Lords Sitting of 20 February 1996

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

"Pogs" and Children's Safety
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
Whether they are satisfied that the small toys, known as "Pogs", are safe for small children when included with foodstuffs in packets.
The Minister of State, Department of Trade and Industry (Lord Fraser of Carmyllie): My Lords, toy safety regulations require that all toys supplied in the United Kingdom must be safe—even those given away free with other products. We have no evidence that any of the "Pogs" currently on the market do not comply with safety legislation; nor are we aware of any incidents of young people mistaking the "Pogs" supplied with food for a foodstuff.
Lord Campbell of Croy: My Lords, I am grateful to my noble and learned friend for that reassuring reply. He and other noble Lords are no doubt familiar with the small discs bearing pictures of imaginary characters now being voraciously collected by children. Is my noble and learned friend aware of reports that large quantities are soon to be launched in rival packets of cereals and crisps, and that the British Safety Council is worried that small children could choke on them? In fact, a Pog in the throat might be dangerous—certainly more so than a frog in the throat.
Lord Fraser of Carmyllie: My Lords, my noble friend has the advantage of me. Until I prepared for this Question I had no idea what a Pog was. It is a small cardboard disc not unlike those that used to be found on the tops of milk bottles. Their size is such that it is not seriously considered that there should be any risk to young people who intentionally or inadvertently put them into their mouths. The Pog complies with legislation. I am very much aware that remarkable quantities of Pogs are circulating. It is anticipated that there will be around half a billion of them in the country in the course of the next year.
Lord Haskel: My Lords, can the Minister say whether the matter has been examined by the consumer safety unit of the DTI and, if so, what is the unit's view? As it is a matter of consumer safety, can he tell us whether there are plans to change the unit—its standards, the scope of its work or its size, or by farming out its work in any manner?
Lord Fraser of Carmyllie: My Lords, regulations were made in 1995. Pogs have been measured against the requirements of those regulations. It has been
968
established that all those that have come to the attention of the DTI—the large numbers in crisp packets and cereal packets—are too large to fail to comply with the regulations. That being so, I do not think there is any further requirement for adjustment within the DTI.
Lord Haskel: My Lords, can the Minister answer the second part of my question about the future of the consumer safety unit?
Lord Fraser of Carmyllie: My Lords, I do not think I can. I am not quite sure how it arises on Pogs.
Lord Campbell of Croy: My Lords, as my noble and learned friend probably knows, a game can be played with Pogs requiring an additional slammer disc. Are the Government concerned about the safety of this sharp metal disc which is already the subject of a toy safety warning from at least one trading standards department?
Lord Fraser of Carmyllie: My Lords, I am now aware what a slammer is. All the slammers I have seen are plastic. When I consider the objects which small children throw at each other, this is probably one of the most harmless I have ever seen.

Maxwell Case: Costs
2.41 p.m.
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
What was the total cost to public funds of the recent prosecution of the Maxwell brothers and Mr. Trachtenberg.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, it is too early to say what the total cost of the case will be. As far as criminal legal aid is concerned, the full costs will be known only when the final bills have been taxed. However, £8.3 million has been paid to date in respect of interim payments and the magistrates' court proceedings. The total cost to the courts to date has been assessed at £0.5 million. The cost to the Serious Fraud Office, including investigation of matters that will form the basis of future proposed trials, was approximately £11 million as at 31st January 1996.
Lord Boyd-Carpenter: My Lords, I thank my noble and learned friend for that extremely interesting if disquieting information. Can he say whether steps are being taken to restrain the very substantial growth in the cost of legal proceedings, particularly prosecutions of this kind, whether successful or, as in the case quoted in my Question, unsuccessful?
The Lord Chancellor: My Lords, every effort is made to deal with these matters as efficiently as possible. In the particular case to which my noble friend's Question relates, the degree of complexity involved was very high indeed. The method by which such matters should be dealt with is kept under review

969
by the Government. In the light of their history further consideration may require to be given to the manner in which such cases are pursued.
Lord Dean of Beswick: My Lords, does the noble and learned Lord agree that it appears that people brought before the courts charged with fraud on a huge scale seem to take a disproportionate share of the money available for legal aid as opposed to people involved in other nefarious activities? Does he agree that it is time that this matter was looked at? At the moment legal aid appears to be a fund for people who have already received large sums of money through their actions and who seem to be able to obtain legal aid more easily than other people.
The Lord Chancellor: My Lords, it is perhaps right that the kind of case to which the noble Lord, Lord Dean of Beswick, refers will involve a high degree of complexity and will therefore attract more in the way of resources both for the prosecution and defence. As regards the rules, they are the same for all. It is in an attempt to make sure that they are rigorously enforced that I made the proposals in relation to legal aid for the apparently wealthy.
Lord Wyatt of Weeford: My Lords, is it not the case that the success rate in fraud matters is very low when conducted by the Serious Fraud Office? Is it not time that another body took over those prosecutions—perhaps the police?
The Lord Chancellor: My Lords, I gave the details of this matter in Answer to a Question from the noble Lord, Lord Spens, not very long ago. My impression is that the success rate of the Serious Fraud Office in relation to disputed matters is comparable to that of the Crown Prosecution Service. One must take account of the fact that the subject matter is different between the two. If the noble Lord looks at the figures he will see that the success rate of the Serious Fraud Office in these matters bears quite good comparison with other such figures.
Lord Clark of Kempston: My Lords, in view of the fact that the case has already cost the British taxpayer something approaching £20 million, does my noble and learned friend agree that it is high time that the rules concerning the .award of legal aid should be changed to the extent that the circumstances of the immediate family of the applicant for legal aid should be taken into account? Can my noble and learned friend confirm that the Saudi Arabian who is appealing against a deportation order will not be entitled to legal aid?
The Lord Chancellor: My Lords, there are two questions. As regards the second, the person concerned will be entitled to legal aid only if he complies with the rules. In relation to the first question, it is not just a matter of legal aid, but of the costs of the prosecution and the defence. In the circumstances of the particular case to which we are referring, and in view of the outcome, even if the defendants had not been given legal
970
aid it is highly likely that they would have been awarded their costs out of central funds. Therefore, legal aid is not directly relevant in this particular situation.
Lord Williams of Mostyn: My Lords, can the noble and learned Lord assist perhaps by putting the matter into context? What was the amount of money disbursed from public funds for legal assistance and representation to those who appeared before the Scott tribunal? Can he offer a view as to which disbursement of public money was the best value?
The Lord Chancellor: My Lords, I do not have the full figures in my head at the moment regarding that matter, which is not the subject of the Question. As to the subject matter of this Question, the problem is that these costs are incurred in pursuit of justice, the rule of law and the integrity of our commercial institutions. It is against that background that their value has to be judged and taken into account. In my view, when that kind of standard is applied it is clear that while the costs are high, they are just a reflection of the complexity of the issues with which the trial was concerned.
Lord Elton: My Lords, as we are in the realm of comparison, does it not reflect interestingly on the comparative efficiency of our legal and our legislative procedures that these legal costs amounted to half the cost of running your Lordships' House for one year?
The Lord Chancellor: My Lords, I would be the first to accept that the taxpayer in this country gets extremely good value for money from your Lordships' House. However, it is really impossible to draw a comparison between the taxpayers' interest and enthusiasm in maintaining your Lordships' House and the cost of a trial of this kind, which is a very different subject indeed.
Lord Mackie of Benshie: My Lords, can the noble and learned Lord tell us whether he thinks that in trials of this complexity—he has already stressed that—the course of justice is best served by a jury trial?
The Lord Chancellor: My Lords, that matter has been considered from time to time. It was considered by my noble and learned friend Lord Roskill and his committee. Important considerations have to be taken into account in this connection. As I said earlier, the Government are keeping such matters under review in the light of developments and of the developing complexities of such issues. In this country the right to jury trial is a very well established and important right and can therefore be innovated upon only after careful consideration and only, I think, for very good reason.

Chechnya
2.50 p.m.
Lord Belhaven and Stenton Lord Belhaven and Stenton asked Her Majesty's Government:
Following the accession of Russia to the Council of Europe, whether they will urge the Russian Government to withdraw their forces from Chechnya so that a properly supervised referendum on independence for that country can be held.
Lord Chesham: My Lords, we shall continue to take every opportunity to urge the Russian Government to maintain the search for an early and negotiated settlement which all sides accept.
Lord Belhaven and Stenton: My Lords, I thank my noble friend for that Answer as far as it goes. However, is my noble friend aware that the wanton destruction of towns and villages by the Russian military in Chechnya has resulted in two-thirds of the population being refugees? Does he think that if we had reacted similarly in Ulster we would still be members of the Council of Europe? Finally, should not Her Majesty's Government call Russia's attention to the fact that Britain has granted independence or self-determination to all her former colonies and territories, and should we not encourage the Russians to do the same?
Lord Chesham: My Lords, the conflict is a tragedy which has claimed thousands of civilian lives and displaced very many people. However, the UK also condemns those who use hostage-taking to advance their cause. We understand the very real difficulties for the Russian and other governments in dealing with this situation, and we have made clear to the Russian Government our concerns about the level of force being used. The OSCE principle is that frontiers are inviolable but can be changed peacefully and by agreement. The right to self-determination does not equate automatically with a right to secession. Chechnya is internationally recognised as part of the Russian Federation. A negotiated settlement needs to find an effective way to enable the Chechen people to express their identity within the framework of the constitution of the Russian Federation.
Lord Hylton: My Lords, the noble Lord mentioned the OSCE. Can he tell the House what action has been taken by the chairman-in-office and the central council of that organisation since the matter was last debated in this Parliament?
Lord Chesham: My Lords, yes, I can. To the best of our belief, I understand that the chairman is in Moscow this very day.
Baroness Park of Monmouth: My Lords, in view of the fact that the Russian Foreign Office said at the end of January that the mandate of the OSCE did not allow it to mediate in Chechnya, despite the fact that it has been present there since 1995, does the noble Lord hold out very much hope that the OSCE will in fact do anything?
Lord Chesham: My Lords, we certainly hope that the OSCE will do something. We are also very aware that President Yeltsin plans to put forward proposals in
972
the very near future. We welcome any initiatives which pave the way for a long-term settlement which enjoys the support of all sides.
Lord Mayhew: My Lords, whatever the merits of the subject, is there not a growing danger of intervening in an issue in the Russian presidential elections, following the precedent set by the noble Lord's party of intervening in the American presidential elections against Mr. Clinton?
Lord Chesham: My Lords, I do not think that putting our concerns to the Russian Government could be in any way interpreted as intervening in the Russian elections.
Lord Rea: My Lords, is the noble Lord aware that as an amendment to the resolution of the Assembly of the Council of Europe which admitted Russia, a monitoring group on the conflict in Chechnya is to be set up? Can the noble Lord say whether that monitoring group has actually been set up? Who are its members? What is their remit? How often will they report, and to whom? What will be the relationship of that monitoring group to the OSCE? If by any chance the Minister does not have all those details at his fingertips, perhaps he can write to me.
Lord Chesham: My Lords, I should certainly like to write to the noble Lord on those matters.
Baroness Blackstone: My Lords, following on from my noble friend's question, given that the Council of Europe's own report to its Parliamentary Assembly admitted that Russia does not meet the membership criteria of the Council because of its failure with respect to human rights both in Chechnya and elsewhere, would the Government be willing to support some increase in Council of Europe resources for human rights monitoring, and would they be prepared to make a small additional contribution?
Lord Chesham: My Lords, as a member of the Council of Europe, Russia will be required to comply with the full range of Council of Europe principles. Those include early signature of the European Convention on Human Rights.
Baroness Blackstone: My Lords, I am sorry to have to intervene again. I do not think that the noble Lord answered my question. I wanted to know whether we would support additional resources for human rights monitoring and whether the UK would make a small additional contribution.
Lord Chesham: My Lords, I feel that that is slightly outside the Question. Our resources at the moment are fully occupied in Bosnia and the countries of the former Yugoslavia.
Lord Finsberg: My Lords, as regards Russian accession to the Council of Europe, which will in fact take place next week, it is not just the Parliamentary Assembly which is monitoring some 25 proposals which have been accepted by Mr. Zuganov and the Russian delegation, but also the Ministers' Deputies. May we

973
have an assurance that there will be as much co-operation from the Deputies' side as there will be from the Parliamentary Assembly side?
Lord Chesham: My Lords, I believe that I can give my noble friend every assurance on that.
Lord Stoddart of Swindon: My Lords, is the noble Lord aware that I am intrigued, as perhaps are other noble Lords, by what he said about the difference between self-determination and secession? Why did not the British Government take the same view in relation to the Yugoslavian federation where Croatia and Bosnia wished to secede but were granted recognition in spite of that? What is the difference between Yugoslavia in that respect and Chechnya?
Lord Chesham: My Lords, it is a somewhat different situation. We recognise independent states.
Lord Belhaven and Stenton: My Lords, following that question, if the Chechen people should use their right to self-determination to ask for secession, what would be the view of Her Majesty's Government?
Lord Chesham: My Lords, I go back to the main Answer. The principle is that frontiers are inviolable but can be changed peacefully and by agreement. Chechnya is internationally recognised as part of the Russian Federation. That is therefore the way we must view it.
Lord Cledwyn of Penrhos: My Lords, has it been made plain and clear to Mr. Yeltsin and the Russian Government that whereas this country was delighted at the collapse of the Soviet Union we think that the attitude of the Russian Government in Chechnya has been deplorable?
Lord Chesham: My Lords, I have already said that we have put as much pressure as we can on the Russians. Her Majesty's ambassador in Moscow discussed Chechnya with Mr. Mikhailov, the Nationalities Minister, and with Mr. Primakov at the beginning of February and urged the Russians to continue the search for a negotiated peace.
Lord Hylton: My Lords, are there not many ways of exercising self-determination which fall short of seceding?
Lord Chesham: My Lords, yes, I agree.

Access to Work Scheme
3 p.m.
Lord Ashley of Stoke Lord Ashley of Stoke asked Her Majesty's Government:
Whether they intend to make any changes in the access to work scheme for disabled people.
The Minister of State, Department for Education and Employment (Lord Henley): My Lords, when access to work was first launched the Government
974
undertook to review it after one year's operation. Discussions are currently being held with a number of organisations. An announcement will be made before the end of the financial year.
Lord Ashley of Stoke: My Lords, does the Minister recall that he played a prominent part in the setting up of the scheme which has been successful and cost-effective, helping many thousands of disabled people to retain their jobs and thousands more to obtain jobs? If the Government go ahead with proposed cuts from £19 million to £12.9 million the jobs of many disabled people and their lives will be seriously affected. A realistic budget has been placed at £23 million. That money should be paid to keep the scheme.
Lord Henley: My Lords, I remember, as does the noble Lord, the launch of access to work. I agree with him that it has been successful. I reject his allegations that we are cutting the budget. We launched access to work with a budget, first, of some £14 million, and for subsequent years, as the noble Lord will remember—this was made clear—of some £12.9 million. The nature of the scheme caused it to grow beyond that figure and we were able to borrow money from other parts of the department. That cannot continue in the longer term. We are restricting it to its budget of £12.9 million. That is why we had to impose certain limitations on the scheme in December last year. As the noble Lord knows, we are committed to keeping the scheme. That is why we are reviewing it and ensuring that it is properly targeted upon those whom it can benefit most. I believe that the noble Lord will remember some figures that I quoted to him previously. Currently, about 80 per cent. of those being assisted by access to work were already in work. The aim of the scheme, as my right honourable friend Mr. Hunt made clear when we launched it, was to try to give priority to those out of work and to help them into work.
Lord Molloy: My Lords, does the Minister accept that the Royal British Legion naturally has an interest in the Question? Will he, as Ministers have done hitherto, keep us closely informed of any developments whereby former servicemen and women who were wounded and are now crippled can be helped by this House and by all those who have sympathy and understanding for British men and women disabled in wars?
Lord Henley: My Lords, like the noble Lord, Lord Molloy, I have the greatest respect for the Royal British Legion. I believe that the whole House has respect for the work done by the noble Lord in the Royal British Legion. As I believe I made clear, we will have discussions with all appropriate organisations as we consider the appropriate changes to access to work. If the Royal British Legion wishes to make any comments to me or to my ministerial colleagues, I shall be more than happy to listen to them. As it is, I do not believe that it has asked for a meeting, but again, should it wish to have such a meeting, I shall be more than happy to consider it.
Baroness Turner of Camden: My Lords, is the Minister aware that the changes introduced since

975
December 1985 have had the effect of disadvantaging some people who want to change their jobs? Is he aware, for example, that the RNIB has a list of people who have been disadvantaged as a result of the changes? Is he prepared to look at those cases?
Lord Henley: My Lords, what I am aware of is the rather scurrilous press release from the party opposite which claims that 7,500 people will lose their jobs as a result of the changes. There is no truth in that whatever. Obviously, we had to make changes because the budget was growing out of control. The programme was never supposed to be demand led. It was launched with a specific budget. We want to keep the programme within that budget.
Lord Addington: My Lords, as the programme has shown itself to be of benefit to the Treasury because it has resulted in getting into work people who now pay taxes, is it not illogical, even from the Treasury's point of view, that it should be restricted or cut back?
Lord Henley: My Lords, I suspect that the noble Lord did not listen to the figures I quoted earlier. I made clear that some 80 per cent. of those whom the programme helped were already in work and only 20 per cent. were out of work. We see it as more important to help people into work, and that is why we should like to target it in that respect. Whether the noble Lord can prove there were benefits to the Treasury as a result is another matter. It is arguable that many of those being helped were in work and would have retained their jobs whatever happened.
Lord Rochester: My Lords, does not the Secretary of State's recent announcement that government funding for the access to work scheme is to be given to the unemployed, as he said, mean that disabled people will inevitably suffer?
Lord Henley: My Lords, that is not what we said. We said that in the first year or so of the scheme's operation there was a bias in favour of the employed. The original intention was that there should be a bias, although not a total bias, in favour of the unemployed. We want to ensure that the scheme is focused properly on the unemployed. We want access to work together with the many other schemes we have to help disabled people into work—I must stress that access to work is only one of many and only one part of our expenditure in this field—to assist people into work.
Lord Ashley of Stoke: My Lords, is the Minister aware that the reason for the overspend is that the original financial allocation was inadequate? In terms of pure public relations the Government should be careful because the volume of protests from disabled people and their organisations, if the cuts are made, will he so great that they will obscure the fine work the scheme has done. In pure public relations terms the Government should give the scheme more money.
Lord Henley: My Lords, the budget for access to work as launched was greater than that of the four schemes which make up access to work. So I believe
976
it was fair to think that access to work would be budgeted appropriately and that there would be sufficient money. I should make clear in terms of public relations, of which the noble Lord speaks, that, as I said earlier, this is just one of many schemes. On the employment side alone my department is spending jolly nearly £180 million on schemes designed to help disabled people in employment. There is further help from my department on the education side. Overall expenditure by the DSS for the long-term sick and disabled amounts to something of the order of £20 billion. A further £6.5 billion is spent on personal social services to help disabled people. Our commitment is pretty real.
Baroness Turner of Camden: My Lords, is the Minister prepared to look at the cases which the RNIB has advanced concerning people who have difficulties caused by their wish to change jobs as a result of the changes introduced in December 1995? I understand from the institute that there are a number of cases of people wanting to change jobs who are disadvantaged as a result of the changes.
Lord Henley: My Lords, obviously I shall look at any cases the RNIB brings before me. I can give the noble Baroness the assurance that I and my right honourable friend the Secretary of State will be seeing the RNIB very soon.

Business
3.7 p.m.
Lord Strathclyde: My Lords, at a convenient moment after 3.30 p.m., my noble friend Lady Cumberlege will, with the leave of the House, repeat a Statement on mental health services that is to be made in another place.

Wild Mammals (Protection) Bill
Baroness Nicol: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(Baroness Nicol.)
On Question, Motion agreed to.

Housing Grants, Construction and Regeneration Bill [H.L.]
3.8 p.m.
The Minister of State, Department of the Environment (Earl Ferrers): My Lords, I beg to move that the Bill be now read a second time.

977
The Bill will assist the construction industry by speeding up the resolution of contract disputes and improving payment procedures; it will reform the arrangements for registering architects; it will give local authorities the freedom to decide their own priorities for tackling "unfitness" and disrepair in private housing; and it will extend powers to give financial assistance for the regeneration and development of derelict and rundown areas.
This is a fairly large Bill of 145 clauses and three schedules. It is long not only because it makes important changes to legislation but because it has been drafted largely to include and to restate previous legislation rather than simply to amend it. It therefore avoids the maddening consequence of having to read the Bill and having constantly to refer in cross-reference to existing statutes. I hope that your Lordships will find that at least to be of convenience.
When one introduces a Bill one normally starts at the beginning of it and progresses through to the end. However, I thought that on this occasion I would take a different course, if I may, not merely in order to muddle the noble Lord, Lord Williams of Elvel, if he is so muddled, but because I prefer to describe first the proposals in the Bill which I know will be of particular interest to a number of your Lordships. They are the proposals relating to construction contracts and they are contained in Part II.
The construction industry is one of the biggest industries in the country. Last year new construction orders were worth £50,000 million. The industry employs some 1.5 million people. Around three-quarters of them are self-employed or are employed in small firms which provide specialist services on construction sites; for example, electricians, plasterers, carpenters and steel erectors. These small companies are sub-contractors to larger contractors who, in turn, are under contract to the main contractor who in his turn is under contract to the client. In addition, the clients and the large contractor may also retain professional advisers—for instance, architects and surveyors—to help them design and manage the construction project.
The picture is one of a complex hierarchy of different contractors. Given the complexity of a large building site where things need to be done in the right order, and given the number of contracts involved, it is not surprising that the industry has a record of contractual disputes; and then, of course, people do not get paid. In every industry cash flow is important but it is particularly important in the building industry.
The payments are made by the client to the main contractor. The main contractor then passes a share to the sub-contractors, who are responsible for the heating, lighting, water services and so forth. They then pass a share on to their sub-contractors, and so it goes on. If a payment is held up, particularly if it is at the top of the chain, like a goods train shunting it knocks everyone down the line in turn. They all become affected by the lack of payment whether, as it were, it was their fault or not. For the large contractor this could mean serious inconvenience but for the small sub-contractor it could mean insolvency.
978
It is against that background that we have proposed legislation with two purposes. The first is to speed up the flow of payments and information about payments on construction contracts. The second is to provide a reliable means of resolving disputes quickly. This is not the Government trying to boss the industry about. That is not what this Government do or would seek to do in any event. Therefore, if the noble Lord, Lord Williams, wished to say anything nasty along those lines he might care now to rewrite his speech. We were asked by the industry to introduce this legislation and, being accommodating, we have done so.
The Bill arises originally from a report which was commissioned jointly by the Government and the construction industry and which was prepared under the chairmanship of Sir Michael Latham. As the industry is so large and so diverse, there are bound to be differences of emphasis in the way in which the Bill is perceived. There are those who will say that we have gone too far and there will be others who will say that we have not gone far enough.
We have tried to strike a balance and I believe that we have established a consensus in the industry in favour of the proposals. However, we are not proposing the legislation just because the industry has asked us to do so. We are proposing changes to construction contracts because the present arrangements are putting up our industry's costs and damaging its competitiveness. The Latham Report concluded that the costs of the construction process in this country were 30 per cent. higher than they need be. That is a large sum.
A great deal of British industry has learnt the need to be outward looking; to work in co-operation with both its customers and its suppliers in order to try to improve the quality and the presentation of its product; and to hold down costs. But the construction industry is only just embarking on that process. It is still at the bottom of the learning curve. It is our judgment that it will not advance further up the curve unless it becomes less adversarial and confrontational. It has to learn the simple lesson that delaying payment without good reason is not part of the ethos of "working together".
What the Bill does in Clause 107, therefore, is to provide that there should be an adequate mechanism for determining what payments become due under the contract and when. We want it to be perfectly clear to both the payer and the recipient what payment can be expected and when.
We are also providing a right as regards contracts which are of longer duration—60 days or more—for payments to be made in instalments. The purpose of this is to ensure that in so far as is possible there is some regularity in the flow of payments and that people can expect interim payments and do not have to wait until the end of the contract period before being paid.
We are also providing a right to information about individual payments. That is most important. It is quite possible that there could be legitimate reasons why payment should be withheld. No one wants defective workmanship but, if that were the case, it would be reasonable for someone to delay payment. There is

979
nothing in the legislation which requires anyone to pay for shoddy work. There is, however, a requirement to provide information and to warn the contractor if payment which he is expecting is to be withheld. The contractor who is expecting the payment must therefore be notified in advance that he will not be paid and he must be told the reasons why he is not to be paid. If the reasons are not valid, the two parties can resort to the new dispute procedures contained in the Bill.
We are also proposing to restrict the notorious practice of using pay-when-paid and pay-if-paid clauses in construction contracts. It does not take a Mensa-type brain to realise that there is considerable financial advantage in not paying the contractor below you until you yourself have been paid. That is a pretty common practice within the construction industry but it is a much despised one since the smallest contractors may have to wait months for their money—
Lord Graham of Edmonton: That is right.
Earl Ferrers: My Lords, I am glad that the noble Lord the Opposition Chief Whip agrees that that is right. I hope that he agrees with everything I say; but in this respect he is right and I am delighted that we are in accord.
We are proposing to make the pay-when-paid clauses in contracts unenforceable in all but the most exceptional circumstances so that everyone may be paid promptly for the work which they have done. I hope to carry the noble Lord the Opposition Chief Whip with me on that too—
Lord Graham of Edmonton: I am listening.
Earl Ferrers: My Lords, I hope that I am carrying him with me too, which is not quite the same thing.
We are also proposing arrangements to deal with construction disputes. That appears in Clause 105. The concept is straightforward. We are giving all contractual parties the right to use the alternative dispute resolution procedure which is known as "adjudication". The procedure is familiar to the construction industry, although it is relatively new and at present not widely used. Essentially, it involves taking a dispute to an impartial third party who will generally use informal procedures to try to sort out the rights and wrongs of the issue and who will make a decision which will enable work on the contract to continue. Our intention is to see contract disputes resolved, wherever possible, within a period of 28 days. Of course, many serious disputes will not be capable of resolution within that timescale and those will have to be resolved by other means, normally by arbitration or through the courts.
The industry's advice to us is that prompt and informal action at the time when a dispute first arises will help to nip the problems in the bud and to save a great number of disputes finding their way into the courts.
The Bill also proposes arrangements which will provide a sanction if the payment proposals are not respected, and it proposes fall-back arrangements if, despite the measures which we are introducing,
980
construction contracts still fail to include payment and dispute resolution procedures. So much for that part of the Bill.
Part III of the Bill reforms the Architects Registration Council of the United Kingdom. The position at present is that one cannot practise as an architect, and one cannot call oneself an architect, without having been first entered upon a statutory register.
That register is not, as many of your Lordships might think, maintained by the Royal Institute of British Architects. The Royal Institute of British Architects is a distinguished body but its duty is to represent the professional interests of architects. The Register of Architects is maintained by an independent Architects Registration Council which was set up by statute in 1931.
The Government initially took the view, following a report which was prepared by Mr. John Warne in 1993, that the registration council should be abolished and that other arrangements should be made to secure the continued integrity of the architectural profession. That in the eyes of the architects was a wholly disagreeable prospect. There was also some disquiet among members of the public and Members of Parliament. So we agreed that the council should be retained, but that it should be reformed.
The proposals in the Bill, therefore, include a reduction in the members of the body from 73 members to 15 members and the streamlining of its organisation. I think that your Lordships might agree that a council with 73 members tends to be a fairly unwieldy body. The proposals also change the balance of membership. At the moment the council is overwhelmingly dominated by architects. The Bill would change that and would provide a small majority of eight to seven in favour of non-architects. Those include the profession's customers whose confidence in the architectural profession is essential to its well-being.
The lay majority on the reformed council was specifically agreed with the Royal Institute of British Architects, who were advised by none other than the noble Lord, Lord Rodgers of Quarry Bank. I am glad to see the noble Lord in his place and I am glad to say also that the Royal Institute of British Architects approves of our proposals. Our intention is that these changes should make the registration council a more representative and, dare I say it, a more efficient body which will work better for the benefit of both architects and their clients.
Part I of the Bill deals with the provisions for supporting the renewal of private sector housing. It is a fundamental principle that homeowners must be primarily responsible for the repair and the maintenance of their own properties. But there is a long-standing tradition of government assistance for owners who cannot afford to deal with their unfit houses.
When my right honourable friend the Secretary of State for the Environment published the housing White Paper last summer, he made it clear that we remained committed to the principle of a decent home for every family. Renovation grants help to achieve this. The present system was introduced in 1989, and it was intended to encourage local authorities to develop their

981
own strategies for private sector renewal, declaring renewal areas where appropriate. It also directed the available help more towards poor condition housing and poorer people. It gave a right to mandatory grants for people on low incomes and in poor housing. It also introduced a grant to give help to disabled people to enable them to adapt their homes to their disability.
Local authorities now have wide powers, but experience has shown that the pressure for grant assistance has resulted in mandatory grants taking the lion's share of resources. This has often distorted what many local authorities might wish to do because so much of their funds have had to go towards what they had to do that there was little left for them to do what they would like to do and which, in their view, was a suitable and needy expenditure in their locality.
The Government are committed to improving the condition of the housing stock and to providing resources to help those who are most in need. But any regime which we have has to be able to operate within a finite level of resources. There will never by sufficient resources to do everything which we might ideally wish to do. They will always be constrained.
The main change which we are proposing, compared with that which happens now, is that, with the exception of the disabled facilities grant, the mandatory grants will be made discretionary. This will give local authorities the ability to manage their resources so that they can provide help to those who are most in need and so that they can secure long-term improvement of the worst of the private housing stock.
Means testing of grants to owner-occupiers will be retained. The Bill will also prevent abuse by introducing a "prior qualifying period" and it will strengthen the conditions attached to the grant. Mandatory and discretionary disabled facilities grants, which are provided to help disabled people to remain in their own homes, will still continue, with some improvements, including a more relaxed approach to means testing.
The Bill will now make grant assistance to landlords of rented property discretionary. This is a change from the White Paper proposals which proposed more restriction on grants to landlords, and it will, I think, be widely welcomed.
The existing minor works assistance scheme will be replaced by a simpler and wider home repair assistance scheme. Under this, local authorities will be able to give help for minor repairs, improvements and adaptations for elderly people, for those who are infirm and for those who are on means-tested benefits. People who live in mobile homes and houseboats will, also for the first time, be eligible for help.
Local authorities will have increased flexibility when taking enforcement action on unfit property requiring repair. They will be able to defer this action for up to 12 months, at which time they will have to review the position and decide what is the best course of action to take.
There are cases where immediate and full repair will not always be the best solution; and, where grant assistance is needed, local authorities will have some
982
discretion in the way in which they manage their budgets. Part IV of the Bill introduces a new discretionary relocation grant. This will help people whose homes are in clearance areas and who wish to acquire a replacement home in the same local area. Wholesale clearance may sometimes be the only realistic option for dealing with the worst housing conditions, especially where space is at a premium. But it should never be undertaken lightly because it is only too easy to destroy close-knit local communities.
This grant will help to keep local communities together by assisting people. It will help to bridge the gap between the cost of a replacement home in the locality and the amount of money which the applicant can reasonably afford, taking into account any compensation which he may receive for the loss of his old home.
Put simply, this is a Bill which aims to help the construction industry and the local authorities to achieve more in the work which they do. It will benefit both the construction industry and the house owners, and I commend it to your Lordships.
Moved, That the Bill be now read a second time.—(Earl Ferrers.)
3.27 p.m.
Lord Williams of Elvel: My Lords, the House will be grateful to the noble Earl for explaining with his usual clarity and good humour what is, as your Lordships will understand, a long and rather complicated Bill. I thought that the noble Earl was perhaps rather worried about what I might be about to say from this Dispatch Box and was trying to get his retaliation in first, as we say in football terms. He may be rather more worried by the time I finish.
As I understand it, this is the first of two or perhaps even three offerings from the Government which started off, according to the gracious Speech, as a Housing Bill. That Bill in draft achieved no fewer than 380 clauses and would have been one of the largest Bills ever put before Parliament. In that event, the Government, in my view quite wisely, decided to split it and present two Bills—one for consideration by your Lordships and another for concurrent consideration in another place. So far so good.
But there is an oddity. The oddity is that the original Housing Bill contained 380 clauses. The Housing Bill introduced in another place contained 180 clauses, of which I understand 11 have now been withdrawn, and this Bill has 145 clauses. My arithmetic is not of the strongest, but to me this means that the two Bills together when reduced contain 326 clauses. So, 54 clauses are therefore missing. What is to happen to those 54 clauses? We do not know. But I hope—and I say this most seriously to the noble Earl—that they are not waiting in some sort of legislative siding, waiting to be shunted into the Bill as it travels along the parliamentary railway. I say that because with other Bills we have had occasion to recommit clauses introduced by the Government. I trust that we will not be going down that track as regards this Bill.

983
The Bill before your Lordships today is, to be honest, something of a mishmash. It ranges from home renovation grants to disposal of the assets of new towns, by way of the construction industry, architects and the single regeneration budget. As such, as your Lordships might expect, there are matters with which we agree and matters on which we disagree. In our view, therefore, the Bill has a strange resemblance to a curate's egg. If your Lordships will allow me, I propose, without muddling the Minister in any way, to take each bit of the egg in its turn.
The first bit of the egg that we come to would, I am afraid, turn off any reasonable curate. It is, of course, Part I, which deals with home renovation grants. Perhaps I may give your Lordships some of the background. Private housing in Britain is in a state of major disrepair in many places. Indeed, 1.5 million homes in England alone—that is one in 12 of the total—are officially unfit for human habitation, failing the basic legal standards covering structural stability, sanitation, dampness, water supply and heating. Nor is there any reason to believe that the situation is any better in Scotland or in Wales.
Further, and contrary to popular opinion, the majority of those homes are not owned by absentee private landlords but by owner occupiers, many of them older people, or unemployed or from ethnic minorities (some, indeed, by people who fall into all three categories at the same time). One-half of outright owners—that is, those without mortgages—live on incomes of less than £150 per week; in other words, people who simply cannot afford to bring their homes up to the minimum legal standard. There are consequential dangers to health which, quite apart from the suffering of those involved, impose greater strains on the NHS. That is the background.
To be fair—and I always try to be fair to the noble Earl—the Government recognised the problem in the 1980s and tried to do something about it by introducing the Local Government and Housing Act 1989. That Act recognised a government responsibility to ensure minimum standards in the nation's housing stock—in our view, quite rightly. The Act set out a grant system under which a statutory grant of up to £20,000 is given provided a property fails the legal minimum standard of fitness and the owner passes a means test, a test which may also set the level of contribution from the owner, him or herself.
That scheme is now to be dismantled, against, as it happens, the advice of most of those who were consulted. After only five years' experience of the scheme, the Government have decided that enough is enough. In its stead we are now to have a new scheme, which is not to be available to everyone as of right, but which is to be at the discretion of local authorities.
Let me be quite clear what that means. It means that the Government have abandoned their previously acknowledged responsibility to ensure the maintenance of minimum standards in the nation's private homes. In future, there will be no clear, national framework either to address the current disrepair in private housing which, after all, provides eight out of 10 of all homes; it follows
984
directly that there will be no government commitment to alleviate the health problems which are clearly linked—very precisely—to that disrepair.
It is no good the Government pretending that what is proposed will reduce the present long queues for renovation grants. The queues will still be there, because the requirement will still be there. It is no good either to pretend that abuses—and there have been abuses—will magically cease; if anything, abuses will increase as those with the greatest influence try to jump the queue. We all know how these things work, even in the best of systems.
Worse still, practice on how to apply the discretionary system will vary from local authority to local authority. The effect of that will be most marked, I believe, in urban areas where local authority boundaries run along streets rather than fields. I have no doubt at all, if precedent is anything to go by, that Wandsworth and Westminster—to name only two councils—will operate the new discretion in quite a different manner from Southwark and Kensington and Chelsea. Not only that, but by introducing a three year qualifying period before entitlement to grant and the ability of local authorities to defer action, the Government have deliberately introduced a place, under statute, for unfit housing to be a permanent feature of our urban landscape. Unfitness is now to be institutionalised. I can only say that, in our view, this part of the Bill will do nothing to help our housing problem and in all probability will make things worse.
The next bit of the egg has a somewhat better flavour. Indeed, in Part II of the Bill, dealing with construction contracts—which is what the noble Earl started with—we are on less controversial ground, although there are still difficulties. We welcome the general intentions of this part as we welcomed the Latham Report when it appeared. As the noble Earl pointed out, we have to recognise that the construction industry is a major contributor to our gross domestic product—8 per cent., we are told. However, by general admission, it is also extremely inefficient. Those inefficiencies are caused by bad contractual and operating practices. If that were not so—and I agree with the noble Earl that it is—I am bound to say that I would have some sympathy with the view taken by the Scottish Law Commission and the Scottish Law Society both of which argue that the construction industry is not so different from other activities in the economy that it requires specific legislation on its own. But the industry is so important and the inefficiencies so great that we agree with the Government's view that legislation should be introduced, and we must reject the view of the Scottish Law Commission and the Scottish Law Society.
The difficulty, of course, lies in deciding what constitutes "construction operations"—to use the words of the Bill. In fact, I am advised that the activities specified in Clause 102 of the Bill only cover about 50 per cent. of what could properly be called construction activity. So here is the first problem. It does seem rather odd, to say the least, to legislate for 50 per cent. of an industry's activity and leave the rest to fortune. The split, if that is what it is, makes curious reading in itself. For instance, we

985
learn that the expression "construction operations" excludes the construction of process plant, which by any standards is or includes a great deal of what would normally be called construction activity; it also excludes construction of steelwork on a site where the primary activity is the storage of pharmaceuticals or food and drink—in other words, warehouses. I confess that I cannot for the life of me see the difference between those activities that I have just mentioned and the installation in any building—including, of course, processing plant or warehouses—of systems of heating, lighting and so on which are included in the provisions of the Bill. I am no construction engineer, but this seems to me to be an argument not even about the number of angels that can stand on the top of a pin, but rather about what kind or degree or character of angels should properly split that place between them.
I have no doubt that the Government will reply that they have a let-out in allowing themselves to change the definitions in Clause 102 by simple order. We shall, of course, see what the Delegated Powers Scrutiny Committee has to say about that. But it does seem to me odd, and some might say offensive, that the Government present us with legislation for half an industry, and then say in effect, "Do not worry; pass the legislation and we will make up the rest of it as we go along".
The same kind of fuzziness appears in other clauses in this part. The process of adjudication is far from clear; there will presumably be a requirement for the parties to act on an adjudicator's decision pending any appeal to an arbitrator or to the courts, but this sits uneasily with the suggested "fall-back" position of "fast-track" arbitration. Nor is there to be any provision for trust funds as recommended by Latham, on the grounds, apparently, that nobody could agree on how such a system might operate; the Government seem to be standing on the sidelines. The whole matter of latent defects liability has been not just kicked into touch but, given the normal timetable for the implementation of Law Commission reports which the Government are suggesting, kicked into touch, over the grandstand and into the car park.
On the question of "pay when paid", we welcome the new Government proposals, while noting that if they had been in force at the time that Mr. Heseltine was running a business we might have been deprived of the glorious presence of a deputy Prime Minister because that is the way Mr. Heseltine, according to his own account—I say that, of course, without any duplicitous intent, to use the modern phrase—made his fortune. But there is a residual concern that the insolvency exemption allows loopholes which will be to the detriment of precisely the smaller contractors whom the noble Earl was so anxious to help. We shall have to look at that carefully.
It is difficult to be enthusiastic either way about the third bit of the egg, and I imagine most curates would munch their way through this part without departing from respectful silence. I refer to the passage on architects. This has, we are told, the strong support of the Royal Institute of British Architects and, given that
986
benediction, it might be assumed that we would all welcome it with our collective hats thrown—metaphorically, of course, given our Standing Orders—high into the air.
But even here there are some oddities. Not very long ago, in February 1992 to be exact, as the noble Earl pointed out, the Government set up a review of the Architects Registration Acts from 1931 to 1969. The review was conducted by an assessor for the Department of the Environment, Mr. John Warne. The review's conclusions were decisive, and warmly welcomed by the Government. The conclusions, I have to tell your Lordships, were that the protection of the title "architect" should be abolished and that the Architects Registration Council of the United Kingdom should be disbanded, its functions to be taken over on a self-regulatory basis by RIBA. So enthusiastic were the Government about these conclusions that they embraced them with the greatest alacrity, and continued to do so until their change of mind. Indeed so sudden was that change of mind that one unfortunate DoE Minister found himself making a passionate speech pledging the Government to implement the Warne conclusions only the day before one of his ministerial colleagues rose to his feet in another place to announce the opposite.
Now, of course, the Government are no stranger to that sort of event, and we have all learnt to take it in our stride. No doubt we will be offered some explanation for this sudden change of heart or, perhaps more likely, an assertion that Ministers were blameless and that it was all the fault of the officials in the first place. But the real question which has to be answered is this: why is it that in almost all other professions, lawyers, accountants, stockbrokers and so on, the Government favour self-regulation, but in this particular case, when there is a competent and distinguished body able to take on the job, they go for statutory control? It seems so out of keeping with their usual approach. As it happens, it is also out of keeping with the Latham approach of Constructing the Team which is the title of the Latham Report. You cannot construct a team when one of its members is given a privileged legal status and is subject to a separate discipline.
Part IV of the Bill deals with relocation grants and is very welcome. Indeed, it is the only bit of the egg that the curate may eat more or less without reservation. Whatever we think about the single regeneration budget—and it is by no means a perfect arrangement—it is certainly better than the previous system of regeneration grants. I confess I find it a bit odd that only now is the SRB to be given, in the words of the explanatory memorandum to the Bill, "a legislative basis". Does this mean that the awards that have taken place already were illegal? What is the answer to that question? Perhaps the noble Lord, Lord Lucas, will explain that when he comes to wind up. As for relocation grants in clearance areas, We welcome these. They are based on good practice developed by Birmingham City Council—I pay tribute to my noble friend Lady Fisher of Rednal in this—which the DoE study showed to have beneficial results, and Birmingham should be congratulated. The only point I would make is that the scheme will only work properly

987
if sufficient resources are available. At present the rate of clearance of obsolete properties is now so low that properties built today, according to a National Housing Forum report, will have to last more than 4,000 years before they are replaced.
I come at last to Part V of the Bill. Our curate has now got down to the shell at the bottom of the egg. This part is entitled "Miscellaneous and General Provisions ". This seems to occur in many Bills nowadays, and serves as a general repository for things which will not fit elsewhere or which the department would like to get in while they have a legislative slot. Thus we have residuary bodies, about which my noble friend Lord Dubs will say more later. I will confine myself to one comment. In the case of urban development corporations we have been assured time after time that once the period for a particular UDC was terminated the properties would revert to local authorities. Are those assurances now to be considered worthless? Are all the assets of the UDCs going to be transferred to unelected residuary bodies? Indeed, are all the assets of new towns to be flogged off by a new quango? It really cannot make much sense.
As your Lordships will by now have gathered, this is a long, complicated and difficult Bill. I am afraid that the Committee stage will be similarly long and difficult. It might have been easier had we been persuaded by the Government that the intentions behind the Bill, and its likely effect if passed into law, would be on balance beneficial. We are, I am afraid, unable to take that view, and we will in Committee hope to expose its inadequacy and attempt to improve it. We will be doing the same when its Siamese twin, the Housing Bill, comes before your Lordships' House, as neither of them taken in the round provide an effective response to the country's many pressing housing, construction and regeneration needs. This should have been the moment for the Government to produce something positive and convincing. They have not done so. When the time comes, we will.
3.50 p.m.
Baroness Hamwee: My Lords, the title of the Bill suggests an ambitious programme. Housing grants, construction and regeneration are ringing terms. However, leaving aside Parts II and III, which I concede are important, it is a Bill concerned with detail. It is important detail, but nevertheless detail. I see it not as a strategic Bill, more micro than macro.
With boring conservatism, I shall start at the beginning, although I am not sure where the beginning of a curate's egg is. That is not something which lends itself neatly to anything with parallel lines. I shall begin with Part I. I do not pretend that the issues are easy. The foreword to the housing White Paper referred to the balance between the role of the state in providing for necessities and the role of the individual in taking responsibility for his own needs. I do not agree with the Government's analysis that:
"Home ownership must remain at the heart of our policies"
988
Within the Government's own objectives, does the Bill meet the White Paper's themes of choice, opportunity and responsibility? I recognise that the Bill contains the offcuts and outtakes of the main Bill, subject perhaps to the lost 54 clauses, but I suspect that it does not.
The Bill might have been called the Housing Condition Bill because condition is the nearest to a common thread running through it. Housing condition matters greatly. Decent housing and good health are fundamental to personal wellbeing. If one has good quality housing one is more likely to have better health than if one is in bad housing. It is crucial to the individual and for society as a whole. It is not only a moral issue but a matter of good economics and of common sense. The noble Lord, Lord Williams, referred to the costs to society: healthcare, reduced productivity if one is in poor health, and the effect on children and on children's education. It has a place in effective community care and the local economy. Housing restoration is labour-intensive. It uses a high proportion of indigenous materials, and that amounts to jobs locally and nationally.
Housing is a national asset. Our housing stock is ageing. Approximately half of it is more than 50 years old. Within the private rented sector about three-quarters is more than 50 years old. Old housing is not necessarily bad. Indeed, it is often very good. However, it needs to be looked after. The noble Lord, Lord Williams, referred to the rate of replacement of obsolete properties, which is now so low that housing built today will have to last about 4,000 years. He did not say that that is probably as long as Stonehenge has lasted, but I suspect that he and I probably got that fact from the same source. Therefore, it is very important that investment in maintenance, repair and improvement is continued. One might say that tender loving care is needed.
The scale of the problem, as reported by the National Housing Forum in its paper Papering over the cracks, published about 18 months ago, is that there are 1.8 million homes unfit for human habitation, 3.9 million in need of substantial urgent repair and at least 300,000 houses shared by more than one household, most of which lack adequate means of escape from fire. People living in housing in poor condition are more likely to be on low incomes, unemployed, young single people, frail older people over 75, or members of minority ethnic groups.
Repairs are becoming very difficult for many households in poor quality housing. We know of the low level of income of many households. We know of the problems of negative equity. We need a strategy to help owners and private landlords—who are in an important position to provide a major source of housing—to afford the costs of property ownership. Housing is a national asset, and it must be good business practice to invest in, and maintain, that asset base.
However, in the same report the National Housing Forum refers to the Government's policies as showing an,
"absence of a broader, long term perspective. The government seems intent on squeezing renovation expenditure and reducing the scope and standard of grant-aided renovation step by step … housing decay is a continuous process. It is the government's responsibility to

989
develop measures which will promote and stimulate investment across the whole of the housing stock, to produce a sustainable renewal programme".
The Government have set their own target of houses that will be needed in the foreseeable future at 50 per cent. of new houses on brownfield or re-used sites. I wonder whether the Bill has a place in helping to meet that target.
What is the thrust of Part I of the Bill? It ends most mandatory grants, but it constrains discretion. As I read the Bill it seems to provide neither a national strategy nor real discretion locally. As the noble Lord, Lord Williams, said, what is local is at times difficult to determine. Boundaries in urban areas do indeed run along streets, although that between Westminster and Wandsworth is a rather wet street. However, if the noble Lord is suggesting that the Thames would be better used as a highway I agree with him. There is not true discretion. A local authority can grant aid if various criteria set by the Bill are met. Its discretion then relates to whether or not to provide the assistance.
The Bill ends the statutory means to tackle the problem. Discretionary grants are not a framework for a strategic approach, without which disrepair will continue. The current system is founded on an assumption that if property is unfit action will be taken to address the problem. That system is being dismantled.
The Bill does not address the funding difficulties. One did not realistically expect that it would. However, funding is a fundamental issue. I recognise that it is not the whole issue. However cash-happy one is, one must target, prioritise and identify best value for money. However, one cannot let this debate pass without commenting on the competing demands for local authority resources, which must affect the level of grant.
What are the Government doing to encourage other sources of funding and to raise awareness among owner occupiers of maintenance needs? Is it that, with repossessions running at 1,000 a week and a stagnant market and negative equity, they accept that there is rather less incentive to repair than there might have been?
The system does not have the values of a truly discretionary scheme. It does not enable local authorities to work up and implement their own plans. For instance, how will the residence qualification period of three years affect those starting on the home ownership ladder? Are not new owners, those coming into the market, the very people to be encouraged? The provision may vary between areas. The three-year period may be varied by the Secretary of State. I am not sure whether that applies for different areas.
What is the place of the deferred option or the do-nothing option in the national strategy? Does this set a specific place for unfit housing in the strategy? The Association of District Councils and the Association of Metropolitan Authorities—the very people one would think advocates of complete discretion for local government—say that,
"it institutionalises unfitness by sanctioning inaction where properties fail minimum standards".
990
What is the place of grants in the strategy for helping people to stay in their own homes? As regards discretionary grants; many of the potential applicants will be elderly. That must have implications for community care programmes.
I welcome the disabled facilities grant in principle. However, I am concerned about the delay of up to 12 months in payments of discretionary disabled facilities grants. That must lead to individual hardship. It must be costly in terms of the well-being of disabled people and their carers and involve costs to social services and the health service while the adaptations are awaited. Although it is a point for detailed amendment, the definition of a disabled person seems outdated. It reflects a definition of some generations ago. At the least it should be replaced by the definition of the Disability Discrimination Act so that, for instance, visually impaired people who are not registered blind will qualify.
I have stated that many of the people affected will be elderly, which must have implications for community care policies. In Committee we shall test the Government on the discretionary aspects of the scheme and the means testing.
My noble friend Lord Ezra will, I am sure, spend some time on the home energy efficiency provisions of the Bill. Knowing my noble friend, I am sure that he will cast light rather than heat on the subject. Those provisions are separated from the grants provisions by some 70 clauses. Is it appropriate to include provisions for grants for lights and domestic appliances in a home energy efficiency scheme which does not have the capacity to meet basic insulation and heating needs? The clause follows the part of the Bill which puts the single regeneration budget on a statutory basis. Like the noble Lord, Lord Williams, I rather blinked at the suggestion that the basis might not have been statutory and wondered what that meant.
When the single regeneration agency was formed, I expressed concern about yet another king-sized quango and asked whether it would harness talents which had not found their expression in the previous system. This was at a time when there was a damning report on the activities of the urban development corporations—I admit that I quote the press on this—which,
"had had a bad year. No council would have been let off as lightly by the hawk-eyed ministerial team".
I am not wholly convinced that matters are now perfect. Although I accept that the bidding process, the competition process, is developing, I remain anxious about the effort, time and cost that are put into unsuccessful competition—the defeated expectations.
I remain anxious about the over-emphasis on the leverage of the private sector. A year ago £1 of single regeneration budget funding was met by £4 of private and/or public sector money. That seems to give enormous scope for tweaking and distorting the target of that funding. I do not believe that competition is the right strategy to tackle deprivation.
I remain concerned about the lack of accountability. Any transparency comes after the event when one reads reports about how the funding has been spent. For

991
instance, how can one assess beforehand what is to go into physical regeneration as against training? It is not easy to see how local communities can influence that area of spending. At Committee stage we shall look for new duties to be attached to the new powers. Otherwise there will be no ability to analyse or debate the changes in the purposes to which the resources are being applied.
I look forward to detailed debate on the provisions on construction contracts. I find difficulty in accepting that an imposed disputes procedure should be separate from the courts. In a complex industry I accept that that may point to a failure of the courts, but it is an interesting and perhaps dangerous path to go down. The same applies to an imposed scheme for dealing with payments separate from that agreed by contract. At the same time I note that the Government are refusing to underwrite the industry's codes of practice by legislation. However, when such changes are heralded, so much is excluded—maintenance, process plant, off-site fabrication. Indeed, it appears to be a complete list of the privatised utilities. I look forward to the comments of the noble Lord, Lord Lucas, on that aspect.
My noble friend Lord Rodgers of Quarry Bank will refer to parts of the scheme which deal with the architects' profession. My personal view is that registration of the professions must provide for complaints and the need to address any compensation scheme. I speak as a solicitor whose trade association attempts also to be the organisation which responds to complaints from the public. I feel that that is not necessarily a happy mix. Having had to seek compensation from an accountant in my professional life, I discovered that that profession does not have a scheme. I look forward to the next stages of the Bill.
As regards Part I of the Bill, the chair of a district council housing committee wrote to me last week saying that government funding for housing could fall on the grounds, "If you don't have to do it, we don't have to fund it". I hope that we shall have undertakings and assurances today that the Bill is not a mechanism for reducing grant funding. I hope that we may also have assurances on the point made in the housing White Paper that local authorities will be encouraged to act as strategic enablers to make the best use of available housing and resources. I remain to be convinced by the Bill.

Mental Health Services
4.9 p.m.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, with permission I wish to repeat a Statement on mental health services.
"With permission, Madam Speaker, I wish to make a Statement about the future of mental health services.
"On 24th August last year, my honourable friend the Minister for Health wrote to health authority chairmen informing them that I had asked the regional directors of the NHS to review the progress being made in their regions, towards the delivery of modern
992
and effective mental health services. I am today publishing the conclusions of that process, and I am announcing the further steps which the Government intend to take to deliver their commitment to a comprehensive, high quality mental health service.
"The background to these developments is familiar to the House. Over the last 40 years, in this and every other developed country, health and social service authorities have been replacing asylum based care with a broad spectrum of facilities which are better able to meet the needs of the individual person suffering from a mental illness. At its best, a modern mental health service represents a dramatic improvement in the quality of care available to its patients.
"Too often however the reality has not matched up to the potential. That is why we decided last June to make the improvement of mental health services a key medium-term priority for the NHS and it is why I initiated the review process last August.
"Today's report of that review confirms that every health authority now has in place plans which commit it to deliver a comprehensive mental health service. Sixty-eight health authorities have demonstrated that this objective will be achieved during the next financial year; the remaining 33 authorities have plans to deliver a comprehensive service which will take longer to complete. The review shows that health authorities are planning to increase the resources committed to mental health services next year by £53 million. Regional directors will continue to monitor the delivery of these plans at local level.
"It is important to be clear about the objective. The phrase "care in the community" has too often been taken to mean the abandonment of residential care for mentally ill people. That is not, and never has been, our policy. That is why I am today publishing a document entitled The Spectrum of Care which sets out in clear language the range of services which constitute a modern mental health service.
"It restates our commitment to provide treatment at home for those patients for whom that is the right answer. For this group there needs to be a range of services provided by the NHS and local authority social services departments, very often in partnership with local authority housing departments.
"The document also sets out the range of other facilities that are needed to complete the required spectrum of care: day hospitals and day centres: to provide for those who need care during the day; access to out of hours specialist services and crisis accommodation: to meet short-term crisis need; acute hospital beds: to meet the needs of those with acute mental health problems; 24-hour nursed residential places: to meet the long-term residential needs of those with severe and enduring mental illness.
"All of these facilities are needed together with a range of secure units for those who need treatment in a secure environment. Today's document makes clear the Government's commitment to deliver not simply

993
care in the community, but the full spectrum of care required for a comprehensive modern mental health service.
"Along with this overview of the full spectrum of care, I am also publishing a report commissioned by my department on 24-hour nursed care. The report states that there is accumulating evidence of a need for residential nursing care, for a relatively small group of so-called new long-stay clients. The Government accept that facilities of this kind do have a valuable role to play in the spectrum of care, and it will look to health authorities to ensure that their plans for the future provide for this need to be met.
"Although it is understandable that much of the comment about the state of mental health services concentrates on the pattern of service provision, a crucial requirement is that there is effective collaboration between the wide range of agencies that contribute to an individual's care. That is why the Government are committed to the full implementation from 1st April of this year of the Care Programme Approach. This requires the preparation for each patient under the specialist services of a plan of care based on an assessment of their needs, which names a key worker to be responsible for ensuring that this care is delivered.
"The NHS is under an obligation from next year to audit the successful delivery of this approach. I am today publishing an audit pack designed to assist with this process. It has been developed by the NHS Executive with the Royal College of Psychiatrists and constitutes an important reinforcement of our commitment to quality in these services.
"A further reinforcement of quality is provided by the Government's decision to introduce a patient's charter on mental health. A charter does not, of course, by itself improve standards. It does, however, state clearly the standards which the individual patient can expect to receive from the statutory services, and it therefore constitutes a bench-mark by which the quality of the service can be judged.
"I am today publishing a draft charter and I am asking for comments by 26th April. The draft charter proposes standards for timely access to specialist services. It sets out the entitlement of a mentally ill person to have their illness explained; to have the effects of medication explained to them; and to be given information about advocacy and support groups, together with information about what to do in an emergency. It also establishes that a patient who needs continuing care outside hospital will not be discharged from hospital until appropriate arrangements, including a care programme, have been put in place.
"There has recently been disquiet about the arrangements which allow hospital managers to discharge patients from detention under the Mental Health Act, possibly against the advice of their responsible medical officer. It is clearly essential that a detained patient must have the right to have their case reviewed. The Mental Health Act provides for
994
mental health review tribunals for this purpose. The powers of the managers operate in parallel with those of tribunals, to allow more informal consideration of individual cases. The operation of this system is currently being considered by the Royal College of Psychiatrists and the National Association of Health Authorities and Trusts with the Mental Health Act Commission. We expect to receive their advice in the spring of this year and the Government will reach a conclusion on the basis of that advice.
"Finally, I come to the question of money. This Government are firmly wedded to the provision of sufficient resources to allow the continued improvement of our mental health services. In December I announced the creation of a Mental Health Challenge Fund within the NHS, and I am today publishing the detailed criteria for applications to this fund. The fund will deliver £20 million worth of improvements and development in addition to the £53 million of growth money which health authorities already intend to spend on mental health next year.
"In December I also announced an increase of £11 million in the mental illness specific grant for 1996–97, and a further £9 million for 1997–98 subject to parliamentary approval. Of this £20 million, £4.5 million will provide for a 10 per cent. increase in the existing specific grant programme; £2 million will virtually double the provision for the homeless mentally ill initiative; and the remaining £13.5 million will be committed to a target fund to assist those local authorities working in areas where the strains on the mental health services are greatest. I have written today to the local authority associations inviting them to join us in drawing up the detailed criteria for the schemes.
"The combination of an extra £20 million through the mental illness specific grant; and extra £20 million through the NHS Challenge Fund; £53 million from health authorities' own plans; and a contribution of at least £2 million from local authorities' own resources will bring the total of growth money for the mental health services under this programme to over £95 million. Our National Health Service has made great strides in improving mental healthcare. I pay tribute to all those working in health and social services who have achieved so much for mentally ill people. We are committed to supporting them, to securing the best standards for users and carers, and to providing a service of which the public can be proud. The measures I have announced today constitute a substantial contribution to the progress we need to make. I commend them to the House".
My Lords, that concludes the Statement.
4.18 p.m.
Baroness Jay of Paddington: My Lords, I thank the Minister warmly for repeating the Statement made in another place. It is an important Statement, not least because the Government are acknowledging that community care for the mentally ill is failing, as we on these Benches have been saying for some time. There

995
are growing numbers of mentally ill people in the country and their care is causing great anxiety to the professional and informal carers who try to look after them; anxiety to ordinary citizens who are disturbed and sometimes threatened by the presence of seriously ill people in their midst; and, above all, anxiety to the patients themselves, who often feel isolated and bereft of support and treatment.
Today it is sadly all too common to see mentally ill people apparently aimlessly wandering our streets. Their present plight arises from a failure to develop proper community care services to substitute for old-fashioned long-stay residential institutions. As the Statement rightly says, too often the reality has not matched up to the potential. Too many psychiatric beds in hospitals have been closed too quickly. Nearly half have been cut since 1980, and patients have been discharged to fend for themselves without adequate support. The modest package of proposals announced in the Statement does little to redress that central crisis—a crisis that has been often demonstrated by many reports that this House has considered. I remind the House of the tragic cases of people such as Christopher Clunis, Alan Boland and Andrew Robinson.
The Government's review of health authority performance has found the mental health services wanting. Will the Government now call a halt to further closures of psychiatric beds at least until these new measures have been given a chance to develop? Will appropriate residential care play an important part in the new spectrum of care programme to which the Secretary of State now lends his support? At the same time, and very importantly, will the Government insist as part of their apparently new, tough line with health authorities, that all those authorities have in place proper care programme policies? The Statement says that they expect full implementation from 1st April. The care programme approach, which is supposed to ensure that all mentally ill patients have a care programme in place before they are discharged into the community, was originally intended to be implemented by 1991. In 1996, it is still not universal. That is disgraceful. Perhaps the care programme approach should be included in the new Patient's Charter when the draft is finalised—which, as the Minister explained, will also be in April.
We welcome the new Patient's Charter, which, as the Minister said, sets out what services patients will have a right to expect. However, I add a note of caution about the value of such a charter in this special area of care. Many mentally ill people are confused, isolated and without personal support. Some will undoubtedly have willing families and friends who will be able to act as their advocates. But others will be literally unable to understand or to pursue their care entitlements. Many noble Lords will remember the evidence of Christopher Clunis, the schizophrenic who murdered Jonathan Zito on the London Underground. Clunis, although he realised he was in trouble, simply had no idea where he should look for help or what help was available. He continued to walk the streets. A new Patient's Charter will not solve that kind of situation, which I fear is very common. I hope that the Government will not have too much confidence in it as an instrument of policy.
996
Even in ideal circumstances, a Patient's Charter will work only if sufficient financial and staff resources are in place to deliver the services promised. Will the Minister explain whether any of the financial arrangements announced in the Statement today represent new money? Will she also tell the House how the Challenge Fund money and the mental illness grant can be used specifically to improve the numbers of healthcare professionals working in this very difficult area of care? The Royal College of Psychiatrists has complained that there are staff shortages at consultant, registrar and junior doctor levels. The Royal College of Nursing reported in January that there are fewer community psychiatric nurses working in England today than there were in 1990—although the past six years has been the time when more and more mental health patients have been discharged into the community. Today, only one in five people diagnosed as schizophrenic and living in the community has access to a community psychiatric nurse.
Staff shortages and low morale among those who are working under great stress make it very difficult indeed to deliver successful care. Perhaps the Minister will explain how the new measures will ease shortages and raise moral.
On these Benches, we welcome the Government's overall review of mental health services. However, we find it extremely disturbing. Despite the confidence expressed in the Statement about future plans and performance, it is disgraceful that, for example, the North Thames region reported that none of its health authorities presently has in place a comprehensive set of services for mentally ill adults. Two-thirds did not expect to be able to offer comprehensive services by the end of this next year, even with extra help. Community care is failing very badly, and this package of proposals is inadequate to deal with that failure.
Just over a year ago the Mental Health Task Force—a national body set up by the Department of Health—published its findings on London. It stated:
"Patients with severe and chronic mental disabilities are being discharged without adequate supervision, or the provision necessary to meet their housing, social and health needs. This could incur risks not only to public safety but also to the safety of the individuals concerned".—[Official Report, 16/3/95; col. 940.]
Unless we have a far-reaching, much broader strategy than is represented by the Statement, one designed to address acute bed shortages and staff shortages as well as overall care and supervision in the community, it seems very likely that the alarming picture painted by the Mental Health Task Force will continue.
Earl Russell: My Lords, Whitehallspeak has a certain residual honesty about it which I rather like. We hear in the Statement that the measures,
"constitute a substantial contribution to the progress we need to make".
That, I think, is accurately translated as, "We believe this is a step in the right direction, but a very little one". We on these Benches would not dissent from that reading of the Statement.

997
I was glad to hear the Government say that the care in the community policy, as it relates to mental health—that is all that we are discussing at the moment—never meant the abandonment of a residential care policy. I remind the Minister of some figures that we discussed during the passage of the Mental Health (Patients in the Community) Bill from the Royal College of Physicians on the shortage of mental health beds in London, and from the noble and learned Lord the Lord Chief Justice about the number of occasions on which people in need of mental health treatment have to be sent to prison. In the light of those, will the noble Baroness tell the House how many more mental health beds, either acute or long-stay, will be provided as a result of the Statement? In assessing the needs, I hope that she will take account of other pressures on mental health beds which may result from increasing homelessness in a wide number of contexts. That is one factor that exposes weaknesses in people's mental health make-up. In fact, it accounts for quite a large amount of the pressure on mental health beds.
Will the noble Baroness also consult, first, the National Association of Citizens' Advice Bureaux, and secondly, her noble and right honourable friends in the Department of Social Security about the plans to remove the mobility component of the disability living allowance for patients in hospital? That will fall particularly severely on mental health patients whose state is perhaps not particularly acute and who are able at present to maintain a contact with friends, relatives and neighbours. For them, such contact will be very much harder in future.
We hear about every health authority having plans. There are plenty of plans. I recall listening to Mr. William Waldegrave, when he was still an undergraduate, referring to Her Majesty's Stationery Office. I believe he described it as, "the large intestine of the body politic producing excreta of national plans". I do wonder whether very much has really changed. What matters is not whether we have plans, but whether those plans are capable of being delivered.
We hear of £53 million being devoted to plans. From where will that money be taken? Is it new money? Or is it at the expense of some other programme that the health authorities might otherwise have undertaken—and if so, what?
I am glad to hear that there is concern about the care programme approach. I am also glad to hear the Government say that a charter by itself does not raise standards. I can recall Mr. Roger Freeman, when he was a junior Minister, in 1991, saying that the Citizen's Charter, by definition, could not be used to solve major problems. At the time Mr. Freeman was speaking about the London-Tilbury and Southend line. How right he was.
I want to know not only whether there is a charter but what it covers and what means there are to make it effective. I should like to know whether the charter will cover the discharge of mental health patients from prison and what arrangements are to be made for them. I want the noble Baroness to understand, as I am sure
998
she does, just how irritating—I could use stronger language—it can be to public service workers who find themselves required to achieve targets under charters at precisely the moment when the means of achieving those targets are taken away. There is no procedure in our public service, and especially not in our public expenditure round, for matching the amount of funds given to various departments in the public services with the targets that they are meant to meet. So, if the targets go up and the funds go down, those who are trying to bridge the gap feel that they are being torn in two. It is not a particularly comfortable feeling.
In this context, we need to bear in mind the remarks of my noble friend Lady Hamwee about the competing demands on local authority resources. Especially we must remember the tendency of mental health sufferers to gravitate to a few particular areas of the country. They go not just to large towns. It is more specific than that. They gravitate in particular to places where there are large concentrations of cheap, privately rented property and in fact to certain corners of London. Those areas often face quite special burdens. I should like to think that there have been discussions between the Department of Health and the Department of the Environment about adjusting local authority revenue support grants accordingly. If that is not done, I do not believe that the Statement will succeed in delivering the changes that we all wish.
A total sum of £95 million has been mentioned. Can the noble Baroness confirm or deny that, of that £95 million, only £20 million is new money now allocated for the first time? Is she aware of and does she accept the figure offered by MIND, which suggests—to me rather more realistically—that something of the order of £300 million is needed? If that amount cannot be raised, we must return to Sir Keith Thomas's definition of magic: if magic be defined as the use of ineffective techniques to allay anxiety when perhaps no effective ones are available, then perhaps no society will ever be free of it. I understand that, but I should like some effective ones sometime.
Baroness Cumberlege: My Lords, I should like to respond now to the two members of the opposite parties who have had a very quick opportunity to see the Statement and to comment on it. Let me start with the comments of the noble Baroness, Lady Jay, who came in strongly to say that community care is failing. The purpose of the Statement today is to put community care into context. In the past, community care has not considered the whole spectrum of care. There was concentration on moving long-stay patients out of huge mental institutions and into the community. Perhaps there has not been enough concentration on those who are severely mentally ill and need a different kind of provision of acute care in hospitals and also with 24-hour staff nursing beds. That is one of the main planks of the Statement today in our policy for the future.
It would be a pity if community care were totally rubbished. I used to be responsible for four of the largest mental institutions that served London. They were built in the last century. When I became regional

999
chairman, I looked through some of the reports. In all, we had 20 major inquiries into long-stay institutions. One has only to read those inquiries to realise what an utterly miserable and dejected life many of those people suffered. We had to do something about that. It is quite right that the majority of those people no longer live in long-stay institutions. Again, one only has to visit them in the community to see their quality of life, a quality which was denied them in the past.
However, there is the other end of the spectrum. That is the end on which my right honourable friend is concentrating today. We are going to put huge resources into mental health services but they are targeted at the severe end. Although the number of beds has been increased, it has been done over a relatively short time. We want to ensure that that momentum is maintained.
The noble Baroness mentioned Christopher Clunis and those very severe cases where homicide has been committed. She described them as quite common. That is not true. They involve a tiny percentage of people. Indeed, there is no evidence at all—
Baroness Jay of Paddington: My Lords, with the Minister's permission, perhaps I may intervene at this point. Perhaps she slightly misheard what I said. I did not say that cases involving homicide were common. Indeed, I should always be at pains to say that people who are severely mentally ill, as Christopher Clunis was severely mentally ill, are more likely, as the statistics always show, to do damage to themselves than to other people. I said that it was common for people who were supposedly under community care not apparently to be properly supervised.
Baroness Cumberlege: I apologise to the noble Baroness if I misunderstood her. Certainly, she will appreciate that the new programme approach that we are adopting will try to address that problem. Indeed, where it works well, we know that it is extremely effective.
Concern has been expressed about the increased numbers of psychiatrists and psychiatric nurses that are necessary. Growth in the past has been considerable. But we recognise that in future there will be an even greater demand. That is why we have put so much resource into this initiative. If we consider just the past five years, over 14,000 nurses have received training as mental health nurses. Again, there has been an increase in the number of psychiatrists. Indeed, medical schools will take an initial 10 per cent. more medical students from now until the year 2000. It is not a matter of funding in this case; it is a matter of ensuring that people want to enter those particular occupations and specialties. We are aware of the vacancy rate that exists at the moment among psychiatrists. The posts are funded; they are there and they are allocated. It is a matter now of ensuring that they are filled. A working party has been set up by the department with the Royal College of Psychiatrists to look at those specific issues.
We are anxious—my right honourable friend has given an undertaking in the past—to ensure that beds are not closed until there is adequate alternative facility made. It will not always be beds. Sometimes it will
1000
consist of emergency teams; there will be a strengthening of community services through GPs employing community psychiatric nurses or having them attached to their practices; and there is a demand for day centres. Above all, we know that we need to keep track of those people who leave intensive care—those who leave acute services—so that they do not get lost in the community. That is taken care of by the Bill which was passed by this House earlier this year and will come into force in April next year.
Perhaps I may now turn to the question of funding. The noble Earl, Lord Russell, asked whether this was new money. We are making available an extra £40 million over the next two years in addition to the £53 million from health authorities' own plans. They have already told us that that is the investment they want to make in mental health services next year. We know that every year the National Health Service receives an increase in funding. We expect the vast majority of that £53 million to come from the growth money that the National Health Service will be receiving through the PES round that was announced in November. We also expect local authorities to put in money from their allocations. They are also receiving additional money, but some of that money will be matched. We expect them to use the money they receive through the community care funds, the mental illness grant and other specific funds for this purpose.
The Patient's Charter in all its various forms—we now have a number of charters—has had an enormous impact, particularly on issues such as waiting times. We have seen waiting times plummet and we know that because we have set standards. Those standards are being met and they are being monitored. The noble Earl asked how we would ensure that the standards are met. There is specific monitoring of the care programme approach to ensure that the standards are met. We now have a system through the reformed National Health Service that enables that to happen through the regional offices.
I appreciate that noble Lords have not had a chance to look at the charter. I shall certainly place one in the Library if that is helpful. It takes into account the care programme approach so that relatives and carers can see whether that is being followed.
4.41 p.m.
Lord Campbell of Croy: My Lords, I welcome in general the proposals in the Statement. On one part of it, while the large majority of schizophrenics are not violent or dangerous, there are a few who are. Will the Government do all they can to ensure that the community care system identifies those very few and keeps them away from the public and under supervision for their own safety? Will the Government also resist attempts by civil liberties organisations to let such people freely into the community?
Baroness Cumberlege: My Lords, the care programme approach is intended to do just that—to ensure that when people leave hospital they have a key worker who makes sure they do not get lost in the labyrinth of different services supplied by the National

1001
Health Service and also by social services. One of the strategies in the policy is to ensure that social services and the health service work more closely together. We accept that some people will need secure accommodation probably for the rest of their lives. But I do not think we should underestimate the enormous progress that has been made, particularly through the new drugs that have become available. We see people now who in the past would have been kept in acute care. They are now holding down jobs, leading a normal life, and in many cases a very happy family life as well.
Lord Strabolgi: My Lords, arising out of what was said by the noble Lord, Lord Campbell of Croy, will the Government pay particular attention in future to the role of the so-called anonymous lay managers? There have been some cases where they have overruled the views of professional doctors and psychiatrists and have let out dangerous mental patients into the community against all advice. Who are they? Why are they allowed to remain anonymous? Why are they allowed to overrule the professionals? Will the Government pay particular attention to this point in future as there have been cases where dangerous mental patients have been allowed back into the community, without adequate supervision, to murder and rape?
Baroness Cumberlege: My Lords, mental health managers are not necessarily people in pinstriped suits who are employed by the health authority. Managers in these terms are often lay people who are brought onto a board. The National Association of Health Authorities and Trusts, the Mental Health Act Commission and the Royal College of Psychiatrists share the noble Lord's concern. They have set up a group specifically to review this role of mental health managers. They will be reporting very soon in the spring.
Baroness Faithfull: My Lords, does my noble friend agree that we have not got to the heart of the matter? We have talked about money; we have talked about beds; we have talked about homelessness; but we have not talked about the best way to treat a schizophrenic. I have had to do this work myself in the community and I have great sympathy with community psychiatric nurses and social workers. If a patient is discharged from hospital and he has to be supervised in the community it is impossible to be with that patient 24 hours a day. One problem—I am sure my noble friend will agree with me—is that some schizophrenics will not take their medication. If they take their medication there are not many problems. But how does a community psychiatric nurse, good though he or she may be, or a social worker, good though he or she may be, make a patient take his medication? The patient may have good accommodation at night but there is always that moment when he has not taken his medication.
We have closed down a number of centres where patients used to be able to go, morning, noon and night. At the centres a nurse would be on duty and food would be supplied. It is also to be regretted that we have closed down the occupation centres. They provided dignity for patients. They could be under supervision—we tried to
1002
make it not appear to be so—and they could do a job of work. In Oxford I used to be in touch with the Cowley works which would Send to us simple jobs which people could do. Cowley would pay the going rate to the patients. In that way patients were supervised throughout the whole day without it appearing that they were being policed. They were provided with dignity.
I do not think we have considered enough how we should deal with schizophrenic patients in the community who will not take their medication. We really should remember the families of schizophrenics. Schizophrenics are an agony to families. I have seen families destroyed because their schizophrenic son has disappeared. They wonder what has happened to him. They do not know. I know it is felt that it is wrong to supervise by laying down lines of supervision, but we have to do that with some patients. The only way to do it is to give them a dignified life. That means giving them somewhere to live where they are supervised, befriended and cared for, where they can work during the day and earn a living, but where they are in care and supervised.
I feel humble in speaking in front of noble Lords who are doctors, but I do not think the doctors have set out for social workers and community workers exactly how such patients should be treated. All the money in the world and all the community care in the world will not make a difference unless we give real thought to what these patients really need and how they can be cared for in a dignified but supervised way.
Baroness Cumberlege: My Lords, I agree with much of what my noble friend has said. Schizophrenia is a quite hard diagnosis to make. We know that it can vary enormously, from those who are extremely ill to those who have bouts of illness from time to time and are easier to manage. The supervision registers which we are putting into place in all health authorities identify those people who may be of particular risk to themselves and to others.
Our second initiative is the new power of supervised discharge under the Mental Health Act which, as I have said, noble Lords passed earlier this year. That enables the re-admission of a patient if they are not complying with the treatment. So there is a much greater grip on the situation. I agree so much with what my noble friend has said about ensuring that people are occupied during the day. One of the difficulties in the past has been when people have been discharged from hospital. Their basic routines, not only of where they sleep, how they eat, how they spend their weekends and whether there are employment opportunities, have been neglected in the past. That is why we want the care programme approach which will address these issues.
As regards families, I share my noble friend's sympathy for the families who take on these very difficult responsibilities. But through the Patient's Charter, which we are putting out in draft form for consultation today, we would involve families in the

1003
assessment of the patient and also in the discharge arrangements. That is very important because so often it is the family which is left to pick up the pieces.
Lord Archer of Sandwell: My Lords, if I understood the noble Baroness correctly, she said that her department would be reviewing the future of mental health review tribunals separately. Is she aware that that will come as tidings of great joy to those who have to operate the system? Will she ensure that the consideration which she indicated a few moments ago in answer to my noble friend as regards management meetings is undertaken jointly with consideration for the future of the mental health review tribunals? The relationship between the two procedures gives rise to a great deal of confusion.
Baroness Cumberlege: My Lords, at this moment we are not reviewing the tribunals but the mental health managers. We have some difficulty with the tribunals in that they are part of the Mental Health Act. It may be that the 1983 Act will need some sort of revision or review in time. I am very sorry to disappoint the noble and learned Lord, but that is the situation.
Lord Mottistone: My Lords, I very much support what my noble friends Lady Faithfull and Lord Campbell of Croy said. I also congratulate the Government on tackling the problem. Like other noble Lords, I have doubts whether they will be able to do so because I do not believe that there is enough money around in the country let alone in the Department of Health. But let us see how that goes.
When my noble friend was making the Statement she mentioned a number of reports, papers, plans and all kinds of other things. It seemed to me that some of them might be in print and some not. It would be helpful if everything that was mentioned by my noble friend, and not only the charter, was available for us to read as well as the Statement itself. There is a great deal there to be read because we have a great deal of studying to do. We are talking blind from this side of the House. Noble Lords opposite always get their papers in advance, and how lucky they are!
Lord Graham of Edmonton: How wrong you are!
Baroness Cumberlege: My Lords, I do not share my noble friend's pessimism. I believe that in time we shall get this matter right. I recall child abuse 20 years ago when it was a huge issue. By ensuring that we had key workers and a number of other procedures, we have managed now to make progress on that front. There are five documents. There is The Spectrum of Care; there is another document on 24-hour nursed beds, an audit pack on the care programme approach; the draft charter for mental health services; and the application criteria for the mental health Challenge Fund. I shall ensure that they are all in the Library.
Lord Hayhoe: My Lords, reference has been made to mental health managers. While I accept that on occasions mistakes have been made, in these exchanges it would be wrong if some reference were not made to the immense amount of work that they do in a voluntary
1004
capacity. That has been a duty laid on them by Parliament, who decided that this lay element should make the decisions. In those circumstances, I hope the Minister will agree that it is right that praise should be given to the great service that the vast majority of these managers give to the community. I have a little knowledge of it myself. I believe that the individuals concerned deserve praise rather than condemnation and criticism.
Baroness Cumberlege: My Lords, I am very grateful to my noble friend. He is right in that we owe a huge debt in this country to the number of people who serve as mental health managers. Sometimes they have not only a difficult but an impossible task to carry out. They are expected to make some very difficult judgments. I would like to be associated with my noble friend's comments.
Lord Finsberg: My Lords, is my noble friend aware that there is one point that worries me very much? I first became associated with mental health when I went over Friern Barnet hospital with Richard Crossman and another Jay, Mrs. Peggy Jay—a much underrated person. I saw those enormous buildings and it was a ghastly sight.
As a junior health Minister I had the responsibility for taking the 1983 Bill through the House. I could never be satisfied that the mechanism was there to ensure that some over-zealous doctor did not discharge a patient just because he had been told by a town hall bureaucrat that they could look after him. I always felt that that was not possible. I would like to know whether we now feel that this problem can be overcome. One of the reasons why people are still drifting around is the semi-promises given to hospital doctors which are not carried out.
Baroness Cumberlege: My Lords, I hope that psychiatrists are robust enough to follow their clinical judgment and that undue pressures are not put on them. It is very difficult for them because they have to balance human rights with containment and the interests of the patient coming first. There are also the interests of the general public to be considered. I believe that in time, with the care programme approach, more careful assessment and more appropriate facilities supplied for these people, not only in the community but with the 24-hour nursed beds, the crisis teams, the working of 24-hour community teams, intensive home support and a whole range of other services that need to be supplied, we will make the psychiatrist's job that much easier.
Baroness Jay of Paddington: My Lords, before the noble Baroness sits down, will she confirm that her reply to her noble friend Lord Mottistone about the five documents to be published did not include the full review of health authority mental health services, on which we understood the Statement was based?
Baroness Cumberlege: My Lords, I should have made that plain. It is actually sub-titled The Spectrum of Care.

Housing Grants, Construction and Regeneration Bill [H.L.]
4.58 p.m.
Second Reading debate resumed.
Viscount Ullswater: My Lords, my noble friend the Minister has introduced the Housing Grants, Construction and Regeneration Bill in his normally clear and eloquent manner. He should be congratulated on presenting a complicated Bill in such a user-friendly manner. It contains important new provisions for housing grants. There is no doubt that action of the kind proposed in Part I of the Bill to help a local authority move from a requirement to approve mandatory grants to a more strategic, discretionary approach, is very welcome. Unlike the noble Lord, Lord Williams of Elvel, I believe that authorities should be free to decide their priorities in this regard.
These proposals should allow the same amount of investment and therefore maximise the impact on the repair of unfit dwellings. I understand that disabled facilities grants will continue to be mandatory. This Bill should make it easier for disabled people living with a relative to get grants.
I know from my own experience how pleased architects will be with Part III. They have been campaigning for some time to amend the Architects Registration Acts of 1931 to 1969. The proposals in the Bill will allow the profession to create a much smaller and more efficient body for the registration of architects. Demands on qualified architects become more complex and far-reaching every year. Statutory independent registration will assist in the development of the profession and with the protection of the public.
The proposals in Part IV will provide a single statutory basis for the single regeneration budget and are designed to assist good management of the Government's regeneration policy. I would have no quarrel with that.
However, it is on Part II that I should like to concentrate my few remarks. As we have heard from my noble friend, Part II concerns the construction industry and seeks to provide a framework for fairer contractual arrangements and better working relationships in the construction industry. That part of the Bill has its origin in the 1994 Latham Report, Constructing the Team, as indicated by the noble Lord, Lord Williams of Elvel, and as my noble friend commented in his introduction. It was an heroic effort by Sir Michael Latham to identify some of the problems in the construction industry, particularly the adversarial nature of the way in which it conducts business and the extent to which it resorts to litigation to resolve disputes. The Latham Report suggested that the industry should change the culture of the way in which it does business and move to one based on co-operation. At the same time, as we have heard, a target has been set to achieve a 30 per cent. real cost reduction by the year 2000 across the UK construction industry as a whole.
I should like to pay tribute to Sir Michael for the important contribution that he has made not only in preparing that important document, but in the continuing
1006
work that he now does as chairman of the Construction Industry Board, which was set up in February 1995. My right honourable friend the Secretary of State for the Environment acts as president of the CIB. That demonstrates the Government's commitment to support the desire of the industry to change its ways.
The provisions in Part II concentrate on two areas that were examined in the Latham Report and would apply to all construction contracts except those signed by a householder or those involving process engineering. It is important that the Bill includes public sector contracts as well as private sector contracts.
Clause 102(2) lists the exclusions from the provisions of the Bill. There may be some need to review that list in Committee, as some concern has already been expressed in the House that too many contracts would fall outside the scope of those provisions. Is it really intended, for instance, that, as the noble Baroness, Lady Hamwee, suggested, all maintenance contracts should be excluded? Should all off-site fabrication, so much a part of modern construction technique, be excluded? Will Clause 102(2)(c) put the construction of a supermarket outside the scope of the Bill?
The noble Lord, Lord Williams of Elvel, criticised Clause 102(4) which gives the Secretary of State powers to alter the provisions of the previous subsections. We shall have to wait and see what the report of the Delegated Powers Scrutiny Committee says, but the Secretary of State has to make any of those changes by order. I believe that Clause 140 would make those subject to the negative resolution procedure in Parliament, and in my view that provides a sufficient safeguard.
The first important proposal is contained in Clause 105 which introduces a right to refer a dispute arising under a contract for resolution by a speedy adjudication procedure under a scheme for construction contracts, unless the contract contains an equivalent procedure.
Although the scheme I mentioned will be brought forward by the Government under secondary legislation and the negative resolution procedure, there are on the face of the Bill what are intended to be the criteria for this speedy adjudication procedure involving timings and the duties of the adjudicator. It is interesting to note that at present even the GC Works 1 Edition 3 government contract, as I am advised, would have a faulty adjudication procedure judged by these standards, and the Def Con 2000 contract (just published) would not meet the criteria. Whereas I believe it to be quite right that the criteria should be spelt out on the face of the Bill, they will be underpinned by the scheme for construction contracts which has yet to see the light of day. It would be of great assistance to the House at Committee stage if a draft of the scheme for construction contracts could be available at that time, and I would ask my noble friend Lord Lucas to inform the House this evening if that will be the case.
The second proposal would require contracts to provide an adequate mechanism for determining the amount and timing of payments. The parties are free to agree the amounts of the stage payments and the intervals, but must include a final date for each payment.

1007
In Clause 105 the criteria for the procedure of adjudication are set out on the face of the Bill. Perhaps there is a case for the same treatment to cover "an adequate mechanism" and the criteria for this mechanism should be placed on the face of the Bill rather than having to delve into the scheme for construction contracts.
Furthermore, I should like to draw my noble friend's attention to the phrase in the Bill in Clause 106(2) which indicates that parties are "free to agree". I do not believe that phrase should be capable of interpretation to mean that small sub-contractors should be forced to agree wholly onerous conditions on a "take it or leave it" approach by a main contractor. Perhaps that condition in the contract could also be referred to the adjudicator. This is again a matter to be dealt with at Committee stage, and I would not expect my noble friend to deal with it tonight.
"Set-off" is a well-established principle in common law, but in the construction industry has been subject to grave abuse. Clause 108 sets out a way of regulating any form of withholding payments, including the use of the adjudicator under the scheme of construction contracts. A new right is given to contractors if a payment is not made without the proper notification. The contractor now has the right to suspend work on the contract after seven days' notice and can even leave the site without the risk of breaching the contract and the contract being terminated as would be the position at present. Another important change is introduced by Clause 110 which prohibits the so-called "pay when paid" clauses in contracts; or more strictly makes any such clause in a contract to be unenforceable except where a third party has become insolvent.
The Bill represents an important collection of improvements to contracts in the construction industry and I am pleased to learn that the industry is in agreement that this legislation is needed. One might ask: if it is agreed, why is there a need for legislation? However, it is important to achieve a level playing field for the industry and to make sure that all parts of the industry should be bound by these sensible provisions.
As the noble Lord, Lord Williams of Elvel, said, not all of the recommendations in the Latham Report have been agreed by the industry in time for this legislation. I believe that that is a matter for regret. In this context, I would mention three rather important areas where agreement has not yet been reached: trust funds, liability law reform, and compulsory latent defect insurance.
Trust funds are designed to make the cascade system of payment in the industry—client to main contractor, main contractor to subcontractor and so on—less exposed to the insolvency of one participant. If a main contractor fails the subcontractors will be treated as unsecured creditors for work they have already done. Bad debt insurance is possible but is another overhead cost at a time when most firms are trying to cut their overhead costs. However trust funds would tie up a huge amount of capital which could have a serious effect on the industry and the wider economy and clients still retain the worry that there remains a serious risk of paying twice in the event of a main contractor insolvency.
1008
With regard to liability law reform, I understand that that has been passed to the Law Commission for its consideration. I can only say I hope that it can proceed expeditiously for as regards the construction industry a mass of reports have dealt with this matter; from the 1988 Building Users Insurance Against Latent Defects known as the BUILD report to the 1989 report prepared by Professor Likierman entitled Professional Liability—report of the study teams published by HMSO and of course the more recent Latham Report of 1994 and even since then there have been three reports from the working group of experts set up under the "follow-up" to the Latham Report. There may be other professions not so far advanced in this matter, but that should not prevent the Law Commission concentrating on the gaps rather than going back to square one.
The problem with latent defects is that there remains an unacceptable level of defective work and "no-fault insurance" will do nothing to reduce that level. Even then, I understand that there are no satisfactory policies of insurance available at reasonable cost.
As I have indicated, the industry has not reached agreement on those matters and further consultation will be needed before progress can be made. In my view it would be premature to try to amend the Bill in the knowledge that consensus has not been reached.
I have been able to welcome these proposals put forward by the Government as sensible, timely and an appropriate response to the wishes of the industry as identified in the Latham Report. There may be one or two suggestions to be made at Committee stage to improve the Bill, as I have indicated. In the meantime, it seems to me that the Government and the industry are moving in the right direction.
5.12 p.m.
Lord Howie of Troon: My Lords, I should begin, under the current dispensation, by reminding the House, if it needs reminding, of my interest in the construction industry as a civil engineer of 50 years or so standing, although it is quite a long time since anyone paid me for doing any civil engineering. I approach the Bill as a civil engineer, since once a civil engineer, always a civil engineer.
I intend to deal with Part II and touch briefly on Part III. I welcome Part II, in part. I have a substantial number of niggles which I shall touch on only briefly this afternoon, but which will surely arise in Committee and at later stages of the Bill.
I must start with a welcome which might appear to many noble Lords as somewhat trivial, but it is not to an engineer. Nor will it be to architects. Clause 102(1)(a) makes a distinction between buildings and structures. That might not strike lawyers or other people as important, but it is significant to engineers. It is something that I have pressed upon the House many times since 1988. I achieved a considerable amount of success a year ago in the Environment Bill when the noble Viscount, Lord Ullswater, agreed with me that that distinction should be made. He brought it into that Bill. However, this is the first time that it has appeared in a Bill as originally drafted. I have the noble Viscount to thank for that small

1009
matter. I do so publicly, honestly, and openly, and if he is around later, I shall buy him a small, inexpensive drink on the strength of it.
What worries me about Part II is that large parts of it depend upon the scheme which has been mentioned and which appears in Clause 111. It is difficult to discuss a Bill sensibly if the scheme has not been published. I know that discussions are going on, and no doubt at some stage the scheme will be published. I believe that the scheme, or at any rate a substantial part of it, should be published before we come to the end of the proceedings on the Bill in this House and not at some later stage. We should know, at least before Third Reading, and preferably before Report, what the scheme is all about, because as it stands it could be about more or less anything. When will it appear? I have no doubt that we shall be told. When it appears we should be told—the noble Viscount mentioned this—how it is to be presented to the House and debated here.
I have one minor point to make. It is a Committee point which I am sure the noble Earl will remember in due course. I wonder why in Clause 111(3) the Minister who deals with the scheme is the Secretary of State, presumably for the Environment, in England and Wales, but the Lord Advocate in Scotland. I cannot remember who the Lord Advocate is for the minute, but I am sure that he is an excellent and eloquent man. I know what his job is but I cannot remember who he is. I am sure that he is a splendid fellow, but he is not the first man I would go to for advice on the construction industry. I am sure that some reply on that will be forthcoming.
I shall turn briefly to Clause 102. My noble friend Lord Williams of Elvel dealt with it fairly convincingly. The clause is, quite frankly, a shambles. It cannot be permitted to stand in its present form. We have a situation where, for example, tunnelling turns up in Clause 102(1)(e) as though it were a subsidiary matter. The Channel Tunnel is not a subsidiary matter. Tunnelling should appear in Clause 102(1)(b). It is a Committee point and it is one to which we should come. It is a Committee point, but it is typical of the shambles which Clause 102 represents.
The point that really worries me is the second part of the clause where the exceptions are set out. I spent a large part of my life as a young engineer designing structural steelwork: columns, beams, gantries, roof trusses and such things. They are all excluded. That is ridiculous. They cannot be excluded. I do not know how on earth anyone can exclude a nuclear power station. Perhaps I have misunderstood the Bill. It seems to me that nuclear power stations and some other things are excluded for some peculiar reason. The noble Baroness, Lady Hamwee, thought that it might be because some of them are privatised industries. I do not believe that the Government would approach it in via manner, or do I? I am not too sure.
I turn to adjudication. The noble Earl said that adjudication was quite recent. He was right in a technical sense in that the word has been used only recently, but traditionally the adjudicator in the construction industry has been the engineer or the
1010
architect. I have been an adjudicator on many occasions dealing with disputes in the course of a contract. I have dealt with them all in my customary bumbling manner and I have hoped to produce a reasonable result at the end of the day. The idea of adjudication is not new, it is merely the name "adjudicator" that is new.
There is a problem with that clause because I am sure that the draftsmen are in total confusion as regards adjudication and arbitration. Adjudication is an interim process which takes place during the construction period, deals with disputes as they arise and reaches a resolution. However, it is not a final resolution because the contractor and the client can then go to arbitration. The difference between adjudication and arbitration is that the decision of the arbitrator is final and cannot be appealed against, which is not true of the activities of the adjudicator. The paragraph in Clause 105(4) which refers to the Arbitration Act should be removed because it demonstrates a mistake.
Furthermore, I am sure that the timescale given in the Bill for adjudication is wrong. It could apply to certain small disputes. However, anyone who has dealt with civil engineering contracts and is aware of the famous Clause 12 in the standard conditions of contracts of the Institution of Civil Engineers, which deals with unforeseen obstacles and circumstances in particular as regards foundation excavations, knows that no adjudication can take place within the timescale proposed in the Bill. That must be reconsidered.
I agree with the strictures of my noble friend Lord Williams as regards the Government's somersault on the registration of architects. However, I believe that for all their peculiarities of acrobatic activity the Government landed on their feet. They have got it right, subject to any reservations which the noble Lord, Lord Rodgers of Quarry Bank, may have. Whatever reservations he has I shall certainly agree with them.
I believe that the registration of architects is a good idea and although it is outwith the ambit of the Bill I would like to see a similar registration scheme applied to consulting engineers. I am not sure that the various engineering institutions will agree with me, but that is my final comment for which I hope the institution will forgive me.
5.22 p.m.
Lord Rodgers of Quarry Bank: My Lords, using a colourful image, the noble Lord, Lord Williams of Elvel, called the Bill a mishmash and a curate's egg. I assume that he meant a scrambled curate's egg. I should describe the Bill as a conglomerate which was crying out for demerger. If each part were floated on its merits, Part I might sink without trace, given the depressing analysis of it by my noble friend Lady Hamwee.
On the other hand, Part II, with all the reservations that have been made today, and Part III would find their backers and it is to those two parts that I wish to refer. I believe that they might be better as separate Bills but, nevertheless, I welcome them and commend the intentions behind them.

1011
I ought to say something that has not yet been said. Any discussion of the future arrangements for the construction industry and for architects who work within it must be prefaced by a reminder that we are not dealing with a confident and prosperous industry but one which has enjoyed few of the benefits of economic recovery and feels very worried indeed about its prospects.
I noticed, for example, that the CBI's economic situation report for January 1996 stated that a balance of firms in the constructions industry expect to cut back on investment in buildings.
"Cuts on buildings are foreseen by all firm sizes, except those employing more than 5,000 staff who expect a very small increase".
Referring to building materials it stated:
"The downturn in building material trends has intensified since October with both output and orders suffering a heavy fall, the biggest decline amongst the main sectors. This reflects the deteriorating climate in the construction industry".
I am sure that that view is echoed in the statistics of the Minister's department. It is a depressing picture and we should not forget the uncertainty within the industry.
Given the contents of the Bill, perhaps I may say in parenthesis that I greatly regret the continued uncertainty about the future of the Building Research Establishment. It has served industry with great distinction for many years. I believe that it is wrong to privatise it if improving efficiency and effectiveness are now on the Government's agenda, as Part II of the Bill shows. It is relevant to consider the comments of the Building Material Producers, which is a free enterprise group and not too committed to the public sector. In its January bulletin it states:
"Any effort to sell the BRE to the highest commercial bidder, with no thought for the consequences for the industry, must be resisted, as must any effort to break up the existing multi-disciplinary core of the Building Research Establishment".
That is an important message that we should not forget, although it is not directly relevant to today's Bill. It is in sharp contrast with the endorsement given by the Building Material Producers to the Government's proposals in Part II to implement the Latham Report. I broadly welcome those proposals and wish to add my congratulations to Sir. Michael Latham on producing a detailed and interesting report remarkably quickly.
As I cannot forbear to give congratulations today, including to the Government, perhaps I may say that I welcome the fact that, although there is still a good deal of unfinished business, they have brought forward Part II of the Bill, even though it might have formed a separate Bill. As other noble Lords have said, Part II is best dealt with in detail during later stages of the Bill.
I agree with other noble Lords about the importance of Clause 105 and the necessity to get it absolutely right. That will need the most careful scrutiny.
The noble Lord, Lord Williams of Elvel, was harsh in his strictures on the building industry. I do not wholly dissent from every one of them, but recently the building industry has made remarkable strides to put its own house in order. One of the best developments is the emergence of the Construction Industry Council which represents more than 49 organisations in the industry, which in turn represent nearly 350,000 constituent
1012
professionals. I was involved at the birth of the council and was active for five years. It is right to remember the late Professor Sir Ted Happeold who was a remarkably visionary structural engineer within the industry and a moving force behind its creation. I believe that the council in its present form owes much to Sir Ian Dixon for his robust and effective leadership. In none of those respects would I exclude the present chairman Sir Robin Wilson. It has been a significant development and I have been glad to be associated with it.
I turn to Part III. As the noble Earl said in his introductory remarks, I have an interest to declare. The noble Lord, Lord Howie of Troon, was most foolish in saying that he would follow me wherever I led him. Perhaps I may make two matters clear. First, I was director general of the RIBA until February 1994 and a consultant to it for a year after that. Therefore, I was closely associated with the negotiations between the profession and DoE Ministers and officials about what are the contents of Part III. On the other hand, I speak on Second Reading and at subsequent stages very much for myself and I must not claim in any way to be a representative of the RIBA, which will make its views more widely known to noble Lords if it wishes to.
Part III of the Bill effectively implements an undertaking on the main features of the agreement reached with Sir George Young, who was the Minister concerned, on 21st June 1994 and the details which were subject to six months' negotiation thereafter. Without going into the history of the matter, I am glad that the DoE recognised defeat and abandoned in October 1993 its initial and declared intention to get rid of registration altogether. The noble Earl rather wisely glossed over that reversal, but I agree entirely with the noble Lord, Lord Howie, that the Government landed on their feet the right way up in that regard.
I am glad also that the Government recognised and abandoned last summer the hopeless, and in my view inappropriate, attempt to amend the Architects Registration Acts by means of a Private Member's Bill.
What we have before us today reflects credit both on the RIBA—the professional body of architects which tends to have individual and non-conforming views—and ARCUK, the existing registration body which has not always found it easy to speak with a single clear voice. In a sense, Part III is a result of discussion and co-operation and I am glad about that. To that extent it represents an agreed solution to the problem of architects' registration.
I say to the noble Lord, Lord Williams, that since 1834 the RIBA has represented the profession itself, but the role of this new registration body, like the old one, is to represent the public interest. Those are distinct and separate roles. It will be for your Lordships' House and another place to ensure that the new body does indeed represent the public interest in the fullest possible way.
I make four other brief observations. First, although the RIBA represents some 70 to 80 per cent. of the members of the profession—and I did so for six years as its director general—it is important that the new arrangements are fair to the so-called unattached

1013
architects who choose not to join the RIBA. The Bill should and indeed does recognise the anxieties that they have expressed from time to time.
Secondly—and this follows from what I said earlier about the respective roles of the professional organisation and the body which represents the public interest—the new body should not be allowed to become a rival to the RIBA. In representing the public interest, its task is quite different and it should not at any time forget that.
Thirdly—and here I refer to the role of the profession—the profession will serve its clients and the public best if standards in education are set and maintained by the RIBA, which should also have an important role in ensuring a higher standard of discipline and competence.
There have been references today to the Warne Report, which the Government first endorsed and then abandoned. I think that Mr. John Warne was a notable public servant and although I disagreed with the conclusions of his report, there was a great deal of good sense in what he said in the course of writing it. The whole profession should take note of that, however much it wishes to retain registration, as it is now able to do.
Fourthly—and again it follows from what I said previously—it is important that the eight lay members of the new board are carefully chosen so that they are not from other professions which may be seen to be competitive with architects or from the supply side of the industry. Its members should comprise independent men and women who wish to perform a public service and represent the clients. Such members may come from housing associations, the National Consumer Council and similar backgrounds.
In deciding what that composition should be, I ask those responsible to bear in mind that a large proportion of architects are either single-handed or working in small practices. Many of their clients are small, once-in-a-lifetime clients. It is they who must be remembered and represented in the lay membership of the board.
I know that there are those within the profession and the RIBA who are deeply concerned about, as they see it, handing over their future to a body in which there is a majority of lay members. I understand that anxiety and it is for that reason that I ask the Government to consider very carefully who those lay members will be. But I supported that principle when I had some direct responsibility in the negotiations and I support it now because I believe that it is consistent with a body charged with the public interest by Parliament that there should be a lay majority in future. If this Bill in any sense pioneers, it is pointing in the direction in which other legislation should go.
We shall wish to scrutinise Part III and the other parts with our usual care, but I hope very much that in due course Part III at least—I shall not commit myself on the other parts—will receive your Lordships blessing.
5.36 p.m.
Lord Finsberg: My Lords, I address my remarks almost completely to Clause 139 which deals with the Commission for the New Towns, and I declare my interest as its deputy chairman.
In what I am saying I do not ask in any way for the life of the commission to be extended beyond its planned dissolution in March 1998. Taking together Clauses 137 to 140, I believe that an opportunity presents itself both to save money and to increase public receipts from property sales.
I urge my noble friend to consider using the powers which are to be given in those clauses in the best interest of the taxpayer and in the best interest of the residents and businesses in the areas where government land and vacant buildings exist.
First, as regards the taxpayer, there are many thousands of acres and millions of square feet of such government-owned property, not just in the Commission for the New Towns, in the urban development corporations, and HATs, but also in other parts of government; for example, the MoD, NHS and the Post Office. At the moment, each part of government must retain its own in-house staff or external agents to handle its disposal activities, thereby duplicating, triplicating and even quadruplicating much of what each does, and in some cases preventing the left hand of the Government from knowing what the right hand of the Government is doing. The sensible disposal of that property can bring several billion pounds to the Exchequer if handled prudently. We must avoid an unseemly and costly competition between different parts of government which will considerably depress the price achieved.
Let us consider the Peterborough area. The Commission for the New Towns owns there some 900 acres of government land available for residential, or commercial purposes, together with some 1 million square feet of commercial buildings. It is busy selling all this property at the rate the market will take and passing the proceeds to the Exchequer. Competition to sell property there is already fierce, and has become even fiercer as a result of the recent launch of the Hanson Group's 2,000 acre Peterborough southern township site in the old brickpits. So it is already difficult to achieve the best deal for the taxpayer. Yet a few miles south down the A.1 is the massive 1,000 acre Alconbury air base recently vacated by our US allies; and it is believed the MoD is about to offer this to the market either as a whole or in a few blocks. That could severely disrupt the property market in the area and make it even more difficult to get a good deal for the taxpayer. No private owner would flood the market in that way. A slim new organisation co-ordinating disposal of government land and buildings would make a lot of sense in such circumstances and produce better net current value for the Exchequer.
Secondly, I turn to the residents and businesses in the areas where surplus government land and buildings exist. It is important that their interests should be carefully planned, and that they get good quality development. That is more likely to come from a single, widely experienced team with appropriate experts than

1015
from a multiplicity of teams less likely to have appropriate expertise. It is important not only for local residents and businesses, but also for the UK as a whole that maximum effort should be devoted to encouraging inward investment—from, for example, North America, continental Europe and the Far East—in the course of such development because it creates new jobs, it raises the GNP, it swells tax revenue, and so on. If disposal of government surplus land and buildings is mainly in the hands of a single body, that body is likely to be much more effective in working alongside the Invest in Britain Bureau to achieve inward investment than a multiplicity of agencies, one per department.
As we found out in the Commission for the New Towns, to maintain a good flow of inward investment from the USA, Germany, Japan, Taiwan, and so on, you need the kind of rapid response which that single combination of two national agencies could provide. Surely it is unwise to jeopardise this competitive advantage that is available to the UK by spreading the Government's ownership of the raw material of inward investment—surplus land and buildings—over a plethora of different departments and agencies.
I urge that the order-making powers in the clauses to which I referred should be used to create a new organisation with wide-ranging responsibilities for the disposal of surplus government land and buildings—not necessarily universal responsibility, but responsibility in most cases—and certainly on the basis that the net proceeds would go to the originating department. The one purpose would be to achieve good results for the taxpayer and to stimulate the economy in the areas in question. There need not be significant conflict between those two activities, as I found out from my own association with the CNT which has been vigorously carrying out both functions for some years.
Let us just imagine what would happen if each agency had its own staff for disposal. Because each would be small, they would not be able to get the best people available; the infrastructure would be bureaucratic; and we would have the situation in area after area where competition in the public sector would bring down the ultimate value to the taxpayer. I know that my noble friend will say—and I have been in correspondence, as has the commission, for some time with the Government—that the Government do not want to create a centralised department because they feel that it would be much better for each department, "to do its own thing". With my experience of the Commission for the New Towns where we have on our property committee the leading property experts in Britain, I can only say that the latter totally disagree with the Government's point of view.
I suggest to my noble friend that it is not too late for the Government to think again. I am sure that my noble friend knows from my background that I hate bureaucracy and centralisation; indeed, such things are an anathema to my philosophy. What I suggest would do neither of those things; indeed, it would find a way of getting more proceeds for the Treasury. I find it impossible to understand why the Treasury does not back this 100 per cent. I know why some government departments may not do so, and we all know the
1016
"Sir Humphreys" who will get together in their clubs and say, "No, we can't do this; we will be giving up control of our property". Of course they will. But, anticipating that, I said that the proceeds should go back to the originating department. It means that they would have no work to do—which would make them happy—the taxpayer would get a bonus, and we would be able to plan the distribution of surplus property in a much better fashion.
Although I am not here as often as I would like to be because of my Council of Europe and WEU duties, I may be tempted—although, in the light of what I may hear from my noble friend the Minister, I may not need to do so—to consider tabling an amendment in Committee just to try to flesh out the ideas that I have tried to put forward. I would not do so in a destructive manner; indeed, I want to be constructive. I first came into contact with the new towns when I became Minister responsible for new towns back in 1979. I found them fascinating places. I also found that the disposals, which, in the first instance, went to the sitting tenants if they wanted them, helped to build up the community spirit in those new towns.
Some 15 or 16 years later I was fortunate enough to be appointed as deputy chairman of the commission. I found that the development of the new towns was a model. They are talked about throughout the civilised world as the best examples of planning, but planning in a sense that is not bureaucratic and which fits into the area for which such towns were designed. I have in mind the planning for Telford and, indeed, for Milton Keynes which owes so much to the late Jock Campbell—and I should like to pay a warm tribute to him. The planning of both of them was different, and yet they had a thread running through them; namely, the creation of a place where people could live, work and be entertained.
Before I sit down I must say how pleased I am that Milton Keynes is to receive some £19 million from the National Lottery to build a theatre which will complete what I call the entertainment and cultural life of that city. I hope that my noble friend the Minister will really consider my suggestions and not accept the advice that has come from the Treasury. I have reason to believe that the Department of the Environment is not totally unsympathetic to my proposals; but, of course, as those of us who have been Ministers know, big brother Treasury has a rather bigger say in such matters than any individual department. However, my noble friend the Minister is a much bigger man and I hope that he will exert his influence to get something done along those lines.
5.47 p.m.
Lord Berkeley: My Lords, in speaking this afternoon I shall confine my remarks to Part II Of the Bill. I do so because I have spent most of my career in construction with consulting engineers, civil engineering contractors and of course latterly with Eurotunnel. I have seen at first hand the damage to progress, overall costs and relationships between the parties that such disputes cause.

1017
The Latham Report has produced an excellent blueprint for changing the atmosphere as regards speed and the comfort that the parties will achieve when disputes arise. I believe that it has been accepted by most, if not all, of the industry's representatives. The important thing is that the principle of being paid at specific and fixed times is vital to the owner, to main contractors, to sub-contractors and to suppliers, whether they be very large or very small. It does not really matter if a contractor is paid annually or monthly, as long as he knows what will happen when he prices the job; for example, if he is to be paid annually, he can make financial arrangements. What really hurts is when the contractor thinks that he will be paid monthly and he then gets paid annually, or, worse still, if the other party who is supposed to be paying him goes into liquidation.
I welcome the principles contained in Part II of the Bill, but there are many concerns which obviously will have to be dealt with in Committee. I should like to discuss just a few of them today. One of the most worrying comments I have heard is one that was made yesterday by a leading lawyer in the construction industry. He said that there was nothing wrong with the Bill—he can obviously see the pound notes flying. I worry about that because an old saying that we used to have when I was dealing with such matters was that when the cost of the lawyers exceeded the cost that you were claiming, you would probably reach agreement with the other side. This Bill is designed to stop that. It used to be called claims engineering. It is more law than engineering. I suppose it is business, but I am sure that it accounts for what the noble Earl, Lord Ferrers, said earlier when he mentioned that the costs were probably up by 30 per cent. on what they should be.
I turn now to Clause 102 and what is included and what is not. The noble Lord, Lord Howie of Troon, said that this area was a shambles and I entirely agree with him. I must compliment the Government on including Crown contracts in this provision. They are setting an example and that is good news. But why is the installation of burglar alarms excluded? As regards the extraction of minerals, when one is building a motorway, one needs material to make embankments. Sometimes one makes a cutting and sometimes one digs the material out of an adjacent borrow pit, as we call it. It looks as if one of those provisions is included and the other is excluded. There is no logic to that at all. If one is making precast beams for a bridge, if one casts them on the site they are included in the provisions but if one casts them off the site they are not. It is much more efficient and cheaper to cast them off site and that results in a much better quality. Of course there is a catch-all at the end of subsection (4) of the clause which I suppose means that the Government can change what they like later. We need proper definitions which cannot be changed later as a result of lobbying on the part of particular suppliers.
I now turn to definitions generally. Clause 105 is a case in point. Several words in this clause need defining. I note in Clauses 62 and 75 in Part I of the Bill that there are about three pages of definitions but poor old Part II does not contain any definitions at all. What is
1018
adjudication? As the noble Lord, Lord Howie of Troon, said, that needs to be defined. What is resolution? Is it final, interim or what? What is a dispute? There are written disputes and verbal disputes. We need to know what constitutes a dispute. Is adjudication linked to arbitration? I certainly hope that it is not.
Does the Bill provide for interim payments to keep a contract moving? I think that it does, but are these interim payments final and binding on the parties or can they be subject to later arbitration? In the case of a large contract, one cannot expect to have matters that are final and binding decided in 28 days.
As regards Clause 106, is it meant to refer to stage payments or interim payments? Stage payments mean that one is paid when one has, for example, completed the floor of a block of flats. In the case of interim payments, these are time related. Or does the Bill mean to refer to payments on account? There is a little tidying up to be done there. What does,
"a final date for payment",
mean in Clause 107? This clause has been mentioned earlier in our debate. It states:
"Every construction contract shall—provide an adequate mechanism for determining what payments become due under the contract".
I envisage the lawyers getting excited over that provision, too.
What constitutes an award under Clause 108(4)? I believe that that should be the decision of an adjudicator. We must discuss later how that is to be enforced. Is it final and binding?
My next point has already been mentioned. I, too, am worried about the lack of a scheme of construction contracts which must provide the detail of how these measures are intended to operate. I do not see how this House can discuss this measure in detail without at least seeing the first draft of the document. I hope that the Minister can indicate that we shall see it before we reach the next stages of the Bill.
In conclusion, I warmly welcome this Bill and I believe that the industry does too. As I have said, some major and many minor changes will have to be discussed during later stages of the Bill. However, subject to that proviso, I believe that the Bill will be a great help in raising the professionalism, the image and the effectiveness of the British construction industry and that it will help to reduce costs.
5.54 p.m.
The Earl of Mar and Kellie: My Lords, I intend to speak briefly in this debate from a Scottish perspective and with a particular focus on Part II and its relationship to Scots law. But, first, I wish to make some general observations. I am interested that Part I of the Bill, dealing with housing grants, does not apply to Scotland. I look forward to hearing whether any alternative provisions will be made for Scotland in this respect.
With regard to Part III, I have no problem with the toughening up of the registration for architects. On the basis that architects design enclosed space for what is usually human activity, there is no case for anything but

1019
the highest standards of competence. A civilisation is judged, in part, by the quality of its buildings. Today's new buildings are the heritage structures of the future. Both the owners and the public as users must be confident that the new building will perform well in respect of its function, design, services and longevity. Clearly, architects have a substantial responsibility.
In Part IV it is suggested that the Secretary of State for Scotland will be given wider powers to assist with the regeneration of Scottish housing, towns and villages. I wonder whether I am correct in believing that this provision does not have any money attached to it. If there were money attached to it, it would be welcome as regeneration continues to be important in Scotland.
I now come to Part II of the Bill. As someone who recently worked in the building industry as a break from my normal career in social work, who worked within a slating and plastering firm and was in possession of a 714 labour only sub-contractor certificate and who is the proud possessor of a Scotvec Certificate in Building—please do not be too impressed!—I certainly recognise the circumstances in which the proposals in Part II would be relevant.
The whole atmosphere of the building industry can seem to be riddled with distrust. It is only necessary to read a bill of quantity, with its strange language, to realise that distrust runs deep. These bills of quantity have a demeaning effect on the craftsmen who will carry out the work. While I acknowledge that the architect and the quantity surveyor must transmit the specification, and have an essential right to do so, this is not always well received at craft level. It feels as if there is nothing left for the craftsmen to sort out.
I must oppose the extension of Part II of the Bill to Scotland. This is not because of any better relationships within the construction industry but because of the implications Part II has in Scots law. Broadly, Scots law is derived, as I am certain your Lordships will know, from principle rather than from precedent. I am encouraged to explain that there is an objection to "stand alone" legislation being established in Scotland for any particular industry. I acknowledge that the construction industry has its mid-contract problems, but it is not the only industry with complex problems. There is no justification for a special regime of law relating to the construction industry. No matter how uncertain or unsatisfactory the law may be, the construction industry is not the only one affected by legal complexities. The building industry is not so different from other activities in the economy as to require specific legislation such as that proposed in Part II. This is a view shared by the Law Society of Scotland and the Scottish Law Commission. That was alluded to by the noble Lord, Lord Williams of Elvel.
To be more specific, the adjudication process which is described in Clause 105 is premature in the Scottish context. There has been an extensive review of civil law by Lord Cullen. I suggest that the changes which are recommended in the report of Lord Cullen, should be allowed an opportunity to develop before an alternative system is introduced.
1020
In Clauses 106 to 110 the problems relating to the payment of debts are not exclusive to the construction industry, and that makes a stand alone reform inappropriate. This is a matter of general interest to all creditors and debtors.
Under Clause 111, which deals with the scheme for construction contracts, there is a risk that any model terms and conditions issued by the Lord Advocate or the Secretary of State for Scotland will come to be considered as the norm by the industry. The prescription of contractual provisions does not sit well in a free market. Parties should be able to meet their own requirements by devising their own terms and conditions, tailored to the always unique project they are undertaking. Trying to approach such a disparate activity as building without complete flexibility seems to me to be unwise. Altering a model contract would probably be more difficult than starting from scratch.
I look forward to the remarks of the noble Lord, Lord Lucas, about the future of the Bill in Scotland.
6 p.m.
Lord Monkswell: My Lords, I hope that the House will forgive me if I do not take issue with the noble Earl, Lord Mar and Kellie, although I am very tempted to take issue with the noble Lord, Lord Finsberg. I do not believe that the House would appreciate a national property sales agency given the experience with the Property Services Agency, which ran the government estate and had to be dealt with by this Government because of various problems.
One of the advantages of being tail-end Charlie in this type of debate is that one has the opportunity to respond to remarks made by previous speakers. I am glad that I do not need to do that to any great extent because there appears to be a fairly wide consensus about the problems that the Bill presents and the amendments that we shall have to consider in Committee and at the later stages. However, I thought that I might take the opportunity to mention one or two minor aspects. I hope that that will be useful, but I shall not speak at length.
One of the advantages of the part of the Bill which deals with the registration of architects is that it gives us the opportunity to write into the Bill the need for the Architects Registration Council to be aware of the needs of disabled people, although I am sure that in most cases architects take those needs into account. For example, one might require the Architects Registration Council to develop a code of practice and perhaps to ensure that members of the council are aware of and have some expertise in meeting the needs of disabled people.
We also need to be aware that disability is not necessarily a permanent condition. In certain circumstances people who have severe difficulties are relieved of those disabilities. One ċan think of the miracles of hip replacement operations. I know of at least a couple of cases of individuals who were seriously disabled and could hardly get about; yet after hip replacement operations, although they are not running around like spring chickens, the change in their disability is very marked.

1021
Surely it would be wrong to penalise financially such people through the means-testing element in the Bill. They may be poor people. Why should we lay a financial penalty on them if their disability is relieved? My reading of the Bill suggests that they would have to repay any grant that they had received. That is an issue that we need to examine closely.
The other matter that we need to consider closely is what I would describe as the anti-Tebbit clause. I hope that the noble Lord, Lord Tebbit, will not take it amiss that I use his name in this connection. However, it is not right that because they move house in order to get work relatively poor people should be penalised financially by having to repay a grant they have received. People are not penalised if they move house in order to look after a disabled or elderly and infirm relative, but if they find work in another town within a three-year period they must repay the grant. That is not a good thing.
Many speakers have mentioned that there will be a need to go through the Bill very carefully during the Committee and later stages. I am hopeful that, in view of the support that exists on all sides of the House, we shall make significant amendments which will make this a better Bill.
6.5 p.m.
Lord Ezra: My Lords, the difficulty in dealing with this Bill is that it is really three or four Bills in one. It is particularly regrettable that Part II, dealing with the construction industry, does not form a separate Bill. It is a matter of vital importance. In introducing this Second Reading debate the noble Earl, Lord Ferrers, graphically described the contractual complexities in the building industry, the large part it plays in the economy and the need to get this right.
There was general praise for the Latham Report, and the Bill is an attempt to introduce its main provisions. The trouble is that it does not deal with the whole of the report, which Sir Michael emphasised should be how his report was handled. Furthermore, various aspects of the Bill have raised questions. Clauses 102 and 105 have been referred to specifically, as has the fact that there is no scheme for us to consider.
Therefore, in relation to Part II of the Bill—and as I said, it is a pity that it does not form a Bill on its own—there is general support for its intent, but a number of amendments appear to be required and will no doubt be moved at subsequent stages to try to improve it.
With regard to Part III of the Bill, my noble friend Lord Rodgers made it clear that in his opinion the solution proposed here is satisfactory. That view appears to be shared by others who spoke on the subject from the point of view of architects.
Part I of the Bill causes me most concern. Here I should declare an interest, because for many years I have been President of the National Home Improvement Council and I have followed the whole question of the improvement of Britain's housing stock with great care. Unfortunately, I have come to the conclusion that the
1022
underlying purpose of Part I of the Bill is to save money. That does not emerge clearly from the Bill itself, but it is stated on page iv of the memorandum indicating the financial effects of the Bill. That refers to the:
"resources released as a result of the change from mandatory to discretionary renovation grants".
Therefore, the underlying purpose of the changes is to reduce the funding in this vital area.
If there is one area in our economy where we should not do that it is this one. As the noble Lord, Lord Williams, and my noble friend Lady Hamwee pointed out, according to the last housing condition survey there are 1.5 million houses which are recognised as being unfit for human habitation in the housing stock in England and at least another million require major improvement and repair. Most of those homes are inhabited by people on low incomes. Many of them are elderly. Many are single occupants. They suffer great hardship. The social implications are very considerable. Age Concern has estimated that the diseases resulting from living in cold and damp homes cost the NHS £800 million a year.
Statistics indicate that the mortality rate in Britain in winter compared with summer is higher than any other West European country. The situation arises from the poor quality of housing lived in by people who do not have the resources to put it right.
What is being done by the Government involves a successive series of make do and mend policies. What is required—it is not apparent in the Bill—is a statement of strategy for dealing with the problem. Is it simply our intention to pass this off to future generations? With the way in which we are dealing with the issue now, it can only get worse.
I would have accepted a change from the mandatory to the discretionary form of grant if it had been set alongside a clearly defined strategy developed over a period of years with identified resources attached thereto. We would have known where we were going. There is indeed an argument for giving more discretion to local authorities. But to use the change from mandatory to discretionary grants merely to reduce the amounts of money used for this vital purpose strikes me as entirely wrong.
My noble friend Lady Hamwee said that I would wish to say something on Clause 136, which relates to the home energy efficiency scheme. On the face of it, what is proposed in Clause 136 is thoroughly reasonable. The clause proposes that the scheme should be widened to apply to other forms of energy saving quite apart from the basic elements of insulation hitherto covered. The trouble is that here again there is a major reduction of resources. I have an interest to declare in this case also. I am the patron of NEA, the charitable organisation which operates the scheme. About a year ago the Government gave a commitment that £100 million would be made available on a three-year basis to ensure that the homes of people, mainly elderly, on low incomes could be improved by a modicum of insulation. Within less than a year that sum was cut by a third. Having geared up the operation to improve the living conditions of those people, the Government cut the

1023
scheme. They now suggest that that reduced sum of money should be used for a wider range of purposes. It does not make much sense.
While we welcome Parts II and III of the Bill, subject to some amendment, I hope that we shall indicate by amendments to Part I and Clause 136 that we have serious reservations in those regards.
6.14 p.m.
Lord Dubs: My Lords, I would judge the Bill in relation to two criteria: first, what will be the effect of the Bill in improving the housing stock of this country; and, secondly, to what extent does the Bill help to improve the working of the construction industry? As regards the first question, I think that the Bill fails. It will not improve significantly the housing stock of this country. Indeed it might well contribute to making it worse. With regard to the construction industry, the Bill helps, but there are detailed flaws.
Let me deal first with the question of grants. It seems to me that one part of the Bill makes an admission that the Local Government and Housing Act 1989 has failed. I do not say that it has failed, but the Government seem to think that it has failed and are therefore replacing that Act rather quickly. However, my anxiety is that the removal of the mandatory grants is being used more as a mechanism to reduce funding than to add sensible flexibility to the way in which we deal with houses which are below standard.
We have heard many statistics this afternoon. Let me give one more: 21 per cent. of our private housing stock is below standard. Yet public expenditure to improve by grants the condition of that stock is less than a third of the 1983 level in real terms. There are many other figures regarding the poor quality of housing occupied by elderly people and the problems faced by those who are disabled. It adds up to a depressing picture.
There is a danger that in dealing with some of these matters the Government have added to the possible delays—for example, by making it possible for grants for the disabled to be delayed for up to 12 months instead of up to six months. That will have a knock-on effect on small builders who will have to wait that much longer for their payments. I am not happy about the delays. However, the main principle that less money will be made available bothers me most.
I turn to the single regeneration budget and the moving of that on to a statutory basis. It is not a bad idea. However, I am concerned that there will be a continued lack of transparency in the allocation process. In moving to a statutory basis, I hope that some of the criticisms of the SRB expressed in this House and elsewhere will be dealt with by the Government. I believe that the process should be more open. Bidders should have a better sense of what they are about; and the arbitrary nature of the competition should be lessened as many small organisations which make bids for the SRB are being penalised by the current process. I hope that it will be improved.
The noble Lord, Lord Ezra, referred to the home energy efficiency scheme. I welcome the fact that it will be widened in scope, but regret very much that the
1024
amount of money available will be reduced significantly, thereby negating the benefits of widening the scheme.
I turn briefly to Clause 102 which I considered at great length. I find it complicated and the reasons for it are somewhat obscure. I simply cannot believe that that is the only definition at which we can arrive. It is a definition which excludes half the construction industry. The Government say, "We'll change it if it does not work". Surely we can arrive at a definition which does not exclude such a large part of the industry and which is more meaningful and precise. I shall not give my suggestions now. The Committee stage will give ample opportunity. It would be better still if the Government came back with an improved definition. I have talked to people in the building industry who say, "It must be a mistake. The Government could not have intended Clause 102 as it stands, a clause which excludes so much of the industry which the Bill is intended to help". Yet here we have a clause which is so complicated, with so many exclusions, that it will negate many of the good purposes of Part II of the Bill. Therefore I ask the Government to consider the matter again. I am sure that they can do better.
I turn, finally, to the part of the Bill to which the noble Lord, Lord Finsberg, and my noble friend Lord Monkswell referred—the miscellaneous and general provisions. I note with interest what the noble Lord, Lord Finsberg, said. I wish to think about it. He clearly puts forward a proposal to make the sales of disposal of land, in particular Ministry of Defence land, more cost effective. I do not think that one could dissent from that aim. However, I have another concern: the growth of the quango culture which is implicit in this part of the Bill. I regret very much that the Bill seems to suggest that the Government will set up other residuary bodies to replace UDCs, commissions for new towns, housing action trusts and so on. The experience of London and Londoners and the difficulties we have had with the London Residuary Body since the decline of the GLC would suggest that the Government ought not to go down that path any further. All the Bill does is to say that local authorities will have no part to play and that on a permanent basis there will be other structures which will be unaccountable, bureaucratic and lacking in transparency of operations.
I ask the Government to think again. I do not see why some of the bodies cannot be restored to local authorities. Some years ago, when the Government carried out their action, there was an indication that local authorities would be considered to take over the bodies. Now the Government are saying no to that. I hope that they will take the problems on board and go some way towards meeting our anxieties.
6.20 p.m.
Lord Lucas: My Lords, I have listened with interest to the Second Reading debate and with a great deal of pleasure. I even find myself recalling the speech of the noble Lord, Lord Williams, with pleasure. It is clear that most noble Lords share our aims of a more efficient and

1025
competitive construction industry and ensuring that help to home owners is spent effectively and goes to those who need it most.
We seem to have a few differences of principle, but many more differences of detail. Given the experience and enthusiasm evident from today's debate and the open minds which we have in government, we have an excellent foundation for a fruitful Committee stage in the best traditions of the House. A number of detailed points have been made today and I shall not have the opportunity to reply to them all. However, if it would be helpful, I shall write in response to points made so that we can get our retaliation in first—as the noble Lord, Lord Williams, would have it—before the Committee stage.
I wish to address the main points raised and in doing so follow my noble friend's order rather than that in the Bill. First, perhaps I may give the noble Lord, Lord Williams, some comfort that the lost clause (almost something by Sir Arthur Sullivan) will not reappear in the Bill. It may emerge in a Bill of its own at a later stage, but it will not be added to this one.
On the construction industry, the noble Lord, Lord Williams, and everyone else supported the thrust of the legislation. I found his comments extremely helpful, he gave us a large helping of the good parts of the egg, although he ground a considerable amount of pepper on to them, perhaps in an attempt to make us sneeze. The legislation is merely a small part of a major change which we hope is taking place in the construction industry. The proposals in the Bill come as a result of a long process of consultation and consensus. We shall listen with an open mind to what noble Lords have to say about it, but everyone should be aware that if we make the wrong changes we shall put at risk the consensus which has been achieved and the basis which is necessary for our proposals to succeed at all.
Everyone who covered the construction industry mentioned Clause 102 and expressed doubts of greater or less severity. We shall consider what has been said today and will have a further opportunity to do so in Committee. Perhaps it would be helpful, however, if I explained how the clause reached its present state. The construction industry is very diverse, from plumbers to decorators, from scaffolders to architects. We have sought to ring-fence the wide variety of traditional construction and civil engineering activities. The provisions are specifically designed to address the contractual arrangements for such activities. For the sake of clarity, we have specifically excluded a number of operations on the margins.
In drawing up that definition, we have drawn heavily on a known definition of construction operations: that contained in the Income and Corporation Taxes Act 1988. It is important to appreciate that there will always be grey areas. Some fine tuning may well be called for, not least because construction operations themselves may evolve over time. That is why it is important that the Secretary of State should have the power to amend the definition by order.
1026
The noble Lord, Lord Williams, and others remarked on the exclusion of process plant engineering. The engineering work involved in assembling plant to carry out a process is subject to very different contractual arrangements from traditional construction work. There is a strong feeling in the process plant engineering sector that such operations should be excluded from any legislation on the grounds that existing contractual relationships in the sector operate satisfactorily and without conflict.
Various other general points were picked up which I shall cover now. The noble Lord, Lord Williams, mentioned trust funds and pointed out that we have not chosen to implement the Latham proposal to introduce them. We made clear to the industry that we would consider any proposals along those lines that had the full backing of the industry. No such proposals have been put forward. Any trust fund arrangement which did not have the full backing and confidence of the industry would be unlikely to be successful. As my noble friend Lord Ullswater pointed out, there are considerable fears about the risk of double payment. That is one good reason why no consensus has emerged.
As regards latent defects, the noble Lord, Lord Williams, recognised that some of the Latham recommendations, including those about liability for latent defects, had been referred to the Law Commission. The commission has recently reported on them and concludes that no action is required. There is now a consultation exercise and if the construction industry feels that there should be change in the law of liability, it has the opportunity to say so. We will, of course, take notice of what is said.
My noble friend Lord Ullswater and the noble Lord, Lord Howie of Troon, asked that the scheme for construction contracts should be made available for the Committee stage. I shall certainly arrange for a detailed description of our current proposals to be available through the Printed Paper Office before the Committee stage. However, we have no intention of introducing the scheme without consultation and discussion. Its final shape must depend to some extent on the primary legislation.
The noble Earl, Lord Mar and Kellie, asked about the application of the Bill in Scotland. It would not make sense to give English and Welsh construction contracts the benefit of speedy payment procedures and informal dispute resolution procedures but, not Scotland. I recognise that there are significant differences between English and Scottish law in relation to contracts. I can give the noble Lord an assurance that they are well understood, but it is the Government's judgment that the legislation should apply throughout Britain.
The noble Lords, Lord Howie of Troon and Lord Rodgers of Quarry Bank, were quite eloquent on the subject of adjudication. Our provisions tackle conflict in the industry from two different angles. First, they will provide access by all parties to construction contracts to an alternative dispute resolution mechanism. Let me emphasise this. We are providing a right to have disputes referred to a quick, informal and impartial

1027
mechanism to deal with them on site. Secondly, the provisions are to deal with one of the root causes of disputes: payment and payment abuses. I firmly believe that our proposals to give a statutory right to adjudication are the right way forward in the circumstances of the industry. Sir Michael Latham was enthusiastic about the merits of alternative dispute resolution and about adjudication in particular. The industry understands adjudication and values it and that is what we are giving the industry.
The noble Lord, Lord Howie, made many detailed points and perhaps I may select two for reply. First, we are not confusing adjudication and arbitration, but there are a number of safeguards and technical points in the Arbitration Bill of which we might like to make use in the scheme. So a reference is appropriate in the Bill. As to the timescale for adjudication, we will listen to industry's views, but we are determined to set a challenging target and also to avoid delays in appointing adjudicators.
Lord Howie of Troon: My Lords, I am grateful to the Minister for giving way. I am sorry to interrupt him. He is doing extremely well. There is a distinction between adjudication and arbitration which at the moment is confused in the clause; namely, arbitration is final and non-appealable, whereas adjudication is interim, temporary and appealable.
Lord Lucas: My Lords, to go into an answer on that point would be to detain the House longer than it deserves. I promise to write to the noble Lord to set out our views. If we come to discuss this matter again in Committee, we shall therefore do so each understanding the other.
The noble Lord, Lord Howie, also asked why in Scotland the scheme will be made by the Lord Advocate. It has been decided that the Lord Advocate is best placed to make the scheme in Scotland because of his ministerial responsibility for arbitration procedures in Scotland.
The noble Lord, Lord Berkeley, said that lawyers will have a field-day in relation to what constitutes an "adequate mechanism" for payment in Clause 107. The industry covers thousands of different operations and dozens of different types of contract. Payment is already determined in far too many ways for us to come up with a single definition. This legislation requires that payment should be defined in terms of amount and date. That will be a big improvement on what happens at the moment.
Many noble Lords praised the work of Sir Michael Latham. We join in that praise. There has been a great deal of consultation between government, all sides of industry and Sir Michael which has resulted in the broad consensus reflected in this legislation.
I now turn to architects' registration. Perhaps I should declare a very remote interest. A forebear of mine was the first president of the RIBA. His qualification for that position, so far as I can discover, was tearing down an old and beautiful house and putting an unlivable in
1028
monstrosity in its place. I am sure the noble Lord, Lord Rodgers, has better qualifications for his interest in the industry.
The noble Lord, Lord Williams, made reference to the Government's change of heart in this matter. Indeed, we confess it. We were persuaded by the almost universal objections from architects and by a certain amount of public concern. My noble friend Lady Denton announced the government decision not to proceed with abolition but instead to examine measures to simplify the present arrangements. I am grateful for the praise from the Liberal Benches for that decision.
The noble Lord, Lord Williams, asked about the statutory protection that the term "architects" has and whether it is our strategy that that should continue. (I am sorry if I misunderstood the noble Lord.) A significant proportion of architects are not members of the Royal Institute of British Architects. We accepted the recommendation of the RIBA and of the architects themselves that there should be a separate registration and professional representative body.
I now return to Part I of the Bill and the abolition of mandatory grants. My noble friend Lord Ferrers has already explained that the pressure for mandatory grants has distorted the operation of the current regime. In other respects, however, the regime has provided a clear basis on which local authorities can carry out their responsibilities for private housing. As my noble friend said, responsibility for keeping a property in good order clearly rests with the owner. The primary aim of the grant system remains to help low-income home owners whose homes are unfit and who cannot afford to undertake repairs.
Resources will always be finite. Our proposals will enable local authorities to make decisions at the local level as to where resources can be used best. I am grateful for the welcome given to that by my noble friend Lord Ullswater. I did not sense the same welcome on the Benches opposite. There was perhaps some feeling that resources were not adequate. I did not hear the noble Lord, Lord Williams, say that resources should be increased. But then he and his noble friend Lord Dubs have had a spell cast on them by the Gordon Brownies and can only croak when it comes to such subjects.
Lord Williams of Elvel: There was no croaking in the spell.
Lord Lucas: You croak after the spell.
Baroness Hollis of Heigham: I think the Minister has his fairy tales mixed up.
Lord Lucas: My Lords, there was also some questioning, and I was very surprised by it, of our decision to give greater discretion to local authorities. The noble Lord, Lord Williams, said that that would result in different local authorities doing different things. Indeed, so it would. However, does the noble Lord not think that local authorities should be allowed that kind of discretion? Is it not something for which he

1029
has argued strongly in other contexts? I am very surprised at the seeming opposition in principle to extending the scope of the powers of local authorities.
Lord Williams of Elvel: The Minister should read my speech.
Lord Lucas: My Lords, I shall.
The noble Baroness, Lady Hamwee, and the noble Lord, Lord Ezra, sought assurance that our proposals , will not lead to reduced resources. Of course resources have to be determined annually in the Budget. There are many calls for resources which cannot all be met. However, there will be no reduction in the provision of over £250 million between 1995–96 and 1996–97 despite the tough constraints on public expenditure.
My right honourable friend the Secretary of State for the Environment today announced proposals for financing private sector renewal. Resources will continue to be allocated specifically for private sector renewal purposes. That will ensure that those resources are used for that purpose rather than diverted elsewhere. There will also be a separate allocation for disabled facilities grants.
The noble Earl, Lord Mar and Kellie, asked why Part I of the Bill does not apply in Scotland. Scottish law on housing fitness is different from that in England and Wales. I understand that the Scottish Office has conducted its own review.
The noble Baroness, Lady Hamwee, shares our concern that the elderly and infirm should continue to live in their own homes. For that reason we propose that they should be eligible to receive help with repair, improvement and adaptation of their home through home repair assistance.
The noble Baroness is also concerned about our proposals for the delayed payment of disabled facilities grant, as was the noble Lord, Lord Dubs. Authorities should use this measure only sparingly and in exceptional cases and not where urgent adaptations are required. We will make that clear in the guidance on the new grant regime. We have no reason to believe that that should cause undue hardship, as authorities have six months to respond to an application anyway and most works are likely to take as many months to be completed. The authority must also inform applicants of the earliest date of payment where a grant is approved. The proposal would give authorities an additional administrative tool to enable them to schedule payments more efficiently, including between financial years where necessary, and to exert some control over mandatory grant expenditure.
The noble Baroness, Lady Hamwee, was also concerned about the definition of "disabled" in the Bill. We will look at that in the light of her comments and will doubtless return to it in Committee.
Concern was also expressed by the noble Baroness and by the noble Lord, Lord Williams, that the prior qualifying period would prevent the first-time buyer entering the market. In general, we believe that where people are looking to enter into home ownership, it
1030
should be at a price they can afford. Where a property is in poor condition, the market price should reflect that rather than the property carrying with it a "dowry" of grant assistance.
Noble Lords raised a number of other points on the tools, other than renovation grants, that local authorities are to be offered under this legislation. The noble Lord, Lord Williams, and others welcomed relocation grants. The noble Lord also questioned whether the single regeneration budget (SRB) was legal. I can comfort the noble Lord. Yes, it is. But it draws on a range of powers, widely scattered throughout legislation. We believe it sensible to draw them all together in one Bill in one place. I was grateful, however, for the praise that the noble Lord, Lord Dubs, implicitly lavished on the single regeneration budget. He asked for its improvement. We can always hope for that. However, I remember that not so long ago the whole concept of it was rubbished by the Opposition. I am grateful for their change of view.
The noble Lord, Lord Williams, asked whether new resources would be provided for relocation grants. The cost of relocation grants will need to be met from within the overall private sector renewal resources. Our aim is to provide a further tool for local authorities to use as they see fit. The change from mandatory to discretionary renovation grants will give authorities more scope to deploy resources according to their own priorities. If they give relocation grants, subsidy will be payable by central government in the same way as for other slum clearance activities. It is currently 60 per cent. We have no proposals to change that.
The noble Lord, Lord Ezra, asked about the home energy efficiency scheme. He wondered why we proposed to widen the scheme to include lighting when the resources available had been reduced. We feel it is desirable to make the scheme as flexible as possible to give the best possible benefit to people in the greatest need of help. The amendment will allow the scheme to include all realistic energy-saving measures, including energy-efficient lighting, which is especially cost effective. It is a structural change not linked to the money allocation in any one year. There is no commitment to change any feature of the scheme. The amendment only effects our power to do so.
The noble Lords, Lord Williams and Lord Dubs, asked for assurances that once UDCs are wound up the property would pass to local authorities. The UDCs intend to dispose of assets prior to wind-up. Each UDC will formulate its own plans in the light of its own circumstances as to where assets go. Some property may pass to local authorities, but that is not the only possible route. Clauses provide for one or more residuary bodies to receive the remaining assets. We should remember who has paid for the assets: the Exchequer. We must be careful in making any assumptions that local authorities , should be the beneficiaries of UDC assets.
My noble friend Lord Finsberg devoted his speech to an extensive proposal for a new role for the Commission for the New Towns. I am delighted to pay tribute to the work of the commission. It has done an excellent job in disposing of new town property with major receipts to the

1031
Exchequer. The Government understand that it should not put on the market more property than the market can absorb. As my noble friend knows, the commission has instructions not to flood the market. It must seek a good price.
My noble friend's proposal for a single government property agency goes beyond the clauses in the Bill. Nevertheless, we take his point about the need for co-ordination in the disposal of government assets. If that is not the case, I shall inquire further. I shall take away his proposal for a single property disposals agency and we shall consider it further before the next stage of the Bill.
A large number of detailed points have been raised on what is, in a sense, a technical Bill. I am sure that we shall return to them in Committee. For their part, the Government will bring forward a few minor technical amendments to keep the noble Lord, Lord Williams, happy. He will appreciate that, as he said himself, the Bill is one half of Siamese twins. There may be some minor plastic surgery required on the join. We undertake to give good notice of any such amendments.
Overall, we believe that the proposals before the House today will secure a system which provides flexibility so that local authorities are able to target help on people and areas most in need of the available resources, as was intended when the present system of grants under the 1989 Act was introduced. I commend the Bill to the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Community Care (Direct Payments) Bill [H.L.]
6.43 p.m.
Bill read a third time.
Clause 1 [Direct payments]:
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 1:
Page 1, line 11, at beginning insert ("subject to subsection (7)").
The noble Baroness said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 4 and 5 which are grouped with it. These amendments are about eligibility. I believe that we all support the Bill. We all believe that the disabled person should be at the centre of the care system and not dependent on it, each and every day able to exercise the kind of choices that each of us as an individual takes for granted. However, I simply do not understand why that right to choose direct payment and to exercise choice should be confined, as the Government intend, to only a small proportion of disabled people; namely, those with physical disabilities under the age of 65.
It is an issue about rights, choices and local judgment. We on these Benches believe that all disabled people who want and are able to benefit from direct payment—cash rather than services in kind—whatever their ability and whatever their age, should be eligible for it. The amendment would cost the Government absolutely
1032
nothing. It would do what disabled people and disability organisations led by DIG and the British council for disabled people as well as local authorities all want.
So why have the Government resisted the proposal? It cannot be on grounds of cost because the amendment is probably cost neutral and would probably save money for the local authorities. It is not about cost. It cannot be because there is no demand for it. Existing third party schemes already include people with learning disabilities, some of those over 65 whom the Government would exclude. It cannot be that local authorities would be overwhelmed because only a small proportion of disabled people, probably younger ones, are likely in any case to prefer direct payments. Indeed, we shall probably need campaigns to encourage people to take up direct payments rather than use efforts to limit them. It cannot be because it is too onerous for local authorities. The entire scheme is in any case discretionary. Local authorities will not start the scheme unless they feel that there is local demand and are confident about their own competence to do so.
If local authorities are competent to have the local decision in their judgment and if local authorities are to be entrusted with the discretion as to whether they should set up the scheme, why do we refuse them the lesser discretion as to who should be eligible within it? It cannot be that all local authorities must progress in the same way, at the same time and at the same pace. That cannot happen. Already some 60 local authorities run direct payment schemes and are several years ahead in terms of experience compared with other local authorities. Are we to hold them back until others catch up? Why? Why not benefit from their experience? Why not benefit from pluralism and let both central government and local government learn from the experience and practice of those already more experienced?
What other arguments can the Government produce against the amendment? It cannot be that the Government seek to avoid a patchwork of provision. Whether or not the Government accept the amendment, there will be a patchwork of provision on the ground. Some local authorities will set up direct payment schemes as well as maintaining third party schemes. Others will stick with only third party schemes. Others may offer vouchers. Others may limit direct payments to those receiving ILF moneys. Others may do nothing at all. Any, all or a combination of those arrangements will be possible. There will be a patchwork but instead of regarding that as a source of weakness, let us see it as a source of strength.
What other final argument can the Government have? It cannot be that central government will not trust local authority discretion. Entire social work departments each and every day are trusted by the Government to make far more significant decisions—for example, about removing a child from a family. As I said, the Government allow the local authority to make the big decision as to whether to run a scheme at all. Why, then, do the Government refuse the local authority the right to make the lesser decision as to who will be eligible? There are all sorts of decisions that local government will have to make about the scheme. They will have to

1033
decide whether to have a scheme, decide the charging policies and decide whether to set up advice and support packages. Why should not they also decide the eligibility according to their own local experience on the ground?
The amendment is a win-win amendment. It costs the Government nothing. But the Government gain from the experience on the ground. It costs the local authorities nothing; they will save money. But it facilitates choice for disabled people and is supported by disability organisations. Even at this very late stage I hope the Government will accept that there is no good or decent ground for denying disabled people who have learning difficulties or disabled people over the age of 65 the opportunity of taking advantage of direct payments. I beg to move.
Lord Campbell of Croy: My Lords, as explained by the noble Baroness, Lady Hollis, her three amendments would have the effect of widening the range of categories of disabled people to be included in the new direct payments system in the first stage when the Bill becomes enacted. As noble Lords will be aware, I have applauded the Government for bringing in the scheme by stages. I thought that was wise. It is a matter of forecasting. The noble Baroness said today—I had not heard her say it before—that she thought comparatively few disabled people would apply and that they would be among the younger ones. My feeling is that the new community care system is now under strain in parts of the country. It is not just a question of how much money is available from central government. It is not wise to load local authorities, even though it is a discretionary scheme, with too much more immediately.
I have in the past encouraged the Government to introduce the scheme by stages so that certain client groups—certain categories of disabled people—will be dealt with under the Bill when it is first enacted. I ask my noble friend Lady Cumberlege to confirm that it is the Government's intention, once the Bill is enacted, to extend its terms to other categories in due course when it is clear that the new system of direct payments is working efficiently and effectively. If that is the case, I would certainly hope to keep the Bill in its present form.
Lord Addington: My Lords, these amendments just ask the Government to allow local authorities to do within the rules what they have been doing outside the rules in many cases. There are no real cost implications as direct payments seem to save money—that is the evidence so far—rather than create the need for extra expenditure.
The noble Lord, Lord Campbell of Croy, referred to bringing in the scheme in stages. The amendment merely says that the people who are administering the scheme should be allowed to bring it in at their own pace for themselves and those they are administering it for. Everything said by the noble Lord, Lord Campbell of Croy, is taken care of by the amendment. It merely enables the scheme to become available more quickly to those who want it and to be administered by those who are ready for it. Nothing of a radical nature is suggested here. If we all want the scheme to work surely we should let those who are to implement it decide how they implement
1034
it. There is nothing radical suggested here. We want merely to allow those who are to run the scheme—those who are going to drive—have the wheel.
Baroness Hamwee: My Lords, when the Minister responds to the amendment, I ask her to bear in mind one simple point. The amendment directly addresses the issue of partnership between the service providers, on which the success of community care crucially depends.
Baroness Cumberlege: My Lords, the noble Baroness, Lady Hollis, has gone to enormous lengths to find a form of words which will meet two goals; first, to allow those local authorities which can manage to do so, to have discretion over the client group; secondly, to avoid the risk of overwhelming those authorities which are less able to cope. But I am afraid that her amendment still does not meet the concern that I expressed at Report stage that where direct payments are available they should be offered to a limited group but still on a national basis.
I have spoken ad nauseam on the need to see how things go so that we can judge whether the national framework needs to be adjusted. We accept that by giving local authorities discretion, as we are, variations are introduced—a patchwork, as the noble Baroness said today and the noble Lord, Lord Carter, has said in previous debates. But this amendment will create variations not only in terms of geography but also in terms of groups which are eligible. The more that we allow the differences, the more the Government lose their capacity to judge how direct payments are working nationally and overall.
During the course of the passage of the Bill I have listened carefully to the particular concerns that have been expressed in previous debates by the noble Lord, Lord Rix, and the noble Baroness, Lady Darcy (de Knayth), over the eligibility of people with learning disabilities who are not also physically disabled. I have given them some assurances that I should like to repeat now so that the words are in Hansard. Those with learning disabilities would be included in option B, paragraph 15 of the consultation paper. We will consider carefully, before reaching a final decision on eligibility, the responses to the consultation exercise, the views expressed in your Lordships' House and the fact that this House divided so narrowly on this issue.
As we have already said, we will consider particularly carefully whether all people with learning disabilities under the age of 65 should be included in the initial eligible group and we intend to keep the eligible group under review, as suggested by my noble friend Lord Campbell of Croy. As the eligible group is to be specified in regulations, we will be able to expand it in the future, if we think that is appropriate, without amending primary legislation.
We also remain unconvinced about 'the way in which this amendment would work in practice. The amendment would require regular consideration and much updating of the regulations. In this respect the amendment is even more cumbersome than that tabled at Report stage. The Secretary of State would still require large amounts of information to enable him to

1035
form a judgment about each local authority which wished to expand its eligible group, and if necessary to defend that judgment in Parliament.
I recognise what the noble Baroness, Lady Hollis, is seeking to achieve in this amendment. But the amendment goes no further to meet our wider concerns than the amendment which your Lordships rejected at Report stage. I therefore hope the noble Baroness will not choose to divide the House.
Baroness Hollis of Heigham: My Lords, I thank all those who have taken part in this brief debate. Perhaps I may comment on the remarks of the noble Lord, Lord Campbell of Croy, although the noble Lord, Lord Addington, has already done this for us admirably. The noble Lord suggested that community care was under strain now and that it would be unwise to add to the problems and burdens. If we were doing the opposite of what the amendment suggests—in other words, if we currently paid people cash and the Opposition Benches were proposing instead to move onto services—the noble Lord, Lord Campbell, would be absolutely right—we would be increasing the workload of local authorities as they would have to do the work in-house. However, the reverse is true. The amendment seeks to allow local authorities to offload, if I may put it that way, onto disabled people the responsibility for administering those services which otherwise the local authorities would have to administer. The amendment therefore reduces the workload and makes it more possible to deliver the objectives of care in the community which we all want. Therefore, I believe that the noble Lord's point is inappropriate.
Lord Campbell of Croy: My Lords, I am grateful to the noble Baroness for giving way. It is not so much a question of what the load will be eventually as bringing in a new system. The local authorities will have to get down to bringing in a new system on top of the community care responsibilities which they have at the moment. We all hope that once it has settled down and direct payments are going to individual disabled people there will be less of a load. But it is the burdening of them with a new system that I was talking about.
Baroness Hollis of Heigham: My Lords, again I believe that the noble Lord, Lord Campbell of Croy, has overlooked the fact that at the moment something like 60 local authorities run direct payment schemes already—
Lord Campbell of Croy: My Lords, that is another system.
Baroness Hollis of Heigham:— and they often make payments to people with learning difficulties and those over 65 years of age. If this amendment is not accepted and those groups have to remain outside the national scheme, that same local authority will be introducing a direct payment scheme of its own to fit the Government category and have to keep in place a second scheme, which is the third party scheme, to cope with the additional people. Therefore, if the noble Lord, Lord Campbell of Croy, is concerned about the load on local authorities, they would be allowed to make that decision
1036
locally so that they are not forced into running two schemes in parallel, because the Government will not allow them to bring the two schemes together into one where it best suits local circumstances. I repeat that if this amendment is not accepted, the workload on local authorities will not be reduced but, on the contrary, increased.
I was very sorry that the Minister repeated her objections. Her basic argument is that the Government wish to go slowly to see how things go. One cannot tell how things will go unless there are also pilot schemes which pioneer and from which one can learn. We have said time and again that very often one of the difficulties with social security legislation is that it is nationwide and one never gets any pioneering or piloting or feedback in order that one can learn from experience and experiment. The amendment would allow central government and local authorities to learn from other people's best practice.
Finally, the Minister suggested that she hoped to bring people with learning difficulties into the scheme as soon as she felt that local authorities could do so. The amendment that was so narrowly defeated in this House would also have brought those over the age of 65 within the scheme, and not just those with learning difficulties. They would remain the largest groups, many of whom would welcome, want, need and benefit from it. For those groups in particular I seek the opinion of the House.
7.2 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 100; Not-Contents, 113.

Division No. 1

CONTENTS

Acton, L.

Grey, E.

Addington, L.

Hamwee, B. [Teller.]

Archer of Sandwell, L.

Harris of Greenwich, L.

Ashley of Stoke, L.

Haskel, L.

Beaumont of Whitley, L.

Hayman, B.

Berkeley, L.

Healey, L.

Birk, B.

Hollis of Heigham, B.

Blease, L.

Howie of Troon, L.

Borrie, L.

Hughes, L.

Broadbridge, L.

Irvine of Lairg, L.

Bruce of Donington, L.

Jeger, B.

Carmichael of Kelvingrove, L.

Jenkins of Hillhead, L.

Carter, L.

Jenkins of Putney, L.

Clinton-Davis, L.

Judd, L.

Cocks of Hartcliffe, L

Kennet, L.

Craigavon, V.

Kilbracken, L.

David, B.

Kinloss, Ly.

Dean of Beswick, L.

Kirkhill, L.

Desai, L.

Lester of Herne Hill, L.

Diamond, L.

Lovell-Davis, L.

Dormand of Easington, L.

Macaulay of Bragar, L.

Dubs, L.

McGregor of Durris, L.

Ezra, L.

McIntosh of Haringey, L.

Falkender, B.

Mackie of Benshie, L.

Falkland, V.

McNair, L.

Farrington of Ribbleton, B.

McNally, L.

Fisher of Rednal, B.

Mallalieu, B.

Geraint, L.

Mar and Kellie, E.

Gladwin of Clee, L.

Masham of Ilton, B.

Graham of Edmonton, L. [Teller.]

Mason of Barnsley, L.

1037

Mayhew, L.

Sefton of Garston, L.

Merlyn-Rees, L.

Serota, B.

Milner of Leeds, L.

Sewel, L.

Mishcon, L.

Stedman, B.

Monkswell, L.

Stoddart of Swindon, L.

Morris of Castle Morris, L.

Strabolgi, L.

Murray of Epping Forest, L.

Taverne, L.

Nicol, B.

Taylor of Gryfe, L.

Ogmore, L.

Thomson of Monifieth, L.

Palmer, L.

Tope, L.

Pearson of Rannoch, L.

Tordoff, L.

Peston, L.

Turner of Camden, B.

Ponsonby of Shulbrede, L.

Varley, L.

Prys-Davies, L.

Wedderburn of Charlton, L.

Rea, L.

Whaddon, L.

Redesdale, L.

White, B.

Richard, L.

Williams of Crosby, B.

Rochester, L.

Williams of Elvel, L.

Rodgers of Quarry Bank, L.

Winston, L.

Russell, E.

Young of Dartington, L.

NOT-CONTENTS

Aberdare, L.

Hardwicke, E.

Addison, V.

Harmar-Nicholls, L.

Aldington, L.

Hemphill, L.

Archer of Weston-Super-Mare, L.

Henley, L.

Ashbourne, L.

HolmPatrick, L.

Astor of Hever, L.

Hothfield, L.

Barber, L.

Howe, E.

Belhaven and Stenton, L.

Inglewood, L.

Beloff, L.

Kenilworth, L.

Birdwood, L.

Kimball, L.

Blaker, L.

Kinnoull, E.

Blatch, B.

Leigh, L.

Bowness, L.

Lindsay, E.

Brabazon of Tara, L.

Lindsey and Abingdon, E.

Brigstocke, B.

Long, V.

Brougham and Vaux, L.

Lucas, L.

Burnham, L.

Lucas of Chilworth, L.

Cadman, L.

Lyell, L.

Campbell of Alloway, L.

McColl of Dulwich, L.

Campbell of Croy, L.

Mackay of Ardbrecknish.

Carnegy of Lour, B.

Mackay of Clashfem, L. [Lord Chancellor.]

Carnock, L.

Chesharn, L. [Teller.]

Marlesford, L.

Clanwilliam, E.

Massereene and Ferrard, V.

Clark of Kempston, L.

Miller of Hendon, B.

Colwyn, L.

Mountevans, L.

Courtown, E.

Munster, E.

Cox, B.

Napier and Ettrick, L.

Craigmyle, L.

Norfolk, D.

Cranbome, V. [Lord Privy Seal.]

Northesk, E.

Crathome, L.

Orr-Ewing, L.

Cross, V.

Park of Monmouth, B.

Cumberlege, B.

Peel, E.

Dean of Harptree, L.

Pender, L.

Dixon-Smith, L.

Peyton of Yeovil, L.

Dundonald, E.

Prior, L.

Eccles of Moulton, B.

Rankeillour, L.

Eden of Winton, L.

Reay, L.

Elles, B.

Rees, L.

Elton, L.

Rennell, L.

Faithfull, B.

Renton, L.

Ferrers, E.

St John of Fawsley, L.

Finsberg, L.

Saltoun of Abernethy, Ly.

Flather, B.

Seccombe, B.

Fraser of Carmyllie, L.

Shaw of Northstead, L.

Gardner of Parkes, B.

Skelmersdale, L.

Gilmour of Craigmillar, L.

Stewartby, L.

Gisborough, L.

Stodart of Leaston, L.

Glentoran, L.

Strange, B.

Gray of Contin, L.

Strathcarron, L.

Grimston of Westbury, L.

Strathclyde, L. [Teller.]

Hamilton of Dalzell, L.

Teviot, L.

Harding of Petherton, L.

Tollemache, L.

1038

Torrington, V.

Vinson, L.

Trumpington, B.

Wilcox, B.

Tugendhat, L.

Wynford, L.

Ullswater, V.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
7.9 p.m.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 2:
Page 1, line 19, at end insert ("in such a manner which, had the authority provided a service, would be subject to section 17 of the Health and Social Services and Social Security Adjudication Act 1983.").
The noble Baroness said: My Lords, this amendment returns us to the issue of the level playing field. I am sorry to revisit this again and to take up the time of the House; but whenever we have tried to raise this matter the Minister has said that such an amendment is not necessary, whereas the professionals, those who actually deliver the policy, believe that it is necessary. I hope that this time we may be able to persuade the Minister.
The purpose of the amendment is to ensure that the charging policy that currently applies in a local authority in respect of services should apply equally within the local authority with regard to direct payments. On Report the Minister made it clear that she entirely agreed with the argument behind the amendment: that those who receive direct payments should not be treated any less favourably than others. At the moment, a local authority may offer free services, may make a flat charge or use a means test. We hope that whatever the local authority does in respect of services, the provision for direct payments should be identical otherwise there is a perverse financial incentive to move from one to the other rather than to make the decision on the merits of the case.
The origins of charging are in the Health and Social Services and Social Security Adjudications Act 1983 which makes it clear that local authorities may take into account a person's ability to pay where it is "reasonably practicable" to do so. The phrase "reasonably practicable" in the 1983 Act has determined local authorities' charging policy for services. However, this Bill does not contain the phrase "reasonably practicable"; instead there is the phrase, "taking financial means into account". However one looks at it, that phrase implies a means test, whereas the law that frames services does not. Therefore, it appears that a local authority must means test whether or not it wants to do so.
If that is not what the Minister means to happen, the Bill is sending out the wrong signals. The Minister said on Report that if the Government were sending out the wrong signals, they would correct those wrong signals by sending out Section 7 guidance. Why? Why send out guidance to correct ambiguous wording in a Bill when you can clarify the wording of the Bill and avoid the need to send out guidance? The Bill should say what it means and should be capable of being clearly understood. How can we make the Bill clear? We could include in this Act identical wording to that in the 1983 Act, which is what we tried to persuade the Minister to

1039
accept in Committee and on Report. Alternatively, as the amendment suggests, we could refer back to the 1983 Act. Either way would stop the Bill sending out the wrong signals.
It is no use the Minister saying that the words mean the same. She may mean them to mean the same, but if when reading them people do not understand them as meaning the same, the Bill is sending out the wrong signals. The disability organisations are most concerned about that. If there is no difference between the Minister and these Benches on the intention, why are the Government resisting changing the words? At worst, to do so is harmless; at best, it makes the situation clear beyond all doubt. Why leave in an ambiguity— and ambiguity there is because people outside this House are confused— when you can clarify the position on the face of the Bill? I beg to move.
Baroness Cumberlege: My Lords, the Government intend that neither those receiving direct payments nor those receiving services should be treated more favourably than the other in the question of the financial contribution that they make towards the cost of their care.
As drafted, the Bill gives local authorities the discretion on whether or not to take someone's financial circumstances into account. It also gives them discretion on how to take someone's financial circumstances into account, provided they do not act unreasonably and ask someone to make a greater contribution than they can afford.
I have explained the Government's intention to issue guidance on this matter under Section 7 of the Local Authority Social Services Act 1970. The guidance will stress that local authorities must treat people fairly. The noble Baroness, Lady Hollis, has made clear her wish to see a provision on the face of the Bill which would render the guidance unnecessary.
However, the amendment does not achieve that aim. It would require local authorities to act as if their assessment of how much someone should contribute to the cost of their care were subject to Section 17 of the Health and Social Services and Social Security Adjudications Act 1983. But Section 17 allows local authorities a great deal of discretion over their charging policies. What this amendment does not do is to require authorities to reach the same or similar result as they would if that person had been receiving the equivalent services. So in order to ensure that there is a level playing field, we would still need to issue the guidance I have described. That is the most appropriate and effective way of achieving the effect we all want to see.
The noble Baroness, Lady Hollis, has raised the point on several occasions that although we claim that the amendment does nothing and that the position is the same with the amendment as without it, if it makes no difference, why should we not accept it? The courts may naturally assume that the amendment does something— and that that something may be different from what was intended. That is why I am so reluctant that the House should accept the amendment. If the position were unclear, I would accept the amendment. I would accept the amendment if it would change the law to achieve
1040
the desired effect. However, the position is clear. The amendment achieves nothing. Therefore, I urge your Lordships to reject it.
7.15 p.m.
Baroness Hollis of Heigham: My Lords, the Minister has made her position clear. At this stage I shall not push the amendment to a vote, but the Opposition will return to this matter in the Commons. However, I repeat that in legislation it is silly to have one set of words affecting the service element of a local authority's provision and a different set of words when the service equivalent becomes direct payments. To suggest two different sets of wording, which is how the Government have ended—one set relating to direct payments and the other to services—suggests that there is not a level playing field between the two and that a different construction can be placed upon them.
The matter is in the Minister's hands. The Minister could have used different words. We have tried to deal with this in different ways to see whether we can meet the Minister's objections. I repeat that the matter is in the Government's hands. They could have put the situation beyond doubt and made the position totally clear by incorporating the same words regarding direct payments as are applied to service provision. The Government chose not to do so. Both local authorities and disability organisations believe that whatever the Minister may intend, it is not what is in the Minister's head that is the issue; the issue is what is stated on the face of the Bill. The Minister has failed to align the wording although she insists that that is what is meant to happen. I do not understand it. It is silly on the Government's part; but at this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 3:
Page 1, line 24, at beginning insert ("Except where the authority is satisfied that the person from whom the services can be secured is suitable,").
The noble Baroness said: My Lords, this amendment addresses the issue of which relative may be employed to meet the needs of somebody in receipt of direct payments. We all accept that direct payments should not replace informal family care with paid formal care. We all accept that we do not want disabled people to be put in a position where they are pressurised by family members to employ someone within the family, whom they cannot subsequently sack, when they would prefer to be independent and to employ somebody from outside the family.
We have no difficulty with the Government's position that any family member living in the same household—by definition, a close relative— should not be eligible to be paid with direct payments. I believe that all noble Lords agree with those principles—that you should not be expected to employ a family member if you do not want to do so, and that you certainly should not be able to employ a family member who lives in the same house because that would turn into formal care that which is currently informal family care.
However, the Government have gone much further than that. They have gone beyond the practice of the Independent Living Fund and have said that you may not make direct payments to members of the family, often quite distant family members, who may live on the other side of the town or village. In other words, the Government have ruled out remote relatives who do not live in the same household.
The Government have recognised that that is too blanket a ban and have already indicated that they will make some exceptions. They will make exceptions for people in ethnic communities where someone may be able to insist that they employ a person who is a member of their extended family; they will make exceptions in rural areas where there may be few people willing or available to care; they will make exceptions for people with AIDS where only a few people may be willing to take on the care role. So, in other words, the Government accept that they need to be flexible; that they need to be within the area of local authority discretion. The amendment will take that just one step further.
Disabled people should not employ relatives living outside the family home except with the express consent of the local authority. That means that the disabled person would have to obtain the agreement of the local authority to do that, and if it were clear to the social worker that the disabled person was being pressurised by the family, or the local authority was worried that abuse or exploitation might arise, that consent would not be given. The local authority, and not the disabled person, would be taking responsibility for that decision, thus freeing the disabled person from any blame within the family. Why then are we pushing this matter? Why do we believe that it is important to extend the flexibility, the discretion?
First, a "family member" as defined by government comes from an arbitrary group. The definition excludes, for example, the ability to pay someone who is the partner of one's stepson who lives on the other side of the town. It excludes, for example, one's right to employ the partner of one's nephew on the grounds that that person is a member of the family.
I do not know about other Members of your Lordships' House. I have met some of my nephews' partners but there are some partners whom I have never met. Are we saying that someone that I have never met is a member of the family such that I could not employ that person in a direct payment situation? One has only to say that to show that such a definition of "family" is absurd. What happens when a person is employing someone to be the carer and to help with the daily tasks and that person meets one's visiting nephew or stepson and they become partners? Does one then have to sack them? That is the implication of the Government's position.
First, as I say, the notion of family is far too arbitrary and too widely cast. No one objects to restricting the ability to employ on direct payments close relatives living in the family home, but the definition is too widely drawn at the moment.
Secondly, and this is a different argument, many disabled people prefer the impersonality of employing a stranger. They want that employer/employee relationship. However, other disabled people, especially those who feel vulnerable, may want the opposite; they fear strangers in their home. Many of the tasks they will be asking for help with are intimate. They involve toileting, for example. They feel vulnerable. They want someone whom they can trust and with whom they feel comfortable. That may be the nephew's partner, the niece or the partner of a stepson. It may be someone whom they already know, with whom they can relax, they trust and with whom they would not have to build up a new relationship. Such a distant family member is often much more flexible, more willing and can be called in at odd times and is cheerful about that. They are more committed; they are more constant; they are more reliable.
As I say, some disabled people would want the opposite— an impersonal relationship. But where a disabled person wants someone with whom they are comfortable, whom they can trust and who is not a close member of the family, why should they not have the right to employ that person if the local authority is satisfied that that choice is free and informed?
It is not always easy to employ someone for such intimate work. By disqualifying distant relatives who live outside the home we are narrowing unnecessarily the group from which a disabled person may recruit.
Finally, the amendment would align direct payments of local authorities with the ILF scheme which distinguishes between close relatives living within the home and those who live outside. Accepting the amendment would allow a seamless provision between the local authority tranche of money and the ILF tranche so that different rules about whom one can employ do not apply to the different schemes.
The amendment requires the consent of the local authority. Thus it will prevent any exploitation or abuse. The local authority has to be satisfied that the disabled person wants it and that it is in their best interests. But if it is in their best interests, the disabled person wants it and it is such a distant relative that they are outside the home, why in heaven's name do we not allow it, just as the ILF has done? Over many years it has had no problems with that. I beg to move.
Baroness Cumberlege: My Lords, as the noble Baroness said, we are seeking to draw a balance between preventing the formalisation of informal care and not prohibiting sensible and appropriate arrangements. We want to avoid direct payments being used to pay people who might otherwise provide care on an informal basis, for all the reasons I have explained in previous debates. But in doing so we do not wish unnecessarily to restrict the choice of providers available to people who receive direct payments.
The restrictions on employing relatives and friends which we propose to make in regulations and guidance are included in the consultation paper, and we will need to consider the responses to the consultation exercise before reaching final decisions on those issues. On Report, the noble Baroness, Lady Hollis, suggested a

1043
change of emphasis to give local authorities more discretion in deciding whom to allow to be employed. We find that a most interesting suggestion and one which we are considering very carefully. I am sure the noble Baroness will not, however, expect the Government to commit themselves before we have heard the views of those responding to the consultation paper.
The amendment goes somewhat further and proposes that local authorities should be able to make exceptions to the content of our proposed regulations. The Government are very carefully considering their proposals. We are consulting on the content of our regulations and guidance and will make our decision in the light of the responses to that consultation and the debates in this House. We shall then decide what we consider appropriate to include in regulations and what in guidance. But having made that decision we do not think it appropriate for local authorities to be able to make exceptions to the regulations, as proposed in the amendment. The areas where we think it is appropriate for local authorities to use their discretion will be covered in guidance.
We feel that the noble Baroness made a persuasive case on her original suggestion on Report. As I said, we are thinking about it carefully. I hope that with that assurance she will not press the amendment.
Baroness Hollis of Heigham: My Lords, I thought that this amendment might be preferable to the previous one, but the Minister tells me that that amendment is better than this one, even though it was not acceptable at the time. I am well content.
In so far as the Minister is saying that the Government will consider this matter seriously, I cannot obviously hope for anything more at this stage. Obviously the Government are right to say that they must wait for responses to the consultation paper and that the Opposition cannot reasonably expect the Government to decide before they have received those responses. That is right, but it would have been even better if the Government had not introduced the Bill until after the consultation paper responses had been seen, so that we all shared that body of information and opinion.
I am sure that it is not the Minister's fault, but it is regrettable when the Minister gives as a reason for not accepting the amendment that her consultation paper was not out in good time for us to get back the information upon the basis of which we could build our amendments. It is extraordinarily unreasonable for the Government to blame us, because we do not have the advantage of a consultation paper which has gone out too late for us to have the responses in time to debate the Bill.
One talks about fingering the Opposition, but that seems unusually perverse. Nonetheless, as a result, and in the expectation that the consultation paper will confirm what we had been hoping— that there is a need to extend the group so that disabled people can employ relatives, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 4 and 5 not moved.]
7.30 p.m.
Baroness Cumberlege: My Lords, I beg to move that the Bill do now pass. This is an important piece of legislation. People throughout the United Kingdom who receive direct payments will have more independence, choice and control over the way they live their lives. Disabled people have been asking for this legislation and in preparing the Bill we have found their views essential. We look forward to considering their responses to the consultation exercise.
The noble Baroness suggested that we were blaming the Opposition. There is no question of blame but I believe that she realises that we need to hear the views.
I would like to thank all your Lordships for the underlying support given to this Bill, in particular the noble Baroness, Lady Hollis, for testing our proposals so thoroughly. At the Report stage the noble Lord, Lord Rix, referred to the "reason tinged by passion", which he felt was evident in many of your Lordships' debates. That is a good description of the debates that have taken place on this Bill, not least those initiated by the noble Lord.
I would also like to pay tribute to the noble Lord, Lord Addington, the noble Baronesses, Lady Darcy (de Knayth) and Lady Hamwee, the noble Lord, Lord Carter, the noble Baroness, Lady Masham, who is sorry that she cannot be here today, the noble Earl, Lord Mar and Kellie, and to my noble friends Lord Campbell of Croy, Lord Hayhoe, Lord Jenkin, Lady Seccombe, Lady Faithfull and Lord Swinfen. We are at one in wanting direct payments to succeed.
My noble friend Lady Faithfull was anxious that we should have some regulation over care providers. We understand her anxieties but we believe that probably this is not the right Bill to bring forward her proposals.
We have given several commitments in response to the points raised by your Lordships. The Government have amended the Bill as recommended by the Delegated Powers Scrutiny Committee. We are committed to giving Parliament a report on the workings of the Act within three years of commencement. As regards the financial contribution that people may be required to make, we are committed to issuing Section 7 guidance to stress that local authorities must treat people fairly, and should treat those receiving direct payments in a manner equivalent to those receiving services.
As regards Section 7 guidance, we will also make clear that payments should be sufficient to allow people to buy services of adequate quality, taking account of any legal liabilities involved in doing so. We will issue practice guidance to encourage local authorities to give support to people who receive direct payments. We intend to tell local authorities that before people consent to receive direct payments they should ensure that they are made aware that they may have responsibilities as employers.
We are thinking of producing a guide for people who receive direct payments. If we did so it would certainly cover the issue of employing staff. We will produce some training materials for local authorities in order to help them to train their staff and we will continue to involve disabled people and local authorities in the

1045
development of this policy. We have also asked the Technical Advisory Group to assist us in looking at what should be in our guidance, considering whether we should produce a guide for people who receive payments and, if so, what it should contain, and thinking about what kind of training materials we should produce for local authorities. We have also given a commitment that we will consult widely on our guidance in draft.
We have discussed at length many of the issues covered in the consultation document and in particular eligibility. We understand the frustration which many of your Lordships have felt over the fact that the consultation has not yet been completed. But we must allow time for people to consider and to respond to the document. We intend to keep the issue of eligibility under review once direct payments are available.
Our shared aim is to create the best possible framework for this exciting new venture. The Government believe that the framework set out by the Bill is right. I commend the Bill to the House.
Moved, That the Bill do now pass.— (Baroness Cumberlege.)
7.34 p.m.
Baroness Hollis of Heigham: My Lords, we are delighted that the Bill is in place. Many of us in the Chamber have campaigned for it for several years while the disability organisations, such as DIG and BCDOP, and local authorities, such as Kingston, have campaigned for it for many more years. They and we are delighted to see the Bill going through Parliament.
The Bill provides that the care system must fit the needs and the wishes of disabled people rather than disabled people fitting the management structures, rotas and rigidities of a formal care system. The Bill restores the right for disabled people to choose and the right to have spontaneity in their lives. Many people who have received direct payments from the independent living fund have found that it has turned their lives around. People who would otherwise be in institutional residential care have come out to live in the community, have married, have had children, have held down a job and have contributed to society all that they and we would wish. That is what the principle of the Bill is about and it is absolutely right.
As always, the Minister has been informed and courteous. By now we expect nothing less. I am sure that I speak for many noble Lords in welcoming and congratulating a former Conservative Back-Bencher who a couple of years ago introduced a Private Member's Bill, the noble Lord, Lord McColl, who too must be gratified at seeing the Bill going through in its present state.
It is a particular pleasure to thank my noble friend Lord Carter who knows far more about disability issues than I will ever learn and whose wise advice is always available to help people such as myself. I thank the noble Lord, Lord Addington, the noble Baroness, Lady Hamwee, and the noble Earl, Lord Mar and Kellie, on the Liberal Democrat Benches as well as those on the Cross-Benches for their informed
1046
contributions. I include the mobility brigade who have been inhibited in attending tonight only by the snow and not by the issues.
We have always learnt from contributions made by Members on the Conservative Benches. They include the noble Lords, Lord Renton and Lord Campbell of Croy, and the noble Baroness, Lady Faithfull. They have real expertise on the subject from which the House has consistently benefited.
I have one regret. The Bill is not faintly party political and no issues of money or ideology or points of principle have been involved. Nonetheless, time and again the Government have simply resisted or been obdurate where I believe they should have accepted amendments. Instead, we have had insights, such as unripe time and running before walking, rather than a real recognition of the arguments. I regret that, particularly as regards eligibility. I hope that the issues that we have failed to clarify in this House will be clarified in another place.
It is a good Bill but it could have been even better. Even so, we are not greatly distressed because the powers of regulation, including the powers to make Section 7 guidance, which carries heavy weight, will permit the next Minister for disabled people to deliver within a few months every amendment that this Government have resisted but which disabled people, disability organisations and local authorities wish him to. This is a good Bill and an even better Bill may emerge from the Commons. If not, an even better Bill is around the corner. In the meantime, we wish this Bill happily on its way.
7.38 p.m.
Lord Addington: My Lords, we on these Benches support the Bill. It is not exactly the Bill we wanted. It is not sufficiently wide in scope and it has certain limitations, but it is a start. It is true that regulation may well include other people at a later date. I am a little more sceptical about regulation; I would rather see the provision in front of me. However, take what is given and be thankful.
I thank the noble Baroness, Lady Cumberlege, and the noble Baroness, Lady Hollis, who between them have shaken the issues extremely firmly and have saved me from having to give too many examples, which I do not like to do. I also thank my noble friends on these and other Benches who have given the Bill such a good airing from so many points of view. It is a pity that so many people who have helped the process of the Bill cannot be here tonight.
Perhaps I may mention in particular my noble friend Lady Seear who has missed the latter stages of the Bill because she is recuperating from an operation. Although she was briefly out of hospital today she has had to return. I hope that my noble friend will soon be back with us and will encourage the Bill in the future.
Lord Renton: My Lords, I must confess that, although this is the last opportunity that one has, this is the first time that I have spoken on this Bill in your Lordships' House. The reason is that I was absent through being unwell.

1047
I too welcome the Bill and I am very glad to know that it applies to those who are in the homeless foundation scheme of MENCAP because I was chairman of MENCAP when that scheme was introduced.
However, I have a regret to express; namely, that the Bill does not apply to people who are in village communities. I believe that that is an omission which should be cured in another place. It so happens that inquiries have shown that in village communities, mentally handicapped people— if I may dare to call them that in these modern times— have all the facilities which they would have if they were living in homeless foundation places or in other schemes within the community, whether or not they are local authority schemes. I have a daughter who for many years has lived in a village settlement and has been very well looked after there. Those who are capable of being trained in those settlements are trained and that is another advantage of them.
There are those who prefer to be in a rural setting or whose parents prefer them to be there. There are such schemes already operated by local authorities and under the National Health Service, especially in Surrey and in the north of the country. I feel that it is a serious omission from the Bill that it does not apply to those people in village settlements.
I know that my noble friend and the Secretary of State have been giving some thought to that matter. Unfortunately, they had not given thought to it in time for it to be included in the Bill when it was first published. But I most earnestly hope that they are keeping an open mind about it and will realise the equity of the matter. Why should those who are in urban hostels be treated better and given a better opportunity than those who are so well cared for in village communities? I hope that that will receive attention in another place.
The Earl of Mar and Kellie: My Lords, this Bill certainly heads in the right direction and will be very popular in Scotland. It certainly clarifies for all time that direct payments can be made legally under the Social Work (Scotland) Act as it amends and extends Section 12 to establish that.
In Scotland, our next task is to persuade the Secretary of State for Scotland to move a wee bit quicker than clown south and to work with a wider group.
Baroness Masham of Ilton: My Lords, I just heard the noble Baroness, Lady Hollis, say that the mobile
1048
Bench is not present. I at least have only half a voice and that is the reason. I listened to the debate with great interest from below the Bar.
I am president of the Spinal Injuries Association which was one of the organisations that campaigned for this legislation. It is extremely pleased that some disabled people will be able to take more control of their lives and it believes that this is a step forward. I thank everybody who has supported the needs of disabled people.
Baroness Cumberlege: My Lords, despite the clock, I know that time has not stood still. For all we know, it may be snowing outside and we need to get home. I thank all your Lordships who have supported the underlying principle of the Bill. I suspect that if the noble Baroness, Lady Hollis, and the noble Lord, Lord Addington, were writing an end-of-term report they would say, "Good progress but could do better". However, I suspect that that is nearly always the case with a Bill that is taken through your Lordships' House.
Perhaps I may quickly clarify one point that was made on the last debate. I spoke about the noble Baroness's proposals and I said that we were considering them very carefully. I should point out that I was referring to the guidance concerning who may be paid to provide the service and not the amendments of the Bill. I wanted to make that quite clear but I think that the noble Baroness understood that.
With the support of your Lordships, perhaps I may send our best wishes to the noble Baroness, Lady Seear. I hope that she makes a very quick recovery. I am pleased also that my noble friend Lord Renton has returned to the House in good health.
I listened carefully to what my noble friend said about village communities. Perhaps he will take comfort from the fact that my noble friend Lord Pearson put his views very strongly and those views coincide with those of the noble Lord, Lord Renton. My noble friend Lord Pearson expressed those opinions with force on Second Reading and he sought to amend the Bill. I do not wish to go into the detail of that debate at this late hour.
Finally, I feel that we are stepping forward into a new world. We must tread carefully to see how direct payments work in practice. But I believe that this Bill will enable us to build a solid foundation for the long-term future of another aspect of community care. I commend the Bill to the House.
On Question, Bill passed, and sent to the Commons.
House adjourned at thirteen minutes before eight o'clock.