Lords Sitting of 14 December 1995

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by The Lord Bishop of Birmingham.): The LORD CHANCELLOR on the Woolsack.
Lord Sempill—Sat first in Parliament after the death of his mother.

European Commission: Discipline
Lord Buxton of Alsa Lord Buxton of Alsa asked Her Majesty's Government:
How they would respond to any action by the European Commission to dismiss or diminish the career prospects of any senior official within the Commission who had expressed disagreement with European Commission policies; and what they consider to be the legal position of an official in such circumstances.
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, the Commission should ensure that its disciplinary procedures are followed fairly. The legal position of an official who breached staff regulations would depend on the terms of his or her contract and the alleged breach.
Lord Buxton of Alsa: My Lords, I thank my noble friend for her reply, which, of course, would apply in almost any circumstance in any organisation. I should be very grateful to my noble friend and to your Lordships if I were allowed to frame my further question very carefully because it is complicated. I want to cite four cases—
Noble Lords: Question!
Lord Buxton of Alsa: My Lords, I should like to ask a question covering four cases. Two distinguished employees have been sacked or are about to be sacked. There is the case of a Danish Commissioner, Mrs. Bjerregaard, who published a book which has been pulped, and there is the case of the former Leader of the Opposition, Neil Kinnock, a notable Commissioner who has apparently been silenced. Will my noble friend confirm that the President of the European Commission has the power to sack employees such as Mr. Connolly and Mr. Wilmott but does not have the power to sack commissioners, although I understand that he can take away their portfolio which is the same? Will she kindly tell us the Government's position and say whether she agrees that these manifestations add up to the emergence of a very ugly authoritarian regime?
Baroness Chalker of Wallasey: My Lords, under Articles 11, 12 and 17 of Title 2 of staff regulations, the rights and obligations of officials are clearly set out. That covers the case of Mr. Connolly, which is sub judice, to which my noble friend referred. He is right that it is not possible for the President of the Commission to sack commissioners. Only the European
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Parliament can do that and the Commission has to be sacked as a whole. So he would be sacking himself plus all the others should he do it. The whole question of staff is a very sensitive one. I would not want to comment either on the case which is sub judice or on the other case at this time. The best thing to do is for me to write to my noble friend; otherwise the House will be delayed in a way which I think is unacceptable at Question Time.
Lord Jenkins of Hillhead: My Lords, in relation to the case of Mr. Connolly, on which the Question appears to be primarily pegged, will the noble Baroness be a little sceptical of the phrase "senior official" which was bandied about by The Times in particular as though Mr. Connolly were a permanent secretary? He is in fact an A4, which means he is somewhere between a principal and an assistant secretary in old Whitehall parlance. Secondly, can the noble Baroness tell us what she thinks would have been the promotion prospects of a middle grade Treasury or Foreign Office official in, shall we say, the heyday of Lady Thatcher's power, who had taken time off without permission to write a book totally opposed to the policies of the then government? Having said that, perhaps I may finally add that I would urge my successors in the Commission to appreciate the virtue of tolerance. Martyrs, even if not very saintly ones, are rarely worth making.
Baroness Chalker of Wallasey: My Lords, the noble Lord is right to say that Mr. Connolly, who worked for the European Commission, was a medium ranking official. But please let us not start throwing aspersions on people of principal and assistant secretary level. They are of excellent value in briefing Ministers so I shall not go along with the noble Lord's slightly negative views. As to what he said about people working for governments, of any hue, under any leader, they are, just as officials of the European Commission are, bound by the staff regulations. I shall refrain from reading out Articles 11, 12 and 17, but it is all down there!
Lord Bruce of Donington: My Lords, is the Minister aware that Mr. Bernard Connolly, who is the author of the book The Rotten Heart of Europe, which I commend to your Lordships, yesterday obtained an injunction against the Commission and is quite capable of looking after himself? The court instructed the Commission to take all necessary measures to ensure that no further information on Mr. Connolly's career, personality, opinions, health or reputation reaches the media. Is the Minister aware that people who differ from Mr. Connolly, who is a quite high ranking official, would do far better to reply to his arguments? Is she further aware that so far no refutation has been put forward to any of the contentions he made?
Baroness Chalker of Wallasey: My Lords, it would be easy in a debate, but not at Question Time, to put forward such a refutation. I have been extremely careful, in view of the injunction issued by the European Court yesterday, not to go into the detail. I have no doubt, having read parts of the book, that Mr. Connolly is perfectly able to look after himself. But I say to the noble Lord that it is important that staff regulations, whether applying to our own national Civil Service or

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in the Commission, should be regarded as the rule and those who breach those obligations must expect some retribution.
Lord Pearson of Rannoch: My Lords, although the Commission has the most unfortunate monopoly to propose legislation, can my noble friend tell the House when it was given the power to decide the interests of the Communities, to which I understand it pretends in the case of Mr. Connolly?
Baroness Chalker of Wallasey: My Lords, I do not believe that my noble friend is right about that. The Commission is going purely by the rules in Articles 11, 12 and 17.
Lord Richard: My Lords, is the Minister aware that I find the prospect of a silenced Mr. Kinnock somewhat bizarre? Does she agree that if anyone is capable of looking after himself it is the former leader of my party? Does the Minister also agree that a principal or anyone verging on being an under-secretary of the Treasury who wrote a book saying that its organisation was corrupt, that it was a fraud and that its policies were deeply damaging to the British people would find that his feet hardly touched the ground before he was out of Whitehall?
Baroness Chalker of Wallasey: My Lords, I should so agree.
Lord Buxton of Alsa: My Lords, is my noble friend aware of what Mr. Santer said? He said that there can be no room in the Commission for anyone who holds Mr. Connolly's views, and that included two commissioners?
Baroness Chalker of Wallasey: My Lords, I believe that we are getting a long way from the Question. This is a matter of discipline. I stand by what I said in my earlier answer to my noble friend.

Public Sector Borrowing Requirement
3.11 p.m.
Lord Barnett Lord Barnett asked Her Majesty's Government:
What is their estimate of the public sector borrowing requirement for 1996–97 and 1997–98.
The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, the Budget forecast of the PSBR for 1996–97 was£22.5 billion. That will represent a halving of the PSBR over the previous three years. In 1997–98 it is projected to fall even further, down to a level of£15 billion.
Lord Barnett: My Lords, the Minister overlooked telling the House that there was a £7 billion underestimate for both 1995–96 and 1996–97. I understand that because I am very much aware of what was said in Paragraph 3.58 in the Red Book—that errors and uncertainties and risks in making forecasts can apply. I am sure that the Minister will agree that, at the
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same time, these are fairly large errors, especially as the Chancellor has also forecast that by the end of the century he is hoping to have a zero PSBR.
A Noble Lord: Hear, hear!
Lord Barnett: My Lords, I am glad to hear somebody opposite saying "Hear, hear!". Can we take what I have said to mean that that is a firm forecast or is it a firm but flexible forecast in order to allow for any other changes that the Chancellor has in mind for November next year?
Lord Mackay of Ardbrecknish: My Lords, as I explained to the noble Lord the last time we had a Question similar to this one, we hope to move the PSBR towards balance towards the end of the decade. But as the noble Lord knows, the PSBR is actually the difference between two significantly large figures; namely, what the Government spend and what they take in. In fact, the errors as regards those two significantly large figures are not very great when one looks at the mathematics of error. Indeed, over a 10-year period the errors in the PSBR have run out at something like three-quarters of 1 per cent. of GDP, which comes to about£4.5 billion. That is large in comparison to the sort of figure of£22 billion which we are talking about, but it is not large when one considers the two very much larger figures which, when taken together, make up the PSBR.
Lord Clark of Kempston: My Lords, does my noble friend agree that the good economic figures that were announced yesterday—that is to say, the reduction in the basic rate and in unemployment—augur well for the future? Does he further agree that it augurs well for the future in that the PSBR will go down?
Lord Mackay of Ardbrecknish: My Lords, my noble friend is right. The PSBR is but one of a number of figures that measure the health of our economy. Other figures which do that are the inflation figures, which are showing a continuing downward trend, as my noble friend said, and the interest rate reduction announced yesterday. That will be warmly welcomed by business, commerce, housing and everyone else; except, perhaps, the party opposite.
Lord Peston: My Lords, I believe that we all know the elementary arithmetic. The error in the difference of two large figures is itself very large relative to the difference. That is the correct way of putting it! But the fact remains that the Government ask us to take these figures seriously. The difficulty, particularly having listened to the reply to my noble friend, is this: do the Government want us to take the figures seriously or not? They can either say that the difference is subject to enormous error, so forget about it, or they can say that the PSBR actually matters. I thought they took the view that it did. Does the Minister agree, therefore, that it then follows that if the PSBR turns out to be larger than projected, which it has, one cannot wriggle around and say that that is due to the errors? Does the Minister further agree that it is due either to a serious mis-forecast or a failure of policy?
Lord Mackay of Ardbrecknish: My Lords, I am grateful to the noble Lord for so eloquently putting what

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I was trying to say at the beginning of his question. He makes the point in answer to his own question, because the PSBR is important. But one can only judge it within the margins of error that operate for those figures. Perhaps I may just remind him of what his noble friend Lord Barnett said in his interesting book, Inside the Treasury. He began Chapter 12, headed "'Fiddling' the Figures", with these words:
"In retrospect it will surely be seen that what baffled and dominated the life of the 1974–79 Labour Government was what I called 'four damned letters'—the PSBR".
Lord Boardman: My Lords, as a major contributor to the PSBR and those two very large figures—public expenditure and gross domestic product; which are now at 42 per cent. this year and will be down to under 40 per cent. in two years time—is it not perhaps somewhat bizarre, if I may use that term, that the noble Lord, Lord Barnett, raises this Question because when he was Chief Secretary to the Treasury that figure was at an all-time record of 47.5 per cent.?
Lord Mackay of Ardbrecknish: My Lords, perhaps that is why the noble Lord wrote the words in his book which I have just quoted. The serious point about the PSBR, which the noble Lord, Lord Barnett, recognised as being of importance, is that it is one of the balancing figures between government spending and what they have to take in taxation. We are firmly of the view that we should get the PSBR down as low as possible and to do that one has to control government spending and yet at the same time ensure that the tax burden on people is not insufferable.
Lord Barnett: My Lords, I am glad that the Minister has seen fit to read my book and, I hope, for the second or perhaps the third time. It may be that he will quote other parts of it later. Can he now answer the simple question that I posed as my first point? Is the Chancellor's forecast for the end of the century firm but flexible or firm?
Lord Mackay of Ardbrecknish: My Lords, the Chancellor's forecast for the end of the century is obviously just that: it is a forecast. Given the margins of error that we have discussed and agreed, and which the noble Lord, Lord Peston, has put more elegantly than I did, they have to be looked at within those margins of error. That is the forecast that my right honourable friend has put forward.
Lord Ezra: My Lords, will the noble Lord indicate whether the PSBR estimate for next year is dependent on a growth in the economy of 3 per cent., as indicated by the Chancellor in his statement, which is generally regarded as being over-optimistic?
Lord Mackay of Ardbrecknish: My Lords, it remains to be seen whether or not it is over-optimistic. The forecast is dependent on a number of factors, including the rate of inflation, which, as I have already pointed out, is coming down, and on the level of growth. With the decline in interest rates yesterday—for which
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thanks are due to my right honourable friend for his sensible economic policies—we hope that growth will hit that 3 per cent.

British Rail: Privatisation
3.19 p.m.
Lord Dubs Lord Dubs asked Her Majesty's Government:
Whether they are satisfied with the performance of Mr. Roger Salmon, the franchising director responsible for the privatisation of British Rail.
The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): My Lords, yes.
Lord Dubs: My Lords, is the Minister aware that the first contracts for the privatisation of British Rail's services, which the franchising director wants to issue shortly, allow the private companies to cut services? Is it not deplorable that even before the services have been privatised, further cuts in services are already being contemplated by the franchising director?
Viscount Goschen: My Lords, the noble Lord should take on board the fact that the passenger service requirement means that for the first time there will be a guaranteed level of service. Of course, operators will be able to offer other services if they see commercial advantage in doing that, but for the very first time the guaranteed minima are laid down.
Lord Clinton-Davis: My Lords, is the Minister aware that his so-called "guarantees" are almost certainly a prescription for cuts? How does the noble Viscount explain how the franchising director could have considered as preferred bidders a company called Resurgance Railways when its managing director had been a director of a double-glazing company which had gone into liquidation owing£60,000, and was someone who had no experience at all of railways? How could the Government have considered Stagecoach, one of the biggest bus operating companies in the country, when 24 inquiries had been made by into it by the Office of Fair Trading and the Monopolies and Mergers Commission, and when one of its subsidiaries was described in August as adopting predatory and deplorable actions against the public interest? What are the Secretary of State and the franchising director up to in allowing such companies to emerge as bidders?
Viscount Goschen: My Lords, I am certainly not going to discuss the individual companies which may or may not be bidders for the individual franchises at this stage of a competitive bidding process. To do so would be irresponsible and I shall not follow the noble Lord down that route. The franchising director is following the role that was set out for him by Parliament. He is doing so and is making good progress in taking the franchising programme forward.
Lord Peyton of Yeovil: My Lords, I recognise that it will probably be well beyond the ordinary bounds of optimism to expect the franchising director to take much notice of what is said in your Lordships' House, but

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could my noble friend arrange for the franchising director to receive a small nudge and to be told that hope springs eternal?
Viscount Goschen: My Lords, I was trying to work out a clever answer to that, but I am afraid that I fail to understand exactly what my noble friend wants me to do apart from bringing to the attention of the franchising director the proceedings in your Lordships' House, which I certainly undertake to do.
Lord Clinton-Davis: My Lords, the Minister dismissed the idea that people who really have no business entering the franchise stakes should even be considered in this House, but will he perhaps consider how the French state railway could begin to acquire a stake in British Rail's rail freight network when British Rail is not permitted to hold on to it? Is not that absolute nonsense?
Viscount Goschen: My Lords, the noble Lord opposite is opposed to the whole policy of rail privatisation. He has stated his reasons on a number of occasions. We take the contrary view. We believe that it will result in better services for passengers and better value for taxpayers. Those must be the essential considerations which take us forward.
Earl Russell: My Lords, does the Minister agree that the franchising director's powers are those which he may exercise under the relevant Acts of Parliament and the secondary legislation under them, and that in case of dispute the extent of those powers is a proper question to be decided by Her Majesty's judges?
Viscount Goschen: My Lords, I believe that the noble Earl is referring to a case that is before the courts at the moment and which concerns the franchising director. Beyond recognising that that is the case and that these matters are sub judice, I do not believe that it would be appropriate for me to comment further.
Lord Dixon-Smith: My Lords, would my noble friend agree to draw to the attention of the franchising director the present performance of SNCF in considering any tenders that might be coming with regard to franchises that might be let in the future?
Viscount Goschen: My Lords, I believe that the franchising director is extremely well aware of the performance of railway companies not only in the UK but overseas also.
Lord Monkswell: My Lords, is the Minister aware that Stagecoach, which is, I believe, one of the bidders for the Great Western Railway franchise, does not have any bus operations in Hampshire? What guarantee will the Government give that trains on the Great Western Railway will actually stop in Hampshire in future?
Viscount Goschen: My Lords, as I explained earlier, the guarantees are provided in the passenger service requirement, which, for the first time, lays down the minima in terms of service provision.
Lord Berkeley: My Lords, a recent report from the rail regulator, referred to in the press at the weekend,
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referred to contracts between the franchising director and franchisees, making it clear that franchisees could cut their services if ticket demand fell, if the government subsidy dropped and, lastly and most surprisingly, if the franchisee loses more than 10 per cent. of his rolling stock through poor maintenance. Therefore, is it not in the franchisee's interests to let his rolling stock run down, take the subsidy and then run away?
Viscount Goschen: My Lords, no, I do not believe that that is the case. It is in the train operator's interests to make sure that he gets the maximum number of passengers on his services and that he provides the best possible service to his customers so that he can then go on to negotiate further service agreements after the expiry of his contract.
Lord Pearson of Rannoch: My Lords, is my noble friend—
Noble Lords: Next Question!

Carrying of Knives: Police Powers
3.26 p.m.
Baroness Gardner of Parkes Baroness Gardner of Parkes asked Her Majesty's Government:
Whether they will make it illegal throughout the United Kingdom to carry dangerous knives, as is already the case under Scottish law.?
The Minister of State, Home Office (Baroness Blatch): My Lords, it is already an offence in England and Wales to carry a knife, other than a small folding pocket knife, in public without good reason or lawful authority. The Scottish offence is almost identical.
Baroness Gardner of Parkes: My Lords, I thank my noble friend for that Answer, but in the reports of very tragic incidents which we all deeply regret, including the most recent one involving Dr Sharpey-Schafer, I have heard the police comment that in this country the carrying of a knife is not in itself an offence and that the police have to be able to prove intent. I have also heard that when people are arrested for entirely different offences and empty their pockets in a police station, dangerous knives appear regularly among their possessions, yet the police are unable to charge because they would not be able to convict without proving intent. Is that the case?
Baroness Blatch: My Lords, there are two offences. First, there is the Section 139 offence under the Criminal Justice Act 1988 whereby carrying a knife, other than a small folding penknife, in public without good reason or lawful authority is an offence. Secondly, there is a higher level offence if it can be proved that the weapon was carried with intent to cause injury. That is an even more serious offence. As I understand it, the proposal for change, supported by the police, is that both offences should be arrestable without a warrant and that the sentence for the lower level offence should be increased.
Lord Hailsham of Saint Marylebone: My Lords, I have heard it said that the Scottish regime has changed in recent years and with very beneficial results. Can my noble friend confirm that, or is it incorrect?
Baroness Blatch: My Lords, there are two aspects to the Scottish provisions. First, the powers in Scotland are almost identical to those in England, but there is only one sentence covering both offences—up to two years' imprisonment. In England and Wales at the moment there is a lower level offence with a maximum sentence of a £1,000 fine. There is also a more serious offence relating to intent to use the weapon where the sentence is up to two years' imprisonment. The intention is to increase the sentence for the lower level offence. There is very little between them. The other aspect of the Scottish system is that it has been more successfully applied, I understand, than that in England and Wales. I know that there is scope for the police here to apply the law in the way in which the law is applied in Scotland.
Lord McIntosh of Haringey: My Lords, is the Minister aware that we on these Benches share the distress and concern expressed at the recent tragedy in Maida Vale and that if any parliamentary action is required to deal with that concern either in the form of legislation or in terms of sentencing, the Government will have our entire support?
Baroness Blatch: My Lords, I very much welcome that. This is one of the issues that brings all parties together. I believe that whatever we can do in the form of strengthening the law and strengthening sentences, we should do.
Lord Campbell of Croy: My Lords, is my noble friend aware that when the Scottish legislation was being considered in Parliament a few years ago, opposition came from civil liberties groups concerned about selective use by the police of their powers of search? Does my noble friend agree that that consideration is clearly outweighed by what has happened in recent serious and tragic incidents?
Baroness Blatch: My Lords, I agree absolutely with my noble friend. I would remind him that it was only last year in the Criminal Justice Act that powers of stop and search were strengthened. Consideration of the protection of the public far outweighs the inconvenience of being stopped and searched for what might be a lethal offensive weapon.
Lord Avebury: My Lords, is not the use of knives one minor component of the vast problem of the growing propensity to resort to violence? Instead of reacting in a knee-jerk way to one incident, however tragic, should we not be considering, by the appointment of a Royal Commission, for example, the general problem of violence in our society and its etiology?
Baroness Blatch: My Lords, first, this is not reacting in a knee-jerk way. My right honourable friend the Home Secretary was already discussing with the police ways of strengthening the law in this regard. The work was already under way when that very tragic murder occurred. The scope for strengthening the lower level sentence is important. We must do as much as we
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possibly can to stop the incidence of carrying knives. What is worrying about the evidence we have so far is that younger people are resorting to carrying knives. We want to do what we can to ensure that that does not happen and to give the police the power that they need to stop, to search, and to ensure that they deter people from carrying these weapons.
Lord Elton: My Lords, did I understand my noble friend to say that both the offences of carrying dangerous knives, which she described, are not arrestable without a warrant? If so, can she be assured that many of us think it ludicrous that a policeman would have to obtain a warrant after finding someone carrying such a knife and that we would co-operate in changing the law in that respect?
Baroness Blatch: My Lords, there are some conditions under which the police can arrest without a warrant, but they have to be certain that they can prove they had good reason to do so. We are relaxing things somewhat to allow the police to make a judgment as to whether they should arrest on sight. As I understand it, that would be one of the proposals in the Bill. I know that the police will find that enormously helpful.

Broadcasting Bill [H.L.]
3.32 p.m.
The Parliamentary Under-Secretary of State, Department of National Heritage (Lord Inglewood): My Lords, I beg to introduce a Bill to make new provision about the broadcasting in digital form of television and sound programme services and the broadcasting in that form on television or radio frequencies of other services; to amend the Broadcasting Act 1990; to provide for the establishment and functions of a Broadcasting Standards Commission and for the dissolution of the Broadcasting Complaints Commission and the Broadcasting Standards Council; to make provision for the transfer to other persons of property, rights and liabilities of the British Broadcasting Corporation relating to its transmission network; and for connected purposes.
I beg to move that this Bill be now read a first time.
Moved, That the Bill be read a first time.—(Lord Inglewood.)
On Question, Bill read a first time, and to be printed.

Community Representation Bill [H.L.]
3.33 p.m.
Lord Sandys: My Lords, I beg to introduce a Bill to provide for the creation in England of parishes in unparished areas and in cities and towns where charter trustees have been constituted.
I beg to move that this Bill be now read a first time.
Moved, That the Bill be read a first time.—(Lord Sandys.)
On Question, Bill read a first time, and to be printed.

Church of Scotland (Property and Endowments) Amendment Order Confirmation Bill
Brought from the Commons, read a first time, and, pursuant to the Private Legislation Procedure (Scotland) Act 1936, deemed to have been read a second time and reported from the Committee.

Consolidation Bills: Joint Committee
3.34 p.m.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That, pursuant to Standing Order 49, the following Lords be appointed to join with a Committee of the Commons as the Joint Committee on Consolidation Bills:

Airedale, L.,

Alexander of Tunis, E.,

Dilhorne, V.,

Gisborough, L.,

Hanworth, V.,

Haskel, L.,

Lloyd of Berwick, L.,

Mallalieu, B.,

Meston, L.,

Steyn, L.,

Strabolgi, L.,

Wigoder, L.

That the Committee have the power to agree with the Committee of the Commons in the appointment of a Chairman; and
That the Minutes of Evidence taken before the Committee from time to time be printed and, if the Committee think fit, be delivered out.—(The Lord Chancellor.)
On Question, Motion agreed to, and it was ordered that a message be sent to the Commons to acquaint them therewith.

Child Support (Miscellaneous Amendments) (No. 2) Regulations 1995
Lord Mackay of Ardbrecknish: rose to move, That the draft regulations laid before the House on 16th November be approved [1st Report from the Joint Committee].
The noble Lord said: My Lords, your Lordships will recollect that the last time we met to debate the issue of child support, the fundamental principles of the child support scheme, in particular the principle that parents remain responsible for the financial support of their children, received widespread support. However, your Lordships indicated during those debates that there continued to be dissatisfaction with various aspects of the child support scheme and with the operations of the Child Support Agency.
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The regulations before the House today, in building on the provisions of the Child Support Act 1995 which noble Lords will recall we passed in the Summer, and in introducing other improvements, address some of those concerns. In particular they provide for clarification of procedures for the recovery of overpaid maintenance; simplifications and improvements to the procedures for the review of a maintenance assessment; the removal or suspension of the reduced benefit directions in certain circumstances; and compensation for reductions in maintenance resulting from changes in child support legislation. Other more technical changes include provisions for handling information, the effective dates of maintenance assessments, and some minor changes to the maintenance assessment formula, including the treatment of housing and travel to work costs.
I start with the recovery of overpaid maintenance. The inadequacy of the existing provisions to allow for the reimbursement of sums of maintenance overpaid by the absent parent has been a cause of some concern. Section 23 of the Child Support Act 1995 introduced powers allowing the Child Support Agency to make payments to reimburse absent parents in circumstances where the overpayment cannot be reasonably recouped by reducing the current maintenance assessment. Regulation 3 specifies the circumstances in which a parent with care may be required to repay such a payment.
Regulation 2 makes provision for all or part of any child support maintenance arrears, including arrears relating to a period before the assessment was made, to be offset against any income-related benefit which may have been paid in place of that maintenance. Previously, adjustments have been made by using general benefit provisions. This amendment places the power to retain the arrears in child support legislation.
I turn to the review of the maintenance assessment. One of the major advantages of the child support scheme over its court-based predecessor is the potential for regular review of the circumstances of the relevant parties and the subsequent adjustment of the amount of maintenance, where appropriate. However, the review process has proved to be more complex and therefore more time consuming than had been originally envisaged. These regulations will help to alleviate this situation. Under the existing provisions, when a change of circumstances is notified the child support officer must carry out a full review of the maintenance assessment. The process is complex and time consuming. Every detail of information has to be re-confirmed and appropriate verification supplied again and again.
The 1995 Act made provision for a limited review to be made in these circumstances. Regulations 24, 25 and 26 introduce provisions which allow the child support officer to deal with the notified change only, plus any other changes of which he is aware.
Regulations 27 to 31 make amendments to the tolerance rules which dictate whether a fresh assessment will be made following a review. A further problem with the completion of the review process has been the failure by parents to comply with requests for information.

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The 1995 Act introduced sanctions against parents who fail to comply with a review of their maintenance assessment. Absent parents face the imposition of an interim maintenance assessment at a higher punitive rate (Regulation 17) and the parent with care risks having her assessment withdrawn unless she is in receipt of benefit (Regulation 35).
Regulations 7 to 10 and 35 provide both that parents will be warned of the consequences of failing to provide this information, and for a number of technical changes to the requirement to furnish information.
There have been some minor difficulties with cross-referencing in the drafting of these regulations. We had hoped to put them right with a correction slip. However, we have now been advised that since the amendments, though minor, are slightly more than just typographical errors the correction slip can have no effect on the regulations. We are therefore currently putting together a very small package of negative regulations to achieve these amendments. They will come into force at the same time as the regulations to which they refer. Therefore, the problem of some of the numbers being out of kilter will cause no difficulty when the regulations come into effect.
Section 46 of the 1991 Act provides for the child support officer to impose a reduced benefit direction. The deduction is made where a parent with care who is in receipt of benefit refuses to co-operate in the pursuit of maintenance and does not have good cause for her failure to do so. In taking this step, such parents are passing the burden of maintenance for their children on to the taxpayers. The Government still believe that it is right to impose a sanction on parents who make this choice.
During debates on the 1995 Act, concern was expressed in your Lordships' House regarding these provisions and the difficulties caused by them to parents with care living on already restricted levels of income. We do accept that the imposition of the reduction could cause particular hardship in certain cases and exemptions for certain parents with care are introduced by these regulations. Regulation 37 allows a parent with care who is disabled or has a disabled person living with her to be exempt from a reduced benefit direction. Where a parent with care is having deductions made from her Income Support to recover arrears of housing costs, fuel or water charges allowed under Regulation 38, that regulation will allow for the suspension of the benefit penalty.
In Section 24 of the Child Support Act 1995 the Government provided for regulations to be made to enable payment of compensation to people receiving family credit or disability working allowance who would otherwise lose money as a direct result of specified child support legislation changes which reduced their maintenance.
During the passage of the Bill the Government spelt out that provision of compensation would be "broad brush" and would provide for compensation at the rate of 50 per cent. of the reduction of maintenance assessments arising from the April 1996 regulation changes. In all cases, this would result in beneficiaries
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receiving more than 50 per cent. of their maintenance reduction. As this is the earliest legislative opportunity to introduce these regulations payments have, in the interim, been made by way of ex gratia payments. Almost 5,000 payments have been made. These regulations provide a statutory framework for any future provision that might be necessary.
We have always said that we would keep the child support scheme under close scrutiny to ensure that it is fair to all; fair to children, parents with care, absent parents, second families and taxpayers. These changes, plus other reforms which we have recently introduced, will ensure that we achieve that goal. I commend the regulations to the House. I beg to move.
Moved, That the draft regulations laid before the House on 16th November be approved [1st Report from the Joint Committee].—(Lord Mackay of Ardbrecknish.)
3.45 p.m.
Baroness Hollis of Heigham: My Lords, as these regulations are within the framework of the Act, it would not be appropriate today to use them as an opportunity to open up a wider debate on the Child Support Agency. Instead, I wish to press the Minister a little on some of the points that he made. First, as regards the review process, it is administratively sensible to review the changes that have taken place rather than to start the assessment all over again. That is wise and sensible, particularly as we know that the working and effectiveness of the CSA has been subverted by, among other things, the complexity of its formula. It has accounted for the fact that approximately three-quarters of all CSA assessments have been wrong or have been incorrectly arrived at. We hope that the regulation will reduce the number. Although the Government may make much of fraud, it is worth reminding your Lordships that government administrative error, caused largely by complexity, accounts for higher overspending than any problems of fraud within the system.
The second issue that the Minister raised was overpayment on the one hand and arrears on the other; they are Regulations 2 and 3. As regards Regulation 3, the Minister referred to a clawback of overpayment when overpayment had been made to the parent with care. The assumption was that that overpayment was made by an error within the agency during the assessment. The parent with care had, in good faith, assumed that that was the appropriate sum, had adjusted her financial circumstances accordingly and had spent the money. Will the Minister assure the House that where the error has been the fault of the CSA, the CSA will not expect to chase that money on the ground that it would be unreasonable to risk the parent with care being exposed to financial hardship through no fault of her own?
The Minister is seeking to claw back arrears of maintenance. The point is that where arrears of maintenance have finally been paid, and would have been paid, to a parent with care on benefit the Treasury and not the parent with care will retain that sum. None of the money that the Treasury seeks to recover through

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the arrears procedure will go to the benefit of children. All of this is about saving the Treasury money and not lifting children out of poverty. Can we hope that if not now at least in the near future the Minister will revisit a point of common agreement on the Opposition Benches; that this Act would have had consent from more absent parents and parents with care if some element of the maintenance, however modest, was retained by the parent with care for the children, even if that parent were on benefit?
The Minister raised the issue of family credit. It is sensible to regularise the situation as regards ex gratia payments which the Minister was honourably and properly obliged to make following changes to the Act. However, perhaps we may take the opportunity to review the situation in which the six-month rule damages the parent with care? A parent's family credit may be fixed assuming maintenance of, say, £40 per week. Let us suppose that for whatever reason the former partner, the absent parent, has become unemployed, or has lost his overtime or has failed to pay maintenance. However, because the family credit was fixed at a particular figure based on a certain level of maintenance, which has fallen, and because of the six-month rule the family maintenance cannot float up to compensate.
Throughout our debates on the child support regulations and subsequent amendments, the Minister insisted that the six-month rule remained. It is a broad-brush rule; there are winners and losers, swings and roundabouts, and all is well. However, when it suits the Government to depart from a tough formula, they do so. They did so when they were the authors of the changes to the regulations and more recently when we debated the earnings top-up for childless couples who when they have a child can then swing from the six-month rule, analogous to family credit, to family credit itself. Therefore, on two recent occasions the Government have departed from the rough justice of the six-month formula. May we hope that they will do so again?
The Minister spoke of the reduced benefit sanction for parents with care who failed to co-operate with the agency in revealing details of the absent father. One of the worries that Members on the Opposition Benches had throughout the debates—and our fears have not been entirely alleviated—was that parents with care who feared domestic violence might feel pressured by financial circumstances to give information that it was unwise for them and their children to give to the agency. Will the Minister tell the House how many benefit sanctions there have been? How many have been appealed against on grounds of domestic violence and how many appeals have been accepted and the benefit restored? That information would be useful to us.
It is worth emphasising that none of the changes in the regulations makes the parent with care and her children any better off. Most are regulations either to follow changes to the Child Support Act made last summer, to help the absent parent, or they are changes to help the Treasury. There are three adult parties in the CSA social contract. These regulations benefit the party
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who has shouted the most—usually, the absent father—and the party which is powerful enough; namely, the Treasury. However, the parent with care, simply because she does not abdicate her responsibilities and does not desert and walk away from her children, receives nothing at all. Her children remain in poverty. One child in three in Britain is in poverty. These regulations will do absolutely nothing to help those children.
3.50 p.m.
Earl Russell: My Lords, these regulations give effect to a number of changes that arise from the 1995 Bill. I am sure that the Minister and the noble Baroness have memories, as I do, of many exhausting hours in Committee in this Chamber. I am glad to see that they were to some effect.
Some of the changes are minor and some are even quite good. They do not give rise to any particularly profound concerns although I was rather surprised that Mr. Mitchell, when he introduced these regulations in another place, referred to a sharp diminution of complaints about the Act. With regard to my own postbag, would that were so. I am sure that my honourable friends in another place will say the same. It may be that the proportion of complaints which is coming to my party is slightly higher than it was, but I am certainly quite unaware of any diminution.
I noted what the Minister said about a new package of negative regulations. He might perhaps agree with the remark of John Locke when he saw the proofs of his second treatise:
"Printers have ways all their own, not united by the general fairness which cements mankind".
It would be helpful if the Minister would send me a copy of the regulations when they are ready. I should be very surprised if I found anything to which I should pay further attention.
The principle of the regulations on family credit and disability working allowance is welcome and I have welcomed it before. In passing, I should thank the Child Poverty Action Group which first drew attention to the problem which the regulations are meant to rectify. However, I agree with what the noble Baroness said. Since there have been one or two breaches in the six-month rule, can that be regarded as a little less sacrosanct when people suffer from its operation?
As regards the other regulations, I should be grateful if the Minister would explain further Regulation 43(5). I am not quite sure exactly what that regulation does.
I warmly welcome Regulations 37 and 38. Those laid down that there shall be no reduced benefit direction depriving the mother of 20 per cent. of her benefit for disabled parents with care or for parents with care who are already suffering substantial deductions. That is a welcome change although, of course, it is no substitute for the abolition of the reduced benefit direction.
Those result from amendments tabled in Committee by the noble Lord, Lord Carter. That is another area in which the Opposition parties are in full agreement. I thank the Minister and I thank the noble Lord, Lord Carter, for drawing the matter to the Minister's attention.

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I was a little unhappy about the wording of Regulation 10 which requires the production of information subject to penalty within 14 days. One does not now have to be rich to be occasionally on holiday for more than 14 days. During this winter's 'flu epidemic, I have known a good many people who have been in bed ill for more than 14 days. Unless that 14-day limit is applied sensitively, it may cause quite substantial injustice.
Regulation 6, which allows the use of one's national insurance number for identification, may help to avoid some of those unfortunate cases where people were accused of fathering a child born while they were still small boys. I should be glad if that could be diminished.
But the main operative matter is the extension of interim maintenance assessments if information is not provided. In principle, I have no objection at all to that. But it depends on the CSA being able to open its post. Mr. Mitchell knows, because I have had occasion to write to him 10 times in the past six weeks, that it is very often a matter of dispute whether or not the maintenance inquiry form has been returned. Since Miss Chant will not yet have received my letter, I thank her very warmly for clearing up the last case of that kind which I referred to her.
The Government might be well advised to make it a condition for people returning information to the CSA that it be sent by recorded delivery and that a copy should be retained. As Mr. Mitchell said, it is very difficult to resolve those cases where one party says, "I did", and the other party says, "I did not", and you do not know whether the form was ever posted or whether it has gone astray. That is one major proviso that I would make as regards being happy with that regulation.
The other proviso is that the CSA could do more than it has to make its requests intelligible. The Minister will remember having a good deal of fun at the expense of NACSA during our arguments in Committee on the Bill. But the laugh can occasionally go the other way. It has recently carried out a survey of its own members as regards the issuing of interim maintenance assessments. The Minister will understand that its members are not the GSA's strongest champion but they have received interim assessments with only half the frequency of people dealing with the CSA as a whole. That seems to me to suggest that the advantage that those members have is that they understand the procedure rather better. Therefore the Government may consider, when they are facing non-co-operation, whether the problem is not an adamant determination to wreck the Act, as they are sometimes tempted to think, but a real difficulty in understanding its operations, which I frequently share.
Having said that, I welcome the main body of the regulations. I am sure that the Minister is an old enough hand not to mistake a Christmas truce for termination of the war. I still believe that within 10 years, whoever is in office, this Act will be repealed.
3.57 p.m.
Lord Mackay of Ardbrecknish: My Lords, I am grateful to the noble Baroness and to the noble Earl for the welcome that they gave to parts of the regulations.
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I noted with interest that the noble Earl has told me that I should not take today's welcome as in any way a diminution of his campaign against the Child Support Agency and his view that it should be abandoned and abolished.
I hope that I shall be able to answer a number of the points raised by the noble Baroness and the noble Earl. If I fail to cover any particular point, I shall write afterwards.
I start by turning to the general questions raised by both noble Lords; that is the question about family credit and the six-month rule. We had a lot of debate about that and I do not wish to go over it again. I believe that there are very good reasons for keeping family credit as sacrosanct as possible as regards the six-month rule. After all, the ruling does not always act to the disadvantage of the party. On a swings and roundabouts principle, I imagine that it sometimes acts to the advantage of the party. But its main advantage is that it gives the parent with care some security over what her income is likely to be from family credit over the six-month period.
We felt that it was right to soften that in relation to changes that we have made to the legislation. But I cannot hold out any hope to the noble Baroness that we should be prepared to go further in considering freeing up the six-month rule because the more we free it up, the less it will become a six-month rule and the more family credit will become a monthly, fortnightly and weekly benefit. I do not believe that that would be in the best interests of the people involved. It would certainly create a far greater administrative burden than the current situation.
Therefore, while I know that my answer will be a little disappointing to the noble Baroness and the noble Earl, I hope that they appreciate—and I believe that they do—that there are strengths in having a six-month rule. That, I suspect, is why they occasionally ask me to shift it at the margins. However, it is difficult to keep on shifting it at more and more margins. I hope that my response answers the point about the six-month rule.
As we are talking about time limits, I shall answer the noble Earl's point about the provision of information within 14 days. I can reassure the noble Earl that, while that is the rule, it will be applied sensibly. Quite clearly if a client has difficulty in supplying the information within that time, then sensible weakening, so to speak, of the extra time will be allowed; in other words, he will be given extra time in order to return the form. However, that will only apply in certain, special circumstances. I hope that that helps to reassure the noble Earl that we are not going to be absolutely rigorous on the 14-day time limit.
The noble Earl also raised a point on interim maintenance assessments. I am happy to tell the noble Earl that interim maintenance assessments which were introduced in large numbers at the beginning have been reducing very considerably. For example, this year the proportion has reduced to 15 per cent. Indeed, last month it was down to 11 per cent. which is quite a considerable reduction. I hope that that will be of some help to the noble Earl and that it will show that the

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system is actually beginning to work much better than, perhaps, it did at the beginning. I believe that there are considerable points of progress in that respect.
I should tell the noble Earl that, so far as concerns the postbag of my department, there has been a considerable decline in the number of complaints that we receive from Members of Parliament since the changes that were made earlier in the year. Indeed, the situation is very much better. Dare I say to the noble Earl that it does not surprise me when he says that he receives quite a number of complaints. The reason is that he and his party have quite a close relationship with NACSA which is an organisation designed to complain about the Child Support Agency. Therefore, if I wanted to see where complaints come from, I might easily look to that kind of combination. The fact is that, for the wider Members of the other place, the number of complaints is quite considerably down. Indeed, the progress that the agency is making in its processing and accuracy work would suggest that the complaints ought to keep reducing. Of course I do not believe that they will ever reduce to zero because there will always be some men out there who, bluntly, do not want to pay anything to the parent with care. I believe that we should live in the real world in that respect. I give way to the noble Earl.
Earl Russell: My Lords, will the Minister concede that not all complaints come from men?
Lord Mackay of Ardbrecknish: Yes, my Lords; I will concede that. However, as I am sure the noble Earl is well aware, a great majority of them do come from men.
The noble Earl asked me about Regulation 43(5). I should say that the first amendment is intended to secure the policy intention that payments under a mortgage protection policy are to be ignored to the extent that they exceed the allowance for the mortgage interest in an absent parent's protected income. The second provision is for the calculation of protected income to take account of any payment of child maintenance which an absent parent or his partner is liable to make under a foreign court order. That is the background to those two provisions.
The noble Baroness, Lady Hollis, asked me if the regulations will reduce the number of errors. I believe that I have answered that point, but I can tell the noble Baroness that the CSA is continuing to improve. Indeed, its recent performance has been very encouraging — around 70 per cent. of maintenance arrears now checked prove to be correct. The significant simplification in the review process that we are looking at today will, I believe, make the information that we need to collect easier to obtain. It will also mean that the processing of the review will be very much quicker and easier. That ought to help absolutely everyone: parents with care and absent parents.
I turn now to Regulation 3 and overpayments resulting from agency error; in other words, official error overpayments. Those are technically left to the discretion of the Secretary of State, but my honourable friend the Parliamentary Under-Secretary in the other place, Mr. Andrew Mitchell, made it very clear during the final stages of the Child Support Act 1995 that
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consideration will be given to the circumstances of overpayment. If it were wholly due to official error, it would be very unlikely that repayment would be required. So there is a discretion. I hope that that assurance will help the noble Baroness who, I believe, asked me that question.
I believe that I have answered all the questions of detail that were raised. The noble Baroness and the noble Earl indicated one or two fields in which we still do not agree; indeed, I mentioned the one about family credit. Another one is that, if the arrears come in, the parent with care may not actually benefit because, of course, she has already had her income support payments which included the theoretical amount which ought to have come in if the absent parent was paying.
I hope that the child maintenance bonus which is to be introduced from April 1997 will allow parents with care to gain up to£5 per week from maintenance in a lump sum to be paid to them when they leave income support for full-time work. I hope that that is at least a step in the direction of helping the parent with care back into work and also letting the parent with care see that some of the money coming from her absent husband or former husband does in fact benefit her when it comes to that change-over into work. I see that the noble Baroness wishes to intervene. I give way.
Baroness Hollis of Heigham: My Lords, I thank the Minister for giving way. As it looks as though the noble Lord is about to wind up his response, I should like to ask him one further question. It relates to an area of concern which has already been debated and explored in the House and for which I should like the up-to-date figures. Can the noble Lord say how many reduced benefit sanctions there have been on parents with care because of refusal to co-operate with the agency? How many of those cases have been appealed on the grounds of fear of domestic violence and how many of those appeals have been granted? That was one of the major areas of concern. We hope that our fears will be allayed, but perhaps the Minister can help us in that respect.
Lord Mackay of Ardbrecknish: My Lords, I am sorry to say that I did not mention that matter in my response. The fact is I do not have the relevant numbers to hand, and I did not want to try to speculate. However, I shall write to the noble Baroness with those figures when they become available. Having said that, I commend the regulations to the House.
On Question, Motion agreed to.

Child Support (Compensation for Recipients of Family Credit and Disability Working Allowance) Regulations 1995
Lord Mackay of Ardbrecknish: My Lords, I beg to move.
Moved, That the draft regulations laid before the House on 16th November be approved [1st Report from the Joint Committee].—(Lord Mackay of Ardbrecknish).
On Question, Motion agreed to.

Bristol Development Corporation (Area and Constitution) Order 1995
4.8 p.m.
The Minister of State, Department of the Environment (Earl Ferrers)The Minister of State, Department of the Environment (Earl Ferrers) rose to move, That the draft order laid before the House on 15th November be approved [1st Report from the Joint Committee].
The noble Earl said: My Lords, the order is required in order to wind up the Bristol Development Corporation. It revokes the 1988 order which designated the urban development area and which established the development corporation. The order will take effect in two stages. First, that part of the 1988 order, which is designated the urban development area, is to be revoked on 1st January 1996. Secondly, that part of the order which established the corporation is to be revoked on 1st April 1996.
The reason for having two stages is that on 1st January the corporation will cease to exercise any operational functions. It is, therefore, quite proper that the urban development area status should be removed on that date. The corporation will then have three months in which to produce its annual report and accounts and to wind up its affairs. On 1st April next year, therefore, the corporation will finally be dissolved.
All development corporations were intended from the outset to be limited-life bodies. They were set up in order to deal with the physical and economic regeneration of various inner-city areas. The Bristol Development Corporation has largely done what it set out to do, and that is why we are able to wind it up.
The area which the Bristol Development Corporation inherited lies to the east of the city centre. For a variety of reasons it had declined for over 40 years. The city council's own figures showed a five-fold increase in the amount of land which had been designated as derelict or underused during the period from 1965 to 1988.
The main project which the corporation had to undertake was to build a new two kilometre spine road linking the M32 and the A4. In the process of doing this, various pieces of land were "unlocked" which had been previously inaccessible and they have attracted over£200 million of private investment in the process. The road carried 22,000 vehicles a day which before had either used small, residential streets as a short cut or had crawled through the congested city centre. The road was built in record time and under budget. It caused minimal disturbance to business and none to residential properties.
Among the new developments which have been made possible by the new road is a highly successful leisure and retail complex at Avon Meads, which has brought a new lease of life to the area. A recent survey showed that 92 per cent. of visitors thought that the development was something of which Bristol could be justly proud. In the Avon Valley, the corporation has established an urban village of nearly 700 houses—many for first time buyers—with shops and a doctors' surgery. Another 400 houses are planned and are under construction.
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This riverside setting has been transformed from a derelict eyesore into the largest residential development in Bristol.
Several new business parks have been developed which have provided much needed employment. These are now places to move into, and not out of. The corporation has also laid the foundation for the future regeneration of the important Quay Point site, which is next to Temple Meads station. It has now sold the site to English Partnerships who will try to secure a development scheme which will revitalise this part of the city. By the end of this year the corporation will have reclaimed 64 hectares of previously derelict land and it will have provided 6.4 kilometres of road. It will have provided 116,000 square metres of new commercial floorspace which will have been developed. Nearly 700 houses will have been built and 4,600 jobs will have been created. For every£1 of public money which will have been invested, the private sector will have invested £3.
I think that that is a record of which the corporation can be quite rightly proud, and I congratulate its board and officials for their achievements over the past seven years.
Having created the framework for the continuing resurgence of east Bristol, it is right to wind up the corporation. It is now for others to carry on the work and to build upon the achievements which have been made by the corporation. The order is necessary in order to wind up the corporation, and I commend it to your Lordships. I beg to move.
Moved, That the draft order laid before the House on 15th November be approved.[1st Report from the Joint Committee.]—(Earl Ferrers.)
Lord Williams of Elvel: My Lords, the House will be grateful to the noble Earl for introducing this order. It is a very rare occasion on which I find myself able to support Government legislation, let alone Government subordinate legislation, but in this case we welcome the order. I do not go along wholly with the noble Earl in his description of the triumphs of the Bristol Development Corporation because, as he will be aware from debates which have taken place in another place, there are two points of view on its achievements. Nevertheless, it is right at the present time for the activities of the development corporation to be transferred partly, as I understand it—perhaps the noble Earl can answer this rather small point—to English Partnerships, but mainly to the local authorities in question. If the noble Earl can say what will be the role of English Partnerships in the future I shall be most grateful and we need not worry your Lordships any longer on this particular order.
Lord Brightman: My Lords, I had the privilege and pleasure of chairing the committee which originally considered the order which established the scheme. When I saw the Motion on the Order Paper I felt some alarm because I did not know whether the order was

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being revoked because the scheme had successfully served its purpose or whether the scheme was terminally ill. I was delighted to hear that the scheme has succeeded, as I am certain will be all the other Members of your Lordships' House who served on that committee.
Your Lordships cannot imagine the devastation which this area of Bristol presented when we first saw it on a bleak October day in 1988. There were abandoned factory sites and land so fouled by tar products that it could not safely be built upon. There was a railway line snaking over empty fields on which reposed abandoned railway trucks through which the bindweed grew profusely. There was a totally inadequate infrastructure to support any redevelopment. In the previous century Bristol was the second city in England after London. If this scheme has revived the fortunes of Bristol I for my part think that the greatest credit is due to the development corporation, to the local authority, to businesses which have migrated there and to all others concerned.
Earl Ferrers: My Lords, I am grateful to the noble Lord, Lord Williams, for saying that he supports the Government. He said that was a rare event but even rare events are greatly appreciated when they occur. Perhaps it will be the start of many. The noble Lord said that that did not represent a change of heart because he had various concerns about the measure. I knew that he would say something like that because it was incumbent upon him to do so as some members of his party are concerned about the Bristol Development Corporation. However, I consider that that body has done a wonderful job of work and has achieved all that I tried to explain to your Lordships. When it is wound up, the property which has been left—most of that is on the Quay Point project—will go to English Partnerships. The Bristol City Council will take on the planning matters on 18th December and the Secretary of State will assume responsibility for any remaining assets or liabilities on 19th December.
I was concerned that the noble and learned Lord, Lord Brightman, should have been worried when he saw the order on the Order Paper. I am quite delighted that I was able to remove his worries. I agree with the noble and learned Lord that the Bristol Development Corporation has achieved a great deal. That has not been easy for the corporation. It has turned a large area of derelict land into successful usable land. As I said, it has attracted private investment to the order of£3 for every£1 of government money. The result is that areas which were formerly derelict are now thriving and have modern houses and businesses. That has been a great success. The corporation's task has been completed and it falls to others to continue that task. I am grateful to the noble and learned Lord for his approval of this measure and for what the Bristol Development Corporation has done. I am also grateful to the noble Lord, Lord Williams, for his encouragement.
On Question, Motion agreed to.

Non-Domestic Rating (Chargeable Amounts) (Amendment No. 3) Regulations 1995
4.18 p.m.
Earl Ferrers Earl Ferrers rose to move, That the draft order laid before the House on 30th November be approved [2nd Report from the Joint Committee] .
The noble Earl said: My Lords, I beg to move that the Non-Domestic Rating (Chargeable Amounts) (Amendment No. 3) Regulations 1995 be approved.
These regulations limit the increases, after inflation has been taken into account, of the rates which will be payable in 1996–97 by businesses whose rateable values increased substantially as a result of the 1995 revaluation of domestic property. The regulations amend the principal regulations which were introduced last December, and in which we provided for transitional arrangements in order to phase in the effects of the 1995 revaluation.
Although these may appear complicated regulations, I do not need to detain your Lordships too long, for the regulations are really quite straightforward. Last year's regulations limited the annual rates increases on property which had a rateable value of £10,000 or more—or£15,000 if the property was situated in Greater London—to 10 per cent. after allowing for inflation. For small businesses the increases were limited to 7.5 per cent. and for small properties consisting of both business and living accommodation the limit was 5 per cent. The changes, which were announced by my right honourable friend the Chancellor of the Exchequer in his recent Budget Statement, result in those limits being reduced by 2.5 percentage points in 1996–97.
That is all that the regulations do. And, as it is a decrease in the business rates which will have to be paid, I am sure that that will meet with the wholehearted approval of your Lordships. The extra cost of limiting the rise in business rates in this way will be £268 million over three years. The cost will be borne entirely by the Exchequer. There will be no reduction in the payments into the non-domestic rating pool, and there will be no reduction in the amount of money which will be paid out of the non-domestic rating pool distributed to local authorities.
The lower limits which are provided for in these regulations will benefit over 1 million businesses throughout the country by reducing the bills which they would otherwise have had to pay. I am sure that this will be widely welcomed by them, as I hope it will be by your Lordships. I commend the regulations to the House.
Moved, That the draft order laid before the House on 30th November be approved [2nd Report from the Joint Committee].—(Earl Ferrers.)
Lord Williams of Elvel: My Lords, the House will again be grateful to the noble Earl for introducing an order with which, again, we can agree. It seems like the

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pre-Christmas season, but I hope that after the new year we may see other legislation on which there will be proper debate on party political issues.
The only issue in relation to the uniform business rate is whether it should be nationalised or should revert to local authorities. That is a matter of principle which has nothing to do with this order, if I may criticise myself.
In so far as the order does what the noble Earl said it does, although it is complicated and technical, we shall not oppose it. Indeed, we welcome it.
Earl Ferrers: My Lords, I am grateful to the noble Lord, Lord Williams. He said that there must be a touch of the Christmas spirit in this. Perhaps there is. I am glad that that makes him happy. However, I am a little disturbed that he looks forward to more controversial legislation after Christmas on which he can sharpen his intellectual knives.
I thought that the noble Lord would agree with the order, because it introduces a reduction in rates. I could not see how he could possibly disagree with it. I am glad that I was right in my premise and that the noble Lord welcomed the order.
On Question, Motion agreed to.

Uncertificated Securities Regulations 1995
4.23 p.m.
Lord Chesham Lord Chesham rose to move, That the draft regulations laid before the House on 16th November be approved [2nd Report from the Joint Committee].
The noble Lord said: My Lords, I beg to move that the Uncertificated Securities Regulations 1995 be approved. These regulations are necessary to allow computerised security settlement systems like CREST to operate.
The City of London is one of the three main financial centres of the world. It makes a substantial contribution to the UK economy and to exports. The equity market is an important part of the City, and the efficiency of the settlement system is an important part of the equity market.
The present paper-based system needs to be replaced to improve efficiency and reduce risk. The Stock Exchange sought to introduce a replacement system called Taurus which, as some noble Lords may remember, was abandoned in March 1993. The Bank of England then co-ordinated the responses of key City players in the setting up of the Securities Settlement Task Force, which decided on a new system called CREST. The CREST team has since been developing the system, and it is due to start testing in January and to start operating in July.
CREST will change the way in which title is transferred from one holder of securities to another. It will replace share certificates and stock transfer forms with authentic electronic instructions. However, CREST is a voluntary system. Only those who wish to use it need to give up their certificates. Detailed descriptions have been published by the CREST project team.
Both the central system itself and the networks which will carry the electronic instructions between participants and CREST will be very secure.
I turn next to the question of why the legislation needs to be altered. At present, under the Companies Act 1985 companies are obliged to issue share certificates to shareholders. They can only register the transfer of shares on receipt of a stock transfer form. It is therefore necessary to change the law to allow an electronic transfer system to work. Parliament foresaw that possibility when it passed Section 207 of the Companies Act 1989, which is an enabling provision. It allows such legislative changes to be introduced by regulations, which can thus take cognisance of advances in technology. That is the purpose of the regulations before us today.
Noble Lords will search in vain for a mention of the word CREST in the draft regulations. CREST is a good snappy name for the system under development. However, the Government believe that the legal structure must leave open the possibility of a competitor in the future. That is why the regulations use the rather dry formula of
"the Operator of a relevant system".
The operator must apply for approval under the regulations against the criteria set out under Schedule 1. It is fair to say that there is little likelihood at present of another system seeking the same approval under the regulations.
The Government intend to delegate to the Securities and Investments Board the task of considering whether CREST meets these approval criteria. SIB has already had a role in recognising CREST as a recognised clearing house under the FSA. In addition, the SIB's role is to approve CREST under the regulations.
Perhaps I may say a word about costs. In accordance with the Government's commitment to private finance, CREST will be paid for by those who use it. Sixty-eight city firms have committed capital to the project. Some noble Lords may have received complaints about the cost of CREST and in particular the costs imposed by those firms providing network links, Swift and Syntegra. The Government have explored those concerns with those who have expressed them and with the network providers themselves. As a result of those discussions the Government expect CREST, the networks and the industry between them to achieve an acceptable balance of costs between large and small users.
Another concern has been the position of the retail investor. Many of those with small shareholdings trade infrequently, if at all. For them it will probably be appropriate to remain with certificated holdings. That will remain a viable option. There will also be the possibility of sponsored membership—a CREST special— which will allow investors to keep their names on company registers and still benefit from the efficiencies of electronic settlement. I am pleased to tell the House that CREST borrowed the concept of sponsored membership from the Australian computerised system called CHESS, which I understand has been very successful.
It is now clear that CREST is expected to be introduced on time and to budget. That is a major achievement. The system will contribute to improving London's efficiency. The draft Uncertificated Securities Regulations make the minimum changes necessary to company law to allow electronic settlement. They have been the subject of extensive consultation, with positive and helpful results. All those busy with their own CREST preparations, including listed companies, will want to see what the final legislative framework looks like as soon as possible. The regulations have been the subject of an affirmative resolution in another place. I commend them to the House.
Moved, That the draft regulations laid before the House on 16th November be approved [2nd Report from the Joint Committee].—(Lord Chesham.)
4.30 p.m.
Lord Stewartby: My Lords, I thank the noble Lord for allowing me just to say a word. I am a member of the Securities and Investments Board. In that capacity I welcome the regulations. There has been close co-operation on the part of the parties involved in this process, including the Securities and Investments Board and my noble friend's department. I very much welcome the fact that the regulations are now before this House. I hope that they will be approved without difficulty.
I should like, however, to raise just one point with my noble friend. He referred to the role of the Securities and Investments Board, which has to approve CREST under the regulations, and continue to approve it. In public discussion of these issues it is sometimes difficult to differentiate between the responsibilities of the Government in the form of the Treasury, the Securities and Investments Board, and other regulatory bodies. I should find it helpful if the Minister could confirm that the Government's published public policy objectives remain the responsibility of the Government and not of the Securities and Investments Board. The Government have spelt out those public policy objectives as being the role of the retail investor; investor protection; competition; company and shareholder relationships; and London's standing as a financial centre.
I make only one other point, and in a personal capacity, not, as it were, wearing a SIB hat. There has been some anxiety expressed as to whether the CREST system will turn out to be a great blessing for the big institutions but cause problems for private and personal shareholders. I hope very much that, to the extent that it is able to do so, the Treasury will join in trying to persuade those who finalise the arrangements for costs that smaller shareholders and personal shareholders are not put at a cost disadvantage against the larger users.
Lord Graham of Edmonton: My Lords, I rise in the absence of my noble friend Lord Chandos, who is due to be here. I shall continue until he arrives, but I shall not take more than four to five minutes because I am conscious of a major social event that hangs upon the speedy conclusion of today's business in this Chamber.
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I listened carefully to the Minister's remarks. This is one of those areas in which one needs to be a practitioner in the business of managing money and securities in order to understand the intricacies. The noble Lord, Lord Stewartby, is well conscious of matters of state, not least because of his present declared involvement as a member of the Securities and Investments Board, and also as a result of his eminent position in the other place and in the Government over many years. However, even he is able to raise one or two points of unease and uncertainty.
On this side of the House we always subscribe to the strengthening of what we call consumer protection, consumers in this context being not merely little men or little women but big men and big women—in other words, the industry. We are very conscious that anything that can be done to strengthen the integrity and reputation for probity of London as a financial centre should be done. I note that the Minister says that London is one of the top three in the world. I am surprised that we are not first. Certainly, we in this country look upon the City of London as a major, if not the major, financial centre.
It all sounds necessary. It all sounds as though it has been well thought out. However, the noble Lord, Lord Stewartby, referred to the Securities and Investments Board. I recall the Financial Services Bill and the creation of, among other bodies, the SIB. Frankly, there was a time when questions were raised as to whether Parliament had got matters right. The noble Lord is not the only Member of this House to have served on securities and investments boards.
Will the Minister assist the House by saying more about the steps that he and his colleagues believe they have in place, not necessarily to police the industry and not necessarily to interfere or intervene? I am quite certain that the best advice available has been given. But at the end of the day I believe the Minister will be frank and acknowledge that he, like myself, while we try to do our duty, is nowhere near competent to deal with people who may very well be sharp. One hears about fraud; one hears about mistakes; one hears about major catastrophes. I do not want the Minister to detail instances. But clearly what we are involved in here is putting in place the best possible improvement in technique and technology. That can be good, not only for this industry and this business, but for the reputation of this country.
I hope that one of these days when we think of CREST, we do not think that we are CREST-fallen! To be crestfallen in this respect may very well be dicing, not just with the money of "big people". I am well aware that most of the funds that are managed, invested and re-invested by big operators come ultimately or originally from the money put into pension funds and other small savings.
I am satisfied. The Minister sounded very confident that the Government had got it right. When we talk about the balance of costs between the big and the small investor, what the general public want is reassurance that to the very best of its ability Parliament is protecting their interests. We are not practitioners, but we have

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access to those who know the market, who can feel the situation and have a nose for it, who can smell it. We want the Minister, undoubtedly acting on advice, to reassure the House and the country in general to the best of his ability ("his" meaning the Government's) that this minimum change is good. He described it as such and I accept that it is, although I shall not go through the regulations to find out where there is reference to "minimum change". If it is a minimum change, that is to the good. If it will provide the maximum consumer protection, that is also to the good. I know that this is the beginning, if not of a new regime, then of a new system. There will be lots of people, not just in this country but throughout the world, who wish it well. To the extent that the Government have brought forward these changes, they certainly have the approval of this side of the House. I look forward to the Minister's replies to one or two queries that I have raised.
Lord Chesham: My Lords, I thank my noble friend and the noble Lord, Lord Graham, for generally approving the legislation. I shall try to deal with questions raised. I stated that the role of the SIB is to approve CREST under the regulations. The Government's public policy objectives remain the Government's responsibility. The Government are satisfied that the objectives for investor protection, competition, company-shareholder relationships and London's standing as a financial centre are met.
Turning to the role of the retail investor, discussions are still taking place to ensure that in particular small registrars and stockbrokers are not unfairly disadvantaged by network costs. Thus, retail shareholders who use small registrars and stockbrokers will not be unfairly disadvantaged.
In response to the question from the noble Lord, Lord Graham, on transaction charges, I understand that the network now plans that the differential between large and small users should be no greater than 2:1. In talking about costs for small investors, we are talking about pence rather than pounds.
The noble Lord, Lord Graham, also asked for some comfort with regard to the protection of shareholders. The Stock Exchange is responsible for ensuring that dealings on its markets are conducted in an orderly manner, affording proper protection to investors. That has not changed. The technology that is being used for CREST is the latest technology so far available. Considerable discussion has taken place with regard to experience overseas where it has been operating for some considerable period. I am delighted to say that Australia is one of the countries involved. I am confident that the Exchange will continue to take that responsibility very seriously. The Department of Trade and Industry has always had the responsibility for investigating and, if appropriate, prosecuting cases of alleged insider dealing. I hope that I have answered the noble Lord's question.
Lord Graham of Edmonton: My Lords, before the noble Lord sits down, let me say that he has reassured me that, to the best of their ability, the Government are satisfied that they have consulted as widely as they need. The noble Lord, Lord Stewartby, from the standpoint
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of his experience and position, saw the need to ask the perfectly appropriate question of whether signals—as one might call them—have been given about the areas of danger that need to be watched. The ordinary man who invests his money trusts people to know what they are doing. To what extent have the Government, after taking advice, flagged up possibly difficult areas? Although the Minister says that the latest techniques have been used and advice taken, he knows that there are people in the world who, as soon as a new procedure appears, look to see how it can be sidestepped or obviated. Sadly, there are crooks in the City of London, as in other places.
I am grateful to the Minister for his patience. I wish to raise just one final point. I do not want him to reveal the areas of worry—perhaps I may think of worry with a capitalW—but to satisfy me that the Government are not so complacent as to believe that they have a perfect system. There is no such thing as a perfect system where money and people are concerned.
Lord Chesham: My Lords, I thank the noble Lord. I shall do my best to amplify my remarks. The point made by my noble friend was not about the security angle; it was much more about whether the public policy objectives had been totally met. I believe that I answered him when I said that discussions are still taking place regarding small shareholders—not regarding the security of small shareholders. The question was about that rather than about security.
No system will ever be perfect. But I do not believe that this system will stand still. This is the start of a system which will greatly assist matters. Enormous concern about the possibility of computer hacking and so on has been taken into account. I believe that those questions have now been answered. It will be an ongoing process. It is not standing still. As the noble Lord knows, with computers one has to keep going. One cannot just stop at any point and say, "This is fine." One has to keep going. The process will be continued.
On Question, Motion agreed to.

Company and Business Names (Amendment) Regulations 1995
4.44 p.m.
Lord Chesham Lord Chesham rose to move, That the draft regulations laid before the House on 29th November be approved [2nd Report from the Joint Committee].
The noble Lord said: My Lords, the Company and Business Names Regulations 1981 set out a list of words and expressions which a company or unincorporated business may use in its name only with the approval of the Secretary of State. These new regulations make some minor amendments to that list.
The main amendment is the addition of "Chamber of Commerce, Training and Enterprise". "Chamber of Commerce" is already listed, but mergers between chambers of commerce and training and enterprise councils (TECs) mean that we must extend the protection.
We are also taking the opportunity to make some minor deletions. We propose to delete the words "Breed", "Breeder" and "Breeding". In addition, we propose to delete the term "Nursing Home".
The amendments make some small but desirable changes. They will come into force on 1st January 1996. I commend the regulations to your Lordships. I beg to move.
Moved, That the draft regulations laid before the House on 29th November be approved [2nd Report from the Joint Committee].—(Lord Chesham.)
On Question, Motion agreed to.
House adjourned at a quarter before five o' clock.