was being taken with this order to harmonise current Northern Ireland airports law with that which applies in Great Britain. That general principle is followed in Parts II and III of the order. The main changes to existing law involve primarily the compulsory acquisition of land, matters relating to airport safety, the appointment of airport constables and the provision by airport operators of consultation facilities for certain groups or bodies. In Great Britain that latter provision, when introduced, spawned the highly successful system of airport consultative committees which has enabled issues of common concern to be discussed by operators and users at those mainland airports designated for that purpose.
Part IV of the order will introduce to Northern Ireland a system of economic regulation similar to that which applies to Great Britain airports. While that will not apply to all airports, nevertheless any airport with a turnover of more than £1 million in at least two out of three consecutive years—in practice Belfast International and Belfast City Airports—will be required to apply to the Civil Aviation Authority for permission to levy airport charges. Such operators will also be required to make available to the CAA prescribed financial information with a view to identifying any subsidy element of charging policy. I should stress that the CAA will not determine airport charges, but it will be empowered to investigate complaints about charging policy or predatory pricing and enforce appropriate remedial measures.
I have already dealt with Part V. The order concludes with a supplementary part on amendments and repeals, and the making of subordinate regulations and orders under the primary legislation.

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In winding up I should like to inform noble Lords briefly of the consultation process on the order. It attracted just over 30 responses, of a minor nature only, and in certain cases the Government have been able to accommodate suggestions that were put forward. For example, it will be noted that after representations the General Consumer Council for Northern Ireland has been included in Article 20 as a body for which designated airport operators must make consultation facilities available.
As more people take advantage of air travel, airports have an increasingly important role to play. The order is timely in that it introduces best practice for all airport operators, and, in the case of Belfast International Airport, frees it from the constraints of government control to take full advantage of the new opportunities on offer. I cannot over-emphasise the strategic importance to Northern Ireland life that Belfast International Airport, as the premier gateway to the Province, commands in economic and social terms. In moving forward with the privatisation of this major asset, the Government are confident that under private ownership it will enhance that reputation and ensure that the Province is able to compete even more robustly in the wider European and global markets which are so important to its economy. I beg to move.
Moved, That the draft order laid before the House on 9th December be approved.—(Baroness Denton of Wakefield.)
6.1 p. m.
Lord Cooke of Islandreagh: My Lords, as a native of Northern Ireland, I welcome the noble Baroness to her new duties and wish her success. I hope that she will enjoy her work.
This is a complex order. It repeals six former measures, and introduces a variety of articles on a number of subjects. However, there is no doubt that the underlying basis for the order is preparation for the privatisation of Belfast International Airport. There is widespread anxiety in Northern Ireland as to whether such privatisation is wise. Naturally, I shall explain why it is such a widespread view.
Some three years ago when the decision was made to privatise Belfast International Airport, a Minister who sought advancement and perhaps brownie points could achieve them by announcing the privatisation of anything in sight. The privatisation of Aldergrove—the international airport—was announced without consideration, it now seems clear, of all the complications and problems which exist. Security is one. It may be helpful if I explain my interest in the international airport. In 1969—perhaps it was 1970—Belfast Aldergrove Airport was transferred from the Board of Trade to the Northern Ireland Government. I was one of six or seven persons who were asked by the then Minister of Commerce, Brian Faulkner, to form the board of the new company and to develop the airport. His brief to us was simple: to develop the airport in the interests of the Province, in particular the business traveller but also the private traveller; and to do that in a commercial manner as though it were a private company. I cannot think of a much better brief than that.
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But there was a reason for requesting that the airport be developed in the interests of the Province. In Northern Ireland we cannot jump in our cars or go to a railway station in order to travel to Birmingham or London. travel is vital to us. As the Minister correctly stated, Belfast International Airport is the gateway to Northern Ireland. It is vital, particularly in the present situation, that first-time visitors receive a good impression when they arrive at the airport. That has been a consideration of Northern Ireland Airports Limited throughout the development. It can make an enormous difference to a would-be industrialist who is considering opening a factory in Northern Ireland if he arrives in a well set out place with competent and friendly staff. Belfast airport is known as having such staff and such a reception.
It may cost more than is normally necessary to provide the current level of assurance. That might be difficult for a private operator. So far as I am aware, the security problems at mainland airports are comparatively straightforward. At the Aldergrove airport the position is extremely complicated. The facilities are shared with the MoD; there are RAF and Ministry facilities within the perimeter fence which is seven miles long. There is a continuing and real threat on the security front which is currently looked after in a corporate manner by the various interests involved. There is excellent co-operation between the different interests, and security arrangements have worked well.
It was perhaps fortunate that the security threat developed in advance of building work and construction of the airport. It was possible to design the airport in a manner to deal with the security threat. Those security arrangements are highly regarded throughout the world. The airport has been visited by security interests from North America, South America, the Continent and from this country. Such visits have been helpful to others facing a security problem.
Security is not referred to in the order but it is vital to the airport complex that the matter should be properly dealt with. Will the new operator be responsible for security? I hope not. I trust that security will be the responsibility of the security services generally. I hope that the Minister will assure us that security arrangements will be outside the operator's control.
Who will pay for the security arrangements if the responsibility is outside the operator's control? I assume the answer is that the operator will pay for them. That presents problems because the security scene often changes. Structural arrangements need to be carried out in order to deal with the threat. Will the private operator have to deal with sudden calls for substantial expenditure for which he has not budgeted?
Any airport operator is bound by regulations and restrictions. I refer to the CAA; landing fees, which may be too much or too little; the Monopolies and Mergers Commission; and, in the case of Belfast International Airport, substantial security costs. One wonders how attractive the sale will be to a private operator. We understand that it is to be a trade sale. That means that the department will negotiate with contenders and will presumably endeavour to achieve the best price. However, if the operator does not find it an interesting enterprise, what prevents him from selling it on to

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someone else—perhaps to an Iraqi operator? How can that be prevented? Is there an intention to have a golden share attached to the sale? How effective in the longer term is a golden share under European law? It is essential that the management of Belfast International Airport should be kept in safe hands.
It is worrying that much new traffic seems to be moving to Belfast City Airport. The airport is overcrowded it does not have the capacity to deal with the traffic which has gone there because it has lower rates than those applying at Belfast International Airport. It is clear from what has been happening recently that Belfast airport is being fattened up for privatisation. One wonders how much that has to do with its lack of ability to attract the new operators.
It is particularly worrying that a direct Belfast-Heathrow service now operates from Belfast City which may mean the cutting back of either the services at present operated by British Airways or British Midland. Those together offer a vital and essential service to business travellers. If the service should become split between the two airports it will be confusing and troublesome. For one thing, one's car may not be at the right airport when one wishes to return. I wonder how the Government intend to deal with the matter which has become urgent. Belfast City Airport is overcrowded. I hear some horrible tales and experiences of travellers, arising from the pressure on facilities.
It seems obvious that the transfer to the private company will be hedged with all manner of restrictions and the companies will not be masters in their own house. What will the department do if it does not consider that offers by the prospective companies are adequate to fund the assets which have been invested by the taxpayer?
We have in place at Belfast International Airport a management system which works. It has made money. It provides good facilities, and the service is excellent. Why change something that works? If the Treasury is concerned about borrowing public money to fund development, I am sure that arrangements could be made or powers provided whereby the present airport company could borrow on the commercial market.
It seems that a great many complex arrangements will have to be made to deal with the problems. It would be much simpler to reverse the decision to privatise. One has the impression that a decision, once made by government, is not changed because of fear of losing face. I suggest that on this occasion the Government would earn respect by changing the decision. I hope and trust that the Minister, having considered the matter, will advise the House in a short time that other arrangements can be made.
Lord Hylton: My Lords, before the noble Lord sits down, does he agree that a measure of competition between the two airports works in favour of the consumer? We accept that the proximity of the city airport to the city centre and to east Belfast tells strongly in its favour.
Lord Cooke of Islandreagh: My Lords, there are certain services for which that is so. Belfast City Airport
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has done a good job in opening up many minor routes and services which would not have happened in the main airport. However, it has now reached the point where main line services are threatening to move. It is said that British Airways proposes to move. That would not be helpful to either the business traveller or the private traveller.
6.14 p.m.
Lord Holme of Cheltenham: My Lords, I thank the noble Baroness for the extremely clear and helpful way in which she introduced the order. It is a complex order but I should say that it is relatively uncontentious. If it is thought sensible to privatise Belfast International Airport, then the order follows naturally from that premise.
When the noble Baroness replies, she would do us all a great service by taking up the points of the noble Lord, Lord Cooke, with his great experience, about security and the question of a sale on to a third party by the trade sale recipient of the franchise. Both those are major questions and I shall return to security in a moment.
Other points about the order are these. I welcome the attention which is given in Articles 21 and 22 to noise pollution—a problem which may become greater in the future. The order empowers the department to take action when aircraft are too noisy. Can the noble Baroness tell us whether the department expects to be receptive to complaints about noise and how it will treat them when such complaints are made?
On a different point, in Article 23 there is provision for the sale of aircraft after 56 days of non-payment of outstanding airport charges. We on these Benches are rather in favour of penalties for the late payment of commercial bills, but I must say that after 56 days, to sell the aircraft seems draconian. Is it the Government's intention that there should often be recourse to that provision? I have a feeling that that may hamper the commercial prospects of Belfast International Airport. At the least, I should like some reassurance about flexibility on that, when the Minister replies.
Another point is that Article 49 is somewhat worrying as regards the restriction on the disclosure of information. The article lists several bodies which should have access to privileged information, but for some reason the list does not include Parliament. If the information were to be relevant, for example, to some future order before the House, then Parliament could only obtain it through a stratagem such as asking the Director General of Electricity Supply for Northern Ireland, who is allowed to have the information. Could the Government please add Parliament to the list of bodies with access to the privileged information?
Finally, I should like again to raise with the noble Baroness the question of security, which is extremely important. There is total integration of security at present at Belfast International Airport, as we all know. Article 19 of the order gives the contractor the power to create a constable to oversee the airport. I think that the creation of a new constabulary is rather an important move. Has it been cleared in consultation with the RUC? And what is the attitude of the RUC to contractual security at the airport with the status of a

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constable? I should be grateful if the noble Baroness could reassure us on that. Speaking from Benches that are on the whole in favour of the privatisation of airports, I have no other comments to make on the order.
6.18 p.m.
Lord Williams of Mostyn: My Lords, I must congratulate the Minister on winning her first Division; I hope that it does not set a precedent for the future. I recognise, of course, that the Government at present in power are obsessed with selling public assets, quite often at too low a price, if we think back to the Statement this afternoon. Perhaps that is an argument that is outside the sensible terms of reference. However, perhaps I may support and endorse the questions which the noble Lord, Lord Cooke of Islandreagh, asked in particular in the security context.
I wish to take up the questions put by the noble Lord, Lord Holme of Cheltenham, about Article 19(4). As I understand it, as at April last year there were 59 airport police at the international airport in Belfast. But Article 19 authorises an airport operator himself to appoint any person to be a constable. Article 19(3) states that such person on appointment shall, on the airport,
"have the powers and privileges and be liable to the duties and responsibilities of a constable".
Curiously, with those powers and responsibilities, under Article 19(4):
"Constables appointed under this Article shall be under the exclusive control of the airport operator by whom they are appointed".
That seems extraordinary. That operator may suspend or terminate the appointment of any such constable.
The questions that really trouble us are these. Who is to control these police officers? Is it to be the private company? What powers are the officers to have? What safeguards will there be about appointment and training? Will pay and conditions be tied to comparable pay and conditions in, for instance, the RUC? Will there be adequate testing for these new recruits? Ought there not to be at least a police committee attached to deal with these important questions? Will the equivalent of the Police Complaints Authority have jurisdiction over the airport police? Are they to be allowed the use of fire-arms? If so, on whose authority and on what basis of training?
The Minister mentioned that the device of privatisation would bring Belfast International Airport in line generally with airports of a significant size in England and Wales. My understanding is that the policing of Heathrow is under the jurisdiction of the Metropolitan Police Commissioner. If that is right, why does one need a separate police force for an airport in Belfast, bearing in mind that the security problems, as both noble Lords who spoke before me have rightly observed, are much more acute and difficult in Belfast? My understanding also is that other metropolitan airports in England and Wales are normally under the jurisdiction of the local police authority. Those are important questions. I realise that there are a number of them, but they all derive either from Article 19 or from the worries that we on these Benches have, which have been expressed by noble Lords who spoke before me, about security.
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I shall now turn to a different aspect:, having asked a fair barrage on the police. Is it correct that within the past three years or so Belfast International Airport has received grants of about £7.5 million from the European Regional Development Fund transportation programme? If it is intended that the sales should be at full market price, what is the estimated clawback which the transportation programme will look for? The Minister has said that she will give further clarification in closing. We should be grateful to know the safeguards, if any, for the employees presently at Belfast International Airport in respect of this trade sale? What are the costs of privatisation? What is the differential between a flotation on the open market and a trade sale in anticipated net receipts? None of these things has been described in any sort of detail at all. Given that, as I understand it, there was a 71 per cent. increase in profit in 1992-93 compared to the previous year, what is the discernible benefit to travellers, local employees, the business community and the economy in Northern Ireland generally?
Finally, I want to revert to the defence aspect. It does not seem to us, from the explanations given so far, that sufficient in-depth attention has been given to the defence and security aspects. We look at least for some reassurances about selling on. One does not want to be over-dramatic. However, as the noble Baroness's colleague indicated in the Statement earlier this afternoon, once a company has been privatised—-Rover in that case—any subsequent transaction is a purely commercial transaction between Rover, and the purchaser, BMW. Will there be any legally enforceable guarantees about a subsequent sale of an airport of this importance, not simply as regards commercial implications but also defence and security implications?
6.24 p.m.
Baroness Denton of Wakefield: My Lords, I am grateful for the comments that have just been made on this Order. As the noble Lord has said, I outlined the background in my opening remarks and I shall deal with specifics in a moment. May I say that the questions of the noble Lord, Lord Williams, came so thick and fast, especially towards the end of the debate, that I hope he will understand that I may have to read Hansard before I can register all of them. However, I will certainly write to him on any questions that I do not reply to now. In particular, I hope the noble Lord will accept that as regards questions with close security implications, I will make a point of writing about them if it is not appropriate to answer them here and now.
I should like to thank the noble Lord, Lord Cooke of Islandreagh, wholeheartedly for his welcome to me in my new job. I am quite certain that I shall enjoy it—indeed, I am already doing so. I also join with him in endorsing the value of inward investment to the Province and say how important Belfast International Airport is in that respect.
I believe that we are following the correct course by permitting Belfast International Airport to enter the private sector. For example, a study of the Government's privatisation programme begun in 1979 shows that privatisations generally have demonstrated

1165
that increased efficiencies are introduced into a business for the obvious reason that commercial decisions are taken on a more profit-motivated basis and that profits allow investment. Privatisation has meant that goods and services are provided at the lowest economic cost by virtue of the competition which privatised companies then face. Decision taking is speeded up, unhindered by government interference and procedures. Here perhaps I may divert in the way that the noble Lord, Lord Williams, did and say that, having worked at Rover when it was a government business, I have been pleased to see it progress since it went into the private sector. Decision taking, as I have said, is unhindered by government interference and procedures and is given exposure to the disciplines and opportunities of private sector markets. All these positive steps assist towards turning privatised entities into streamlined businesses. That can only be of benefit to the consumer.
Perhaps I may also draw attention to the fact that our privatisation policy is being copied in many countries now. Again, as the noble Lord said, the experience of British international airports in security matters has been something for which other countries have turned to us for lessons. I would expect Northern Ireland travellers to benefit. The BAA, to which I alluded in my opening remarks, continues to be a beacon of success as a privatised airport group. I am sure that Belfast International Airport will follow that pattern.
Not surprisingly, noble Lords felt anxiety about the security implications of this airport. There can be no question that matters of security in Northern Ireland on any aspect are treated with the utmost seriousness and resolution in order to maintain the high security standards that are needed. This matter of airport security, once it is in private hands, has been examined thoroughly with the appropriate bodies and I can assure your Lordships, without going into details, that security will not be affected by privatisation either now or later. The Ministry of Defence has been very closely involved in discussions in bringing this Order forward. Present security arrangements will apply. The present company meets appropriate charges as laid down in regular surveys by the RUC, and that position will continue. Any new owner will be aware through the sales prospectus of his responsibilities in that area. I would add that those responsibilities do not appear to have deterred interest in the airport. I am sure noble Lords will be pleased to hear that there will be put in place a system which effectively gives Government full control over the vetting of new owners, subsequent to the original buyer.
With regard to the question of whether the taxpayer will receive full recompense, the public investment at Belfast International Airport has been made at every stage over its 30-year history, as the noble Lord, Lord Cooke, will know better than I. The Government expect that that soundly-based investment will be recognised in the price offered by bidders and have complete confidence that after privatisation all the assets of the airport will be fully exploited. There will be no clawback of the grant on ERDF. That has been confirmed by Brussels.
1166
With regard to competition between Belfast City and Belfast International Airport, it is the Government's policy not to interfere in the marketplace. Having said that, the growth of Belfast City Airport will be measured against the policies adopted as a result of the Belfast Harbour local plan inquiry. The noble Lord, Lord Holme, raised the question of noise pollution, which is crucial and of growing interest. The department initiated a scheme to identify noise contours at Belfast City Airport. Although the location of Belfast International Airport means that environmental problems are not apparent, I can assure the House that they will be monitored closely and complaints carefully considered.
Perhaps I can cover a point raised by the noble Lord, Lord Holme, regarding the Government's plans for the policing of Belfast International Airport. They were drawn up in full consultation with the Royal Ulster Constabulary. Where it is necessary for airport constables to carry firearms after privatisation, the RUC is content that adequate controls will be in place regarding their issue and use.
The question of security and the airport constabulary is a matter of major concern. Government security advisers carefully considered the issue of policing following the privatisation of Belfast International Airport. They are satisfied with the performance of the present airport constabulary, which is under the direct control of the airport management. They are content that the force can transfer into the private sector. But the Government will be putting in place certain safeguards and strict monitoring arrangements to ensure that the commercial interests of the new management do not undermine the operational independence and professionalism of the force or the security of the airport generally.
Lord Holme of Cheltenham: My Lords, I am grateful to the noble Baroness for giving way. I am not sure that I heard her correctly. Do I understand that there is some question of this privately contracted police force carrying firearms? For that to be the case in any part of the United Kingdom would be an extremely serious step to take. I do not know whether the noble Baroness misstated herself or whether it is possible that a privately-contracted police force would carry firearms.
Baroness Denton of Wakefield: My Lords, the noble Lord heard correctly. I said that where it is necessary for airport constables to carry firearms after privatisation, the RUC is content that adequate controls will be in place regarding their issue and use.
Lord Holme of Cheltenham: My Lords, I am sorry to press the noble Baroness. But does that mean that those firearms will only be issued with the explicit consent of and under the control of the RUC? Is there any situation where that would not be the case?
Baroness Denton of Wakefield: My Lords, I am pleased to say that the RUC would work on the issue and in close collaboration with the airport authorities. It is the responsibility of the RUC to advise and ensure that the last thing we do is put the security of the airport at risk.
Lord Williams of Mostyn: My Lords, perhaps the noble Baroness will allow me to intervene. In England and Wales, as is well known, a firearm can only be issued to a police officer of a lower rank by a designated officer of a significantly superior rank. Both the noble Lord, Lord Holme, and I are concerned about the issue. I would not wish to press the Minister this evening because, in fairness, we asked a number of detailed questions. For my part I would be happy with a written, researched reply. That would perhaps be a fairer way of dealing with the matter. We are both concerned about the aspect, as I believe appears from our earlier questions.
Baroness Denton of Wakefield: My Lords, I thank the noble Lord, Lord Williams, for those remarks and understand that the noble Lord, Lord Holme, also will accept a detailed, researched reply. I shall ensure that that is forthcoming. I should like to conclude that issue now by saying that if for any reason the airport were to cease to maintain a satisfactory level of policing, powers are available under the Aviation Security Act 1982 to allow the policing role to be taken over quickly by the RUC.
I can assure the noble Lord, Lord Holme, also that the sale of aircraft has not been seen as a major source of revenue in the prospectus. The issue of the commercial payment of debts is one which I know we both hold close to our hearts.
The questions your Lordships asked were detailed and are deserving of a detailed response. I shall ensure that comes to your Lordships. With that assurance, I commend the order to the House.
On Question, Motion agreed to.

Millennium Fund
6.36 p.m.
Lord Howell Lord Howell rose to ask Her Majesty's Government what are the principles upon which the Millennium Fund, created by the National Lottery, will be distributed.
The noble Lord said: My Lords, I am pleased to have the opportunity to ask the Question standing in my name on the Order Paper. Perhaps I may say at the start that I am an unrepentant supporter of the National Lottery, both in and outside government. I am not opposed to the principle of the Millennium Fund but I have a growing apprehension in regard to issues which are now arising and I shall ask the noble Baroness, Lady Trumpington, a number of questions which it is essential should be clarified.
First, the Millennium Fund will be a goldmine and a honey pot. Therefore, its purpose, its use and its integrity are matters of the highest importance, which is why I sought leave to debate those matters tonight. If we assume that half the takings of the National Lottery will go in prizes; 12 per cent., which I regard as being too high, will go in tax, and 15 per cent. on administration, the Millennium Fund will receive one-fifth of the residue over the five or six years after it is established
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and will have at its disposal an estimated sum of £70 million a year—that is, between £420 million and £450 million by the turn of the century.
That considerable fund is to be distributed by two Secretaries of State (one who is to be the chairman) and one Opposition appointee, with six so-called independent commissioners, presumably appointed by the Government. That leads me to the first question about the people who are to be in control of such a large sum of money. What is the principle that will be applied in their selection? I suppose it is too soon to ask who they will be. The only clue that we have so far is the statement by Helen Wilkinson —a principal in the Department of National Heritage—who said,
"The 6 will give the Commission its flavour … We want some new names, some young names, a reasonable spread. They have to be absolutely top class".
I await the choice of those paragons of virtue who are to be put in charge of over £420 million of public money. As the Act gives them absolute discretion on how to use the money, how can we ensure some degree of public examination as to their sensibility?
I turn to projects that are already lining up to be considered. For example, on the arts side I refer to the Royal Opera House. Lord Salisbury and Vivien Duffield have stated that they will raise £45 million if another £45 million can be raised from public funds. The Secretary of State, Mr. Peter Brooke, has written to the chairman of the Royal Opera House in the following terms:
"Your scheme for refurbishment and development is certainly the kind of capital project to which the lottery is relevant".
Does the noble Baroness believe that the public £45 million to match the private £45 million should come from the Millennium Fund or from the Art Council's £420 million, which will be a one-fifth share? There is a total blank about these matters in public discussion, yet when the Secretary of State commits himself in those terms in writing I believe we are entitled to ask from where he believes that kind of money will come. What are the principles which will govern that decision? That raises the question—discussed many times in this House, but not satisfactorily—whether all of this lottery money is to be spent on capital projects, and certainly the Millennium Fund? I know that there are a lot of capital projects—probably more from the Millennium Fund than other aspects of this funding—which will need to be financed. I repeat what I and other noble Lords have already said and what everybody in the arts and sport is saying. There are very many capital projects around the country but not enough revenue to sustain them. It is no good building more white elephants if we cannot finance their operations. As I well know, it is easier to build projects than to get bodies to continue to finance the losses which most sports stadia and theatres create. The relationship between capital and revenue has to be thought out afresh, especially in respect of new projects financed by the Millennium Fund.
I turn to the question of sport. Not only are there projects lining up for expenditure from the Millennium Fund but from what I have read, and if we are to believe what we are told, millennium money has already been spent. I feel, therefore, that 11 should raise a number of questions. I can give many examples but will confine

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myself to the launch last week by Sir Robert Scott of an attempt to obtain money to build a stadium for his Commonwealth Games bid. That is based on Manchester, but my understanding is that there is no commitment or involvement in money terms from Manchester City Council. According to the Financial Times, last week, his bid for the new stadium is based on £70 million of Millennium Fund money. I have with me the document issued by Sir Robert Scott and his colleagues in AMEC, a private enterprise developer. They call their stadium the Manchester Millennium Stadium. They say that they have the money and have named the stadium, the cost of which will be £70 million or more. That is public money which they are committing at this moment. I quote from that document:
"Costs for the stadium and associated development will be approximately £187 million. A sum of £72 million has already been committed through acquisition of the site, relocation costs for existing businesses, site clearance, construction of the velodrome and the initial infrastructure".
I pause to say that all of that money has already come from the Government, not the private sector. The document continues:
"Of the remaining £115 million stadium construction costs, £75 million will be the subject of Manchester's bid to the Millennium Fund and the National Lottery, while the remaining £40 million will come from private sector equity and sponsorship".
It is also said that AMEC will design, build and operate the stadium, for which they require £72 million from the Millennium Fund. I say good luck to them, but they must not lay claim to having the money before it is allocated to them. This is a vitally important principle.
I ask the Minister, have any private, of public, assurances been given to AMEC or Sir Robert Scott, or is there any understanding that they will be given £72 million from the Millennium Fund? That is what they are saying. It is a matter of crucial public importance, as I shall illustrate. The Millennium Commission has not yet been established. We do not know who the members will be, nor have its policies for the distribution of money been determined. Therefore, I would expect the noble Baroness to reply that certainly no undertakings have been given for the simple reason that any such undertakings would have been illegal. It would be illegal either to spend or to promise money from the Millennium Fund before the commission had been established and the money was available. Yet people are making claims to the effect that they have such money. The reason why I raise these matters in the House tonight is that people in those quarters are saying, with a nod and a wink, that the money is in the bank.
There is another very important reason why I ask the Minister to clarify the issue. The English Commonwealth Games Federation has to decide this week on which of the three bids before it will be chosen to represent England in an endeavour to have the Commonwealth Games held in this country in the year of the Queen's Jubilee. I am sure that all of us hope that that will come about. The federation has to know whether the stadia in which to hold the games are already built and in place or, if not, whether the money to build them is assured. I am sure noble Lords will appreciate that we must know whether the £72 million
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which has been stated to be available to one of the bids is assured. We need to know what has been said privately or publicly about the availability of millennium money.
I turn to other considerations. Here I declare an interest. I happen to be a director of Wembley Stadium. I refer to the question whether millennium money will be used to create stadia which will be in competition with stadia already built and operating either in the public or private sector. In the public sector cities like Birmingham, Sheffield, Gateshead and Edinburgh have all built stadia paid for by their ratepayers or with money raised by the city and guaranteed by the ratepayers. None of those cities has received a penny piece from the Government in the establishment of their facilities. They have to make a surplus, of course, or under existing legislation they are rate-capped, handicapped and penalised. Therefore, these cities are saying to me "We need to know: are we to find ourselves competing with stadia which have been paid for largely by the Government and where there are no loan charges outstanding? That could represent unfair competition against us when we seek to get these very important events to our cities". It is of considerable importance to those cities to have the answers to those questions.
I turn now to the private sector where, as I have said, I declare an interest. The position is even more remarkable because Wembley Stadium, and other stadia and places which hold such events such as Earl's Court and Olympia, are privately owned and have to raise their money on the open market. They have to make a profit and be answerable to their shareholders. Therefore, it is very important for them to know the terms on which they will be competing. Again, as I know from talking with my fellow directors and others concerned in this area, they believe that it would be grossly unfair if they are expected to make a profit and be answerable to their shareholders and find themselves competing with a project financed largely by the Millennium Fund, which has not had to be raised on the market and where there are no interest charges involved. That is a very important consideration and one of the reasons why I ask that the principles on which the Millennium Fund money will be distributed have to be spelt out to this House and to the public. What are the principles that will apply?
I have one final point to make to the people making claims to this money. They must not forget the due process of democracy. It may well be that by the time this money is available another party might be in government. Indeed, to be fair, the Secretary of State, the right honourable Peter Brooke, made that point himself in earlier statements in the other place. If that were to be so, it is possible that these thoughts or private nods and winks will not operate. I cannot say what another government will say if that happens. That is more for my noble friend Lord Donoughue on the Front Bench. Having some knowledge of the matter, and having followed these matters through, I can say that a Labour Government would certainly wish to hold the ring fairly as between one city and another. They do not believe that this ring has been held fairly so far, when

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cities like Sheffield which put all its money into building facilities to stage the world student games—an act of great courage which cost it a great deal of money —might now find itself at a further disadvantage if the claims of Sir Robert Scott and his colleagues are correct.
Therefore, I hope the House will appreciate why I felt it right to raise these questions today and to have this short discussion at an early stage, particularly so that questions on whether money is available can be cleared up by the noble Baroness whom I thank for being in her place tonight.
6.54 p.m.
Lord Redesdale: My Lords, I thank the noble Lord, Lord Howell, for bringing forward this Question tonight. I know that he speaks with a great deal of knowledge on the subject of sport, having been a Minister responsible for Sport. I believe (although I am not sure) that he is still acting as a football referee—
Lord Howell: My Lords, not at my age!
Lord Redesdale: My Lords, during the passage of the Bill the Millennium Fund was described as a far-reaching and visionary body which would be of interest to the entire nation. It is certainly of interest tonight. However, I fear that until a millennium commission is set up and the spoils of this golden honeypot are spent, very little interest will be expressed in it, although I am sure a great many people will make claims to what the Millennium Fund should be spent on.
During the passage of the Bill I was given the title of "spoilsport", as one who actually objected to the Millennium Fund being set up at all. However; since it will shortly come into existence, I wish to put forward some of the principles under which it should be run. However, I fear that when the millennium commission is set up one grave disadvantage will be that there will be only one Opposition appointee rather than two from the two Opposition parties.
I would like to make some constructive suggestions towards the Millennium Fund. There are many very valid projects on which the money could be spent. We are not talking about a vast sum of money. One point should be underlined and it is the major principle behind the Millennium Fund—namely, that regionalisation should be the key. The lottery tickets will be bought by people throughout the country from Penzance to John o' Groats. During the passage of the Bill and discussions afterwards the large projects talked about were often London-orientated. Great schemes are always put forward which are sometimes London-based. An opera house has been mentioned which I presume would be built in London.
The lottery should benefit everybody in the country and should not be based purely in London. The Olympic Games were mentioned. I know that many noble Lords share my extreme disappointment that Manchester was not chosen for those games. I am very grateful to the Government for funding large works in Manchester, a city deserving of such spending.
One of the underlying principles behind the Millennium Fund is that it will take place at the end of this millennium and at the beginning of the next. Can
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the Minister say when this millenium will end? Does it end on 31st December 1999 or 31st December 2000? That would be an indication of when the money stops being paid into the fund. I know that there is sonic debate about when that will take place.
Acknowledging that the Millennium Fund is at the end of this millenium and at the beginning of the next, one of the principle areas in which money should be spent is youth. One project which the fund could finance —we are not talking about vast sums of money taken out for large capital projects—is the provision of youth clubs across the country. It could fund travelling theatre and music groups. It could actually fund most of the outdoor activity groups. All those areas of youth activity have been drastically cut during government and local authority cuts in spending. That has been one of the first areas to suffer. Would it not be a fitting way to start the next millennium by considering the youth of tomorrow?
In this area I would also wish to add proper funding for the British Youth Council whose grant is threatened at present. It has been estimated that the amount of money involved is close on £0.5 billion. I know that there was talk in Committee about having an enormous party. I have to declare an interest. I own a pub arid I think that a party would be an excellent idea. However, we must remember that New Year is usually a great disappointment. Although I cannot remember a great deal about last New Year, usually it is spent standing around in a town square with everybody doing hundreds of different countdowns according to the different times on their watches.
If capital projects are to be undertaken, the question of the date by which they are to be completed is of considerable importance. Returning to my question about when the millennium starts, it would seem strange to have the Millennium Fund set up and yet for some of the capital projects not to be completed until towards the end of the first decade of the millennium. I think that it would be more fitting to spend money on smaller projects around the country at the beginning of the millennium.
7 p.m.
Lord Renton: My Lords, although my name is not on the list of those wishing to speak to this Unstarred Question, I understand that it will be in order for me to make a short contribution. Although I disagreed with much that he said, and felt that he was a little premature in asking the Government to explore certain issues, I am glad that the noble Lord, Lord Howell, has raised these matters this evening because it is right that we should start thinking about 'how the important National Lottery etc. Act will work, especially the Millennium Fund.
One matter of interpretation arises in connection with Section 22 on which I have no doubt that my noble friend Lady Trumpington is clear in her mind or at least has been well advised. I should be grateful if she could confirm this point which is of great importance. Section 22 sets out the way in which the money is to be apportioned from within the distribution fund. Section 31 refers to deducting expenses, as is natural. Section 22(3) refers to five matters: the arts, sport, national heritage, charitable expenditure and,

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"expenditure on projects to mark the year 2000 and the beginning of the third millennium".
We have a rule of interpretation of statutes which is very important and relevant to this matter. When different expressions are used in the same statute, each of them is assumed to have a different meaning and effect. Therefore, one must assume—it is on this point that I would welcome clarification—that none of the
"projects to mark the year 2000 or the beginning of the third millennium"
should be concerned with the arts, sport, national heritage or charitable expenditure. It is very important, as a foundation to all our thinking, that we understand that. What I am saying about Section 22 is most certainly endorsed by the way in which Section 23 refers to separate arrangements by the distributing bodies in connection with those five matters.
It would seem to follow that the £45 million for the Royal Opera House, to which the noble Lord, Lord Howell, referred, could not come out of the money that is to be spent on the millennium projects because an opera house would come under the heading of "the arts". I should have thought that point requires no answer from the Government because it is manifestly plain.
That is the only matter to which I wish to refer. I shall be interested to hear what my noble friend Lady Trumpington has to say about it.
7.4 p.m.
Lord Donoughue: My Lords, many people will be very interested to hear what the Minister has to say on that matter because it is a critical question. From the conversations that I have had, my experience is that the majority of people who are involved in the arts or with sport assume that money from the Millennium Fund is to be available for their areas. I do not know what the experience of my noble friend Lord Howell has been on this point. In other words, those involved in the arts or with sport are assuming an overlap or a "double bite", especially for the bigger projects because they believe that is the only way in which a national stadium for Wales, a big opera house in Cardiff or something similar for Scotland can be achieved. If the noble Lord, Lord Renton, is correct in his interpretation—and on my observation, he is too often correct for our present comfort—a major landmine lies ahead. Therefore, I thank the noble Lord for his intervention. I have nothing to say to rank with what he said in terms of worrying the Government.
I should also like to thank my noble friend Lord Howell for tabling this Unstarred Question. Although in one sense he is premature, I do not think that now is too early to discuss the matter because the important questions about the principles of distribution and the membership of the commission have to be raised and one would like reassurances that the Government are clear in their thinking before they embark on the final stage.
We on these Benches welcome the lottery and the Millennium Fund in principle although I expressed some scepticism on Second Reading. Overall, we
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welcome the fund because of the shabby state of arts and sports facilities in Britain. We welcome it on the assumption that the noble Lord, Lord Renton, is not entirely correct in his interpretation. As we discussed last week, our theatres are crumbling. Wembley, our great national stadium, is now 70 years old and is virtually the oldest national football stadium in the world. The Millennium Fund will provide British architects with opportunities for some grands projets in the French style, which I think would be exciting.
We should like the projects to cover a geographical spread and, as the noble Lord, Lord Redesdale, mentioned, not to be metropolitan-centered. However, I would not want an overbalance the other way. We must not neglect London, which is the artistic capital of Britain. In fact, despite good work by the Foundation for Sport and the Arts, London's cultural infrastructure is definitely crumbling. One obvious example is the South Bank where one is in danger of being "clobbered" by falling concrete or whatever other appalling materials were used. That is in urgent need of refurbishment. I mention the South Bank also because the political driving force behind it was Herbert Morrison, who was a great politician and a great Londoner—I was honoured to take part in writing his official biography—and we should like to remember him. The South Bank was established in 1951 to celebrate a great centenary. I think that its refurbishment would be appropriate at a time of further celebration.
My noble friend Lord Howell raised the important question of the balance between capital and maintenance revenue. The lottery was originally presented in terms of capital. That was what made it different from the distributions of the Arts Council or the Sports Council. Since then, there has been mention of using endowments to pay for maintenance. This is a critical question, especially in the light of the big cuts that we have suffered in arts expenditure. I should like to ask —again, for clarification—what is the position on the millennium projects? How will those great buildings be maintained satisfactorily in financial terms?
There is a real danger that by the end of the century we shall have a mix of riches and rags in this country: a few big, impressive and expensive projects which great politicians can open and for which they can claim credit, absorbing huge funds, while at grass roots there will be terrible poverty and no money to maintain and provide for the current costs of the network of British local arts and sports. We need some clarity and reassurance on that point.
On the subject of commission membership, which my noble friend mentioned, we should like to be reminded who appoints those people. I believe that we know the answer, but we should just like to hear it. We should like to hear also when we can expect those appointments. It was speculated last year during the Bill's passage that we would hear them in January or February. We are there now. We should like to know how the matter is going on. Except for the politicians on the commission, to whom are its members accountable? They have draconian powers. I should like to be clear to whom they are accountable in executing them.

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I should like to raise the issue of the composition of the commission. I have never been clear why it needed two government and one opposition member on a commission which was specifically stated to be independent. Why do the Government need a majority? The Labour Party has accepted that proposal. With characteristic generosity it has blessed that body with itself having only minority representation. Some of us might not have been as easy going, but my right honourable friend the leader of the party is well known for being a soft touch on such things. But I still do not see why the Liberal Democrats are not represented. I speak up for them on this subject, if not on much else.
As to the independent members, we want to be reassured as to how independent they will be. We can assure the Minister that we shall scrutinise the list closely, looking, of course, for various Conservative association chairmen and financiers of the party who have cropped up so regularly on bodies right down to hospital committees. We need genuine independence. We want to avoid the nightmare of scores of projects cropping up in Conservative marginals.
On the background of those independent members, I noticed that when speaking to the lottery Bill on 25th January 1993, the Secretary of State said that he wanted the six members to have available a wide range of experience. He mentioned business, finance, heritage, architecture, education and the environment. He also said that they should have a balance of age, gender and ethnic origin—truly politically correct people—and represent all four countries in the UK. It will prove testing to find all those qualities among only six people. They will have to be the paragons of virtue that my noble friend mentioned. I feel that one might have to look to the Labour Party to find people to meet all of those qualifications. Perhaps there should have been nine independents.
I reinforce one or two other questions asked by my noble friend. I was struck, and quite shocked, as perhaps were others, by what he said about the Manchester application; that it is already, apparently, using the name the "Manchester Millennium Stadium". Assumptions are being made about it receiving large sums of money. I love Manchester as much as anyone, and I follow Manchester United fairly carefully, but people must not go too far in these things. Will the Minister reassure the House that no discussions have taken place. I am sure that she will feel able to say that no guarantees or assurances have been given to any Mancunians. But will she tell us that no discussions have taken place between the department and any representatives of that great city?
I wonder how people can use the millennium name, on the assumption of receiving millennium money, when the Millennium Commission has not yet been appointed. I am sure that the House is confident that nothing was promised when Sir Robert Scott was so privileged to be included in that small group of people attending the Prime Minister's private new year's party.
The location of sports stadia or arts houses in competition with existing facilities will be an important question for the commission to decide. It is important
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that we do not have duplication in some areas. especially if we subsidise competition—-that would be unfair—while other areas may be left with no facilities.
There has been mention of two kinds of millennium activities —the grands projets and smaller local projects. Do the Government have any feelings on the ratio or balance to be struck between the two? Some important questions have been asked. Large sums of money are at stake. The majority of people taking the decisions are appointed by the Government and appear not to be directly accountable. Therefore, the principles for determining the distribution are important. I look forward with great interest to hearing the Minister's reply.
Lord Harmar-Nicholls: My Lords, before the noble Lord sits down, I understand that this procedure comes under the same heading as a Report stage.
Baroness Trumpington:: My Lords, no.
Lord Graham of Edmonton: My Lords, it is an Unstarred Question.
Viscount St. Davids: My Lords, it is an Unstarred Question, and I am afraid that my noble friend has missed the gap.
Lord Harmar-Nicholls: My Lords, therefore I shall adhere to the rules.
7.15 p.m.
Baroness Trumpington: My Lords, I am grateful to the noble Lord, Lord Howell, for giving the House the opportunity to express its ideas on the uses to which the proceeds of the National Lottery might be put in marking the millennium. I should like to say how much I have always admired the things that he has clone for sport both nationally and as an umpire. I should like him to know that I, too, in my time, have a modest claim to fame in so far as I once kicked off for Cambridge United.
Before I turn to the principles upon which the Millennium Fund will be distributed, it may be helpful to your Lordships if I describe briefly the purpose and background of the Millennium Fund. The National Lottery etc. Act 1993 provides for 20 per cent. of the net proceeds of the National Lottery to be allocated by the Millennium Commission for expenditure on projects to mark the year 2000 and the beginning of the third millennium. It is that share of the proceeds of the lottery which is commonly referred to as the Millennium Fund. The Millennium Fund will receive income from the lottery until the end of the year 2000. Thereafter, the Millennium Fund's share will be redistributed to the other sectors the lottery has been established to benefit —sport, the arts, heritage and charities. We estimate that the lottery might raise at least £75 million a year for each of the good causes it supports, giving the Millennium Fund a total income of around £450 million: I am aware that other estimates have put the income for good causes much higher, but I prefer to keep my feet on the ground. Funds are likely to begin to flow into the commission in early 1995.

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In answer to my noble friend Lord Renton, the Government hope that the Millennium Commission will support imaginative and large-scale capital projects which celebrate the millennium and add to the inheritance we leave for future generations. I heard the plea for youth made by the noble Lord, Lord Redesdale. I am sure that my right honourable friend the Secretary of State will take note of what he said. We hope that people across the United Kingdom will seize the opportunity to celebrate the achievements of our age, and that the Millennium Commission will support projects which lift the spirits of the nation in the same way as did the Great Exhibition of 1851 and the Festival of Britain a century later.
The noble Lord, Lord Howell, touched on the membership of the commission. It will have nine members appointed by Her Majesty the Queen on the advice of the Prime Minister. Two of the members will be Government Ministers, one of whom will chair the commission. One member will be nominated by the Leader of the Opposition and the remaining six will be independent and distinguished figures. I do not believe that their political affiliations will be relevant—so the Liberal Party may still be in with a chance! The commission will not be a part of government; its status will be akin to that of non-departmental public bodies such as the National Heritage Memorial Fund, the Arts Council and the Sports Council, which will also be distributing the lottery proceeds.
The noble Lord, Lord Donoughue, asked about the accountability of the Millennium Commission. It will be directly accountable to Parliament. Its accounts will be audited by the Comptroller and Auditor General. Under the National Lottery etc. Act 1993, it must report annually to Parliament.
The noble Lord, Lord Donoughue, asked about discussions with those in Manchester. I shall pop that in now and return to the subject later. A member of the Manchester team discussed the Millennium Commission with a member of the Department of National Heritage. No undertaking has been given. He was seen on the same basis as anyone who asked to discuss the broad purposes of the Millennium Fund. Your Lordships are free to do so.
The noble Lords, Lord Howell and Lord Donoughue, asked about the selection criteria. The Secretary of State has stated that the six independent members should be distinguished and disinterested. The commission will need to draw on a wide variety of skills and expertise in, for example, dealing with large capital projects. Representatives of individual organisations or interests will not be appointed, nor will anyone who has already advocated backing for a potential millennium project.
The Millennium Commission has not yet been appointed. We hope that appointments to the commission will be announced within the next few weeks. It will decide its own policy on the type of project that it wishes to support and make its own decisions on applications for funding. The noble Lord, Lord Donoughue, asked about the principles upon which the Millennium Fund will be distributed. We
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cannot say what the commission's intentions towards the fund will be, but I can describe the broad framework within which the commission must operate.
Section 26 of the National Lottery etc. Act provides for the Government to issue directions to all distributors of lottery proceeds, including the Millennium Commission. The directions have not yet been issued and all the lottery distributors will be formally consulted before they are finalised. Section 26 directions will take two forms; first, broad policy directions concerning matters which the commission must take into account in determining applications for funding and, secondly, financial directions which might be complied with to secure the proper management and control of money paid to the commission.
The broad policy directions issued by the Secretary of State will be the starting point for the Millennium Commission in determining the principles upon which it intends to distribute grants to projects. They will encompass the basic principles upon which the national lottery is based and which were made clear during the passage of the legislation. For instance, I would expect them to cover the priority of capital rather than revenue projects. This would not prevent the commission from supporting an endowment fund to secure a project's long-term maintenance or from using a smaller proportion of its income for other projects such as a bursary scheme.
I am anxious to give your Lordships as much information as possible in order that we need not bring up the subject until something controversial occurs once the whole thing is up and running. It has always been the case that the national lottery will support capital projects rather than running costs. That means that the lottery will make a lasting improvement to this country's cultural facilities. It will also help to distinguish lottery proceeds from normal public expenditure. It is on that basis that the National Lottery etc. Act was passed by Parliament. The Millennium Commission can, where it considers the case to be exceptional, contribute to an endowment fund to support the maintenance of a project and will be required to ensure that the project's long-term viability is secured before it makes any funding commitment. There is no reason why partnership funding should not contribute to the running costs of a project.
The noble Lord, Lord Howell, asked whether the Millennium Commission will be able to support a bid in respect of which there is no demand which jeopardises the future of other similar facilities elsewhere in the United Kingdom. First, I cannot comment on the merits of any potential application to the Millennium Commission. Secondly, any reports in the press relating to the funding of any stadium or any other project are pure speculation—
Lord Crickhowell: My Lords, I am sorry to interrupt my noble friend but she has touched on a crucially important point and has not answered the question asked by my noble friend. She referred to the possibility of a cultural activity being funded by the Millennium Fund and referred to the possibility of sports being funded. She also referred to the 1851 exhibition which embraced

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the arts. Will my noble friend assure the House that the Millennium Fund is not excluded from supporting an arts, a sports or a national heritage activity, which was the question posed by my noble friend?
Baroness Trumpington: My Lords, until the commission is in being I cannot comment on that aspect in more detail. I do not wish to pre-empt its right to decide on the projects. I have gone as far as I can in this matter. As I said, the commission has not yet been appointed. I have no doubt that it will wish to avoid funding any project which may turn out to be a white elephant. That is hardly the kind of legacy to the nation which the Government had in mind when they introduced the legislation to establish the Millennium Commission.
The commission is likely to be directed to ensure that a project's future running costs and maintenance are provided for before it grants any application and it will want to be assured of the long-term viability of a project. The commission will wish to take the advice of appropriate expert bodies when making that judgment, and that is something we shall be encouraging. However, it will be for the commission to consider each application on its merits. There can be no question of the Government or anyone else saying at this stage that such and such a project will not be contemplated.
The noble Lord, Lord Howell, asked about the Royal Opera House and he mentioned the figure of £45 million. The Secretary of State said that the money could come from the national lottery but it was not for Ministers to say from which distributor. There is no question of a guarantee of funds from the 'national lottery or elsewhere. It will be for the Royal Opera House to decide where to apply when distributors announce their guidelines—
Lord Howell: My Lords, the noble Baroness is giving an extremely helpful reply to the debate. From what the noble Baroness said, can I say categorically that nobody in the world of the arts or sport can make any assumption at this stage as regards receiving any money from the Millennium Fund? That will be a matter for the commissioners in due course when they have been appointed. Therefore, people should not make promises and prognostications which are totally unjustified.
Baroness Trumpington: My Lords, I believe that I have already answered the noble Lord. I referred to "pure speculation". It is quite wrong for those stories to be announced before the commission is even sitting.
As the noble Lord said, the commission is not yet established. Therefore, no undertakings have been given with regard to guaranteed funding for the Manchester stadium. I cannot give the noble Lord a stronger assurance. No one should be misled about the Millennium Fund having already been spent because at the moment, there "ain't none", and none of it has been spent.
The noble Lord, Lord Redesdale, asked whether the millennium commissioners will support small-scale initiatives. There is nothing to stop the commission
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having smaller schemes alongside major capital projects. I am sure that the commission will be interested in the noble Lord's suggestions.
Another important principle behind the use of lottery proceeds is that applications should include a measure of partnership funding from the public or private sectors or from voluntary organisations. The degree of partnership funding sought from applicants is likely to be a matter for the commission to determine. Other directions are likely to include a requirement to treat each application on its merits—not to prime any particular application—and to use the proceeds of the national lottery primarily to promote the public good or charitable purposes rather than private gain.
The noble Lord, Lord Redesdale, asked also when capital projects will be completed. I hope that some will be completed by the millennium but it is not possible to say that with regard to capital projects. It really depends on their scale. I am sure that the commission will have regard to the noble Lord's point on the timing of smaller projects. The financial directions which the Secretary of State will make under Section 26(3) of the National Lottery etc. Act will cover such matters as the accountability of the Millennium Commission to Parliament, the proper financial management of the commission and grants made by it, and the minimum information upon which applications should be judged and conditions of grant determined. The Government's intention in setting those financial directions is to put each of the lottery distributors on a similar, if not identical, footing in regard to the handling of applications and distribution of lottery money and to set out the standards of financial management and propriety expected of organisations handling the public's money in the shape of lottery income.
The noble Lord, Lord Howell, asked whether the Millennium Commission will discriminate between applications from organisations which are publicly funded and those which are privately funded and whether profit-making organisations will be prevented from applying or be otherwise disadvantaged in competing for a share of lottery money. I assure the noble Lord that the Government do not intend to rule out applications from privately-funded organisations. The Millennium Commission will be obliged to give any privately-backed application the same consideration as an application from a local authority or voluntary body. However, in creating a national lottery the Government do not intend that the proceeds should be used for the benefit of shareholders. We should expect the Millennium Commission to satisfy itself that any profit raised by a project deriving in whole or in part from the use of national lottery proceeds is not distributed to shareholders. The steps which the commission might take to ensure that would depend on the nature of the individual project. I am sure that the commission will take account of the input of other contributors when considering the issue. It will not disregard any costs or risks incurred by private organisations or individuals in backing a project.
The noble Lord, Lord Redesdale, asked me when the old millennium ends. It is worth putting that on the record. The historically correct date on which the new

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millennium will begin is 1st January 2001. But the Government recognise that many people in this country will wish to celebrate the millennium as we begin the year 2000. That is why the National Lottery etc. Act refers specifically to celebrations which mark the year 2000 and the beginning of the third millennium.
Many people have suggested that the Government are trying to stop people celebrating in the year 2000. Nothing could be further from the truth. It is not for the Government to tell people when they should or should not be celebrating the millennium. Indeed, we have an excuse here, if anyone is looking for one, to celebrate for a whole year. I hope that it will all be a huge success.
Lord Donoughue: My Lords, before the Minister sits down, I join with my noble friend in thanking the noble Baroness for the very full and helpful way in which she has replied to the Question. Perhaps I may revert back to the critical intervention of the noble Lord,
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Lord Renton. What he suggested is possible; namely, that there is a gap between what the Government have said about the Act, what we believe about the Act, and the legal drafting of it. Will the noble Baroness assure us that Ministers and officials will look at the noble Lord's intervention and relate it to the drafting of the Bill? Perhaps the noble Baroness will then write to all noble Lords who have intervened in the debate to tell us what her reflections are. We do not expect a reply to that this evening.
Baroness Trumpington: My Lords, my noble friend Lord Renton will understand my difficulties as regards interpreting something in an Act which relates to a body that has not yet been formed. I welcome the suggestion made by the noble Lord, Lord Donoughue. I shall take legal advice and write to my noble friend and the noble Lord, Lord Donoughue.
House adjourned at twenty-three minutes before eight o'clock.