Lords Sitting of 24 April 1995

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

Gulf War: Health of Servicemen
Lord Burnham Lord Burnham asked Her Majesty's Government:
What progress has been made in the investigation of the causes of the so-called Gulf War syndrome.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Henley): My Lords, although we retain an open mind on the question of a Gulf-related illness, our examinations of more than 200 British Gulf veterans have so far failed to reveal any evidence of the alleged Gulf War syndrome.
Lord Burnham: My Lords, I thank my noble friend for that Answer. Has he seen the American report on the first 1,000 of 11,000 cases? I believe that the report on the second 1,000 cases came out last Friday, but my fax machine was not working and I did not receive it. However, from what has emerged, can my noble friend say whether British researches support the American findings that most patients are suffering from relatively common diagnosable and treatable illnesses? Further, are Her Majesty's Government compiling, like the Pentagon, a comparison of morbidity and mortality statistics among servicemen who served in the Gulf and those who did not so serve?
Lord Henley: My Lords, broadly speaking, I think I can agree with my noble friend. We are aware of the US research. We have examined it, and we shall certainly study the further research to which my noble friend referred, published on, I believe, the 21st of this month. Obviously, we want to see more information in relation to that research so that it can be evaluated. We have also seen research from a number of other countries which broadly supports our view that there is no evidence as such at the moment of a Gulf War syndrome. Clearly, we are sympathetic towards all those who believe they are suffering from unexplained illnesses. However, in any group of some 45,000 there will always be a number of such people. I can reassure my noble friend that a recent report from the Royal College of Physicians and the Royal College of Psychiatrists highlights just that—the extent to which chronic multiple unexplained symptoms can occur among the civilian population. It points to something of the order of an average of 1,200 per health district.
Lord Craig of Radley: My Lords, although I appreciate the Minister's desire to keep an open mind on the subject, has not the time perhaps come to draw a line and to suggest that the efforts and resources being
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put into studying this problem should be directed to the more pressing issues facing the defence medical services?
Lord Henley: My Lords, I believe that the noble and gallant Lord is right. We should not put excessive resources into this issue. I believe that we are devoting sufficient resources to examining something about which I think it is right that we should keep an open mind. I agree with the noble and gallant Lord that at present there is no evidence to warrant any further detailed inquiry, but we shall certainly do whatever is necessary to reassure those who still feel some uncertainty and fear that they may have suffered something as a result of the Gulf War.
Lord Campbell of Croy: My Lords, can my noble friend inform the House whether comparable syndromes arose from World War II, a war in which there were long periods of fighting in the desert and in insalubrious jungles, and grievous and heavy casualties in other theatres from violent and relentless enemy action? Is it possible that some surviving soldiers, in touch with me still, may have been suffering from a syndrome for the past 50 years without knowing it? If so, should they be encouraged to seek redress?
Lord Henley: My Lords, I am not aware of any such syndrome. Obviously, in any war, and particularly in the war to which my noble friend refers, a great many servicemen suffered grievous and horrendous injuries, both physical and mental. It is right that we should compensate them for that, as and when appropriate. I can assure my noble friend that any serviceman from the last war or the Gulf War who still believes that he has suffered as a result of that war can apply to the War Pensions Agency and seek redress in that forum.
Lord Williams of Elvel: My Lords, while supporting the question of the noble and gallant Lord, Lord Craig of Radley, that there are other matters to which defence expenditure should properly be addressed, has the Minister seen a report in the New Scientist—unlike the noble Lord, Lord Burnham, my fax machine is working—stating:
"The mysterious illness known as Gulf War syndrome may have been caused by the combined effect of a pill given to protect against nerve gas and an insect repellent, according to preliminary results from American research"?
Are the Government aware of that? Do they support that preliminary finding?
Lord Henley: My Lords, I am not aware of the article to which the noble Lord refers, but I shall certainly ask my officials to look at it. As I said, I am aware of the American research, but we are not aware of any implication in that research that there is evidence of a Gulf War syndrome as suggested.
Lord Walton of Detchant: My Lords, is the Minister aware that a letter published in the British Medical Journal on Saturday last, 22nd April, by the Surgeon-General stated:
"No evidence has emerged that any organic disorder has occurred more commonly in Gulf veterans than in any similar population over a similar four year period. As might be expected, certain psychiatric conditions … can be attributed to the Gulf conflict, though there is

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no evidence that their incidence is greater than that in earlier conflicts. These findings remain consistent with the earlier British position and recent American findings"?
Lord Henley: My Lords, I am most grateful to the noble Lord for referring to that letter from the Surgeon-General. I had highlighted that paragraph with a view to reading it to the House.
Lord Greenway: My Lords, bearing in mind the fact that ships of the Royal Navy had to change their chemical filters very much more often than usual as a result of the burning oil wells, did the ingestion of such fumes and smuts have an adverse effect on our servicemen, particularly in relation to respiratory problems?
Lord Henley: My Lords, studies have shown that the level of atmospheric pollution caused mild irritation to the respiratory tract but did not impair lung function or produce long-term effects on health. There is no definitive medical evidence of adverse health effects resulting from multiple exposure to individually non-harmful levels of chemicals containing oil fire smoke. I believe that the noble Lord's point is dealt with. We have no evidence that servicemen in the Royal Navy suffered from the effects of smoke.
Lord Ironside: My Lords, in the United States restrictions have been placed on Gulf War veterans giving blood. Have any such restrictions been placed on Gulf War veterans here?
Lord Henley: My Lords, I am not aware of any such restrictions, but I shall take up that point and write to my noble friend.
The Countess of Mar: My Lords, why is the attitude of Her Majesty's Government towards Gulf veterans so very different from the American Government's attitude to their veterans? Also, has the noble Lord seen the research, mentioned by the noble Lord, Lord Williams, which has been carried out at Duke University, North Carolina, which indicates that tests with pyridostigmine bromide and deer (the insecticide) have an adverse effect upon the neurological tissues of rats and chickens which are the test subjects for OP poisoning?
Lord Henley: My Lords, I reject totally the noble Countess's allegations that our attitude has been different to that of the Americans. We have kept in close contact with the US authorities who are investigating this alleged syndrome. There is no clinical evidence from the US Department of Defense investigations of a single or unique agent causing the so-called Gulf War syndrome. I accept that President Clinton has authorised a programme to award payments to US Gulf veterans suffering from undiagnosed symptoms, but that should not be taken to mean that the US Government acknowledge the existence of a Gulf-related condition or that it is compensation in the legal sense. Payments are in the form of disability awards and reflect the significant differences in welfare and war pensions arrangements between the US and the UK.

Ordnance Survey: Rural Mapping
2.46 p.m.
The Earl of Kinnoull The Earl of Kinnoull asked Her Majesty's Government:
Why the Ordnance Survey is no longer able to provide a full service in updating rural mapping; and when such a service will be resumed.
The Earl of Lindsay: My Lords, Ordnance Survey agreed a new investment strategy with Ministers in 1992 and is now introducing a much faster rate of up-date of its mapping across the whole country. But I suspect that my noble friend is alluding to the unique reference numbers and areas of fields which, from the mid-1970s, have not been revised as field boundaries changed. Ordnance Survey is aware of growing customer concern and fully intends to reintroduce those features as standard as soon as possible.
The Earl of Kinnoull: My Lords, I am grateful to my noble friend for that encouraging reply. I recognise the valuable service that Ordnance Survey has performed over many years, especially in introducing helpful interim measures for individual customers while new technology is being developed. But will my noble friend say how soon is "soon" in the introduction of these computerised maps?
The Earl of Lindsay: My Lords, I agree that Ordnance Survey has produced a valuable service for many people for many decades. In answer to my noble friend's question, that will be when the national topographic database has been restructured to allow automatic generation of the information. The restructuring will begin this year and will be completed in five years. An interim solution to be introduced this year will enable Ordnance Survey's Superplan agents to provide specified field numbers and areas to order.
Baroness Nicol: My Lords, in updating its rights of way mapping is it correct that Ordnance Survey no longer includes rights of way through Forestry Commission holdings? If it is true, why is that? Has it anything to do with the privatisation of the Forestry Commission?
The Earl of Lindsay: My Lords, Ordnance Survey shows rights of way on its maps based on information provided to it by the responsible local authorities. So if those rights of way through Forestry Commission grounds are not shown on Ordnance Survey maps it is because that information has not been provided by the local authorities.
Lord Bridges: My Lords, is not a further improvement required to rural mapping? I refer to the changes introduced by Ordnance Survey when transferring to the new metric scale. Changing from 1:63,360—the one-inch scale most popularly used—to 1:50,000 has had the effect of causing large areas of blank paper to appear on the maps. As more space is available, is it not desirable to provide more detail? I asked that question, bearing in mind the high standard which Ordnance Survey has maintained internationally

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in the past. I am anxious to see that the excellent balance between space and detail in the old one-inch series is maintained in the new series.
The Earl of Lindsay: My Lords, the Ordnance Survey has used metric measurements, among others, since the 1940s. Therefore, there is a long history of the use of metric values. Some five different scales are used on Ordnance Survey maps as a norm, ranging from large scale to small scale. It tries to strike a balance with those different scales so that considerably more information can be put on the large-scale maps and information on the small-scale maps can be reduced in order to avoid clutter. There is an increasing ability for the Ordnance Survey to customise its maps so that customers can order specific requirements or scales.
Lord Avebury: My Lords, are the Ordnance Survey maps provided in machine readable form; and what standards are being adopted for such maps?
The Earl of Lindsay: My Lords, I shall have to write to the noble Lord giving the exact standards that are being used. All the maps are being computerised and digitalised so that there are increasing opportunities for machine reading.
Lord Pearson of Rannoch: My Lords, is my noble friend aware of the serious problem that exists when one looks at a map of, say, Rannoch Moor? It is impossible to tell the height of the hills because one cannot see whether that is given in metres or feet. Indeed, some maps are produced suggesting that a hill is only 300 feet high when, in fact, it is over 1,000 feet. Will my noble friend give an indication of when this unfortunate situation, which is dangerous for hikers and so forth in the winter, might be put straight?
The Earl of Lindsay: My Lords, I imagine that no one looks at a map of Rannoch Moor more than my noble friend. It is the sensible duty of those relying on a map to guide them in safety to ensure that they understand the map and to read the legend, which will show whether the measurements are metric or imperial.
Lord Bruce of Donington: My Lords, does the Minister anticipate that the Ordnance Survey will have any difficulty in East Anglia, where the familiar landmarks have been swept away into a prairie by the common agricultural policy?
The Earl of Lindsay: My Lords, no difficulties are anticipated in East Anglia.
The Earl of Clanwilliam: My Lords, is my noble friend aware that due to security reasons certain areas are not published on the Pathfinder maps? I refer in particular to an area at Chilmark, Reference SUO/12 No. 1262, which is part of an RAF atomic bomb storage area now being dismantled. When will that area appear on a map in the Pathfinder series?
The Earl of Lindsay: My Lords, I shall write to my noble friend informing him how to obtain that specific map. The Ordnance Survey is required to comply with
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security notices issued by the Ministry of Defence in respect of certain sites. Therefore, the detail on certain maps will reflect that observation.
Lord Williams of Elvel: My Lords, does the Minister recognise that this is more than a simple matter of whether hills are there or not? It is a matter of public money. Contracts awarded to landowners—I acknowledge my interest as a beneficiary of such a contract—in environmentally sensitive areas are based on Ordnance Survey maps. The Ordnance Survey map for Radnor, for instance, is out of date and needs to be brought up to date. Nevertheless, public money is being paid out to landowners such as myself on the basis of out-of-date information. Will the Government ensure that these maps are rectified so that proper amounts of government money are paid out to the beneficiaries?
The Earl of Lindsay: My Lords, in recent years, the prime objective of the Ordnance Survey has been to bring up to date unsurveyed changes in urban areas, where the need for resurveying had fallen somewhat behind. The Ordnance Survey recognises that there is a need for more frequent revision of maps of rural areas. That is the major investment strategy that has been put into action to upgrade the reorganisation of the Ordnance Survey's national topographic database. It will enable all new field areas and rural areas to be properly surveyed.
As regards public money, in 1993–94 the Ordnance Survey managed to raise £62.8 million from sales whereas the Parliamentary Vote for that year was just £16.8 million. Therefore, the Ordnance Survey costs the taxpayer one quarter of what it cost 25 years ago.
Lord Williams of Elvel: My Lords, is the Minister aware that I am not talking about public money spent on the Ordnance Survey, which I understand? I am talking about public money that is paid to landowners such as myself—I understand that the noble Earl, Lord Howe, too has declared his financial interest—on the basis of out-of-date Ordnance Survey maps in rural areas.
The Earl of Lindsay: My Lords, usually in such situations any applicant for public money who proffers inaccurate information is liable to have that money removed or to be prosecuted. However, even if the standard Ordnance Survey maps are out of date in some areas, it is possible for every single person in this country to commission a customised map from the Ordnance Survey. Therefore, there is no excuse for inaccurate Ordnance Survey information.
Lord Williams of Elvel: My Lords, I am sorry to detain the Minister. Is he aware that I am advised by my noble friend Lord Carter that if the Government have got it wrong I am liable? I do not believe that that is right. Is it not the case that if the Government make a contract they should meet that contract?
The Earl of Lindsay: My Lords, as I said, if an applicant to such a scheme proffers inaccurate information it may be that when that is discovered the money will not be given to him or will be removed from him.

Nurses: Local Pay Guidance
2.57 p.m.
Baroness Jay of Paddington: My Lords, in the absence of my noble friend Lord Dean of Beswick and with his permission, I beg leave to ask the Question standing in his name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have issued any guidelines to National Health Service trusts concerning the present negotiations on the pay of nurses and ancillary staff.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, guidance on local pay has been issued in England, Wales, and Northern Ireland, which advises that pay offers should be fair, affordable, simple and understood. The management executive in Scotland will issue guidance on local pay for nurses this week.
Baroness Jay of Paddington: My Lords, I thank the Minister for that Answer. Will she confirm that 75 per cent. of local trusts have not responded to the letter which I understand was written by the director of human resources for the health service, Mr. Jarrold, on 11th April? What will the Government do if that letter is simply left in abeyance by local trusts? Will they guarantee the 3 per cent. rise which the Royal College of Nursing wants across the board?
Baroness Cumberlege: My Lords, the letter, as the noble Baroness said, has only just been received by health authorities and trusts. We are encouraging trusts and health authorities to make their offers quickly. The majority which have made offers have made them at around 3 per cent. It is up to local management to decide the level of local pay.
Lord Peyton of Yeovil: My Lords, while accepting that nurses' pay is a sensitive issue and one that has great popular support, does my noble friend agree that it is possible that Members of the party opposite, suffering from an understandable lapse of memory because it is a long time since they were in office, have forgotten what happened when they were in office?
Baroness Cumberlege: My Lords, I believe that my noble friend is referring to the fact that as regards real term pay settlements, the Labour Party reduced—cut—nurses' pay by 3 per cent. whereas this Government have increased it by 51 per cent.
Lord Ennals: My Lords, was it not inevitable, once the changes in the structure of the National Health Service were made, that such confusion would arise? Is this not an issue on which there ought to be a national pay policy for the National Health Service?
Baroness Cumberlege: No, my Lords. I have been taught that when in charge, ponder; when in trouble, delegate; when in doubt, mumble. There is no confusion. I shall not mumble on this occasion. I am absolutely convinced, as are Her Majesty's Government, that the National Health Service can no longer live in
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Jurassic Park where 70 per cent. of the costs are not decided by the people who actually employ the staff. We must get away from the national agreements and into local agreements where local managers can manage, working closely with their staff.
Lord Stoddart of Swindon: My Lords, does that mean that we are now in a situation in which market forces and the efficiency of the administration determine nurses' pay rather than their training, ability and efficiency? If that is so, we really are going down a very difficult and wrong road.
Baroness Cumberlege: My Lords, the whole purpose of local pay is that local managers should consider not only the recruitment possibilities for their area, living costs, travel costs and rent costs, but also the skills and abilities of the staff whom they employ. Only last week an article in the Guardian said that an element of local pay for nurses makes good sense. We believe that. We believe that it should mean that nurses should be paid more in parts of the country where those costs are higher. That was a view confirmed also in the Evening Standard and the Economist. Those people who are enlightened recognise that the future must lie with local pay.
Lord Hayhoe: My Lords, will the Minister confirm that the arrangements which have been the subject of our exchanges this afternoon were the result of the recommendation of the independent review body? They are not the result of a decision by the Government, other than the Government very properly accepting without reservation or amendment the extremely clear recommendations put to them by the independent review body. I believe that that body was generally and broadly accepted as good when it was set up some years ago.
Baroness Cumberlege: My Lords, my noble friend is absolutely right. The review body was set up in 1983. It was fought for extremely hard by the nurses, midwives and health visitors who wanted an independent review body. The review body has made those recommendations. Indeed, over the past 11 years since the Government established the body, nurses' pay has risen faster than earnings in the economy as a whole. It is disappointing that on the one occasion on which the review body recommends local pay, it is not received warmly by those nurses whom it is intended to help.
Lord Desai: My Lords, will the noble Baroness tell the House which of the four criteria—fair, affordable, simple and understandable—are not met by the current offer, which has made the nurses so unhappy?
Baroness Cumberlege: My Lords, one must recognise that those who are opposing this measure are those who, in the past, have had the power, as trade unions, to negotiate nationally. We believe that that time should come to an end now. It is relevant that the employers of those staff should take into consideration all the local factors. I can understand the RCN and

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UNISON and the other trade unions all wishing to resist that because, after all, that is where their power base lies.
Lord Molloy: My Lords, I agree with a great deal of what the noble Baroness says about local organisation and local agreements. However, problems arise when those local agreements are not accepted or when they break down. As UNISON has pointed out, local agreements are good but there appears to be nowhere to turn to if those agreements are not adhered to or cannot be achieved.
Baroness Cumberlege: My Lords, if nurses or other members of staff feel that they are not receiving a fair deal, there is a strict legal system to which they can appeal in terms of employment law and so on. It is interesting to note that nurses who are members of UNISON are opposing this measure and yet for 40 per cent. of its staff who are not nurses, UNISON is going along with local pay. Indeed, the RCN and UNISON are putting a considerable amount of investment into their local stewards to negotiate local pay. Therefore, they recognise that it will come and that it is up to them to consider the offers that are being made and to do the very best for their members.
Baroness Jay of Paddington: My Lords, perhaps I may return to my original Question about what the Government will do if local pay is not agreed. If the Government are content for there to be substantial agreements at local level which do not meet the 3 per cent. figure, why is it that Mr. Jarrold, in his letter to local executives, wrote—and I believe that I have this correctly:
"Ministers have expressed concern that there have not been more pay offers"?
Baroness Cumberlege: My Lords, as I explained earlier to the noble Baroness, that letter was sent out as recently as 11th April and still has to be received and considered. Of course, a I per cent. increase in pay across the board will be awarded to all nurses, midwives and health visitors. The other 2 per cent. is a matter for local negotiation. The offers are on the table and local organisations must decide whether or not to take up those offers.

Business of the House: Finance Bill
3.7 p.m.
The Lord Privy Seal (Viscount Cranborne): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with on Friday 28th April for the purpose of taking the Finance Bill through its remaining stages that day.—(Viscount Cranborne.)
Lord Boyd-Carpenter: My Lords, may I ask my noble friend why this streamlined procedure is to be applied to the Finance Bill? Is it because the Government regard it as unimportant?
Viscount Cranborne: My Lords, I am aware, as the House will be, that my noble friend has a long-standing interest in these matters. Perhaps I should point out that the last occasion on which consideration of a Finance Bill was taken over two days was as long ago as the 1977–78 Session. Therefore, I suggest to my noble friend that taking the Finance Bill on one day in your Lordships' House is a long established practice.
Lord Simon of Glaisdale: My Lords, it is really too bad that your Lordships should be faced with this situation for the second year running. Once again, the most important Bill of the year—this year running to 377 pages—is to be dealt with on a Friday at a time when your Lordships are not normally sitting.
Your Lordships' membership includes five former Chancellors of the Exchequer, four former Chief Secretaries, a great many past senior officials of the Treasury and three former Governors of the Bank of England. One could go on almost indefinitely. No other deliberative assembly in the world can match your Lordships' House in judgment, experience and knowledge of such matters. Therefore, your Lordships are in a full position to respond to the summons which is issued by our Sovereign to advise and consent and to give counsel, not merely to nod through a measure of this sort on a Friday at a time when the House is not normally sitting.
There are convenient occasions on which all that expertise can be made available; for example, as regards the Consolidated Fund Bills and the Finance Bill, above all. But your Lordships are consistently refused the opportunity to use the Consolidated Fund Bills for their proper purpose on the grounds that at any rate the No. 2 Bill coincides approximately with the Finance Bill. That excuse goes utterly by the board when the Finance Bill is taken on a Friday, as it was last year and will be again this year.
Last year it was debated on the Friday before an English Bank Holiday; this year it will be debated on a Friday before a Scottish Bank Holiday. Obviously, most Members of your Lordships' House will have made arrangements in advance which preclude their intervention next Friday. I believe that your Lordships will want at least two assurances: first, that this will not become an annual event; and, secondly, that the Procedure Committee will, once again, look seriously at the question of debating the Consolidated Fund Bill in the light of the fact that the Finance Bill treated in this way is no sort of alternative.
Viscount Cranborne: My Lords, I always regard the moment when the noble and learned Lord, Lord Simon of Glaisdale, rises to his feet with a mixture of intense pleasure and nervousness. I have to tell your Lordships that today is no exception. It is with the greatest of diffidence that I venture to disagree with the suggestion made by the noble and learned Lord.
Your Lordships will be well aware of the debates that we have been holding—I am sure they will continue—on whether this House should sit more frequently on Fridays. It has been suggested, notably by my noble friend Lord Rippon of Hexham, in his report to my predecessor on the Sittings of the House, which we

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debated fairly recently, that we should make greater use of Fridays. I believe that a number of your Lordships have expressed sympathy with that view. In particular—and I hope that I do not misunderstand him—the noble Lord, Lord Richard, has done so. The noble Lord underlined, I think, the point just made by the noble and learned Lord, Lord Simon; namely, that he would support the greater use of Fridays, especially if adequate notice were given of the intention to use them.
I should point out to the noble and learned Lord that there have been a number of occasions of late when economic matters were able to be discussed; for example, in a recent debate introduced by Conservative Peers on one of their days for debate. In addition, the Finance Bill is, by definition, a money Bill to which Royal Assent may be given, even without the agreement of your Lordships, after one month. Moreover, the statutory deadline for enactment of the Finance Bill is 5th May which, as the legislation was brought from another place on 18th April, gives us little time in which to consider it.
I suggest to your Lordships that it is perfectly sensible for us to take seriously the strictures of my noble friend Lord Rippon and his committee and to use Fridays when the pressure of business makes it expedient for us to do so. Like the noble and learned Lord, I am well aware of the extraordinary concentration of expertise in your Lordships' House on financial matters—an expertise which is not entirely confined to former Chancellors of the Exchequer. I hope that Friday's full-day debate on the Finance Bill will provide the House with an opportunity to demonstrate its full range of expertise on the matter, even though we are following precedent and, indeed, only using one day for the purpose rather than more.
I hope that the noble and learned Lord, Lord Simon of Glaisdale, will at least consider that the Government have done their very best to provide adequate time for discussion of a Bill, the importance of which I would certainly not deny in any way, but which, nevertheless, I believe, by precedent, has been discussed by your Lordships at rather less length than has been the case in another place.
On Question, Motion agreed to.

Landlord and Tenant (Covenants) Bill
Brought from the Commons; read a first time, and to be printed.
Land Registers (Scotland) Bill
Brought from the Commons; read a first time, and to be printed.
National Health Service (Amendment) Bill
Brought from the Commons; read a first time, and to be printed.
Prisoners (Return to Custody) Bill
Brought from the Commons; read a first time, and to be printed.
Olympic Symbol etc. (Protection) Bill
Report received.

Health Authorities Bill
3.15 p.m
Report received.
Clause 1 [Abolition of RHAs, DHAs and FHSAs and duty to establish HAs]:
Baroness Jay of Paddington Baroness Jay of Paddington moved Amendment No. 1:
Page 1, line 11, at end insert ("and to establish for each of the English health regions and for Wales an Advisory Committee on Appointments to advise on the selection and appointment of non-executive members to those authorities.").
The noble Baroness said: My Lords, the above amendment is designed to ensure that the appointments to the new, very powerful, health authority boards are made more openly and more objectively than is the case at present. It would bring the appointments system for the new authorities that would be established in England and Wales into line with the practice that already exists in Scotland.
Noble Lords will be aware that there is considerable disquiet about the present methods of appointment in the health service. That has led, at worst, to accusations of political cronyism and patronage and, at best, to a widespread feeling that sometimes inexperienced or inappropriate people have been appointed simply because they are known to senior people in the health service, to Ministers or to others involved.
There are fears that that situation will become worse under the new Bill with the abolition of the regional health authorities because all local appointments will then be directly in the hands of the Secretary of State—involving about 900 appointments a year. The Government seem to have accepted that some reform of the present system is necessary. New guidance on appointments was published in February and the Chief Executive of the health service, Mr. Langlands, in his evidence to the Committee on Standards in Public Life of the noble and learned Lord, Lord Nolan, spoke of change, somewhat coincidentally on the same day that the new guidance was published.
It is now suggested that appointments will be advertised and that candidates will be formally interviewed. But all of that has taken place since the Health Authorities Bill was published and after it had finished its passage through another place. There is nothing on the face of the Bill as it now stands to make the appointments system open and more objective.
We discussed the issue at length in Committee. From these Benches we proposed various amendments to try to ensure that the new health authorities would be

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democratically rooted in their own local communities and demonstrably appointed on an open basis. However, the Government rejected all those amendments. The present amendment would simply create a statutory, independent authority to advise on health service appointments; a system which, after all, is widely accepted in other fields and is in the best traditions of British public service.
Perhaps I may remind the House of the system which exists in Scotland. The Secretary of State for Scotland has created a committee of five chaired by the Lord Provost of Edinburgh—who, I understand, is a Labour councillor—to advise him on the appointment and reappointment of non-executive members of the health boards in Scotland. In order to broaden the selection base of candidates to posts in that field, a wide range of bodies which represent many different aspects of community life in Scotland—for example, the voluntary sector, different Church groups and members of different political parties—have been invited to put forward names and widespread public advertising is going on at the same time.
Initial interviews for people whose names come forward as a result of those processes are conducted by the chairmen of the relevant boards. They then pass on their recommendations to the national advisory committee for consideration and recommendation for appointment. That committee also considers reappointment to health boards on the basis of local reports.
When we discussed this matter in Committee the Minister said that the Scottish system could not be adopted sensibly south of the border because of the different scale of organisation of the health service in England and Wales and the much larger population in those two countries. But that would only be an argument, it seems to me, against having one national, advisory body for England and Wales. Amendment No. 1, which we are now considering, proposes that there should be an appointments body for each of the English regions and for Wales. That would enable local knowledge to be used in making recommendations for appointments in precisely the same way as has been done up until now by the regional health authorities.
During the Committee stage the Minister also said that in future candidates' appointments would be sifted locally and that the sifting panel,
"may include an independent member".—[Official Report, 30/3/95; col. 1725.]
But the fact that the sifting panel may include an independent member is not good enough. It seems to me that that leaves too much to local discretion and to the continuing suspicion that appointments are being arranged on a cosy and friendly basis rather than in an open environment.
The Minister also said that she would re-emphasise the role of the regional chairmen in the new process. When I reread the Official Report I was not sure who precisely this would refer to under the new system. I imagine that the Minister refers to the person who will be appointed to be the regional member of the health service executive. That person will of course be appointed by the Secretary of State and will be just one
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of a few people who will be members of the executive board of the health service. That again seems to me—if it is to be the case that the emphasis is to be placed on the role played by that person—to continue the suspicion that all appointments are made on the basis of a cosy, internal collaboration rather than in an open and rigorous fashion.
I remind your Lordships that the Minister also said in Committee, in response to our amendments on appointments, that the,
"views of people who are more detached from the NHS can also be valuable".—[Official Report, 30/3/95; col. 1725.]
That is exactly what the amendment seeks to formalise and to make statutory. We know that the committee chaired by the noble and learned Lord, Lord Nolan, on standards in public life has received more representations on National Health Service appointments than on any other subject. We also know that members of the noble and learned Lord's committee described the present proposals for changing the system of appointments—which were described in the February document and by the chief executive of the health service in his evidence to the Nolan Committee—as "inbred". They also said that they were disappointed that there was no compulsory independent element in the new proposals that were to be introduced.
During the Committee stage the noble Baroness, Lady Cumberlege, said that the Government would consider carefully any recommendations which came from the Nolan Committee on this subject. I would ask her to consider this amendment carefully. It seems to me that by accepting it she could well pre-empt what could be an important future recommendation from the Nolan Committee, which could be embarrassing for the Government if an independent selection procedure has not been placed on the face of this Health Authorities Bill. I beg to move.
Lord Elton: My Lords, I listened with great interest to what the noble Baroness said. Of course many of us are aware of the extent of government patronage and of the concern that it should be responsibly used. However, I am not at all sure that I see anything reassuring in this amendment because it does nothing more than require the Secretary of State to set up an advisory committee. At the moment he is allowed to take advice from whomever he will; under the Bill as it would be amended, he would merely be required to get the same people into one room with a chairman, so nothing whatever would change. I suspect that not very long after that the noble Baroness would seek an opportunity to move an amendment which would require there to be a committee of advisers on who should be appointed to that committee and thus to get it out of the Secretary of State's hands. This manifestly does not do that.
Lord Desai: My Lords, I support my noble friend in the amendment she has moved. I think the noble Lord, Lord Elton, is trying to damn it with faint praise, or perhaps faint criticism. The principle is openness. We must have an open system which is seen to be above criticism or above charges of favouritism. In many areas of life in this country over the past decade or so more and more matters have been made open. It is time

709
National Health Service appointments for non-executive directors were made open. The kind of questions which are emerging in the business area as regards the responsibilities of non-executive directors and their liabilities will also emerge as regards the National Health Service as it becomes more and more market oriented. When that happens we may find that some of the people who fill non-executive appointments may not he up to scratch because they may not have the expertise required of non-executive directors in the business area. I believe it would be a good idea if we adopted the amendment moved by my noble friend. If the noble Lord opposite wants to makes it a statutory and completely independent body, perhaps we should move an amendment to that effect.
Lord Peyton of Yeovil: My Lords, I wish to support what my noble friend Lord Elton said. The noble Baroness opposite moved this amendment with her usual skill and made a persuasive case for it. However, I am not convinced, even by the cogent way in which she put her arguments, that we are really in need of another advisory committee. This country is not perhaps as rich as it was in the amount of advice and counselling which is made available at almost all levels, regardless of its value.
Lord Milverton: My Lords, I also do not see the point of this amendment. I am sure my noble friend the Minister will be able to give good reasons why we should dismiss it. As my noble friend Lord Peyton of Yeovil has just said, it seems to me the amendment would make things just as top heavy, or more top heavy. We want less of that. The amendment has not impressed me. I believe the National Health Service is open; it is not a closed shop.
Lord Ennals: My Lords, I was not present in the Chamber during the Committee stage and I greatly regret that. I rise to put a question. In moving the amendment my noble friend referred to the Nolan Committee. We are led to believe that its report will be brought forward fairly quickly. If the committee made a recommendation relating to the National Health Service and its structure and its appointments but the Government had decided to reject this amendment, what would they do? Would they take another stage of the Bill to find a way to respond to the Nolan Committee? I should have thought that in view of the importance of the Nolan Committee—I refer to its chairman, its membership and its role—they would want to respond in a positive way. Perhaps the Minister will deal with that point when she replies to the amendment.
Lord Carter: My Lords, before the Minister replies, I hope she will be sure to deal with the point raised by my noble friend on why the arrangement we are discussing is in place in Scotland but not in England and Wales. I noticed that she said that point was made by the National Association of Health Authorities and Trusts (NAHAT) in its evidence to the Nolan Committee, and it obviously supported that point. I hope that the Minister will deal with that point in her reply and that she will explain to the House exactly why the provision is required in Scotland but not, apparently, in England and Wales.
Lord Rea: My Lords, I should have thought that the Government would welcome the opportunity to have an advisory committee such as is suggested in order that fair play should be seen to be done. There is a certain amount of evidence that health authority and trust non-executive members have been drawn from those rather close to the Government and the Conservative Party. If there were to be such an advisory committee, that accusation would not be made so often. I should have thought that would be very much to the Government's advantage in the eyes of the electorate.
Baroness Cumberlege: My Lords, the point that has just been raised is one of which I have studiously fought shy during the course of these debates. However, the noble Lord will be aware that even in your Lordships' House there are Members who sit not on our Benches but on the Benches opposite who are closely involved in the health service. We very much value the contribution that they make. It is wrong to believe that one has to be a paid-up member of the Tory Party to get a position on a trust or health authority.
So far as concerns Scotland, I believe that this procedure is a new one and that the committee has not as yet made many appointments. We will watch with interest to see how that committee operates. There is an issue about size. What we propose is not totally unlike the Scottish system but it is relevant to our regions, each of which is roughly the size of Scotland.
We endorse the views of the noble Lord, Lord Desai, and the noble Lord, Lord Ennals—whom I am delighted to see back on your Lordships' Benches—that the NHS should be an open organisation. As the noble Baroness has said, on 14th February my right honourable friend the Secretary of State published new guidelines for the appointment of chairmen and non-executive directors of NHS authorities and trusts. The guidelines, which draw together examples of existing best practice in appointment procedures, demonstrate our commitment to a fair and open appointments system based on merit, not patronage. The new guidelines make it clear that potential candidates for non-executive appointments will be sifted by a panel of at least three people. These people will be serving chairmen and non-executive directors of local NHS authorities and trusts. We believe that people who are already working as non-executives are well placed to judge whether a candidate is suited to the demands of service as a non-executive director.
We recognise the need to avoid possible accusations of bias in the appointments system. We have said in the guidelines that the members who do the sifting must not be drawn from the same health authority or trust board and that the panel may include an independent member. We have suggested that this may he, for example, a member of a local community health council or a local justice of the peace. The new guidelines are designed to be flexible to meet local demands without compromising standards in the appointments process. This is reinforced when we look at the role of the sifting panel. The guidelines make clear that all new candidates for non-executive appointment will be sifted against agreed criteria to ensure that all those recommended for appointment possess the skills, personal qualities and experience required.

711
It is this use of nationally agreed criteria against which experienced NHS chairmen and non-executives will judge candidates for non-executive appointment that is the most important element of the sifting process, and will ensure that those recommended for appointment are of a uniformly high standard.
Perhaps I may clarify the position of regional chairmen in future. If the Bill is passed and regional health authorities are abolished, it is our intention to retain a non-executive who will be a member of the policy board and will have the role and title of regional chairman. That person will be the chairman of the health authority and the trust chairman within that region. It is important that that person is involved in the appointments process. Indeed, the guidelines emphasise that he should be. Ministers will look to regional chairmen to make their own assessments of candidates before making their recommendations to Ministers. This means that the suitability of any individual candidate will be double-checked to ensure that the process has been conducted objectively and fairly. Those finally appointed—your Lordships will be aware that many are called but few are chosen—will rest in the knowledge that they really are the best people for the job.
I endorse the views expressed by my noble friends. One can go on and on with further tiers of advice as to who eventually appoints these people. We believe there is no need to strengthen the arrangements that are already in hand. I hope that the noble Baroness will be reassured and will not press this amendment.
Lord Cledwyn of Penrhos: My Lords, the noble Baroness has dealt with the Scottish position with great care. I was concerned that she might tell us about the Welsh position before this debate ended. When I was at home in Wales over the Recess two or three people who were deeply concerned about the National Health Service asked me why Wales was being treated as if it was a region of England. Of course, it is not; it is a separate nation in these islands and has the right to be treated with the same respect as Scotland, which seems to be treated with respect at all times. Before we complete this Bill I hope that she can satisfy us that there is a good reason for not giving Wales the same independence in this matter as Scotland has enjoyed.
Baroness Cumberlege: My Lords, I very much concur with the noble Lord that Wales should have equal respect. However, the position is rather different under this Bill. There have never been regional health authorities in Wales, so that whole tier has been absent in Wales. A good deal of this Bill is concerned with the abolition of regions and therefore is not relevant to Wales. The parts of the Bill that are relevant to Wales are those which merge district health authorities and family health service authorities. Therefore, they come into this Bill. We shall be discussing an amendment later today that is concerned with the particular agency that covers Wales in terms of procurement.
712
With regards to appointments, I understand that that is a matter for my right honourable friend the Secretary of State for Wales. No doubt he will take note of what we do in this Bill. I am sure that he will wish to reflect on it and possibly follow the same system.
Baroness Jay of Paddington: My Lords, I am grateful to the Minister for her reply. There is a difficulty in regard to the position of Scotland. My noble friend Lord Cledwyn said that the Minister had spoken very carefully on that subject. I believe that that is the appropriate expression. Although she described the situation in Scotland very well, she did not explain precisely why there was such a clear difference in the Government's mind between what was happening in Scotland and what could potentially happen in England and Wales.
It is a little difficult to understand why, if one is to create what is de facto roughly the same situation in terms of openness as will exist in Scotland—the Minister has said that there are many similarities in the situation—it is not possible to go the whole way and make the advisory committee a statutory one. There remains the difficulty raised by my noble friend Lord Ennals—to which the Minister did not respond—about what will happen if the committee of the noble and learned Lord, Lord Nolan, makes a recommendation to the effect that there should be an independent advisory body similar in nature to that proposed in this amendment. Will the Government then feel the necessity to bring forward additional legislation or will they ignore that provision, which I suspect may prove to be a little politically difficult?
In view of my concerns about the answers that have been given and the fact that the health service should be seen to be entirely open, in particular that appointments should be conducted in an objective and open manner, I wish to test the opinion of the House.
3.38 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 74; Not-Contents, 119.

Division No. 1

CONTENTS

Acton, L.

Desai, L. [Teller.]

Addington, L.

Donaldson of Kingsbridge, L.

Ailesbury, M.

Dormand of Easington, L.

Airedale, L.

Ennals, L.

Archer of Sandwell, L.

Ezra, L.

Ashley of Stoke, L.

Falkender, B.

Avebury, L.

Fitt, L.

Beaumont of Whitley, L.

Freyberg, L.

Blackstone, B.

Gallacher, L.

Bottomley, L.

Gladwin of Clee, L.

Broadbridge, L.

Graham of Edmonton, L. [Teller.]

Bruce of Donington, L.

Carmichael of Kelvingrove, L.

Gregson, L.

Carter, L.

Halsbury, E.

Chorley, L.

Harris of Greenwich, L.

Cledwyn of Penrhos, L.

Hollis of Heigham, B.

Cocks of Hartcliffe, L.

Hooson, L.

David, B.

Howie of Troon, L.

Dean of Thornton-le-Fylde, B.

Hylton-Foster, B.

713

Jay of Paddington, B.

Ogmore, L.

Jeger, B.

Rea, L.

Jenkins of Hillhead, L.

Redesdale, L.

Jenkins of Putney, L.

Richard, L.

Judd, L.

Sainsbury, L.

Kilbracken, L.

Sefton of Garston, L.

Kinloss, Ly.

Serota, B.

Lockwood, B.

Shepherd, L.

Longford, E.

Simon, V.

Lovell-Davis, L.

Stallard, L.

Stedman, B.

McFarlane of Llandaff, B.

Stoddart of Swindon, L.

McIntosh of Haringey, L.

Strabolgi, L.

McNair, L.

Taylor of Blackburn, L.

Milner of Leeds, L.

Tordoff, L.

Monkswell, L.

Wallace of Coslany, L.

Morris of Castle Morris, L.

White, B.

Nicol, B.

Wigoder, L.

Northfield, L.

Williams of Elvel, L.

NOT-CONTENTS

Aberdare, L.

Hayhoe, L.

Addison, V.

Henley, L.

Ailsa, M.

Hives, L.

Aldington, L.

HolmPatrick, L.

Alexander of Tunis, E.

Hothfield, L.

Ampthill, L.

Howe, E.

Annan, L.

Inglewood, L. [Teller]

Astor, V.

Ironside, L.

Astor of Hever, L.

Johnston of Rockport, L.

Balfour, E.

Kinnoull, E.

Belhaven and Stenton, L.

Knollys, V.

Blaker, L.

Lauderdale, E.

Blatch, B.

Lindsay, E.

Blyth, L.

Long, V.

Borthwick, L.

Lucas, L.

Boyd-Carpenter, L.

Lucas of Chilworth, L.

Brabazon of Tara, L.

Lyell, L.

Braine of Wheatley, L.

Mackay of Ardbrecknish, L.

Brougham and Vaux, L.

Mackay of Clashfern, L. [L. Chancellor]

Burnham, L.

Butterworth, L.

Macleod of Borve, B.

Cadman, L.

Mersey, V.

Caithness, E.

Miller of Hendon, B.

Campbell of Alloway, L.

Milverton, L.

Campbell of Croy, L.

Morris, L.

Chalker of Wallasey, B.

Moyne, L.

Chesham, L.

Munster, E.

Clanwilliam, E.

Murton of Lindisfarne, L.

Constantine of Stanmore, L.

Nelson, E.

Courtown, E.

Norfolk, D.

Craig of Radley, L.

Norrie, L.

Cranborne, V. [L. Privy Seal]

Northesk, E.

Cullen of Ashbourne, L.

Oppenheim-Barnes, B.

Cumberlege, B.

Orkney, E.

Davidson, V.

Orr-Ewing, L.

De Freyne, L.

Pearson of Rannoch, L.

Dean of Harptree, L.

Pender, L.

Denton of Wakefield, B.

Peyton of Yeovil, L.

Digby, L.

Pym, L.

Ellenborough, L.

Rawlings, B.

Elles, B.

Rennell, L.

Elton, L.

Renwick, L.

Flather, B.

Rodger of Earlsferry, L.

Forbes, L.

St. Davids, V.

Fraser of Carmyllie, L.

Saltoun of Abernethy, Ly.

Fraser of Kilmorack, L.

Seccombe, B.

Gainford, L.

Selborne, E.

Geddes, L.

Shannon, E.

Gibson-Watt, L.

Shaughnessy, L.

Goschen, V.

Shaw of Northstead, L.

Gridley, L.

Skelmersdale, L.

Hailsham of Saint Marylebone, L.

Slim, V.

Strange, B.

Harding of Petherton, L.

Strathcarron, L.

Harmsworth, L.

Strathclyde, L. [Teller]

714

Sudeley, L.

Vaux of Harrowden, L.

Swinfen, L.

Vivian, L.

Tebbit, L.

Walton of Detchant, L.

Thomas of Gwydir, L.

Whitelaw, V.

Tollemache, L.

Wynford, L.

Trumpington, B.

Resolved in the negative, and amendment disagreed to accordingly.
3.47 p.m.
Baroness Jay of Paddington Baroness Jay of Paddington moved Amendment No. 2:
Page 1, line 14, at end insert:
("() No order shall be made under subsection (1) above until the Secretary of State is satisfied that the establishment of each Health Authority proposed by that order is such as to ensure that every Health Authority includes persons who, by virtue of specialised training in health care disciplines and experience in health care work, can bring to health authorities perspectives derived from their professional training and expertise.").
The noble Baroness said: My Lords, Amendment No. 2 stands in my name and the names of my noble friend Lord Carter and the noble Baroness, Lady Robson of Kiddington.
The amendment seeks to ensure that the new health authorities include members whose professional qualifications and training gives them special expertise on those matters which will be at the centre of the health authorities' business. The House will recall that at Committee stage several amendments were proposed from different parts of the Chamber—from the Government Back-Benches and the Cross-Benches as well as from the Opposition—to make it compulsory for, for example, general practitioners, nurses and health visitors to be members of the new boards. All of those amendments were unsuccessful.
The Minister's main argument for opposing the amendments seemed to be that the Government now dislike the idea of representatives of any body being members of the new health authorities, although I remind the House that that has been the practice in the family health service authorities which now exist and will continue in existence until the new health authorities take over in April 1996.
The Minister was also anxious that prescribing any specific professional group for a reserved place was bound to create resentment from other bodies which felt that they had an equal right to a position on a health authority.
It is for those reasons that the present amendment is drawn in such general terms. As I am sure the Minister recognises, the terms are taken directly from the draft guidelines on professional involvement in the work of the health authorities which were issued by the Department of Health on 20th January this year. That detailed document, offering consultation and guidance to the new health authorities which may, if the Bill goes through, become the health authorities responsible next year, states in its opening paragraph:
"These changes make essential closer and more effective involvement by doctors, nurses (including midwives and health visitors) and other professional staff in the work of authorities, uniprofessionally, multi-professionally and on a multi-disciplinary basis. Careful attention therefore needs to be given to the means by

715
which health care professionals make an input to decision making. This guidance makes clear the requirement on health authorities to ensure that the professions are involved in the full range of health authority work".
The guidance defines professionals as,
"people who, by virtue of specialised training in health care disciplines in health care work, can bring to health authority issues perspectives derived from their professional training and experience".
Those are the words of the amendment.
At Annex C of the draft guidelines, the Department of Health gives a list of examples where professional input is, in its view, essential. It is a long and detailed list, but it includes, for example, maintaining a district wide view of healthcare purchasing, clinical effectiveness—needing to ensure that health authorities work closely with hospital clinicians on strategies for improving clinical effectiveness—inspection and registration of nursing homes, planning health care services for people with disabilities, child protection, midwifery supervision, AIDS, mental health and mental health Act doctors.
The guidelines document concludes by describing methods for monitoring professional involvement and ensuring compliance because,
"appropriate professional involvement is fundamental to the effective working of authorities".
It is fundamental, and yet the Government have so far rejected the idea of ensuring that professionals are members of the health authority. The Government prefer to rely on the professionals giving advice and being consulted. However, as the noble Baroness, Lady Gardner of Parkes, stated in Committee when her amendment to include a primary care worker was not accepted, consultation is not the same as being on the authority.
During Committee stage, the Minister referred to the fact that health authorities have every right to appoint members who come from a professional background. At col. 1531 of the Official Report of 28th March, the noble Baroness said:
"I am sure that many health authorities will have non-executive members with experience in primary care and, indeed, experience in the acute sector and in community care. Everyone who is suitably qualified will be welcome to apply for appointment, provided there is no conflict of interest".
However, there seems to me to be a great difference between that enabling position (perhaps I may so call it) and ensuring by statute that appropriate professionals are involved in the new health authorities at board level. Like the Minister I, too, am sure that many good authorities will include, for example, GPs, nurses and pharmacists among their members. But if such inclusion is not required, other authorities are just as likely to fill their membership with businessmen or accountants, many of whom in my personal experience have neither professional nor personal experience of the National Health Service.
It is worth reminding the House that the requirement for health authorities to secure advice and consult with professionals was inserted by the Government in Schedule 1 of the Bill only at Report stage in another place. It is interesting to note that in Committee the Minister stated at col. 1599 of the Official Report of
716
28th March that the provision to ensure that advice is given—it is now Schedule 1(3) to the Bill—was introduced so that,
"[professional] involvement in health authority decisions should not simply be left as a matter of good practice".
That is precisely what the amendment seeks to re-emphasise: that we should not rely simply on good practice.
The Minister having heard the persuasive arguments from all parts of the House about the need for professional membership of the new authorities, I hope that the Government will now be able to go one step further than they did when ensuring appropriate consultation and will accept the amendment. The logic of their own position was demonstrated by the new Department of Health guidance on professional involvement in the new health authorities from which I quoted: that professional involvement with the new health authorities is essential. Surely the proper way to achieve such involvement is to make those with specialised training and experience in health—the amendment cites those people and they are cited in the new guidance—full members of the new board. I beg to move.
Lord Addington: My Lords, I wish to speak to the amendment which stands in the name of my noble friend Lady Robson. Unfortunately my noble friend is not able to be present due to ill health. I offer, too, the apologies of my noble friend Lord Tope who is unable to be present due to important business meetings.
The amendment effectively states that members of the board should have a working knowledge of their subject. In many other fields I have sought to argue that one should have expertise on a subject because one is then able to respond to information given. One may well miss the issues upon which advice is needed because one cannot spot them. The position is that simple. If one knows one's subject well, one is able to call for more advice where it is required.
The amendment does not state that we should not be able to call for advice from others outside the health authority. It merely provides that those members of the authority should know where to start looking for such advice. I fully support the amendment.
Lord Elton: My Lords, I have a certain sense of déjà vu. I have lost count over the years of the Bills on which I have assisted which create some body with statutory powers. We go into almost a ritual dance about who shall be members of that body. We start by listing all the people who should be members. We then come to the conclusion that the number of members is finite; and we remember that some desirable people will not be members of the body. We remind ourselves of the old rule, expressio unius, exclusio alterius, which means that if you name six people who ought to be members of the body, the suggestion is that the other 83 people ought not to be on it. Remembering that, we decide not to have names. We then normally go back to the original position: that the body shall be described by its functions and not by its components.

717
The noble Baroness has put forward an ingenious half-way house. I ask the Government to consider the amendment with a little care. Although she has done a great deal to avoid offending sensibilities such as those I have already described, she has made it justiciable. It seems to me that if her amendment were put on the face of the Bill, it would be open to anyone who wished to impede progress, or who was hostile to the general principle of the health authorities, to go to court and argue that the requirements had not been fulfilled. As to whether or not the requirements were fulfilled would take a great deal of argument. There seems merit in ensuring that such a body is composed in a way which enables it to fulfil its function properly. I should have thought that the way to achieve that is to give an undertaking from the Dispatch Box in a speech during which my noble friend courteously dismisses the amendment, and the noble Baroness opposite courteously accepts that assurance.
Baroness Cumberlege: My Lords, for my part I shall take that good advice. However, saving my noble friend's sorry sense of déjà vu, we feel that professional membership is an important issue and one on which feelings run high.
As I said during Committee stage, I agree that professionals including GPs, nurses, dentists, pharmacists, physiotherapists, occupational therapists, speech therapists, art therapists and psychotherapists, psychologists, dieticians, health visitors, midwives, optometrists, radiographers, scientists, biochemists, geneticists, researchers, paramedics, chiropodists and podiatrists, to name but a few, have a vital contribution to make to the decisions of health authorities. I am sure that many health authorities will have members with professional experience, whether in primary care, in the acute sector, or in community care. Everyone who is suitably qualified will be welcome to apply for appointment, provided there is no conflict of interest.
However, professional input and advice are much broader than the relatively narrow professional contribution which one or two members can provide. My list illustrates the point of how difficult it is when so many professionals are involved in a single service. Of course, on a personal basis, such members can bring extremely valuable qualities; but we feel that that is no substitute for broader professional involvement.
The draft guidelines, Professional Involvement in Health Authority Work, referred to by the noble Baroness, were circulated widely to the professions and the NHS. They show other ways in which health authorities will be expected to involve professionals. For example, some authorities have already established multi-disciplinary teams with responsibility for reviewing, planning and purchasing certain services. Others have commissioned reviews of priority services such as mental health from teams involving professionals from both primary and secondary care. Of course, all health authorities will employ professionals—nurses, for example, in senior positions—who will ensure that health authority work is informed by professional views, without necessarily being members of the health authority.
718
There are many other ways for professionals to be involved. The guidelines talk in detail of how professional involvement can be made effective without being prescriptive on the arrangements health authorities should put in place. So health authorities can adapt the suggested models to suit their individual needs.
As the noble Baroness, Lady Jay, said, the Government made clear how seriously they take the issue by tabling an amendment in another place. The amendment adds force to the draft guidelines by requiring health authorities to make arrangements to ensure that nursing and other professional advice is available to them. It leaves in no doubt the importance of professional involvement. My honourable friend the Minister for Health made clear in another place that any authority that did not seek professional advice or did not listen to it when it was volunteered would not be complying with its statutory duty.
In conclusion, we do not believe that the amendment is necessary. I am fully confident that the close monitoring of professional involvement planned by the regional offices will ensure that health authorities involve professionals across the range of their work. I hope that the noble Baroness will feel able to withdraw the amendment.
Baroness Jay of Paddington: My Lords, I thank the Minister for that reply and particularly for her emphasis once again that the Government and the National Health Service Executive appreciate the importance of professional involvement in health authorities. I am glad that they are prepared to be firm in their monitoring of that involvement, as is seen in the guidelines.
I am not sure that my Latin is quite up to translating it precisely, but I am also grateful to the noble Lord, Lord Elton, for giving me the instant phrase for the discussions which we had at such great length in Committee. I wish that he had been here to interject the phrase.
However, I am still anxious about the point. The draft guidelines from the Department of Health describe the professional involvement as seen by the department as essential, with which I agree. If it is intended to encompass the many functions of the health authorities—as I hope the brief list which I gave from the draft guidelines suggests—that cannot necessarily be accomplished simply by relying on advice. Unfortunately, the noble Baroness, Lady Gardner of Parkes, is not in her place. She said in Committee that there is a great difference between being consulted and being a member of an executive board.
For those reasons and since I, like the Minister, feel that it is absolutely essential that professional guidance be involved in health authority work in the future, I feel that I must test the opinion of the House. I commend the amendment.
4.3 p.m.
On Question, Whether the said amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 78; Not-Contents, 118.

Division No. 2

CONTENTS

Acton, L.

Jeger, B.

Addington, L.

Jenkins of Hillhead, L.

Airedale, L.

Jenkins of Putney, L.

Archer of Sandwell, L.

Judd, L.

Ashley of Stoke, L.

Kilbracken, L.

Attlee, E.

Kilmarnock, L.

Beaumont of Whitley, L.

Lawrence, L.

Birk, B.

Lester of Herne Hill, L.

Blackstone, B.

Lockwood, B.

Bottomley, L.

Longford, E.

Broadbridge, L.

Lovell-Davis, L.

Brooks of Tremorfa, L.

McFarlane of Llandaff, B.

Bruce of Donington, L.

McIntosh of Haringey, L.

Carmichael of Kelvingrove, L.

McNair, L.

Carter, L. [Teller.]

Milner of Leeds, L.

Cledwyn of Penrhos, L.

Monkswell, L.

Cocks of Hartcliffe, L.

Morris of Castle Morris, L.

David, B.

Nelson, E.

Dean of Thornton-le-Fylde, B.

Nicol, B.

Desai, L.

Northfield, L.

Diamond, L.

Ogmore, L.

Donaldson of Kingsbridge, L.

Rea, L.

Dormand of Easington, L.

Redesdale, L.

Dubs, L.

Richard, L.

Ennals, L.

Sainsbury, L.

Ezra, L.

Sefton of Garston, L.

Falkender, B.

Serota, B.

Falkland, V.

Shepherd, L.

Fitt, L.

Stallard, L.

Freyberg, L.

Stoddart of Swindon, L.

Gallacher, L.

Strabolgi, L.

Gladwin of Clee, L. [Teller]

Taylor of Blackburn, L.

Graham of Edmonton, L.

Tordoff, L.

Gregson, L.

Wallace of Coslany, L.

Harris of Greenwich, L.

Walton of Detchant, L.

Hollis of Heigham, B.

Wharton, B.

Hughes, L.

White, B.

Hylton-Foster, B.

Wigoder, L.

Jay of Paddington, B.

Williams of Elvel, L.

NOT-CONTENTS

Aberdare, L.

Cullen of Ashbourne, L.

Addison, V.

Cumberlege, B.

Ailsa, M.

Davidson, V.

Aldington, L.

De Freyne, L.

Alexander of Tunis, E.

Dean of Harptree, L.

Astor, V.

Denton of Wakefield, B.

Astor of Hever, L.

Ellenborough, L.

Balfour, E.

Elles, B.

Belhaven and Stenton, L.

Elliott of Morpeth, L.

Blaker, L.

Elton, L.

Blatch, B.

Flather, B.

Blyth, L.

Forbes, L.

Borthwick, L.

Fraser of Carmyllie, L.

Boyd-Carpenter, L.

Fraser of Kilmorack, L.

Brabazon of Tara, L.

Gainford, L.

Brougham and Vaux, L.

Geddes, L.

Burnham, L.

Gibson-Watt, L.

Butterworth, L.

Gilmour of Craigmillar, L.

Cadman, L.

Goschen, V.

Caithness, E.

Gray of Contin, L.

Campbell of Alloway, L.

Gridley, L.

Campbell of Croy, L.

Hailsham of Saint Marylebone, L.

Chalker of Wallasey, B.

Charteris of Amisfield, L.

Harding of Petherton, L.

Chesham, L.

Harmsworth, L.

Clanwilliam, E.

Hayhoe, L.

Constantine of Stanmore, L.

Hemphill, L.

Courtown, E.

Henley, L.

Craig of Radley, L.

Hives, L.

Craigavon, V.

Holderness, L.

Cranborne, V. [L Privy Seal]

HolmPatrick, L.

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Hothfield, L.

Northesk, E.

Howe, E.

Oppenheim-Barnes, B.

Huntly, M.

Orr-Ewing, L.

Inglewood, L. [Teller]

Pearson of Rannoch, L.

Johnston of Rockport, L.

Pender, L.

Killearn, L.

Pym, L.

Kingsland, L.

Rawlings, B.

Knollys, V.

Rennell, L.

Lane of Horsell, L.

Renwick, L.

Lauderdale, E.

Rodger of Earlsferry, L.

Lindsay, E.

St. Davids, V.

Long, V.

Seccombe, B.

Lucas, L.

Selborne, E.

Lucas of Chilworth, L.

Shaw of Northstead, L.

Lyell, L.

Skelmersdale, L.

Mackay of Ardbrecknish, L.

Slim, V.

Mackay of Clashfern, L. [L. Chancellor]

Strange, B.

Strathcarron, L.

Macleod of Borve, B.

Strathclyde, L. [Teller]

Mersey, V.

Sudeley, L.

Miller of Hendon, B.

Tebbit, L.

Milverton, L.

Teviot, L.

Morris, L.

Thomas of Gwydir, L.

Moyne, L.

Tollemache, L.

Munster, E.

Trumpington, B.

Murton of Lindisfarne, L.

Vaux of Harrowden, L.

Noel-Buxton, L.

Vivian, L.

Norfolk, D.

Whitelaw, V.

Norrie, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.12 p.m.
Lord Rea Lord Rea moved Amendment No. 3:
Page 2, line 14, at end insert:
("Strategic Health Planning Authority for London.
"8A.—(1) It shall be the duty of the Secretary of State by order to establish a Strategic Health Planning Authority for London.
(2) The membership of the Authority shall be established in accordance with Part I of Schedule 5 to this Act."").
The noble Lord said: My Lords, in moving this amendment, which is very similar to Amendment No. 8, debated in Committee in this House, I make no apology. Some confusion prevailed last time. The amendment defined the region of London as,
"the area of the London Boroughs".—[Official Report, 28/3/95; col. 1552.]
As several noble Lords pointed out, inner and outer London boroughs differ greatly in their socio-economic make-up. The inner London boroughs have much greater social and health needs due to their high levels of social deprivation. It is possible to consider a strategic authority covering entirely or mainly the health authorities which cover the inner London boroughs. That is the spirit in which I want to consider the proposal in this amendment.
The inner London boroughs have, on the whole, quite similar needs. They have quite high levels of unemployment; not very good housing; high levels of immigration; and degrees of poverty that we do not see so much in the outer London boroughs, whose make-up is rather similar to that of the Home Counties, which have a more affluent population in better housing, for example.
There is a need for close co-operation among inner London health authorities. Their populations are concentrated. As the Tomlinson Report, Making London Better and the London Implementation Group task force have pointed out, there is opportunity for the rational siting and sharing of specialist care units.
Primary care is relatively poorly developed in all the inner London boroughs. It will be best helped by co-ordinated action to raise standards. That is shown, for example, by action on the London Implementation Zone. Co-operation between health authorities and local authority social services departments is a crucial element in making care in the community efficient. In fact, the concept of a primary care led health service depends on that.
The noble Baroness Lady Miller, said in Committee that the work of the London Implementation Group was now complete. I suggest that there is still plenty of ongoing work for such a body, as there is for the London Implementation Zone, which relates to primary care. This amendment would allow the work of those two task forces to be built upon in a constructive way.
Finally, it is worth pointing out that the population of London—its size, depending on whether you take the population of the inner London boroughs or include Greater London—would be comparable to that of each of the eight existing regions, which are to be succeeded by the regional offices of the NHS Executive.
This amendment is reasonable. This is a very good opportunity, while changes are being made in the structure of the health service, seriously to consider setting up a suitable strategic authority for London as described in this amendment. I beg to move.
4.15 p.m.
Lord Addington: My Lords, very briefly, I support this amendment. The same issue was raised from these Benches in Committee. London is a very large and diverse area. Strategic planning in virtually all fields would be beneficial for so large an area. Health provision is certainly no exception.
Lord Desai: My Lords, perhaps I may be allowed to speak at this stage, even though I did not speak in Committee. I shall refer only to the concrete experience that I have. I declare an interest as chairman of a small drug intervention agency, City Roads, which deals with drug crisis problems.
Since the care in the community legislation was passed, this small group has had to deal with all the various boroughs of London separately. When it comes to issues such as drug and alcohol abuse, it is quite clear that there will need to be some sort of co-ordinating agency for different drug intervention agencies. Although these have to deal legally and contractually with individual boroughs, the problem is London-wide, if not larger. In the absence of an authority such as that proposed in the amendment before us, ad hoc co-ordinating committees are liable to be set up separately for different topics. Then there will be the
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problem of setting up co-ordination across those different co-ordinating bodies, be it for drugs, mental health, alcohol abuse or whatever.
It would make much more sense at present initially to set up a strategic health authority that can deal with all those problems. They will not go away. While some matters can be dealt with at individual health authority level and individual trust level, there will be cross-authority problems. The amendment deals with that issue; therefore I support it.
Baroness Jay of Paddington: My Lords, before the Minister replies, perhaps I may speak briefly in support of my noble friend Lord Rea. As we all know, the position in London moves very rapidly and changes very often. I was extremely interested to hear the remarks on London that the Secretary of State for Health made on television yesterday afternoon. Among other things, she said that London has had entrenched problems over many years. I believe that we would all concur with that point. She also said that the London health service is not good enough now, and that some health authorities have not planned well enough and not done well enough to meet the various problems with which London deals. All of that speaks to the argument for having some kind of strategic authority which can enable the Government, the Department of Health and the Secretary of State, to have some influence of a more direct kind so that future Secretaries of State will not need to say that the London authorities have not done well enough and feel that that is something that they can only remotely influence.
In introducing the amendment, my noble friend Lord Rea spoke about the London Implementation Group. He mentioned that it was a task force which the noble Baroness, Lady Miller, told us in Committee had completed its work.
Obviously the task force has completed its work, but the measures, the problems and the issues that it was set up to deal with have certainly not been solved. It would be useful to translate the London Implementation Group, with its various task force functions, into something with a longer life and a more strategic overview.
I was invited by the Minister, when we talked last week in your Lordships' House about the end of term report on the London Implementation Group, to visit with her the various projects in primary care which have been developed under that initiative and which she felt were very suitable examples of its success. But, without wishing to lend coin or credence to what is an unattractive word, I think that is what is described in the jargon as "projectitis". There is very little strategy attached to what the London Implementation Group has achieved and, in terms of the end of its life this month, a lack of evaluation.
If I look at some of the issues which have arisen during its life—and which have risen again, acutely, in the past few weeks—I can mention, among others, the pace of change in London. How quickly are we to implement the moves towards making primary care the most important method of delivering care to Londoners and weaning—if that is the appropriate word—them away from using the acute services for primary care?

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How quickly should we engage in more bed closures in the London area? How can we effectively improve primary care in a population which has little understanding of the necessity to register with GPs? I described in Committee how many local health authorities in London have had a reduction in numbers of the population registered with GP fund holders. How do we deal with improving primary care in a floating population, with all the great social distress and deprivation, which, as people know—the noble Lord, Lord Rea, referred to it again this afternoon—is particularly acute in the London boroughs? How do we organise the specialties which have been reviewed following Professor Tomlinson's report?
All of these are issues which need to be dealt with strategically. They are not susceptible to the task force "projectitis" approach of the London Implementation Group.
I was interested in the February report of the inner London chief executives on hospital services for London. It was obviously an informal group of people which got together, I believe, in response to the special lecture given by Professor Jarman about inner London health needs. The chief executives' report said:
"the broad strategic direction that has been set for London is correct, but at a number of points clear and strong management action is required by our Authorities if it is to be achieved in a manner which is clearly seen to benefit patients".
It goes on to say:
"We also believe that action needs to he taken at Regional and/or national level in relation to a number of the findings in the studies".
It cited, for example, the questions of management of admissions and discharges, of calculating bed requirements and whether or not trusts were in a position to make the appropriate calculations on the basis of their business cases, It also said that there should be an overall review of the yellow and red alert mechanisms across London, and of the role that the emergency bed service should play in the future.
Those are just some of the issues which the inner London chief executives clearly felt were appropriate for collective working and a strategic view.
Of course we can continue to have ad hoc committees working on these matters—as indeed the chief executives did on this particular subject—but it would be much more sensible if we had in place a strategic health authority with the additional authority and status necessary to achieve solutions to so many of the medium and long-term problems of London. I support my noble friend.
Baroness Cumberlege: My Lords, I have already made it clear that the Government's commitment to improving health services for London is very great. The direction has been well set out. The strategy was clearly laid out in Making London Better, which also set out the framework for action: to develop better, more accessible primary and community health services; to provide a better balanced hospital service to meet the needs of London's resident working and visiting population in the most appropriate way; to develop and enhance specialist services that continue to provide a high quality service; and to take action that will benefit and enhance London's excellence in medical teaching and research.
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Progress on all these fronts was announced earlier this month with proposals for change in services in north, east and south east London.
The Government established the London Implementation Group to provide a short-term boost and extra support to existing health agencies in London in the considerable task before them.
As my noble friend Lady Miller mentioned in Committee—the noble Lord, Lord Rea, mentioned it again this afternoon—the work of the London Implementation Group is now complete. A great deal has been achieved and London's health authorities and trusts are now moving forward this great agenda for change. But, as I emphasised in Committee—and as the noble Lord, Lord Rea, has said this afternoon—London cannot be treated as a single entity. It is a large and diverse city, often characterised by extremes. Areas that receive huge influxes of people by day—for example, in the city and the West End—have much smaller resident populations. As the noble Lord said, the needs of the Inner city are in contrast to those of its suburbs. Account must be taken of London's size and the character of its local populations. Collaboration must take place between a range of health and social care agencies if the needs of Londoners are to be met. I agree with the noble Lord, Lord Desai, on that point. The health service in London has made good progress in achieving major change to give Londoners access to a comprehensive range of services. Much of that work has been taken forward at a local level.
I do not agree with the noble Baroness, Lady Jay, about "projectitis" or with her philosophy in coining that phrase. It is at local level that the real difference will be made and where better services will be experienced by Londoners. There can be the most cerebral strategies, but they are worthless if they are not translated into real services of a higher quality experienced by Londoners; for instance, through better premises for GPs.
Nevertheless, I would not dismiss the fact that some strategic overview of the needs of the whole of London is still needed. A London focus has been retained at the highest level by the North and South Thames Regional Offices working with the NHS Executive, the Primary Health Care Forum and the Primary Care Support Force. That focus will ensure that a wider view is retained.
The London focus will mean that health authorities and trusts in London will be able to maintain a broader strategic vision across the capital. They will share experience and good practice in implementing and managing the pace of change in London's health care. This has already been demonstrated by the London Initiative Zone which focuses on improving primary care in those parts of London where need is greatest. Within the zone, health authorities have identified priorities for their local communities and have moved towards closer working partnerships, including local authorities and the voluntary sector, in tackling the problems of underdeveloped services in the community. These working partnerships have not required the establishment of a strategic, overarching, authority.

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They have emerged as part of the responsibilities of existing health authorities to work with other agencies. I urge your Lordships to reject this amendment.
Lord Rea: My Lords, I was slightly puzzled when my noble friend mentioned the word "projectitis". The way I heard it it was "project Titus"—which I thought might be a Roman monument built in anticipation of developments in the future Yugoslavia. I now understand that it is a form of disease.
All the words of the noble Baroness could easily have been taken as an argument for establishing a strategic body for London such as we suggest in the amendment. All the things that she said had been established by the London Implementation Group and were being done in the London implementation zone—how there was need for co-operation between the different health authorities and local authorities in London—seem to me to cry out for such an overall strategic body as we propose. However, it is perfectly clear that the Government are not taking our advice. I cannot count on mobilising support for the amendment today. It is possible that we may try yet again. For the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.30 p.m.
Lord Carter Lord Carter moved Amendment No. 4:
After Clause 2, insert the following new clause:
Annual report on activities of regional offices of NHS Executive
(".—(1) It shall be the duty of the Secretary of State to lay before both Houses of Parliament an annual report on the activities of the regional offices of the National Health Service Management Executive in respect of the discharge of all duties and functions transferred to those offices upon the abolition of Regional Health Authorities.
(2) In this section, "regional office" means any office of the National Health Service for the time being designated by the Secretary of State to have responsibility for the oversight of the finances and activities of the National Health Service purchasing authorities and trusts on a regional basis.").
The noble Lord said: My Lords, this amendment places a duty on the Secretary of State to lay before both Houses of Parliament an annual report on the activities of the new regional offices of the National Health Service Executive and to report in respect of the discharge of all duties and functions transferred to those offices upon the abolition of the RHAs. The second subsection of the new clause defines "regional office".
The purpose of the new clause is clear. It will create a mechanism by which Parliament can be informed of the outcome of this legislation and can monitor its effects in practice as opposed to its claimed intent. The enthusiasm of the Government for open government and accountability has often been asserted. If their real intention is, as they claim, to remove unnecessary bureaucracy, increase efficiency and create savings, the new clause will raise no problems for them and will present an opportunity for the Government to report back and parade their achievements.
We know that in 1991, as part of the Government's so-called reforms, regional health authorities were given greater powers because it was judged that a strategic
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authority at regional level was required. As we went through the Bill and began to see how this legislation might work, two matters became very clear. First, the Bill will allow much greater secrecy, and indeed concealment, in hospitals and trusts. We have tabled some amendments to deal with that matter. Secondly, in line with everything else the Government have done in a number of fields of activity, this legislation will ensure that all roads lead back to the Secretary of State.
Perhaps I may repeat a point I raised in Committee. At present, regional directors of public health have a duty to produce an annual public report on health care in their region. Historically, the role of practitioners of public health medicine as potential whistle blowers for public safety is one of the glories of British medicine and British public service. But at regional level—this point was underlined in an exchange I had with the Minister in Committee—they will become civil servants, bound by the Official Secrets Act 1911. Their duty will not be to the public but to the Secretary of State.
So what will happen to the annual public health report on health care in their region? Who will make that report? Can it be done by civil servants at the regional level? As the Minister underlined in Committee, they will be bound as civil servants under all the normal rules. In fact, will that reporting just stop?
The only remotely independent voice in the new structure that the Bill creates is that of the community health councils. Their chief executives, full time salaried public servants, are presently employed by the regional health authorities. What will happen to them?
I turn to statistics and information. At present the RHA collects statistics at regional level in the service of the public and, if requested, much of that information is made public. We shall also deal with that point in a later amendment regarding the codes of practice on openness. The only information that anyone can currently obtain about matters such as hospital closures come from the RHAs. The Department of Health, for understandable reasons, does not want to know about that. It tells us that in future the regional offices will collect only the statistics that the department wants for its own purposes in administering the system. Will that include information about hospital closures, for example? Will it include the closure of accident and emergency departments, or other such decisions, which impinge directly on the pattern of available health care across the region and which are certainly of public interest whether or not the department wishes to know them.
It was confirmed again in Committee that if the decisions deal with policy, however defined, the Minister will answer questions in Parliament but operational matters will be referred to the executives. So apart from the information that the regional health authorities will no longer collect, any request for information from Members of Parliament on operational matters will in future be referred to individual authorities or trusts. So there will not be the same responsibility for the flow of information to the public or their representatives for the use of public money.
The mechanism proposed in the new clause will allow Parliament to explore how those and other functions of existing RHAs are being carried out under the new structure; or, if they are not being carried out, to consider the effects of the change. We know that the vital responsibilities of the present RHAs are to stay at regional office level and be lifted into the power of the NHS Executive. On those grounds there remain severe doubts, including among health professionals, whether the new authorities that the Bill creates in place of the regions will have the expertise to plan and co-ordinate the existing activities of those regional health authorities. We have tabled a number of amendments to try to make sure that they do have the expertise that is required. The Government have resisted any attempt to put that on the face of the Bill.
All this shows is that whether at regional office level or away from that level there is a continuing and important role to be played by those who are charged with carrying out the duties which are currently the responsibility of the RHAs. We feel that Parliament must have the chance to scrutinise the effects of the legislation, not only by discussing the regulations when they are proposed but by exploring every year the cumulative practical changes to which the Bill will give affect. The new clause will do that. I beg to move.
Baroness Cumberlege: My Lords, the new regional offices will he an integral part of the NHS Executive and therefore part of the reporting arrangements already in place for the Department of Health through the departmental annual report. That report, which is a Command Paper, is laid before Parliament and is available to the public. It describes in detail the department's expenditure and activities across all its responsibilities. All major developments during the year are included. Further information about NHS Executive activities is made public through a wide range of publications, including the NHS annual report and a new series of quarterly reviews as well as a range of statistical bulletins and issues-based newsletters. We already publish extensive information on performance management of the NHS and will continue to do so.
The noble Lord, Lord Carter, expressed particular concern about the move from the regional health authorities to regional offices which will be part of the Civil Service. He felt that the move would mean a loss of openness. I can assure him and your Lordships that information held centrally, which is not of a confidential nature, is and will be available on request under the open government provisions. Regional offices are not the bodies which need to be independent. Their role will be different from that of the old regional health authorities. It is the new health authorities which will be taking decisions that directly affect local people. They will be independent in the same way as regional health authorities are now.
Regional health authorities are artificial entities in public health terms. There is no particular reason why public health should be dealt with in one geographical administrative area rather than another. The new health authorities will be much more appropriate
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places for public health work. Their areas will be smaller than the regions and they can be more sensitive to local variations in health and health care needs. They will have better links with local government which is an important public health role.
The shift in responsibilities for public health from regional health authorities to the new health authorities means that it will no longer be appropriate to produce regional health reports. But there will continue to be over 100 district directors of public health reporting annually on public health issues, who are wholly independent, as now. Those directors can also work together on issues of common interest, supported as necessary by the regional director of public health. Public health reports will continue to be a key and welcome feature of the work of health authorities. Therefore, I cannot accept that the amendment is necessary. I hope very much that the noble Lord will withdraw it.
Lord Carter: My Lords, before I decide what to do with the amendment and because the Minister was helpful in referring to the departmental annual report, may I ask her whether she can tell the House what aspects of those "appropriate" activities will be spelled out in that report as opposed to being lost in the raft of general information that will be given on the work of the whole department? I am sure that the Minister understands that there is concern about whether there will be any attempt in the departmental annual report to try to tease out and explain what has happened in terms of the responsibilities to be transferred from the RHAs to the new executives. We need to know that, at least in the early years, so that we can ensure that those responsibilities are discharged effectively.
Baroness Cumberlege: My Lords, there is in addition the Chief Medical Officer's annual report which deals specifically with the nation's health. That is produced yearly and receives wide publicity with a press conference and an explanation of it. It would also be possible to include in that report on the health of the whole nation the reports of the 100 or so health authorities which I mentioned. If the noble Lord is seeking much more managerial information, I can advise him that that is contained in the annual report of the NHS, which is produced by the chief executive, and in its quarterly reviews. There is also a range of statistical bulletins. Different types of information are available, and I can assure the noble Lord that there is no intention to be secretive.
Lord Carter: My Lords, that is extremely helpful. The purpose behind the amendment was to get on the record what the Government intend to do. In the light of the Minister's reply, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.45 p.m.
Lord Carter Lord Carter moved Amendment No. 5:
After Clause 2, insert the following new clause:
Provision of information
(" . The provision of information by Health Authorities established under this Act shall be in accordance with those Codes of Practice which shall from time to time be issued by the National Health Service Management Executive or the Secretary of State.").
The noble Lord said: My Lords, in moving Amendment No. 5, I should like to speak also to Amendments Nos. 11 and 17. Amendment No. 5 deals with the new Code of Practice on Openness in the NHS which has been published by the NHS Executive. It includes not only a number of welcome provisions, but also some puzzling ones with which I shall deal. It states correctly at the start that it,
"reflects the Government's intention to ensure greater access by the public to information about public services and complements the Code of Access to Information which applies to the Departments … including the NHS Executive".
We can all welcome that.
The introduction continues:
"Because the NHS is a public service, it should be open about its activities and plans. So, information about how it is run, who is in charge … should be widely available".
Under the heading "Aims", the code spells out the extremely important second aim that people,
"are provided with explanations about proposed service changes and have an opportunity to influence decisions on such changes".
The fourth aim is that people should,
"know what information is available and where they can get it".
Your Lordships will remember that in Committee I referred to something that happened in my area of Wiltshire, which seemed to show that the whole of the consultation process had broken down badly. It is important to realise what is happening in a number of areas around the country. Perhaps I may again describe what happened and ask the Minister whether she feels that what happened was correct and whether it fits the code of practice that is before us. The example goes back to 1989 when a number of plans were published for reorganising the health plans in the district. There were public meetings—I attended some—and all were helpful. Everything was open. All sorts of plans were produced. New community hospitals were mentioned and there were discussions about the right sites for them. There was good local consultation and everybody was reasonably happy.
Things then went into cold storage because the plan depended to a large extent on the sale of some property. That sale did not take place because of the slump in the property market. Everything went quiet. However, everybody was still convinced that what had been promised would take place, but perhaps more slowly. Without anybody in the district knowing what was going on, a secret business plan was produced in September 1994 which completely reversed all the previous ideas and proposals. The promise of new community hospitals for several areas was removed. Hospitals were to be closed, without replacement. My area, with a catchment of about 35,000 people, was to have virtually all its services removed. That seemed to be because of the possibility of a housing development on one of the sites.
All of that was in secret, despite all the previous consultations. When the report was leaked earlier this year and people saw what was proposed, as you can imagine, all hell broke lose in the district and throughout the county. The authorities then hastily backtracked and started a consultation process.
As I have said, page 3 of the code states that people should be provided,
"with explanations about proposed service changes and have an opportunity to influence decisions on such changes".
All of us who have been involved in business know about business plans and that you do not spend a lot of time and money making such plans and then put them on the shelf as a theoretical exercise. The health authority involved had decided what it wanted to do—and that was a complete reversal of all the earlier plans. It was only because that secret business plan was leaked that we were able to achieve the fourth aim of the code, which is that people should know what information is available and where they can get it.
That is not the only such example around the country. As I said in Committee, the business of consultation starting after the authority has made up its mind is a farce. I hope that the Minister will be able to spell out exactly how the code of practice is supposed to work.
Before I turn to Amendments Nos. 11 and 17, I should like to deal with another interesting aspect of the code. I refer to the business of charging for information. Paragraph 7(b) on page 5 states:
"for requests from people not listed above"—
that is, press and other media; community health councils; MPs; local authorities and citizens' advice bureaux—
"no charge for the first hour and a charge not exceeding £20 per hour for each hour thereafter",
may be charged for time expended. In the case that I have just described, a local organisation has been formed, called Save Our Local Hospital. It does not have any real money and if it is asked to pay about £20 per hour after the first hour for such information, it will find it extremely hard to do so.
We had a good debate on the provisions of Amendment No. 11 in Committee, so there is no need to repeat the argument at length. When moving his amendment, Amendment No. 23, in Committee, the noble Lord, Lord Tope, gave a full list of everything that has to happen in local government regarding the declaration of interests. About half a column of the Official Report is taken up with a list of all those things that members of local authorities are required to declare. When the Minister replied, she mentioned the implementation of the codes of conduct and accountability. The Government seemed to have to rest their case on that. However, she also said:
"Having introduced the codes of conduct and accountability, we have begun the process of monitoring their implementation. An initial early check will be completed next month"—
that was said on 30th March, so I presume that the results are due in April—
"and the results will be reported to Ministers shortly afterwards".— [Official Report, 30/3/95; col. 1734.]

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Can the Minister tell the House when those results will be available? Indeed, will that report to Ministers be in the public domain and published? It is important that we know the way in which the code of conduct has worked in the early stages. A test of the Government's view of openness will be whether they make that information public.
The Minister's other answer which I found extremely unsatisfactory was her explanation of why health authorities are different from local authorities. She said that it is because local authorities raise taxes. She also said that the Government did not have any objection to the principle of the amendment. That is extremely important because, if they have no objection to the principle of the amendment, why not accept it or table a similar amendment themselves? Big sums of money are involved. We all know what happened at Wessex Regional Health Authority. We need not go into that again—it has been mentioned often enough. That is not the only case where a declaration of members' interests was vital.
Amendment No. 17 deals with "gagging clauses", as they are known. Again I am afraid that in Committee we had an unsatisfactory reply from the Minister, which is why we have tabled the amendment again. All sorts of examples were given in Committee about where health authority employees have been gagged, in effect, when they have tried—to use the jargon or slang—to blow the whistle, and I shall not repeat them. However, perhaps I may repeat a point I made on this amendment in Committee. The terms and conditions of service of hospital medical and dental staff used to contain a clause in paragraph 330 which stated:
"A practitioner shall be free, without prior consent of the employing authority, to publish books, articles, etc. and to deliver any lecture or speak, whether on matters arising out of his or her hospital services or not".
That is an absolute freedom. It is a safeguard for public health, the public good, and for the professionalism of medical staff which is the cornerstone of the NHS.
Another matter to which I referred in Committee, and to which I do not believe the Minister replied, was the concern relating to the additional financial incentive for trusts, as employers, to keep quiet matters which might have a negative impact on their marketing (these are customers, not patients, we should not forget) of hospitals to purchasers such as the GP fundholders, health authorities and the rest. For all those reasons, there is now real concern about the lack of openness about information.
There is a difference in ethos and approach between working for an NHS authority and working for the Department of Health. There are practical issues regarding the freedom of speech. We have had it confirmed that civil servants are responsible to the Secretary of State and are bound by the Official Secrets Act. Will concerns about standards and procedures be aired publicly? RHA staff have a strong commitment to the NHS. They consider themselves to be health service staff. While they currently work for an RHA, most expect their employment paths to cover the various parts of the service on both the provider and purchaser side.
There is a qualitative difference in being a civil servant working directly to the Secretary of State, whose career path could lead to other parts of the Civil Service outside the health service. The NHSE wishes to see more fluidity between the department and the service, but will that happen to any significant degree?
What will be the significance of all that for the service and ultimately for patients? RHAs are often rightly criticised as being remote and not attuned to the needs of the service. Will not the regional offices, staffed by people (however efficient personally) answerable directly to the Secretary of State, be worse? Is that not another example of the Government's tendency to centralise and direct under the rhetoric of devolution and the granting of freedom?
Will the Minister comment upon the footnote to page 3 of the Code of Practice on Openness in the NHS? At the top under "Scope" it states:
"The Code of Practice covers the following NHS organisations".
The first it quotes is the RHAs. There is then a footnote which states:
"Under the Health Authorities Bill at present before Parliament, Regional Health Authorities would be abolished on 1 April 1996 and District Health Authorities would combine with Family Health Service Authorities to form a single local Health Authority. When necessary, this Code will be revised accordingly".
When is "necessary"? How will the code be revised? It is a NHSE publication, and so presumably the code, or parts of it, will apply to the new regional offices. It would be helpful if the Minister could tell us how the code will be amended to take account of the changes proposed in the Bill. I beg to move.
Baroness Miller of Hendon: My Lords, your Lordships will be aware of the Codes of Conduct and Accountability for NHS boards, issued by my right honourable friend the Secretary of State on 28th April 1994. Your Lordships will also be aware of the Code of Practice on Openness in the NHS which the Secretary of State issued on 5th April 1995.
The Codes of Conduct and Accountability were warmly welcomed when they were issued last year, not least by your Lordships, and by the noble Lord, Lord Carter, a few moments ago. They were also welcomed by the Audit Commission, the Public Accounts Committee and Sir Adrian Cadbury himself.
There is wide acceptance that those codes have done much to ensure that the public service values of openness, probity and accountability remain at the heart of the management and operation of the NHS. They introduced new measures to enhance the accountability to their local communities of authorities and NHS trusts. All trusts and authorities now hold publicly available registers of board members' interests and those demonstrate to the public that the pursuit of private gain plays no part in any member's service to the board and to the organisation. Health authorities now produce annual reports. All boards have audit committees. All boards have remuneration and terms of service committees. Those are real steps forward in ensuring that the board is held accountable for the stewardship of public funds.

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Your Lordships have previously drawn comparisons between the requirements placed on local authority councillors and what is required of health authority members. That is not comparing like with like. Local councillors are elected. Health authority chairmen and non-executive members are direct appointees of the Secretary of State and are accountable to her. They can be more easily moved if necessary. For example, the current regulations governing membership make it clear that the Secretary of State can terminate an appointment if a member has failed to comply with the requirement to disclose financial interests. The codes arc very specific about the requirement on chairmen and board members to declare any interest that may be relevant to NHS business, and that such information should be made available to the public in a register.
The Codes of Conduct and Accountability do not need to have legislative force to achieve their objectives. Current evidence is that NHS trusts and authorities are complying with the codes and that they are proving effective. To underline the importance of the new codes, my right honourable friend the Secretary of State for Health has made compliance with them a condition of appointment for all board members. There is therefore no suggestion that the requirements of the codes are not taken seriously by NHS boards. The noble Lord, Lord Carter, asked whether the results will be published. I shall have to write to him on that, because I am afraid that I do not know the answer.
The Code of Practice on Openness in the NHS was issued on 5th April and will be implemented throughout the NHS on 1st June. That code builds on the success of the Patient's Charter in making information available to the public. It aims to ensure that the public are well informed about the health service they fund; that they know what information is available and where they can obtain it.
The Code of Practice on Openness in the NHS is the first of its kind in the NHS. It is a code for the public: to help them understand what the NHS does for them and to enable them to hold their local NHS organisations to account. It sets out statutory requirements on publishing information and describes good practice in publishing other information. To give legislative force to that code would not enhance its effectiveness. My right honourable friend the Secretary of State has said that she is introducing the code of practice in order to promote a climate of openness, to foster a culture of co-operation and confidence. We believe the code of practice, as a flexible and non-statutory code, will help to achieve that in the health service.
I note what the noble Lord, Lord Carter, said about matters that happened in his area. I should like to refer to part of Section 5 of the code of practice which states:
"details about important proposals on health policies or proposed changes in the way services are delivered, including the reasons for those proposals. This information will normally be made available when proposals are announced and before decisions are made; details about important decisions on health policies and
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decisions on changes to the delivery of services. This information and the reasons for the decisions, will normally be made available when the decisions are announced".
That is, apart from exemptions later in the code, NHS trusts and authorities must publish or otherwise make available in the following information the matters that I have just discussed.
With regard to the rights of the regional office staff to speak out, the regional offices will have a different role to that of the RHAs. The new health authorities will be the operators in the new system. They will be taking the decisions that will directly affect local people. There will be no reduction in the rights of health authorities to represent publicly the needs of their populations.
The regional offices will contribute to the development of central policies for the National Health Service, monitor the health authorities and trusts in their areas and intervene managerially where this is needed. Those are responsibilities appropriate to the Civil Service and therefore it is right that the regional office staff should he civil servants.
The noble Lord, Lord Carter, was anxious about the charges for information. The code recommends that charging for information should be absolutely exceptional and that no charge should be made in the majority of cases. It also sets out where information must not be disclosed; for example, where details of other people are requested.
Clearly, the change in the rights of regional office staff to "speak out" is a change of status but it gives them more influence over central policies. As civil servants in the new order, they will have greater opportunities to shape central policies by offering advice to Ministers.
I hope that in the light of that explanation the noble Lord, Lord Carter, will feel a little more satisfied and will not believe it necessary to press the amendment.
5 p.m.
Baroness Jay of Paddington: My Lords, with the leave of the House, I was a little unclear about what the Minister said about the way in which the Code of Practice on Openness in the NHS applied to the new regional offices. It states in the introduction that this builds on:
"and complements the Code of Access to Information which applies to the Department of Health, including the NHS Executive".
How will that apply to the regional offices?
Baroness Miller of Hendon: My Lords, as I said, the regional offices will have a different role from that of the RHAs. Under those circumstances, the regional offices will contribute to the development of central policies for the NHS and will monitor the trusts. Their responsibilities will therefore be appropriate to those of the Civil Service, so it is right that the regional office staff should be civil servants.

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Perhaps I may comment on a point made by the noble Lord, Lord Carter. He asked how the codes of practice will be amended. I do not have that information but I shall write to the noble Lord.
Lord Carter: My Lords, I hope that the Minister will not object if I say that that was not a very satisfactory answer. I am glad that she has spelt out the information which must be provided under Section 5 of the code. In the example that I gave, almost everything was done in complete breach of what has been suggested and we shall want to follow that up.
The arrangements for direct appointees by the Secretary of State to the various bodies raise anxieties about the declaration of interests and we hope that the new code will help to prevent the recent bad examples. I am surprised that the department has not taken a policy decision on the publication of the results of the survey as regards the Code of Conduct and Accountability. I hope that it will not be described as an imputed motive if I suggest that perhaps the department is waiting to see what the survey says before deciding whether to publish it. That is not exactly the openness of government that we should all like to see.
Charging for information was mentioned as exceptional but presumably it will be left to the trusts and authorities to decide what is exceptional and what is not. That will be a considerable disincentive to the small local groups that are set up to try to save a hospital or to protest about a closure. They will be discouraged by the charge for information, which I believe is excessive.
We have heard about civil servants at the regional offices being able to influence central policies and so forth. I wonder what will happen to the civil servant who does not believe in the internal market and how far his or her career will progress under the change of responsibilities that we have discussed.
The answer is not satisfactory but it is the kind of answer that I expect from the Government when we are discussing openness and accountability. I do not intend to press the amendment at this stage but we may wish to return to the matter on Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Cledwyn of Penrhos Lord Cledwyn of Penrhos moved Amendment No. 6:
After Clause 2, insert the following new clause:
Special Authority for Wales
(" . After section 8 of the National Health Service Act 1977 there shall be inserted—
"Special Authority for Wales.
The Secretary of State shall, by order, establish a Special Authority for Wales which shall have such clinical and non-clinical duties of a specialized and all-Wales character as the Secretary of State shall in such an order determine and shall include (but not be limited to)—

(a) a blood transfusion service,

(b) an artificial eye and limb appliances service,

(c) a breast cancer screening service,

(d) a service relating to the examination, checking and pricing of prescriptions for drugs, medicines and appliances supplied by the National Health Service,

(e) a health complaints administrative service,

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(f) a research, intelligence and health service management information system,

(g) such functions relating to capital works, the procurement of supplies, income generation and the provision of computer services on his behalf or on behalf of the Health Authorities as the Secretary of State may direct it to perform in the interests of the Welsh National Health Service,

(h) such other functions as the Secretary of State may direct it to perform on his behalf of a Health Authority."").

The noble Lord said: My Lords, as I mentioned in our exchange on Amendment No. 1, I learnt during the recent Recess that there is considerable anxiety that in many ways Wales is being overlooked and neglected in the Bill. The amendment is intended to correct that neglect and to provide Wales with a number of services which I am sure the House will agree are essential. They were mentioned by my noble friend Lord Prys-Davies when he spoke in Committee on 28th March. My noble friend made a comprehensive case and went in detail into the various services affected by the Bill. He dealt with the work and contribution of the Welsh Health Common Services Authority, which provides special services and has an excellent workforce of 1,750 experienced people.
I must pay tribute to the noble Lord, Lord Thomas of Gwydir, who set up that authority in 1974 when he was Secretary of State for Wales. Since then, every Secretary of State for Wales has built on that authority and extended it. Its contribution to Welsh health has progressively been considerable.
I regret to have to say that the present Secretary of State, Mr. John Redwood, has taken an attitude quite different from his predecessors. He proposes to detach three of the clinical services because, he said, he wanted to bring them closer to the mainstream of the National Health Service. That is totally unnecessary. The three services were already an essential and integral part of the Welsh National Health Service.
The Secretary of State has also instructed the staff to find work in the private sector. I find that extremely difficult to understand. They appear to be the actions of a ruthless operator who places his dogma before the interests of the Welsh people. The special health authority was deliberately disbanded, without adequate consultation or concern for those whom it served so well.
I would like the Minister to explain why consultation did not take place; that is, consultation with Welsh general practitioners, the Welsh committee authorities and the county councils in Wales. They all work together effectively in the Principality, as those who know Wales are aware. Perhaps I may ask the noble Baroness to tell the House what will happen to the 1,750 people whom I have mentioned because—and I must press this home—they have a very good reputation throughout Wales for the work which they are doing in their various areas. Will the Minister give an assurance that their jobs are safe?
I understand that the Secretary of State has said that they must find work in the private sector. May we he told where in the private sector in Wales those splendid people are to find work? We are entitled to an

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explanation about that matter. Work is not easy to find in Wales and unemployment is high. In some parts unemployment is higher than others. In Gwynedd, where I live, I know from experience how difficult it is to find work. I must ask the noble Baroness to tell the House how work will be found in the private sector for 1,750 people. I do not wish to see those people having to leave Wales and cross the Severn to find work as they did in the 1920s and 1930s.
I know that both noble Baronesses are ladies of compassion. I am quite sure that they feel as strongly as I do and they certainly would feel strongly, as I do, if they went to Wales to find out the feelings of the people there. This amendment is reasonable. The Welsh people support it. It is necessary. I hope that the noble Baroness will agree with me, I beg to move.
5.15 p.m.
Lord Prys-Davies: My Lords, I wish to support as sincerely as I can the amendment moved by my noble friend Lord Cledwyn. This is a positive amendment; it is not a destructive amendment. It is positive because it seeks to ensure the continued existence of the Welsh Health Common Services Authority—WHCSA, as we know it in Wales. This amendment is identical to that which was moved in Committee except that it does not include a new health promotion function. The simple reason for that is that we have no wish to complicate the debate by mixing up two arguments.
As my noble friend Lord Cledwyn demonstrated, the case for WHCSA stands on its own merits. It has given excellent service to the NHS in Wales since it was set up some 22 years ago. I should like to stress that the noble Baroness acknowledged in Committee the high quality and achievements of WHCSA and the dedication of its staff. Therefore, its contribution is not an issue. That was a helpful contribution by the Minister but the rest of her speech, which I have no doubt was written by someone else, was disappointing. That is why we are not content to let the matter rest.
As my noble friend Lord Cledwyn pointed out, notwithstanding its achievements in April last year the present Secretary of State decided that the authority should be disbanded, dismantled. We heard the Secretary of State's reason; namely, that that organisation should move nearer to the mainstream NHS, as though it were standing in splendid isolation from it. In Committee, the Minister sought to defend that curious position on an additional but ambiguous ground. The Minister said:
"Trusts need freedom now to introduce different mechanisms and services to support them".
Two sentences later she added the extraordinary statement—particularly in view of the enormous growth of the Welsh Office—
"It is no longer tenable to have a large central organisation".— [Official Report, 28/3/95; col. 1595.]
Those statements by the Minister do not absolve the Welsh Office from giving evidence in support of their decision. But I am sure that there in the Minister's own
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sentences we have the explanation. The reason is essentially ideological. That is the problem and that is the anxiety.
As I said, in Committee the Minister spoke of the need to give freedom to the NHS trusts. If that concept rightly claims a top priority—it has not been argued or demonstrated—why is it proposed to transfer the breast-screening service to a single authority; to transfer the artificial limb service to three authorities; and why is it that the blood transfusion service, thankfully, is to remain where it is? How can those arrangements for the breast-screening service and the artificial limb service give freedom to all the other trusts in Wales?
Have the risks, the damage and the injury which may flow from that decision been weighed properly in the Welsh Office? Has it occurred to the Welsh Office that the dismantling of WHCSA may do great damage to the health service of the future? As my noble friend Lord Cledwyn pointed out, the Welsh people speak highly of that organisation and they wish the high WHCSA standards to continue. But such standards, expertise and commitment require an abundance of WHCSA skills, dedication, efficiency and experience. If the WHCSA structure is removed, there will be a risk—I put it no higher—that the support will not exist. Therefore, we ask the Minister whether that down-side has been considered properly.
It is our understanding, which I believe was confirmed by the Minister in Committee, that some rapid studies were undertaken by officials to see how the post-WHCSA services could best be organised, subject to the proviso that, in any calculation, WHCSA was to be eliminated from the computation. In Committee I asked that a copy of those studies be placed in the Library before Report stage. I thought that that was a helpful suggestion on my part. That would at least help us to get at the facts. That information had not been provided to the Library by five o'clock today. Why is it being withheld? But, as it is being withheld, how can we have any confidence that the right decision is being made?
If a businessman wishes to change the administration or management of a business, he works out the costs of doing so stage by stage. He identifies the risks and the new problems which may arise and compares the proposed arrangements with the present arrangements and assesses the effects. But, in relation to WHCSA, we have no means of knowing whether that essential exercise has been undertaken properly by the Welsh Office. We have no means of ensuring that the Welsh Civil Service has done its homework properly.
The Minister claimed on two occasions during her short speech in Committee that the promoters of the amendment were seeking to set,
"one particular set of administrative arrangements … in legislative concrete". [Official Report, 28/3/95; col. 1596.]
With respect to the Minister, whom the House holds in high regard, that does a disservice to the arguments that we have deployed.
My noble friend Lord Cledwyn and myself are not interested in an academic argument about the merits or demerits of primary and delegated legislation. However, I would add that neither of them is set in concrete; they

739
can be changed. But if it pleases the Minister and her advisers, I am sure—although I have not discussed this with my noble friend—that we would be content to rely on the statutory instrument if she gave an undertaking to the House that there will be no substantial change in the role of WHCSA during the foreseeable future. Does that help the Minister?
I turn now to my final point. Sadly, the present Secretary of State declined—indeed, refused—to meet staff-side representatives to discuss such a curious decision which will affect their daily lives. Surely that is not the way to treat people. The Minister, who has to defend the decision taken by her colleague, tried to persuade us in Committee (at col. 1595 of Hansard) that, "Handling the process"— people are experiencing some difficulty in understanding that phrase—
"is a matter for WHCSA's own management".
The fallacy of the argument is clear. It ignores the fact that WHCSA's management is not empowered to decide whether the organisation does or does not have a future. Its future is in the hands of the Secretary of State for Wales in the Welsh Office. We say, without underlining it, that in his decision not to meet the staff representatives—indeed, representatives of 1,750 people—the Secretary of State went wrong. We hope that the Secretary of State's mind is not closed, at least on this issue, and that he will listen to argument.
Baroness Cumberlege: My Lords, the noble Lord, Lord Cledwyn of Penrhos, invited me to agree with him. However, I fear that both he and the noble Lord, Lord Prys-Davies, will be disappointed with my response. I try my best to agree with the noble Lord on most things, hut we have a difference of opinion in the matter.
One of the main purposes of the Bill is to reduce bureaucracy in the NHS. It would be a pity if, through the amendment, we used the Bill to impose additional bureaucracy on the NHS in Wales. Your Lordships are aware that most of the functions listed in the amendment are currently carried out by the Welsh Health Common Services Authority; and that the various parts of that authority have been under review. During our considerations in Committee, I explained to your Lordships that the driving force behind the review was the needs of patients and of the NHS organisations which directly serve patients.
Our aim is to ensure that NHS organisations in Wales obtain the many support services that they need as cost effectively as possible. We believe that that is the best way to ensure that they, in turn, can meet patients' needs effectively. That is why my right honourable friend the Secretary of State for Wales decided to market test WHCSA's non-clinical services and explore the possibility of privatisation. That process will enable NHS trusts to provide more or better care for the same money. As my right honourable friend said in another place:
"In a world in which NHS trusts are doing more for themselves, we should not second guess them or double bank their activities through a central common services authority".
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The noble Lord, Lord Cledwyn, asked me why there had been no consultation on the matter. There has been consultation with the service users and the market-testing process involves consultation with staff. I shall return to that aspect later.
The Welsh Office is currently considering options for market testing or privatisation of two of WHCSA's non-clinical services—estates design and maintenance and information technology. Following that consideration, in the next month or so, tenders will be invited. It is envisaged that the exercise will be completed during 1995–96. Market-testing exercises are already underway for two other functions, supplies and prescription pricing. The results should be known by early autumn. The noble Lord, Lord Elis-Thomas, raised a question in Committee about the use of the Welsh language in relation to prescription pricing services. I understand that colleagues at the Welsh Office are writing to the noble Lord on the matter.
As I made clear in Committee—and I am more than happy to reiterate it this afternoon—employees at WHCSA have made a valuable contribution and one which is much appreciated in terms of what they have done for the NHS in Wales. I well understand how unsettling such uncertainty must be for them. The process provides for consultation with staff and we hope that they will see that as an opportunity to improve the services that they provide. But handling the present process is a matter for WHCSA's own management. That is why Welsh Ministers have declined to meet staff-side representatives whose interests are best served by the proper out-working of the process itself.
I turn now to WHCSA's clinical services. I am very pleased to be able to confirm to your Lordships that my right honourable friend has now decided on the new management arrangements. His decisions were taken after full consultation with the NHS in Wales and announced to the NHS on 4th April. In the light of consultation, as the noble Lord pointed out, my right honourable friend decided that the management arrangements for the National Blood Transfusion Services (Wales) should not change for the time being; that the Artificial Limb and Appliance Services should, in general, be managed by the hospitals where they are based, but some specialist services will be centralised at a single point; and that management of the screening programme for Breast Test Wales will transfer to a single trust, while evaluation and research will be taken forward by the director with the University of Wales College of Medicine.
I believe that the noble Lord, Lord Prys-Davies, raised the question of destabilisation. During a full consultation with the NHS in Wales, many useful responses were received. The new management arrangements for Breast Test Wales and the Artificial Limb and Appliance Services will be phased in during 1995–96. The new arrangements are expected to be in place by 1st April 1996. Funds in support of those services are to be ring-fenced for the financial years 1995–96, 1996–97 and 1997–98. I believe that many of the amendments were made through the consultation process and because of it. Of course, the National Blood

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Transfusion Services will remain with WHCSA for the time being. Therefore, there should be no destabilisation.
The option appraisals for each of those services have been placed in the Library as the noble Lord, Lord Prys-Davies, requested. I cannot understand why the noble Lord says that they are not in fact there. I was informed that the appraisals had actually been placed in the Library. I shall certainly look into the matter. However, if they are not there now, I shall arrange for summaries of the consultation responses to be made available.
The amendment also suggests that the new authority should be responsible for administering health complaints. We do not see the need for such a centralised system which we believe would not be consistent with the proposals that the Government recently published for a new, streamlined NHS complaints system.
Both noble Lords, I believe, raised the question of redundancies, employment and, indeed, unemployment. It is hoped that any redundancies will be kept to an absolute minimum and that staff may be redeployed elsewhere in other areas of the NHS in Wales. Of course, there would have to be further consultation before any redundancies took place. I also believe that the Transfer of Undertakings (Protection of Employment) Regulations—commonly known as TUPE—are capable of application in that respect. It would mean that the rights of employees are protected at the point of transfer.
In conclusion, although I understand the issues that have been raised this afternoon, the Government do not believe that the amendment would help to improve the health service in Wales. We think it would introduce a rigidity and an unnecessary central bureaucracy which would only be changed by further primary legislation. Such an authority would frustrate our efforts to get the best for patients. I therefore hope that the noble Lords will withdraw their amendment.
5.30 p.m.
Lord Cledwyn of Penrhos: My Lords, we have listened carefully to the speech made by the noble Baroness. I am bound to say that I was impressed with some of the things which she said although, broadly, I was disappointed that she was unable to make the major concession. I think she is wrong in talking about rigidity in Wales. There is no rigidity in Wales. We do things in a rather more elastic way than that. If we do that, then we usually succeed. But having said that, my noble friends and I would wish to look at her speech carefully and to consider whether we might bring the matter back at Third Reading. With that in view, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 1 [Amendments]:
Lord Rea Lord Rea moved Amendment No. 7:
Page 6, line 24, after ("Authority") insert (", including administering the arrangements made in pursuance of this Act for the provision of general medical services, general dental services, general ophthalmic services and general pharmaceutical services,").
The noble Lord said: My Lords, in moving Amendment No. 7 I wish also to speak to Amendment No. 15, which covers the same ground. We looked at some of the issues referred to in this amendment when debating Amendment No. 19 in the name of the noble Baroness, Lady Gardner of Parkes, in Committee. The professions involved in primary care named in the amendment, while not opposed to the merging of FHSAs and DHAs in principle, are still concerned that nothing on the face of the Bill requires health authorities to protect and to promote the activities of primary care. They would feel more comfortable if words such as those in the amendment were included, as health authorities will have great pressure put upon them to devote increasingly large proportions of their budget to contracts for hospital services. Those pressures are still there, even if less direct, after the purchaser/provider split.
The Government have coined the phrase, "a primary healthcare led National Health Service", which of course many of us welcome. However, general practitioners are rather used to being told that, for example, they are the linchpin of the service, or the key to the success of the National Health Service, with little cash following the rhetoric. In the National Health Service Executive's Guidance on Transitional Issues to the new health authorities, the role of the new health authority, as it will be after the Act, is described in some detail. These are not transitional arrangements as such but describe what the new health authorities will do when constituted, as well as describing the steps to be taken towards achieving that.
Among other functions of the new health authorities which the document mentions are those in paragraph (b) on page 3 which states,
"developing primary care and forging constructive partnerships with all primary care professionals".
Paragraph (c) on page 4 refers to,
"administering and managing arrangements with local GPs, dentists, ophthalmic practitioners and pharmacists".
That is similar to the wording of the amendment, including the terms of service of family health services contractors.
In other parts of that guidance document reference is repeatedly made to primary care. I would not expect the words of a guidance document to be on the face of a Bill. However, the words in the amendment would remind health authorities of their obligation to those who work with and for the current family health services authorities. The guidance document from which I have quoted goes further in describing steps to be taken towards achieving a primary healthcare led NHS than does the amendment. I wonder whether in her reply the

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Minister can say whether and how the Government will ensure that the guidance is followed by health authorities. I beg to move.
Lord Carter: My Lords, my noble friend has explained the purposes of these two amendments extremely well. However, it is important to emphasise from this Front Bench that we feel there must be a clear recognition in the Bill of the role that is played in the health service by primary care. We know all about the GP being the gate-keeper and so on and we feel that wording on these lines—or indeed on the lines of Amendment No. 15 which is grouped with this amendment and concerns a report on the functions of the family health services authorities—would help to underline the crucial importance of primary care in the operation of the health service. It is often thought when one refers to the health service that it is a hospital service but I believe that the hospital budget accounts for only about 15 per cent. of the whole. The words I have referred to may not be perfect but something along those lines would at least underline and, as my noble friend said, would remind those concerned of the crucial importance of primary care in considering the functions of the new arrangements. I hope that if the Minister cannot accept the amendment she will at least be able to confirm the crucial importance of the whole of the primary care service.
Baroness Cumberlege: My Lords, while respecting greatly the distinguished medical career of the noble Lord, Lord Rea, in family doctor services, I think that he will surely recognise that the Government's aim in establishing the new health authorities is to create a single authority at local level with responsibilities across the full range of health care. This aim has been widely supported by many of your Lordships. We believe that the new authorities will deliver a better service to patients by removing artificial boundaries between primary and secondary care. Unified health authorities will be able to develop a single comprehensive health strategy for the people in their area. We expect them to secure a more sensitive balance than was possible in the past between prevention and treatment, and between primary, community and hospital-based care.
Against that background, I am not at all sure that it makes sense for the Secretary of State to report in isolation on certain functions, simply because in the past they were carried out by family health services authorities. The Secretary of State and the NHS Executive already publish a wide range of reports and, of course, health authorities, like DHAs now, will be expected to publish annual reports on their activities.
I recognise, as the noble Lord, Lord Carter, has said, that there are people who are concerned that former FHSA functions may be overshadowed in the new authorities and I am very happy to make it absolutely clear that we will not allow that to happen. The close working which already exits between some authorities has demonstrated that there need be no loss of focus on primary care in the new health authorities. Rather, the skills and knowledge of both DHAs and FHSAs are being brought together to provide a better service. I can assure your Lordships that administration of primary
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care will he a core function of health authorities, with many specific functions placed on them in primary legislation and supported by regulations. So any health authority which neglected these functions would be failing in its statutory duties.
As has already been said by the noble Lord, Lord Rea, the department issued guidance to the NHS recently on The Creation of the New Health Authorities. Your Lordships may be reassured by some of the statements in the guidance about the role of an effective health authority. For example, the guidance says that essential elements of their role include:
"developing a strategy in collaboration with GPs, providers, local people and other agencies … to meet national and local priorities … developing primary care and forging constructive partnerships with all primary care professionals … administering and managing arrangements with local GPs, dentists, ophthalmic practitioners and pharmacists".
The performance of the new authorities will be measured by how well they carry out functions like these, not just by how effectively they purchase hospital care. I hope that your Lordships accept that the Government are committed to a more primary care-led NHS and that these amendments are not necessary.
Lord Rea: My Lords, perhaps I may ask the Minister how much force the guidance that she and I have quoted has on the conduct of health authorities and what sanctions the Government have if guidance is not followed.
Baroness Cumberlege: My Lords, some of the specific functions, not the actual guidance, are placed upon health authorities through primary legislation and are supported by regulation. If an authority were to fail in those it would be contravening that legislation and failing in its statutory duty. Certainly, the department and management executive would come down very heavily on that authority.
We have found guidance to be very effective. One aspect that impresses me about the National Health Service is that when it is asked to do something it does its utmost to achieve it. One sees that not only in terms of broad strategy but in the detail of the care that is provided. There is every reason to believe that conviction exists in the health service that guidance is there to be carried out.
Lord Rea: My Lords, what the noble Baroness says has pleased me greatly. It was in order to get such a statement that I put down the amendment. I believe that many workers in primary care will be very relieved to read in the pages of Hansard what she said. I thank the Minister very much for her statement. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.45 p.m.
Lord Rea Lord Rea moved Amendment No. 8:
Page 6, line 40, at end insert:
("() The Secretary of State shall give directions with respect to the exercise of responsibilities exercised prior to the passing of the Health Authorities Act 1995 by Regional Health Authorities in

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respect of the holding of contracts of registrars and senior registrars so as to require that those responsibilities should continue to be exercised on a regional basis.").
The noble Lord said: My Lords, this amendment allows us to continue the discussion we had in Committee. I refer to Amendment No. 15 and the proceedings at cols. 1601 to 1604. The National Health Executive document Options for the Future Management of Postgraduate Medical and Dental Education was published on the same day and briefly discussed in Committee. At that time the noble Baroness said:
"It is our intention that the training programmes of registrars and senior registrars, and in the future those doctors in the proposed new unified training grade, will be managed at regional level by the postgraduate medical deans."
That was a relief. Later, she said:
"It will not be necessary for the doctors' employment contracts also to be held at regional level to safeguard the doctors' training interests. It would not be right for them to be held by the regional offices as part of the Civil Service."—[Official Report, 28/3/95: col. 1603.]
That is possibly but not necessarily so. Mine is not the only voice to express doubt about that statement. The Committee of Vice-Chancellors and Principals said:
"The CVCP would prefer to see the management of PGMDE contracted to the universities which are well used to the strict accountability requirements placed on them through the Higher and Further Education Act."
This amendment will accommodate that preference. The current contracts of junior doctors are overseen by the regional postgraduate deans who are jointly appointed by the universities and the regional health authorities. They can insist that the educational standards of junior doctors are protected. The CVCP and Royal colleges are unhappy that employment contracts will be held, as the Government suggest, at trust level, even if a lead or neutral trust continues to hold the main contract when a training programme involves rotation from one trust or health authority to another. I pointed out in Committee that it was difficult to insist on protected educational time in the face of heavy clinical demands. It would be more likely to be protected if a doctor's contract was with a body not directly concerned with service provision.
In Committee the Government put down several amendments to secure continuity of employment if junior doctors moved across trusts or health authorities during their rotation. However, those amendments were not moved. It is reasonable to ask why not. If the Government reject this amendment, the amendments, which the Government did not move, will be necessary to protect the jobs of junior doctors. If those amendments were withdrawn for a technical reason, surely it should be explained. Depending on the reply of the noble Baroness, we will have to consider whether or not those amendments, or something like them, should be introduced by this side. Of course, this will not be necessary if the noble Baroness accepts our amendment
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to keep the contracts of junior hospital doctors under one jurisdiction—the universities—through the current regional arrangements. I beg to move.
Baroness Cumberlege: My Lords, as I made clear when we discussed this in Committee, there are two important issues in relation to the contracts of registrars and senior registrars whose contracts are currently held by RHAs. First, their employment contracts need to be held elsewhere when RHAs go. Secondly, the continuity and quality of training programmes needs to be properly protected. It may be helpful if I deal first with the question of employment contracts. The Government tabled amendments to employment legislation in Committee which were relevant to these staff, among others. We did not move the amendments because we had not yet completed consultation on related issues set out in the department's discussion document on the future management of postgraduate medical and dental education. In particular, we are concerned to ensure that the new arrangements do not disadvantage doctors by breaking their continuity of employment so as to deprive them of rights under employment legislation. We are considering the means by which such protection can best be secured. Should further amendments prove necessary to achieve that, it would be our intention to table them at Third Reading.
It would not be right for the contracts of junior doctors to be held by the regional offices as part of the Civil Service. The Government have made clear that they would prefer junior doctors' employment contracts to be held by the employer, usually an NHS trust. This is consistent with the treatment of other NHS medical and non-medical staff. It is consistent with the principle that personnel issues are generally best managed at local employer level and with trust freedoms to determine the quality and type of resources they employ. Devolving contracts to employers is still a matter for discussion with the various professional bodies representing these staff.
This brings me to the second issue. I am aware that particular concern has been expressed that to transfer contracts to NHS trusts may cause problems in maintaining the required level and standards of training. A number of proposals arising from discussions with postgraduate deans were set out in the discussion document issued recently by Dr. Winyard, the medical director of the NHS Executive. The closing date for comments is today. In particular, the document suggests that there should be a network of training agreements between trainee doctors, deans and trusts. There would also be a system of service-level contracts between deans and trusts to ensure that the right environment was provided for a high standard of training delivered in a cost-effective way. Training agreements might cover matters such as the agreed balance between service and training; the level and type of specialist training to be provided; educational plans, inlcuding rotational arrangements and study leave; and arrangements for assement.
Service level contracts between deans and trusts have already been introduced in many parts of the NHS. They are a good way of ensuring that trusts continue to

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provide high quality postgraduate medical education. The safeguard they provide is reinforced by the dean's financial control over a very significant proportion of the resources involved—including 50 per cent. of the basic salary costs of full-time junior doctors. That amounts to between £300 million and £400 million nationally. I should make clear that neither training agreements nor service level contracts would require any provisions in this Bill.
We are committed to high quality medical education and training, which underpins our objective of providing high quality health care to patients. The interests of the profession, universities and postgraduate deans will be taken fully into account in developing the detailed framework for medical education and training. We will ensure that the staff concerned are treated fairly, and that continuity and quality of training is maintained.
In the light of those comments I hope that the noble Lord will withdraw his amendment.
Lord Rea: My Lords, once again I thank the noble Baroness for amplifying the Government's plans for postgraduate medical education. The Royal Colleges, the CVCP and postgraduate medical deans will want to consider carefully the statement that the noble Baroness has just made. A definite advance has been made. Without promising not to return to the matter at Third Reading, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 9:
Page 12, line 14, at end insert:
("() after that subsection insert—
"() For the purpose of ensuring the effective integration of clinical teaching and research within the National Health Service, the Secretary of State shall, in relation to any relevant committee, office or other body which he establishes to exercise any regional management function within the National Health Service, provide, following consultation with the relevant universities, that at least one member of that committee, office or body is a representative of the university medical or dental schools within that region.".").
The noble Lord said: My Lords, I rise to move the amendment standing in my name on the Marshalled List and in the names of the noble Lord, Lord Jenkin of Boding, the noble Baroness, Lady Robson of Kiddington, and the noble Baroness, Lady Jay of Paddington. The noble Lord, Lord Jenkin, who is unable to be present this afternoon, has given me permission to say that he supports fully the principles outlined in the amendment.
In the late 1960s I was a member of a regional health authority. At that time I held a consultant contract in the NHS coupled with a personal chair in the university. It became clear to me that the inter-relationship between the National Health Service on the one hand and the universities with medical and dental schools on the other was crucial and vital to the future of health services and to teaching and research in medicine, dentistry and the other health services.
When I became dean of the medical school in 1971 I was surprised when a senior government Minister expressed astonishment on learning that clinical academic staff employed by universities were heavily involved in providing clinical services to patients. In
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fact, throughout the history of the National Health Service those holding clinical contracts with universities have provided extensive services to patients. When I held the particular appointment to which I referred the clinical load that I carried was almost as great as, if not at times greater than, that of my colleagues employed wholly by the National Health Service.
Later, when I became chairman of the Education Committee of the General Medical Council, and subsequently its president, it came as a surprise to many of us in academic medicine to learn that there was no formal liaison mechanism between the then Department of Education on the one hand, responsible for the funding of the universities through the University Grants Committee, and the Department of Health on the other, responsible for providing the clinical facilities for medical and dental teaching. One of the actions that we pursued at that time, which I am glad to say was successful, was to persuade those two departments to come together. Hence a liaison committee was created under the chairmanship of the then Permanent Secretary at the Department of Health, Sir Christopher France.
That particular body has grown and its role has been extended until it is now the steering group for undergraduate medical and dental education and research. It is chaired by the current Permanent Secretary at the Department of Health.
Through that mechanism the relationships between the universities with medical and dental schools and the National Health Service have become much closer. Ten key principles outlining the basis of that relationship have been promulgated. I understand that those principles will be carried forward in the changes that result from this Health Authorities Bill.
One other factor of great importance which I learnt as the dean of a medical school was that at that time, some 25 years ago, it was regarded as inappropriate, if not illegal, for money to be transferred across the divide between the Department of Education on the one hand and the Department of Health on the other. Happily, that principle was soon breached because, as time went by, it became increasingly clear to those working in the health service that if there was an area within the health service where the standard of patient care and of research and education was not as high as it ought to be one of the best ways of improving those standards and of developing services was to create a chair or a senior academic post with supporting staff to try to raise the quality of the services in those particular medical, dental and other disciplines.
As a consequence, the Department of Health, through its regional health authorities, began a process of funding academic posts in the universities across the country, to such an extent that in some medical schools 40 per cent. of clinical academic posts are now funded by the Department of Health. That underlines the crucial importance of that inter-relationship between the NHS on the one hand and the universities with medical and dental schools on the other.
We have been given assurances that that process will continue, even when the regional structure has been changed as proposed in this Bill. We in the university sector were much reassured on reading the Hansard

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transcript of the Committee stage debate. I deeply regret that because of a professional commitment elsewhere in the United Kingdom I was unable to be present. I was very happy to read the words of the Minister when she said that:
"The Government are strongly committed to the vital partnership between the universities and the new National Health Service. We will work with them to achieve the highest standards of education and research".—[Official Report, 30/3/95; col. 1718.]
We were also much encouraged to learn, as a result of an amendment tabled at that stage, that the universities' position would be strengthened and that the Government were able to give a clear undertaking that, in regulations, they would require the health authorities whose areas include a medical or dental school to have a university representative as a non-executive member. That was a very reassuring development, and we were delighted to have that assurance.
However, that still left a serious anxiety about the position in the regions. As the Minister said:
"The regional offices are very different bodies from the old RHAs. They will not have boards on which different groups are represented. Therefore, it will not be appropriate to have a university representative within the regional office".
We fully accept that, because the regional offices will be staffed by people who are part of the National Health Service Management Executive. It would be inappropriate to have a university appointee employed in such an office. We know that there will still be a powerful university voice at national level. But surely it is not beyond the wit of man to devise a mechanism whereby universities can play a major statutory, advisory role at regional level. It is true that many of the regional directors of research and development are at present, and are likely to be in the future, distinguished academics. But they do not necessarily speak on behalf of the universities at which they have previously worked.
I was much encouraged earlier today to learn from the Minister that the regional chairmen will in future be non-executive members of the policy boards at regional level. If we were to be reassured that the university voice would be heard through an agreement that the university would have the right to appoint, in consultation, a non-executive member of the regional policy board, I believe that most of the anxieties that we feel in relation to the future would be allayed.
The postgraduate dean will be a key link between the regional office and the university. I have had the privilege of seeing the consultative document which was recently circulated. I believe that it is absolutely right that the postgraduate dean in future should be jointly appointed by a contract held on the one hand with the regional office and on the other with the university. However, it may not be necessary for the postgraduate dean to be housed in the regional office as many postgraduate deans are already provided with satisfactory accommodation in the universities, funded under the partnership with the universities which is so crucial to the future.
Those are the major concerns we have. I trust that the Minister will be able to assure us that there is a likelihood that the regional policy boards—they are concerned with the crucial, strategic developments in relation to patient care, teaching and research in which the universities play such a vital role—will be able to have a non-executive university appointee in their membership. I beg to move.
6 p.m.
Lord Addington: My Lords, the noble Lord makes an important point. Integration between universities and the health service is far closer than in virtually any other area regarding universities. The fields of activity are directly connected. The frontier of medical knowledge affects healthcare very quickly. It is appropriate that there should be such representation.
Baroness Jay of Paddington: My Lords, I support the amendment. It is unfortunate that it is necessary for the noble Lord, Lord Walton of Detchant, to bring forward such an amendment at this stage. As we discussed at Second Reading and in Committee, we are all aware of the consultation, for example, between the chairman of the CVCP, the Department of Health and others professionally involved in this area to seek to resolve the issue before the Bill reached this stage in your Lordships' House. But still it is unclear what will happen. In introducing the amendment, the noble Lord underlined this important area. It is particularly unfortunate that arrangements are still not in place.
Noble Lords will remember that in Committee I referred to the correspondence between Dr. Edwards, chairman of the CVCP, and the Secretary of State. The chairman stated that for the Department of Health to write to regional directors asking them to remember that universities should be consulted in appropriate circumstances underlined the heart of the problem. It gave no assurances about the appropriate circumstances. It left the process of consultation to the individual decision of regional directors.
Noble Lords have made an incontrovertible statement: that a formal, clear and unambiguous mechanism needs to be in place before we start the new arrangements. The noble Lord, Lord Walton, emphasised the important role of academic medicine in the higher ranks of the medical profession. As the noble Lord, Lord Addington, said, it is equally important to patients that that extremely important connection is maintained. If we are to have an effective, knowledge-based health service, as Ministers constantly tell us that we have—it is an ambition to which we all subscribe—we must ensure that the important links between academic medicine and the health service are maintained at every level so that standards of excellence are not simply maintained but continue to be improved.
Baroness Cumberlege: My Lords, we discussed a similar amendment in Committee when the noble Lord, Lord Walton, was unable to attend. I am glad that today he has been able to contribute his considerable expertise. It is recognised nationally and internationally. I am grateful for this opportunity to emphasise again the Government's commitment to the vital partnership

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between the universities and the NHS. Perhaps I may reiterate my earlier comments. We intend to continue to work closely with the universities to maintain the highest standards of education and research. We agree entirely with the noble Lord, Lord Addington, and the noble Baroness, Lady Jay, that it is a crucial link.
As the noble Lord, Lord Walton, said, the new health authorities will have membership; it will be laid down in regulations. They will be required to include a medical or dental school member on their boards as a representative and as a non-executive member.
The new regional offices will be firmly part of the Department of Health. Their advisory and liaison arrangements will be much more closely linked with the national advisory framework. The regional offices will be different from the old regional health authorities and, as the noble Lord said, it would be inappropriate for their management boards to include representatives of outside bodies. However, there will be many other links between universities and the Department of Health at regional level.
As I made clear in our previous debate, regional chairmen will have a special responsibility in this area. Perhaps I may clarify a point which the noble Lord may have misunderstood in an earlier debate. There will not be eight NHS policy boards reflected in each region. There will be one national policy board, as indeed there is now, upon which the regional chairmen will sit. But there is nothing to stop regional chairmen within their regions building any mechanisms they wish in order to strengthen those links. Indeed, that was my situation when I was regional chairman at South-East Thames. We had a clear structure that incorporated the university representatives who were not members of the health authority but had a contribution to make in that they were involved in the medical schools—the deans, and so on. So there is much opportunity there.
The postgraduate medical deans also form a strong and important link since they will be fully involved in both the regional offices and the universities. We are just completing consultation on the document which my department published last month, Options for the Future of Postgraduate Medical and Dental Education. We believe that the proposals contained in that paper can be developed to provide an effective and acceptable basis for managing postgraduate education.
We also discussed in our earlier debate the "10 key principles", referred to by the noble Lord, Lord Walton. These guide effective working relationships between the universities and the NHS, in particular at regional level. The recent report of the Higher Education Funding Councils' Joint Medical Advisory Committee found that the principles were well regarded and were seen to provide an essential point of reference at a time of change. The committee recommended that the principles should be rewritten to reflect the new NHS. That is being given active consideration at present. We shall, of course, involve the universities in any changes that are made.
Your Lordships have raised concerns about research and development. On 11th April the Government published a plan to implement the Culyer Report, Supporting Research and Development in the NHS.
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Under the new research funding system, National Health Service research and development funds are to be raised through a levy on NHS purchasers and distributed via cost-based contracts. Contracts will be for research, research facilities and service support for research. The new system will aim to target NHS research and development funds to important work of high scientific quality.
Input from people with a university research background will be essential, especially during the development stage when we are agreeing definitions of coverage and eligibility for funding. Regional offices will, of course, work closely with universities in drawing up and managing contracts for NHS funding of research.
I can assure your Lordships that research and development will remain a top priority in the new NHS. Each of the new regional offices will have a senior post of regional director of research and development. Part of their role will be to develop extensive networks so that the views of all interested bodies, particularly universities, can influence their decisions.
We are continuing to have regular and constructive discussions with the Committee of Vice-Chancellors and Principals about the changes in the Bill. Indeed, there is to be a meeting in the next few days between the CVCP and NHS Executive directors to discuss the CVCP's concerns about liaison between universities and regional offices. I am sure that those discussions will lead to an effective framework to ensure that regional offices work closely and constructively with universities. In the light of those comments, I hope that the noble Lord will withdraw his amendment.
Lord Walton of Detchant: My Lords, I am grateful, as always, to the Minister for her comprehensive reply. She has given us a number of important reassurances about the interrelationship between the universities and the NHS. Since there is to be a meeting between the Committee of Vice-Chancellors and Principals and members of the National Health Service Executive or the Government, I trust that we can await the outcome of that meeting before deciding whether to bring back further amendments at Third Reading. Incidentally, the Minister said that that meeting was to be held in the next few days. My understanding is that it has been cancelled, or at least postponed. However, we trust that it will take place in the near future.
I, like my colleagues in the universities, will read the Minister's comments carefully. The issue of regional representation or the non-representation of the regional university voice is crucial. I had not understood that the policy board would be a purely national body. I trust that the regional chairmen may be persuaded to create mini-policy boards at regional office level because of the crucial nature of the relationship and its importance to the future. However, in the light of what the Minister said, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.15 p.m.
Baroness Jay of Paddington Baroness Jay of Paddington moved Amendment No. 10:
Page 19, line 34, after ("Authority") insert ("but of whom one shall be a Chair of the Social Services Committee of a local authority in the area for which the Health Authority is to act").
The noble Baroness said: My Lords, my amendment is designed to establish a formal working relationship at board level between the new health authorities and the social services of the relevant local authorities, In a sense, it does not cover the same ground as that discussed on the previous amendment introduced by the noble Lord, Lord Walton, but is designed to try to make more precise and more formal the relationships which are vital to the work of the new health service and community care arrangements.
Noble Lords will be aware that it is the Government's aim to transfer more and more health services from hospitals, from the acute sector to the community and primary care, and that the boundaries between medical treatment and social care are becoming ever more blurred. We have seen some of the difficulties that that has caused for both health and local authorities in the past one-and-a-half years. The problems of funding and managing care in the community for the mentally ill, the disabled and the elderly, have been discussed in your Lordships' House on many occasions. Like other services they are now the joint responsibility of health and social services authorities.
In the past few years we have also seen the development of The Health of the Nation programme which crucially depends on co-operation and collaboration between, among others, local environment and education agencies and health authorities. We cannot expect to have successful "healthy alliances" on issues such as air pollution and asthma and sexual health education in schools if those responsible for the programmes are working from different parts of the social and health services and perhaps working in demarcated isolated.
Noble Lords will be aware that Clause 22(1) of the National Health Service Act 1977 places a statutory duty on health and local authorities to co-operate to secure the health and welfare of their residents. But the formal mechanism for achieving that has been through the joint consultative committees which, in my many years' experience of membership of two such committees, has always been the least satisfactory and least practically effective part of health authority work. My discussions with local authority colleagues, both past and present, suggest that they feel the same.
The amendment is designed to breathe new life into inter-agency co-operation at a formal level by bringing social services into the heart of the new health authorities. I suspect that the Minister will say in response that the Government prefer to rely on good practice and guidance to achieve co-operation. I am sure that in some places that will be enough. I am impressed, for example, by the recently published Community Care Plan for Westminster 1995/96. That local authority document is signed jointly by the director of social services from the local authority and the chief executive of the local health authority. The proposals emphasise
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the importance of their joint planning teams. Interestingly, they measure their performance against key area targets suggested by the Department of Health. The document also says that there are longer-term issues which the Department of Health has asked them to continue to address. Those include focusing on,
"developing care management; making sure that continuing care responsibilities are made clear; developing the 'enabling' role of the local authority; learning to manage the market for social care and improving collaboration between agencies".
That is obviously an example of good practice which has been largely driven by officers of the local authority and executive directors of the health authority. It depends on effective working relationships between individuals.
However, there is nothing in the new Bill and little in the guidance to ensure either that that kind of good practice continues or, perhaps in other places, gets started. The whole crucial system could collapse if particular individuals moved to other posts or there were bad personal relationships between the executive officers involved.
Surely, it would be more sensible if the relationship were formalised by making the chair of social services a member of the health authority board. Community care plans would then, in the current jargon, be jointly owned. If the Government or the Department of Health would prefer to make the local social services director an executive member of the new board, ex officio—which could be specified in regulations—we would find that satisfactory. But the important issue is to create an unavoidable requirement for health authorities and social services to work together.
There seems to be an inconsistency in the Bill of relying on good practice, for example, in that area and, as we discussed earlier, in professional representation on health authority boards; but not in other areas—particularly in regard to professional advice which we discussed in relation to Amendment No. 2. Paragraph 3 of Schedule 1 to the Bill requires health authorities to secure professional advice. The presence of the social services in the health authority is at least as important and, therefore, should be given the statutory force of the other type of advice by making the chair of the social services committee or the director of social services an integral part of the new health authorities. I beg to move.
Lord Rea: My Lords, I speak from a lifetime of work in primary healthcare in which collaboration with the social services has been absolutely crucial. That does not only apply to primary care; socio-economic conditions are absolutely crucial in governing the health status of whole communities. Nevertheless, that said, the co-operation between social services and the health service has not been as good as it should have been. The frustrations of the JCCs that my noble friend mentioned are only one part of this. Even at a lower level things have not always been as good as they should be—although, as I said in a debate last week, I have the highest respect for the integrity, motivation and dedication to work of individual social workers.
Enabling the director of social services, or someone who is nominated in his or her place, to sit in on the meetings of the health authorities and to take part in the

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discussions that lead to decisions, and to be always there to give advice from a social services point of view, would be enormously helpful in boosting the morale of the social services. It would make them feel much more as if they are true partners in integrated care, which is surely part of the new primary care led National Health Service.
Baroness Miller of Hendon: My Lords, we have made clear on a number of occasions the Government's view that membership of health authorities should primarily be decided on the basis of an individual's personal skills and qualities and not the office that they hold or the group they represent. I should first explain, however, that neither the chairmen of local authority social services committees nor any other member of a local authority is currently excluded from membership of DHAs and FHSAs. They will continue to be eligible for appointment to the new health authorities.
It is true—as the noble Baroness, Lady Jay, said—that the experience of a social services committee chairman might be valuable in many circumstances. This does not mean, however, that social services committee chairmen will necessarily possess the range of skills, qualities and experience that are necessary to serve effectively on a health authority. The duties that will fall to health authorities will be wide-ranging; many will fall outside the scope of the responsibilities of a local authority social services committee.
One of the aims of the new guidelines on the appointments process, published by the Secretary of State for Health in February, is to ensure that appointment to NHS boards is open to as wide a range of people as possible. That will enable us to continue to achieve our objective of ensuring that the NHS continues to benefit from the appointment of the best people both to health authorities and trusts.
The allocation of a non-executive appointment on health authorities to the chairmen of social services committees is in direct contradiction to the key principle of making appointments based on the merit of the individual. This principle is key to the success of the appointments process and must not be undermined.
There are other mechanisms in place to help health authorities and local authorities comply with their statutory duty of necessary co-operation. In particular, joint consultative committees of local authorities and health authorities will continue under the new NHS structure and their work will be made easier by the reduction in the number of NHS authorities at local level.
I was very sorry to hear that the noble Baroness, Lady Jay, did not have a particularly good experience of JCCs; nor indeed did the noble Lord, Lord Rea. I can say from personal experience as a former chairman of the local FHSA that we had very good experiences on our JCC and much valuable work was done on that committee, notwithstanding that the chairman of the local social services committee was not a member of the FHSA. Although it was very early days, we produced a
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joint community care plan then as well. I hope that the noble Baroness may feel that she can withdraw the amendment.
Baroness Jay of Paddington: My Lords, I am very grateful to the Minister for that reply. The whole issue of representative members of health authorities is one that we have discussed at length in relation to different amendments and at different stages of this Bill. My primary concern in introducing the amendment was to emphasise the concerns that have been expressed many times in the House about the most effective ways of developing community care, particularly in relation to the joint responsibilities for continuing care of the NHS and social services.
I suspect that, although we could no doubt dispute for several minutes or even hours about our relative experiences on joint consultative committees, some other form of mechanism will have to be developed if we are to be sure that effective working relationships between social services and health authorities can be dependent on something more formal than simply the good working relationships of individuals. However, the spirit of the amendment was, as I said, to explore my concerns about that particular relationship. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 11 not moved.]
Baroness Cumberlege Baroness Cumberlege moved Amendment No. 12:
Page 31, leave out lines 7 to 9.
The noble Baroness said: My Lords, your Lordships will recall that we debated this amendment, along with two others concerning the Local Government Finance Act, at Committee stage. As I explained during that debate, Section 28A of the Local Government Finance Act 1982 confers certain functions on the Audit Commission. The section should have been repealed by the 1990 Act. It is no longer needed because similar functions are conferred on the Audit Commission by the 1990 Act.
The set of three amendments clarified the situation by repealing Section 28A and removing a provision in the Bill which amended that section. Owing to my error, and despite the help and co-operation of the Benches opposite, the second of that group of three amendments was not moved at Committee stage. That is the amendment I have moved today. It is needed to make sense of the other two and to complete the clarification. I invite, indeed beg, your Lordships to agree this amendment. I beg to move.
Lord Carter: My Lords, this amendment gives me the chance to thank the Minister for the very helpful letter that she sent me after we discussed this amendment and the one that she failed to move. In her letter she states:
"The Government amendments tabled during Committee Stage clarify the situation by repealing section 28A and removing all references to that section from the Bill".
But of course they did not, so she has had to move this amendment.

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The Minister will remember that I was rather puzzled on reading Chapter 32 of the Local Government Finance Act 1982, having obtained a copy from the Printed Paper Office, since there was no way of telling that the Act had been amended. I have checked this with authorities. There is a difficulty for us, without the resources that the Government have, in tracking down the way in which Acts have been amended. I am told that in 18 months' time, once the computer programme is right, a system might be available. It would be helpful in instances such as this—that Act was amended twice by the Local Government Act 1989 and the National Health Service and Community Care Act 1990—if there could be a footnote or an indication in some phrase such as "as amended by Clause so-and-so of the amending Act". As I say, when one goes back to the Act itself and the chapter referred to, it is not possible to find the amendments at all because the relevant section has been amended by later Acts of Parliament. It is a lacuna in our procedures, a gap which it is hard to fill.
As the noble Baroness said, this amendment puts right a slight omission at a previous stage of the Bill.
Baroness Cumberlege: My Lords, perhaps I may take up the point that the noble Lord made. Certainly it rests with a higher authority than myself. Perhaps we could discuss that. It is a very valid point.
On Question, amendment agreed to.
Clause 3 [Preparations for reorganisation of authorities]:
Baroness Cumberlege Baroness Cumberlege moved Amendment No. 13:
Page 2, line 32, leave out ("prescribed").
The noble Baroness said: My Lords, in moving this amendment I should also like to speak to Amendment No. 14. They are both technical amendments. They relate to Clause 3 of the Bill which contains provisions to enable regional health authorities, district health authorities and family health service authorities to prepare for the reorganisation on 1st April 1996. In particular, Clauses 3(2) and 3(3) enable us to make regulations allowing DHAs and FHSAs to exercise functions jointly or on each other's behalf.
We will make regulations under these provisions to come into force as soon as the boundaries of the new health authorities have been agreed. So, for example, DHAs and FHSAs which are to merge will be able to form joint committees to plan for the first year's work of the new health authorities. The powers in Clause 3, and the regulations, will of course lapse on 1st April 1996 when DHAs and FHSAs are abolished.
All DHA and FHSA functions are to be brought together in a single body from 1st April 1996. We consider that a smooth transition will best be achieved if all DHA functions and all FHSA functions except a specified few, are made exercisable by the other bodies. But we have recently been advised by our lawyers that Clauses 3(2) and 3(3) as they stand would make that difficult. They state that the regulations will apply to "prescribed" functions. We are advised that the word "prescribed" indicates that we are expected to specify particular functions. To list all DHA functions without
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any exceptions or omissions could be considered outside the powers of the clause. We therefore wish to remove the word "prescribed" from the two subsections. I should make it clear that the regulations under this clause will not affect the legal status of DHAs and FHSAs. They will remain separate entities, each accountable for its own decisions and actions until 1st April 1996. I invite your Lordships to accept this simple amendment. I beg to move.
6.30 p.m.
Lord Carter: My Lords, I am grateful to the Minister for her explanation, because we wondered about the purpose of these amendments when they were put down.
Although the word "prescribed" is to be removed from Clause 3(2) and 3(3), it remains in Clause 3(4), which states:
"Regulations made under this section in respect of any function shall not, except in prescribed cases …"
Is there some contradiction here? Perhaps the Minister will look at it to ensure that there is no overlapping.
It is interesting that the report of the Delegated Powers Scrutiny Committee draws attention, as has the Minister, to the provision in Clause 3(10) limiting the life of the power, which ceases to have effect on 1st April 1996. It is what the Australians call a "sunset clause". It is appropriate to have a sunset clause for a sunset government.
Baroness Cumberlege: My Lords, I think I shall ignore that last comment. I understand the issue that the noble Lord has raised. Perhaps I can take it up and come back to him on that.
On Question, amendment agreed to.
Baroness Cumberlege Baroness Cumberlege moved Amendment No. 14:
Page 2, line 40, leave out ("prescribed").
The noble Baroness said: My Lords, I have spoken to this amendment. I beg to move.
On Question, amendment agreed to.
[Amendment No. 15 not moved.]
Schedule 2 [Transitional provisions and savings]:
Baroness Jay of Paddington Baroness Jay of Paddington moved Amendment No. 16:
Page 43, leave out line 3.
The noble Baroness said: My Lords, I apologise to the House if the amendment seems to be somewhat cryptic. It is designed to achieve the rather important result of preventing employees of existing regional health authorities being automatically transferred to the Civil Service and, therefore, into the direct employment of the Secretary of State.
We are particularly concerned about the future employment of the chief officers of community health councils, whose contracts of employment are at the moment held by the regional health authorities. The community health councils have a very important role as independent watchdogs in the NHS. Ministers have acknowledged that role. Many people who work in the NHS—and those who use it—feel that that role may become rather more important after the reorganisation

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and the establishment of the new health authorities, and following some of the moves towards a more centralised structure of the health service.
My concern about the employment of community health council officers was increased by the remarks of the noble Baroness, Lady Miller, in response to the earlier amendments of my noble friend Lord Carter about the gagging clauses and the new codes of openness as they apply to the health service. In reply to my noble friend's amendment, the noble Baroness, Lady Miller, said that it was appropriate that employees in the new regional offices—who will be members of the Civil Service—should be subject to the regulations which limit their ability to speak out. That was in relation to the so-called gagging clauses.
We can argue about that, but it is not relevant to the amendment. It may indeed be relevant to some of the people employed in the regional offices in a Civil Service capacity, but it is completely inappropriate to chief executives and chief officers of community health councils, whose very function is to speak out about matters in the health service.
The noble Baroness also said that employees of the regional offices would be in the Civil Service because that would bring them closer to the strategic planning and policy decisions of the Secretary of State. Although I have no doubt that many of those decisions and discussions would be of great interest to chief officers of community health councils, it really is not appropriate, either to their role or to their function, to see that as an advantage to them if they are to be employed by the new regional offices.
As they are recipients of public complaints, the community health councils are often seen by the public as independent bodies. It is very important that that should be reinforced, particularly at the moment when, as we have discussed on many occasions, there is considerable public disquiet about some of the measures being undertaken by the health service.
The relationship between the chief officers who service the community health councils, their chairmen and members, is perhaps not unlike the relationship between local authority committees and the officers who service them. The officers' advice is obviously crucial. Their particular work is important because those who sit on a CHC do so on a part-time, voluntary basis, whereas chief officers are employed full-time. They are the people who have the expertise, who disseminate information and prepare agendas, and so on, to enable their committees of volunteers to function properly.
What will happen to those officers who are employed by a regional health authority when that authority is abolished? We have sought answers to this question at several earlier stages during the passage of the Bill but we have yet to receive a precise response. If it is intended to transfer them to the new regional offices—where they might be described as "outreach workers" of the regional offices—it would be entirely inappropriate and would seriously compromise them.
It is often to a community health council that members of individual health authorities and the local public users of the health service go as a first point of reference for information or confirmation about an issue,
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particularly a complaint. If chief officers are to become outreach officers of regional offices, that will necessarily compromise their position. Certainly it will be seen as undermining their role as independent commentators, advisers and general watchdogs of the local services.
If, on the other hand, it is intended that chief executives and chief officers of CHCs will be employed by the health authority in which they are situated, or perhaps by a commissioning agency or a consortium of local trusts, that, too, would be inappropriate. It is bound to lead to allegations of collusion. It would not, for example, be possible for an officer of a community health council to be seen by members of the public as entirely independent if it was known that he was an employee of a local trust or local commissioning agency.
It would be helpful if the Minister would be a little more precise than she has been and explain what exactly has happened in terms of discussions with the community health council national bodies and other organisations representing patients' interests in the health service. Precisely how does she see this absolutely vital function continuing? There is no clear indication in the Bill of what will happen.
The purpose of the amendment is to achieve some clarity and, as I said at the beginning of my remarks, to ensure that these very independent officers—these very vital people in the structure of the new NHS—are not automatically transferred to the employment of the regional offices and, therefore, automatically become civil servants. I beg to move.
Baroness Cumberlege: My Lords, the objective of this amendment has already been debated at Committee stage under Clause 1 of the Bill. We agreed then that regional health authorities will be abolished to cut unnecessary bureaucracy and reduce waste at the centre of the NHS.
We also agreed that some functions, such as co-ordination of education and training, and supporting consortia of health authorities in purchasing specialised services, should still be performed at regional level. This means that a streamlined regional system of NHS management is still needed.
To abolish RHAs and replace them with a new set of statutorily independent bodies would simply mean the recreation of the bureaucracy we are committed to removing. Only by replacing RHAs with regional offices which are part of the Department of Health can we be sure that bureaucracy will be kept permanently under control and that the new streamlined management will work effectively. The tasks which regional offices will perform, such as monitoring the new health authorities and contributing to the development of central policies for the NHS, mean that it is appropriate that they will form part of the Civil Service. We agreed all that in the debate on Clause 1.
This amendment, which prevents the transfer of staff to the Secretary of State—that is, to the regional offices—on 1st April 1996, contradicts the agreements reached on Clause 1 in that debate. But, as the noble Baroness said—I understand now, having heard her

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speak—her amendment is confined to the future of the secretaries of community health councils. I am sure we all agree that they do a valuable job. They perform a most important task representing the interests of the public in their dealings with local National Health Service bodies. They have a well-deserved reputation for independence, authority and insight.
CHCs have a statutory responsibility to represent the interests of the community in the National Health Service. Indeed, they have the right to be consulted on any substantial changes in services to local patients. These are important safeguards which ensure that CHCs have a voice in the management of the NHS. In addition, CHCs have observer status on health authorities and the right to meet them annually.
As I made clear during our earlier debate, there will be no change in the requirements of health authorities to consult community health councils.
It is essential that community health councils speak with an independent voice. They act wholly on behalf of the local community. The Government are fully committed to maintaining that independence.
In the new system, the establishing authorities for CHCs will be the regional offices of the Department of Health. They will be responsible for providing important support and training for CHCs. But clearly, as the noble Baroness said, it would not be appropriate for officers of CHCs to be employed by the regional offices. That would mean that they would become civil servants. It could be seen as compromising their independence. So the employment contracts of staff will be held in the NHS.
The details of who will make appointments of CHC members and how those appointments will be made are still under discussion. I can assure your Lordships that the vital independence of CHCs will be protected.
Having listened to those remarks, the noble Baroness will, I hope, not press the amendment.
Baroness Jay of Paddington: My Lords, I am grateful to the Minister for those remarks. Obviously, I understand that we agreed the principle of RHA abolition at an earlier stage. As I said at the beginning of my remarks, I feared that the amendment was somewhat cryptic. I am grateful for what she said about the continuing independence of the community health councils and particularly their staff. The words she used—she said that their employment contracts will be held within the NHS —are frankly not as specific as I should have liked. I am encouraged by what she said about it not being appropriate for them to be held by the regional offices of the new health service. I understand—and we agreed—the reasons for that.
However, the Minister did not say that they would not be held by consortia of trusts or indeed of local purchasing authorities. In my view—I hope I made it clear in my remarks when proposing the amendment—that would be equally as compromising as their being employed by regional offices. I shall want to look at precisely what she said and perhaps consult outside with
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community health councils about the terms that the Minister has now expressed in her reply. At this stage I shall withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 17 not moved.]

Crown Agents Bill [H.L.]
6.45 p.m.
Report received.
Clause 1 [Vesting of property, &c. of Crown Agents in a successor company]:
Lord Judd Lord Judd moved Amendment No. 1:
Page 1, line 18, at end insert ("; and thereafter that company, and any other company to which the successor company is subsequently transferred, shall be a company limited by guarantee, in the form of a foundation committed to social and developmental objectives; and the memorandum and articles of association of that company shall contain those objectives, and shall be included in any order by the Secretary of State regarding transfer of the property, rights and liabilities of the Crown Agents or of the successor company.").
The noble Lord said: My Lords, the Minister was very keen in Committee to say that there was no need for amendments on the constitution of the future of the Crown Agents. She reiterated that the foundation that she intends to create will own all the shares in the company that will operate the Crown Agents' business. She said that the foundation will not distribute dividends to its members, and that its objectives will encompass the social, ethical and developmental principles on which the Crown Agents' business is based. She said, in fact, that this is not and will not be a trade sale.
But we on this side of the House remain deeply concerned about what the Minister did not say. She said only that that the new owner was "likely" to take the form of a company limited by guarantee. She said that the terms of the transfer of the business were not a matter for Parliament but instead the members of the foundation will need to discuss and agree with the Government the terms of transfer of the business once Parliament has agreed to the arrangements set out in the Bill. She said that members of the foundation would not be appointed by Ministers; but she failed to address the question of by whom they would be appointed and what would be the basis of legitimacy for such appointees.
In the same breath as asserting once again that what is intended will not amount to a trade sale, the Minister insisted that it was essential to ensure that full confidentiality for Crown Agents is maintained throughout the process of transfer and thereafter. She promised, not for the first time, that the proposed memorandum and articles of association would be made available to Parliament. As I see it, we are still awaiting that momentous day. But whatever information is provided by the Minister today or hereafter will no doubt be limited by the requirements of full confidentiality to which she referred.
Therefore, it is hard to know just what Parliament is to be told. So far, we have been told only what the Government intend. We have been told nothing of what they have, in fact, arranged. Frankly, we are alarmed by

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the continuing failure of the Government to be more forthcoming. When the Minister says that the terms of the transfer will be agreed with the members of the foundation once Parliament has agreed the arrangements set out in the Bill, we have to recognise that what is set out in the Bill is only the removal of accountability to Parliament, giving the power to Ministers to agree whatever terms of transfer should take their fancy. We argue that that is simply not enough.
What is the Minister's argument against including the foundation on the face of the Bill? It is only that it is unnecessary and unprecedented and would add nothing of substance to the Government's proposals. Let us just consider those points. The amendment that we propose would not so much add substance to the Government's proposals but would give them substance for the first time. The Minister's speeches on this issue have been entirely without substance, if by "substance" we are to understand firm proposals enshrined in law rather than general intentions dependent on the political priorities of the Minister, her colleagues or successors.
Our amendment is far from unnecessary. It is essential for the same reason. I fail entirely to understand why the Minister believes that it is right to stand up in this House and tell us what she intends to do, yet resists any move to confirm her intentions in even the most modest way on the face of the Bill. We have today given her yet a further opportunity to reconsider the logic and consistency of her position by withdrawing the amendment which would require Ministers to appoint members of the foundation. We have done that because we understand that she does not favour such a proposal. We only propose an amendment which contains propositions to which she says she is in any case committed. It is therefore not our amendment which is unnecessary. If the Minister intends to proceed as she said, it is her resistance to the amendment that is unnecessary and, frankly, incomprehensible.
Let me say a few words about the Minister's argument that what we propose is unprecedented. We are told that the Bill itself is unprecedented. We understand that this is not any old privatisation. There is to be no sale to the highest bidder. Any idea that this Government are ideologically driven must be the fault of the press releases from other government sources seeking to compensate for the scrapping of real privatisations elsewhere.
The foundation that Ministers say that they intend to establish is to be unique—I repeat "unique"—in the history of privatisations over the past 16 years; yet to write the foundation into the Bill designed to enable it to be set up should be at the same time opposed as unprecedented. So "unique" but "unprecedented"—that makes no sense at all.
I plead with the Minister. Clearly she still intends to avoid a trade sale and to proceed with a non-profit foundation, if she possibly can do so. I do not doubt her commitment in that respect. We support that intention. Why not accept the support of Parliament and of those of us who believe the Crown Agents too valuable a national asset to put in jeopardy? Will not the Minister
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even now accept our support in protecting the foundation from predators and write the foundation on the face of the Bill? I beg to move.
Lord Redesdale: My Lords, I support the amendment. I know that this is ground that we have covered before and I do not expect the Minister to give any further information. However, on Second Reading the Minister said that,
"as the Bill progresses, I shall explain more".—[Official Report, 28/2/95; col. 1410.]
I am afraid that I do not feel that I gained any knowledge whatever in Committee about what was progressing. Can the Minister give any indication of what progress, if any, has been made since Second Reading? If no further progress has been made, the amendment seems like a worthy safeguard which will give Parliament some indication that the Crown Agents will become a foundation in the form that the Minister described.
In Committee, the Minister used as one of her arguments the fact that it would be unique to include such provisions on the face of the Bill. However, as she said on Second Reading, the route that is taken in the Bill is interesting and unusual. Therefore, could she not go one step further and accept the amendment?
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, I congratulate the noble Lord, Lord Judd, on his persistence and ingenuity in drafting another amendment designed to put the foundation on the face of the Bill, just as the new clause that was proposed in Committee sought to do.
I understand your Lordships' wish to be fully informed about the Government's plans for the foundation. I can assure your Lordships that progress is being made although, to answer the noble Lord, Lord Redesdale, it is slow and not yet complete. I suppose that it is fair to say that I am somewhat embarrassed that I cannot provide your Lordships tonight with complete answers to your questions. Needless to say, nothing has actually happened since we discussed the Bill in Committee which makes any of the comments that I made on that occasion invalid.
The Government still intend to establish a two-tier structure with the foundation the sole owner of the operating company. The foundation will be a company limited by guarantee. I know that noble Lords would like to see that stated in the Bill. I am told that legally that is not required. I can confirm that the foundation will not distribute dividends to its members. I can confirm that it will have its social and developmental objectives clearly defined in the memorandum and articles of association. It is those that we are working on; I shall let your Lordships have details as soon as possible. It is intended that the operating company should be limited by shares and that it will be able to pass its profits to the foundation for use in pursuit of its objectives. That will in no way impair its ability to continue to uphold the high ethical standards for which the Crown Agents are valued by us all.

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In moving the amendment, the noble Lord, Lord Judd, said that he thought it was likely that the company would be limited by guarantee. I can reassure him that that will be a certainty. The noble Lord wanted to know more about the terms of transfer. That is not a matter that we can declare at this point simply because the foundation, which will be independent of government, will be the owner of the new body when the Crown Agents are transferred to it, and further work must be done with the Crown Agents before those terms of transfer become clear. I am not seeking to avoid the question which the noble Lord asked me; I am simply saying that more work has to be done before those terms of transfer can become clear.
The noble Lord asked about members of the foundation. I have said many times that the foundation will be independent of the Government, but the permanent members will comprise a core group of enduring institutions, representatives of the corporate sector, and other bodies such as non-governmental organisations concerned with developing countries and overseas aid. It is proposed that in due course a larger number of term members may also be appointed by the permanent members, but the Government will have no hand in that. However, I assure the noble Lord, Lord Judd, that, before transfer, the Government will wish to be satisfied that the founder members possess the requisite competence and integrity. If the Government were not satisfied, the transfer would be held up until they were.
In Committee, I mentioned the names of some institutions interested in becoming members of the foundation and holding shares. Perhaps I may remind your Lordships that they include notable bodies such as the British Consultants Bureau, the British and international chambers of commerce, and chartered institutes, including the Chartered Institute of Building. Once established, agreement must be reached by the Government and the foundation on the terms and conditions of the transfer to the operating company. If the foundation should decide to seek registration as a charity, I see no need for the Government to be a member of the foundation. We have not discussed that aspect tonight, but we can return to it on later amendments if your Lordships wish.
I want to make absolutely clear that the foundation's objectives must be satisfactory because the Crown Agents must be able to continue to give their overseas and, indeed, their UK clients assurances about their structure and that they will continue to operate very much as now. I believe that the membership of the Crown Agents Foundation will give that sort of assurance to clients who have been built up over the years. We must ensure that there is no disruption while the new arrangements bed down.
The noble Lord referred to the need for full confidentiality which I explained at an earlier stage. That is still necessary—even though it will not be a trade sale—to ensure that the financial structure is absolutely right for the transfer.
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The noble Lord asked about the memorandum and articles of association and when they would come to Parliament. I very much hope that they will come to Parliament early next month —or as soon as they are ready. Their preparation has already started, and I shall make them available to the House at the earliest opportunity. They will clarify the proposals dealing with the foundation's name, social and developmental objectives, the application of income to those objectives, membership provisions and the board of directors. As I indicated some moments ago, the foundation will be made up of institutions which have an enduring membership. Obviously, each institution would need to approve individuals to represent it. I believe that it is perfectly feasible and appropriate that we should write into the memorandum and articles of association of the foundation a requirement for the agreement of, say, two-thirds or even 75 per cent. of the members of the foundation before any change can be made to its memorandum and articles of association. By writing that into the original, we can safeguard the foundation in the future against adverse changes that might be attempted.
Both the noble Lord, Lord Redesdale, and the noble Lord, Lord Judd, understandably asked why, if our plans are so well developed, they are not written into the Bill. I cannot give any explanation other than that I gave in Committee, which is that it would be unprecedented to include such provisions in a Bill of this kind, and it is not necessary to do so. As soon as I have information, I shall continue to provide it to the House. I very much hope that that will happen shortly. The amendment does no more for us than the previous one, which the noble Lord, Lord Judd, knows found no more favour than, I have to tell him, this one finds tonight.
7 p.m.
Lord Judd: My Lords, naturally I thank the Minister for her reply, but I wonder whether she will think over this point again. She has once more advanced the argument that it would be unprecedented to write the information that we request on to the face of a Bill of this kind, as she said again tonight. But as I understand it, she is one of the most emphatic advocates of the principle that there has never before been a Bill of this kind; that this is not a normal privatisation; that this is a Bill to set up a foundation with a unique and special purpose.
It is because we are interested in that idea and not at all hostile to it, and we feel that it is so special and exceptional, that it would be sensible to have what is entailed on the face of the Bill. I think the Minister is well aware that she has good friends in all parts of this side of the House who want to support her and to ensure that this brave, new and exciting adventure upon which she has embarked is there for all to see and not just to hear. I just hope that by the time the Bill comes to be considered in another place the Government will have listened to the arguments put forward tonight and will have taken an opportunity to write on to the face of the Bill some of the information which we have not had available here.

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Perhaps I may add that it seems to me rather unfortunate that we should be seriously considering an enabling Bill of this kind when the Minister has volunteered that the work on what is to be done is not yet completed. I find that constitutionally worrying. If we are embarking upon an enabling Bill, there should somewhere be something definite which is being enabled, because otherwise what is it in the end that we are enabling? As the reasonable person she is, the Minister will recognise that there is a worrying point here. I hope that it can be addressed again before the Bill goes forward in another place.
I hope that the Minister will recognise that our arguments have been put forward in good faith and constructively, but, in view of all that she has said and the assurances that she has given, we would do better to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Judd Lord Judd moved Amendment No. 2:
Page 2, line 6, at end insert:
("() No order shall be made under this section unless such an order has been laid before and approved by a resolution of both Houses of Parliament.").
The noble Lord said: My Lords, the Scrutiny Committee of this House, for which we all have tremendous respect, recommended that orders issued under the Bill should be subject to a greater degree of parliamentary scrutiny than the Government have proposed. In Committee it was rightly pointed out by the noble Lord, Lord Elton, and the Minister that those recommendations applied to matters other than the transfer of ownership to a proposed foundation. That is why in our earlier amendment we on this side of the House sought to extend the principle of parliamentary scrutiny to the actual transfer.
We return now to the question of parliamentary scrutiny of the initial transfer from the existing Crown Agents Corporation to the successor company to be nominated by the Secretary of State. The noble and learned Lord, Lord Simon of Glaisdale, has been kind enough to keep me informed of his correspondence with the Minister about the scrutiny of delegated legislation, and the Minister has been equally considerate. The outcome, as noble Lords will no doubt gather, is that the Government have been prepared to concede not a whit more scrutiny and accountability than they proposed initially. I therefore feel that it is right to offer the House the option of a level of scrutiny greater than that recommended by the Scrutiny Committee, since the very moderate proposals of the Scrutiny Committee and the noble and learned Lord, Lord Simon of Glaisdale, have clearly fallen on deaf ears.
The appointment of a day for winding up of the Crown Agents and the nomination of a successor company remain the most substantial measures included in the Bill. In the absence of any other substantial proposals, it is entirely appropriate that those steps should not be taken without further examination in Parliament. We have taken the precaution of establishing the practical implications of subjecting those steps to the two forms of scrutiny available to us. The Scrutiny Committee felt that the negative resolution procedure would be sufficient for the terms of transfer
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of ownership to the successor company. In view of the Government's refusal to make any concessions to the calls for more transparency, that no longer seems to us sufficient.
In the parliamentary Session 1993–94, 1,221 statutory instruments, excluding draft statutory instruments subject to annulment, were tabled; 143 were prayed against; but only one was debated on the Floor of the other place. The last time such an order was annulled after debate was on 24th October, 1979. Therefore the negative resolution procedure results in debate on only a tiny fraction of the orders in question which are tabled, and even of the orders which are prayed against. The reality is that the chances of a measure subject to annulment being considered properly are infinitesimally small, whereas, of course, any measure requiring affirmative resolution is guaranteed consideration. I am sure noble Lords will agree that the importance of this matter is great enough even to require ministerial attendance in Parliament on a Friday afternoon.
Noble Lords will therefore understand that we on this side would be happy to support changes to the Bill along the lines recommended by the Scrutiny Committee, but we believe that Parliament should go a step further and insist on real accountability in the transfer of ownership of Crown Agents at each important stage. We therefore recommend the amendment to the House.
Perhaps I may speak briefly to Amendments Nos. 6 and 7 at the same time. I draw the attention of noble Lords to the fact that in Committee the Minister said that if it were felt necessary to have a golden share, that would be in the foundation, and that the foundation is not covered by the Bill. We have therefore brought forward these amendments in order to help the Minister find a formula for a golden share, which can apply to both the successor company and the ultimate new owner in the proposed foundation. Since the only golden share that appears to work is a majority share, that is what we have suggested in the first instance, with provision for a reduced shareholding with the consent of Parliament.
The Minister told the Committee that she would look again at the question of the intended powers to be reserved to the Secretary of State. I hope that she will now be able to tell us more. She has talked of keeping the foundation in line with its declared objectives for a period of perhaps five years. We need to know how that is to be done. We need also to know what would happen if the successor company found itself in commercial difficulty within that time. Would Ministers be prepared to see it go to the wall, or would they intervene? A golden share would allow a fairly straightforward answer to such questions. If the Minister regards such a provision as a deplorable example of the nanny state, I would in all sincerity ask her what she proposes instead.
Lord Redesdale: My Lords, I support the amendments. We covered them exhaustively in Committee. It is sad that the noble and learned Lord, Lord Simon of Glaisdale, is not here to debate them once again. It is always an interesting exchange. I realise that the affirmative and negative resolution proposals in the Bill go no further than the transfer. However, as the Minister said on Second Reading, the Secretary of State has reserved powers to enable him to ensure that no

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change can be made to the fundamental purpose. Would it not be appropriate that Parliament too should be given that power, as we have not yet had a clear indication of the detailed form of the foundation, so that we could object to the foundation once it is set up?
Baroness Elles: My Lords, I wish to comment on the contributions of the noble Lords, Lord Judd and Lord Redesdale, in trying to improve this difficult Bill. The third report of the Delegated Powers Scrutiny Committee stated that it could be possible to subject to negative rather than affirmative procedure matters that have not been spelt out in the Bill.
The Minister made it clear that there will be a foundation and named a considerable number of the considerations that will be attached to it. However, she also made it clear that not all the considerations that will attach to the foundation and to a successor company have been crystallised. I understand that she is not in a position to make the matter crystal clear on all counts, including charitable status.
I support the Minister and express my gratitude for what she has said about the foundation. I suggest that if when the Bill goes to another place certain issues have still not been covered it might be appropriate to table an amendment proposing a negative procedure because some powers may be allotted to the Secretary of State that will not have been referred to during the course of the Bill. I hope that the noble Lord, Lord Judd, will withdraw the amendment and leave the matter to a later stage of the Bill when perhaps more information will be produced by the Government.
7.15 p.m.
Baroness Chalker of Wallasey: My Lords, it is important to understand that the purpose and effect of Amendment No. 2 is to subject to the affirmative resolution procedure the orders appointing a day for the vesting of Crown Agents in the successor company under Clause 1(1) and nominating the successor company under Clause 1(2). I make that point because the matter discussed by the noble and learned Lord, Lord Simon of Glaisdale, and I and the point made in the correspondence which we both copied to the noble Lords, Lord Judd and Lord Redesdale, dealt with the order-making power in Clause 13(3). They are slightly different. I do not wish to muddle your Lordships, or to get into a muddle myself, by dealing with the matter at this moment because Amendment No. 2 does not apply in the same way. I shall concentrate on the general remarks made by the noble Lords, Lord Judd and Lord Redesdale, and by my noble friend Lady Elles. There is a difference, however legally subtle it may be.
I understand the desire to allow Parliament to look at the details of the proposals for transfer. That is what the noble Lord's amendment is all about. In Committee, I explained why an affirmative resolution procedure would be inappropriate. I know that the noble Lord, Lord Judd, does not agree with me on this matter but we considered the issue in some detail during that debate. I said—and I repeat it as a matter of consistency—that it would be unprecedented to act in this way. Enabling
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legislation is the normal way of proceeding, accepted by your Lordships' House and another place on every previous occasion, of which there have now been many, when there is a transfer from the public sector to the private sector.
In this short debate I have heard no convincing explanation of why an exception should be made in the case of Crown Agents. I am more concerned that the practical effect of introducing the affirmative resolution procedure could be damaging to the commercial interests of Crown Agents. During previous stages of the Bill I have made it abundantly clear—and I do so again now—that I will have nothing to do with anything that will damage the commercial interest or the future of Crown Agents.
We are dealing with the privatisation of a public corporation. Such things always involve complex and commercially confidential negotiations. That is why I repeat that details could not be disclosed in the way that the noble Lord has suggested. I also believe that the inevitable delay caused by the need to obtain parliamentary approval could sow seeds of doubt and uncertainty about the Government's plans or the timing of the transfer, which would adversely affect Crown Agents.
When talking about the negative procedure, which is now before us in Amendment No. 2, the noble Lord, Lord Judd, spoke of the few occasions when in another place an order is debated on the Floor of the House. He gave that as his reasoning for opting for an affirmative order. I too am well aware of the delays that take place in another place, even to debate affirmative orders. That underlines the anxiety I would have were the House to agree to the noble Lord's Amendment No. 2; that is, the delays that would be built in.
The Government's intentions should not be in doubt. On many occasions we have announced that we intend to transfer Crown Agents to an independent foundation and that that is the way forward. We have also said that we will provide as much information as possible, as soon as possible and before the transfer is completed. That is why I am determined to get on with the work that has already started on the memorandum and articles of the foundation and will make them available to Parliament. An information memorandum will be prepared for prospective foundation members and that will be made available to your Lordships and to Members of another place.
The noble Lord, Lord Judd, also asked me what would happen if the Crown Agents' business should fail. Perish the thought—it is not going to fail! He asked me whether the Government would bail it out. Perhaps I may say, first, that the Crown Agents has some 150 international clients, including my department, and provides a wide range of services. I see no reason why we should not have every confidence that the Crown Agents' foundation will have a bright future. But, as we all know, there is no guarantee of success in life in anything. That is why the management of the foundation will be the responsibility of its members and the board, who will be chosen for their experience and expertise.

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I believe that the noble Lord is wrong to talk about bailing out a privatised Crown Agents. The members of the board of the Crown Agents' foundation have to be fully responsible for ensuring the viability of the business after transfer. It would be quite wrong to expect taxpayers to bail out something which was mismanaged. I do not see that there is any risk but it is worth saying that I do not believe that it should be a responsibility for the Government and thereby for the taxpayers.
When the noble Lord proposed the amendment he talked about obtaining a clearer picture of the details of the proposed transfer. I give him an undertaking that I will prepare a paper for your Lordships and for presentation to the House of Commons Select Committee on Foreign Affairs so that there will be an opportunity to have a clear view of the proposals before the proposed transfer takes place. But beyond that I cannot go. The arguments that were used in Committee still stand and I can see no reason for proceeding with this amendment. I hope that the noble Lord will withdraw it.
Lord Judd: My Lords, again I thank the Minister for her courteous reply. It would be remiss of me not to underline the fact that what she has said on this amendment again raises an unsatisfactory constitutional question. One can only commend the Minister's candour but that candour only underlines our anxiety. She confesses that we do not yet know exactly what it is that we are being asked to enable. That is why we suggest that safeguards must exist to ensure that Parliament has the final say before the deed is done. Otherwise, by this Bill, we are enabling something to happen and we do not know what that something will be. We have the Minister's good will. I repeat almost ad nauseam—although it is not ad nauseam because I have so much regard for the Minister—that we do not doubt her intentions. But, in a democracy, it is not responsible to legislate by intention. We must legislate by substantial proposition. The point is that we do not know what is the substantial proposition. That is the first point.
I was even more troubled, as I listened to the Minister, because I would have held her out as a shining example of an exception to the arrogance of government which, in so many other realms of the current Administration, begins to disturb us all. Yet she has told the House that safeguards would lead to delay and we must not envisage that those safeguards should be insisted upon because of that delay.
We are not talking about delay or lack of delay. We wish to get right the legislation which we are enabling and we wish to fulfil our responsibilities as trustees of the nation's assets. If our arrangements in this place or the other place lead to delays, that is unfortunate but is no reason for not taking seriously our responsibilities.
I listened carefully to what the noble Baroness, Lady Elles, suggested. She is a person of so much standing and experience that what she says cannot be lightly cast aside. I am not happy about the situation, but the Bill will be considered in another place and I just hope that the Minister, for whom I have such a high regard, will live up to her high reputation for taking seriously not just the letter but the spirit of ministerial responsibility. I hope that she will ensure safeguards for the public
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interest and that before the matter reaches the other place she will find ways in which to ensure that we no longer continue with this unsavoury business of being asked to buy a pig in a poke. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 [Provisions with respect to capital structure]:
The Viscount of Oxfuird The Viscount of Oxfuird moved Amendment No. 3:
Page 2, line 10, leave out from ("be") to end of line 12 and insert ("converted into equity").
The noble Viscount said: My Lords, the fact that the Bill has progressed to this point warrants the support of us all. My noble friend has nurtured it through her department and the Treasury. It is to be hoped that we are not that far from a situation in which we can pass to the Crown Agents the organisation which they seek: a foundation which will enable them to continue to overcome the vicissitudes which inevitably lie in wait for them. Theirs is a world which cannot but have directed at it the spotlight of national and international attention. As such, they must not face the burden of penury.
This amendment again draws to your Lordships' attention the fact that this new body, created under the Bill, will not be the property of private shareholders. It will not be a British Telecom of a British Airways with the freedom to go out into the market and seek additional equity or funding. For one moment we must put ourselves into the shoes of the directors of a company. We must ask ourselves what corporate management would accept a debt of £2 million on its balance sheet under such terms and report with confidence to the shareholders that all is well. Indeed, what auditor would not seek to raise more than an eyebrow over such a situation?
With the limitations attaching to the structure of its potential foundation, the management would have every right to seek comfort in legislation, particularly in relation to the conversion of debt into equity. There is a commercial wisdom in that action and the will must somehow be found to make it a reality. I beg to move.
Lord Rea: My Lords, this amendment is grouped with Amendments Nos. 4 and 5. I shall speak to all three amendments but shall direct my remarks in particular to Amendment No. 5.
On Second Reading, the noble Viscount, Lord Oxfuird, and other noble Lords on all sides made clear their anxieties about the initial burden of debt which the successor company would be expected to carry. The amendments in the name of the noble Viscount, Lord Oxfuird, suggest one safeguard, and my Amendment No. 5 proposes another. Both have the same aim.
A month ago the Minister said that it was premature to take a decision on what should be the balance between the interests of the Crown Agents and the taxpayer. Perhaps she will now be more forthcoming. It will certainly be interesting to hear whether she agrees that a debt of no greater than 10 per cent. of the value of the Crown Agents group is in the same general area that she is considering.

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The noble Baroness said that she did not want the debt and capital structure of the new company enshrined in legislation. It is quite difficult to see what the Minister does want enshrined in legislation. I am sure that the Minister will listen to the advice of the current board of Crown Agents as to the appropriate levels to set. The board may advise and the Minister may accept that the level we propose is too high or perhaps too low. But Parliament is entitled to be concerned that we are being asked to approve whatever level of debt Ministers choose to impose.
Amendment No. 5 proposes a level of no more than 10 per cent. of current value in order to probe the Government's intentions. We wish to signal clearly our view that the initial debt imposed on the successor company should be in reasonable proportion to its assets. We must avoid a situation in which the successor company quickly founders, as we discussed on the last amendment, in the private sector because its capital structure is too weak from the beginning. Therefore, we have tabled the amendment in order to offer some protection to the successor company at the vulnerable point of privatisation. I hope that the Minister's reply will offer an assurance in regard to such protection.
Lord Redesdale: My Lords, I support the spirit of the amendments. I agree with other noble Lords when they speak of their confidence in the Minister. I have every confidence in the Minster. However, I have absolutely no confidence in the Treasury, and I am sure that it will try to get as much as it possibly can from this proposal.
I have two brief questions to ask the Minister. These amendments deal with the financial status of the Crown Agents after transfer. Is it envisaged that the £2 million debt which must be paid back to the loan fund will be paid by the Crown Agents from their employer pension contributions, because at present that fund is on a pensions holiday? Would that be used to finance the debt as opposed to being used to restructure the company? Secondly, will the Crown Agents in the future be left, after the transfer, with sufficient capital equity to carry on their work without being burdened too heavily with debt?
7.30 p.m.
Baroness Chalker of Wallasey: My Lords, we now have a most interesting group of amendments before us. I am grateful to my noble friend Lord Oxfuird for tabling Amendments Nos. 3 and 4 and to the noble Lord, Lord Rea, for tabling Amendment No. 5. I understand why the amendments have been put forward. Certainly, decisions can only be taken on the appropriate financial structure of the company when a full corporate plan has been put to us by the Crown Agents. Of course, that must be based on the needs of the business. We want to take full account of the views of the Crown Agents' board as well as the views of the Government's own financial advisers. That is why I believe that it would be premature to take a decision of such a nature at present.
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My noble friend Lord Oxfuird wants the Crown Agents to start off with a sound balance sheet; so do we. But, if his amendment were to be accepted by your Lordships, we would then find that the new Crown Agents would be launched with 100 per cent. equity capital. I regard—as, probably, does the noble Lord, Lord Judd—the setting up of the Crown Agents back in 1979 with 100 per cent. debt financing as a mistake. However, I do not believe that that means that we should go from one end of the spectrum to the other; in other words, that we should go for 100 per cent. equity. It is not a matter that we should be determining at present. I take full note of my noble friend's concerns, which I share. But I hope that he also shares my concern to ensure that the taxpayer receives value for money when the Crown Agents transfer to the private sector.
The noble Lord, Lord Rea, spoke to Amendment No. 5. I should stress that I cannot alter the response that I gave in Committee. We are all agreed that the Crown Agents should not begin their life overburdened with debt. We are determined to give them a good start. We want to give them the means to have a strong and stable structure within which to carry forward their business into the 21st century on a viable and sustainable basis.
I have explained—and I shall repeat it again—that the Government have no plans to make some great raid on the pension fund as the noble Lord, Lord Judd, seemed to think at an earlier stage. However, as a government, we have a duty to consider value for the taxpayer when we transfer assets to the private sector. That is why I maintain that it would be premature to take decisions now.
The noble Lord, Lord Redesdale, asked me about the pension fund surplus. Obviously, the surplus which allows a holiday on contributions at present is of great value to the business of the Crown Agents. However, I should underline the fact that it is certainly not directly relevant to the pensioners. As I believe the noble Lord knows, the surplus in the pension fund is the amount, as declared every three years by the actuary, not currently needed to contribute to paying the pensioners. Therefore, if there is a surplus, it does not in any way affect what it has already been decided is needed for the pensioners themselves.
There are other ways of sorting out the capital structure, but that cannot be decided until closer to the day when the transfer of the Crown Agents takes place. That is why I also believe that it would be wrong to accept Amendment No. 4 tabled in the name of my noble friend Lord Oxfuird. It could rule out one or other of a range of options for which the Bill allows. My noble friend's amendment would certainly provide for further borrowing from the NLF, but I must tell him that that power already exists under the current Act. However, it is not considered appropriate for private sector bodies to borrow from the NLF. That is why there is a provision in Clause 2 for the current debt to be repaid. Then there are the provisions in Clause 4 which would allow the Secretary of State to lend to the new Crown Agents.
Therefore, within the structure of the Bill, there is a range of options. It is not the time to rule out any options; nor is it the time to rule them in. That is why I

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know I am appearing to noble Lords tonight to be less helpful than they would wish me to be. However, it really does not help the Crown Agents to prejudge such issues. That is what we would be doing if we were to accept any of the amendments in this group. I hope, therefore, that they will be withdrawn.
The Viscount of Oxfuird: My Lords, I thank my noble friend the Minister for all that she has said on the subject. I should be most grateful if the comfort of her words could be carried from this Chamber. The first principle of total quality management is prevention and not detection. My amendments seek to prevent the Crown Agents being burdened with something which would stop them fulfilling their role as providers of a service. Let us have nothing but praise for them from Members of your Lordships' House. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 4 not moved.]
Lord Rea Lord Rea had given notice of his intention to move Amendment No. 5:
Page 2, line 15, at end insert (", such amount not to exceed ten per cent. of the value of the closing capital and reserves of the Crown Agents Group at the end of the last financial year ending before the appointed day.").
The noble Lord said: My Lords, I, too, am grateful to the Minister for her response, in which she said that she did not feel that the size of the debt should be specified, presumably because, as I understand from what she said and from the contents of the Bill, all the current debt is to be repaid. In fact, we do not know quite what that will be; indeed, it may actually be onerous.
My amendment would relate the debt that the new foundation or successor company would have to the size of its assets. Therefore, in a sense, it is more flexible than the Government's proposal. However, I believe and hope that the members of the Crown Agents will read the Minister's reply and that they will, as the noble Viscount, Lord Oxfuird, said, draw a little comfort from it.
[Amendment No. 5 not moved.]
Clause 3 [Initial Government holding in the successor company]:
[Amendment No. 6 not moved.]
Clause 4 [Government investment in securities of the successor company]:
[Amendment No. 7 not moved.]
Clause 6 [Use of "Crown Agents" as part of company name]:
Lord Rea Lord Rea moved Amendment No. 8:
Page 4, line 11, at end insert (", but only so long as any such company shall be a company limited by guarantee, in the form of a foundation committed to social and developmental objectives.").
The noble Lord said: My Lords, noble Lords may recollect that at the Committee stage we discussed the question of the title "Crown Agents". This amendment returns to that issue although the words "Crown Agents" do not as such appear in the amendment. In Committee the noble Baroness did not have a lot to say about the use of the name "Crown Agents", and the Government's reasons for including in the Bill permission for this
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name to be used by the new owners. It is not that we object to that provision being included; it is rather that we fail to see why it is possible to include this provision as to the future new owners, but it is not possible to include anything else.
The noble Baroness said that the name "Crown Agents" embodies the traditional virtues of probity, impartiality and integrity, and is recognised worldwide. However, in fact it means something more to Crown Agents' international clientele. It implies the even-handed and public spirited approach which is associated with the best traditions of British public service, and in this case it certainly implies the good will and approval of the British Crown and Government. Was retention of the name one of the issues which has been discussed with overseas governments or other clients in the negotiations which took place before the bringing forward of the Bill?
According to the noble Baroness, it is right that the name can be used by the ultimate owner of the successor company. We agree, but only if the ultimate owner is as she has outlined. Why is she not prepared to accept this point? If it is right to include the use of the title on the face of the Bill, then it must surely be right to include also the other desirable characteristics of the new owner which the noble Baroness has described. The amendment states,
"a company limited by guarantee, in the form of a foundation committed to social and developmental objectives".
Surely it must be right to be able to include on the face of the Bill those desirable characteristics. I beg to move.
7.45 p.m.
Baroness Chalker of Wallasey: My Lords, I well understand why the amendment was put down but I believe that we rather covered this point at the Committee stage. I agreed then that the Crown Agents' name is a valuable asset. It is of course recognised worldwide as the embodiment of the company's traditional virtues, as the noble Lord, Lord Rea, quoted back at me. He asked me whether the maintenance of the name was discussed with any of the overseas clients during the preparatory stages for this Bill. Because the name was never in question and because of the whole concept of having a foundation with a memorandum and articles of association, as we have described in our debates, neither of the overseas clients which we have discussed in this House had any doubt that we would continue to use the name "Crown Agents", and therefore I presume that is the reason that they did not raise it with me at any stage. What they were concerned to do was to maintain the integrity of the business and the manner of running it which we have determined should be embodied in the memorandum and articles of association for the foundation.
The virtues that we talk about with the Crown Agents will survive only if the business flourishes. It is by this Bill that we are giving Crown Agents the chance to flourish in the private sector. It is right that the name should be preserved for use by the ultimate owner of the successor company in the private sector therefore, but any name is only preserved to the extent possible under the current Companies House rules. The ultimate owner

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will be the independent foundation and it will continue to have that clear commitment to a developmental purpose. I have already made quite clear that I hope to make the detail of this available to Members of this House and another place in a few weeks' time.
Throughout this Bill—although I know that I have not yet been able to satisfy your Lordships on all the questions that have been asked—we have been willing to make as much information available to Parliament as has been decided. However, what I am not prepared to do is to indulge in speculation about what might or might not happen. That is why I do not see any virtue in attaching such an amendment to the Bill. Certainly I believe that the name is important. Certainly we believe that the whole concept of the work that Crown Agents do through a foundation for developmental purposes is fundamental to the future foundation. That is why I feel quite confident that we can manage without Amendment No. 8 and I hope that the noble Lord will feel able to withdraw it.
Lord Rea: My Lords, before the noble Baroness sits down and before I respond finally to her reply to the amendment, I hope she can answer a question. Would she anticipate, or even promise, that in the articles of association of the new foundation it will be spelt out that the foundation is committed to social and developmental objectives?
Baroness Chalker of Wallasey: My Lords, I can give an affirmative answer to that straight away. The whole purpose of the memorandum and articles of association for the foundation is to spell out those very social and developmental objectives. Therefore I do not think that there is any question of answering other than by saying "yes".
Lord Rea: My Lords, I thank the noble Baroness for that response because the statement that she has just made has confirmed what I think was not absolutely certain. It has made the putting down of this amendment worthwhile because we can now read what she has said and that will give much relief to some people who might not have been clear that that was what her intention was. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 1 [Supplementary provisions as to vesting of property, etc.]:
Lord Judd Lord Judd moved Amendment No. 9:
Page 9, line 38, at end insert:
("() Nothing in this Act affects the right of members of staff of the successor company or a subsidiary of that company to be members of a trade union of their choice, which subject to the provision of primary legislation on employment and industrial relations currently in force shall be recognised by the successor company or (as the case may be) its subsidiary for the purposes of—

(a) the settlement by negotiation of terms and conditions of employment of persons employed by such a company;

(b) the resolution of trade disputes;

(c) the promotion and encouragement of measures to improve efficiency, in any respect, in the carrying on of the activities of such a company; and

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(d) the discussion of other matters of mutual interest to such a company and a trade union representing its employees.").

The noble Lord said: My Lords, we have tabled this amendment in recognition of the excellent provision in the Crown Agents Act which this Bill is intended to repeal. The 1979 Act provides for full participation by Crown Agents' staff and their trade union representatives. I am confident that both management and staff would agree that industrial relations have generally benefited from a positive legislative framework and a willingness to consult on both sides. It is this that we are anxious to maintain.
The Bill contains assurances about pension rights and regarding the Transfer of Undertakings (Protection of Employment) Regulations 1981, which we welcome. It is important that staff should know that both their terms of employment and their future pension benefits will be protected on the appointed day. We are, however, concerned that they should enjoy the same assurances about their future terms and conditions while they are in the employ of the new owners of the successor company. It is those provisions which this amendment is designed to underwrite. Once again the need for such protection of free collective bargaining does not arise from any express, or indeed feared, ill intention on the part of either the present Minister or the present management of the Crown Agents. It arises from the uncertainty, which remains after the exchanges this evening, about the future constitution and direction of the ultimate owners of the successor company, which the Government continue to refuse to include on the face of the Bill.
Therefore, we are anxious to know what discussions the Minister has had with prospective members of the proposed foundation, including current members of the Crown Agents board, about future trade union rights and intentions with regard to recognition. It would be good to have her observations on exactly what consultations had taken place. As a matter of principle, those who have taken up employment as public servants should continue to have the right to be represented by a union of their choice. There should be no question of any change being imposed as part of the privatisation process. We very much look forward to hearing what the Minister has to say in this regard. I beg to move.
Baroness Chalker of Wallasey: My Lords, I have always shared the opinion of the noble Lord, Lord Judd, that the staff of the Crown Agents are one of their most important assets. The staff of the Crown Agents both at home—in Sutton and central London—and across the world share the organisation's commitment to development. The continuity of experience is vital to their future. Only last week I saw the benefits of some of their work in Ghana. They continue to do the most remarkable jobs in all sorts of different circumstances across the world to assist with development.
There is nothing in the Bill that affects the application of the Transfer of Undertakings (Protection of Employment) Regulations 1981, often called TUPE. By virtue of Regulation 9 of TUPE, the continued recognition of trade unions already recognised by Crown Agents at the moment of transfer to the successor company will be secured, for the same

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matters with which they now deal. The noble Lord, Lord Judd, quite understandably, asked me about consultation with the trade unions. This is a matter for the directors of Crown Agents, not Ministers or the Government. The plans for Crown Agents have been explained to the trade unions. There is nothing to concern the noble Lord, Lord Judd, in the way he described just now. Indeed, I am slightly puzzled by his amendment. It goes much further than TUPE. His amendment would entrench recognition in perpetuity because it would require the new company to recognise any union to which any employee chose to belong, whether or not it had any significant membership among staff. The amendment would put the new Crown Agents under a much more onerous obligation than that of any other employer under general employment and industrial relations law. I do not believe that that was the noble Lord's intention. Because Crown Agents already have sensible and practical procedures for staff consultation which have served them very well over the years, I see no reason to change them. Just as senior management meet the recognised trade unions to discuss these plans, so they also discuss the whole spectrum of issues that concern conditions of service. I know from comments made to me by staff that they go to great lengths to involve staff, not simply on the bread and butter issues of recruitment, hours of work, tenure, remuneration and superannuation, but, much more importantly, in using the ideas and experience of staff and to involve them in the responsibility of running an efficient and successful modern business.
That this particular amendment has been tabled comes as some surprise to me. I do not believe that it is sensible, necessary or indeed practical. It may require the successor company to recognise an indefinite number of trade unions. As in the case of other employers, I believe that Crown Agents management must have the discretion to make the arrangements most appropriate to their business, including matters such as staff representation and consultation.
I also see no reason why Crown Agents will not use that discretion in the best interests of both the business and staff. To have staff who work positively is good for business, and the business of Crown Agents has enjoyed very good industrial relations for many years. I
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understand that there are no proposals to alter the current arrangements for staff representation, and certainly the Government do not even envisage that Crown Agents will want to make such changes.
I hope that, with those assurances, the noble Lord, Lord Judd, will see fit to seek leave to withdraw his amendment.
Lord Judd: My Lords, I hope your Lordships will forgive me if I say the the tenor of the reply was anticipated. The Minister has said, with all sincerity, that one of the greatest assets of the Crown Agents is their staff. She has emphasised their outstanding record of commitment and loyalty. The Government have also told us that the arrangements that are to be made are intended to ensure that that national asset continues to serve the interests of the nation to greatest possible effect. Part of the framework within which that asset has developed is a very far-sighted and clearly spelt out provision for industrial relations within the organisation. It has been demonstrated that this is not just a formal legalistic provision but one that has worked in an exemplary fashion in spirit as well as letter.
What we sought to do by this amendment was to ensure that what had been central to the success and spirit of the Crown Agents, as we saw it, should be preserved in future. It would be a great shame if those who had served the Crown Agents so well and built that reputation were in any sense put into a position of anxiety.
I respect the Minister's personal goodwill. I hope that she will look carefully at this matter before the Bill goes to another place. I also hope that she will be able to demonstrate that she understands the significance of the argument I have just put forward, and that provision will be made on the face of the Bill to cover the point. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

Family Homes and Domestic Violence Bill [H.L.]
Reported from the Special Public Bill Committee with amendments.
House adjourned at one minute before eight o'clock.