Lords Sitting of 18 January 1996

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Southwark.): The LORD CHANCELLOR on the Woolsack.

Universities: Grants Cut
Lord Ashley of Stoke asked Her Majesty'sLord Ashley of Stoke asked Her Majesty's Government:
What was the figure for the Budget cut in grants to universities, and what assessment have they made of its effect.
The Minister of State, Department for Education and Employment (Lord Henley): My Lords, the Budget settlement for universities confirmed plans for recurrent expenditure announced in the 1994 Budget. However, planned capital funding was reduced by about 40 per cent. compared with previous plans. Universities are being encouraged to use opportunities offered by private finance to maximise the value of taxpayers' money.
The plans allow for institutions to continue to admit over 30 per cent. of young people into higher education and for further increases in participation by part-time students.
Lord Ashley of Stoke: My Lords, I declare an interest as Chancellor of Stafford University. Is the noble Lord aware that the Committee of Vice-Chancellors and Principals was fully justified in describing the capital funding cut as "catastrophic"? That is especially so as the cut will be some 52 per cent. in the next three years and it followed a 25 per cent. cut in funding for students. That is a tremendous cut to the universities. There is no doubt that the effect of the cuts will be damaging to the fabric of British universities. It will impose enormous strains on students and staff and leave Britain trailing behind her competitors. So could we have a complete change in the whole system?
Lord Henley: My Lords, I am aware of the views of the Committee of Vice-Chancellors and Principals. My honourable friend Mr. Forth met members of the committee a week ago, on 11th January. I think that the description of the adjustments to expenditure on universities as "catastrophic" is rather overstating the case. The simple fact is that we spend of the order of £35 billion a year on education in the United Kingdom, some £7.5 billion of which goes on higher education. We now send of the order of 30 per cent. of all 18 year-olds to university compared with 13 per cent. 16 or 17 years ago. That is a record of which we can be proud. It compares well with that of other countries. If noble Lords or the Committee of Vice-Chancellors wish to see yet further expansion in universities, they must say from exactly which budgets they will take the money.
Lord Campbell of Croy: My Lords, is my noble friend aware that some vice-chancellors feel that they are being presented with two possible courses? The first is to borrow the extra money required to carry on as before—and from my noble friend's original reply, it sounds as though that course may be favoured by the Government, but it some cases it may he difficult or unwise. The second course would be to reduce student numbers. Are the Government happy to see one or other of those courses adopted?
Lord Henley: My Lords, we do not think that it will be necessary for universities to reduce the numbers of students attending them. As I said, we have seen a fairly dramatic increase over the past 15 years to over 30 per cent. of the relevant age group. I repeat, that if anyone feels that the figure should be expanded, they must say where the money will come from. It is obviously open to universities to borrow and many have done so in the past. It is quite right that they should look to that avenue as a possibility and also at the possibility for a private finance initiative.
Lord Annan: My Lords, will the Minister say which universities are clamouring to admit more students, now that they know what their budget will be in the next three years? Surely that is absolutely untrue.
Lord Henley: My Lords, I do not believe that I said anything untrue. What I said was that the numbers of students had increased dramatically over the past few years. It is now of the order of 30 per cent. of that age group. We recognise that there will probably have to be a period of stability over the next few years. I am trying to make clear that if noble Lords, universities or whoever it is, wish to see a much greater expansion in numbers at universities, they must say how it should paid for.
Lord Merlyn-Rees: My Lords, commendably the Government have increased the number of university students, particularly in the new universities. However, if the amount of money available to deal with them has not been increased, is that not rather foolish?
Lord Henley: My Lords, the amount of money has increased over the years. It has not done so as fast as the number of students because we have sought efficiency gains from universities, as we have from many other sections of society. I am grateful that we have seen efficiency gains produced by the universities. That is part of the reason many universities have been able to take on more students.
Lord Morris of Castle Morris: My Lords, will not the cap on student admissions, which was also announced in the Budget, make the Government's participation target of 33 per cent. of school leavers entering higher education by the year 2000 absolutely impossible to attain?
Lord Henley: My Lords, I do not necessarily believe that to be the case. We have said that we wish to see a period of stability. We have also announced that in due course we shall come forward with a review of higher education. As I made clear, anyone who wants to see

697
yet further dramatic growth in the number of students must carefully consider how it should be paid for. That is one of the reasons we introduced student loans in the past. No doubt it is a reason noble Lords opposite opposed the student loans.
Lord Morris of Castle Morris: My Lords, may I follow that up? The 33 per cent. target is no one's target but the Government's. Let them say where the money will come from.
Lord Henley: My Lords, that was a target that we set for sometime after the year 2000. At the moment we are looking for a period of stability. We are many years away from 2000 at the moment. As we announced, we seek a period of stability in the numbers attending university, and that is quite right.
Lord Callaghan of Cardiff: My Lords, on another aspect of the problem, is the Minister aware that in a number of universities where students are dropping out, it is often alleged that it is because of financial difficulties caused by the loans? Will he make inquiries into that? The drop-out rate of students, caused either by that or some other reason, is alarming.
Lord Henley: My Lords, we have seen evidence of increased drop-outs but we have seen absolutely no evidence—despite what some will say—that it is caused by financial hardship. It occurs on some occasions. Perhaps for the benefit of the noble Lord and the House I may give a few figures from some BMA research on student expenditure. We find that the average medical student—and I imagine that this is true of most students—spends of the order of £37 a week on accommodation; about £22 a week on food; £3.60 on clothes; £2.70 on text books; £1.10 on equipment; and £18.60 on what is described as "social expenditure". I imagine that that accounts for beer and skittles. I do not believe that that is evidence of hardship.
Lord Ashley of Stoke: My Lords, vice-chancellors are not given to hyperbole like some politicians; they are reserved in their comments. They are outraged by the cuts and their cumulative effect. The reality is that many of our universities have shabby buildings and over-crowded campuses. This House must decide between the words of the vice- chancellors working at the coal face, as it were, and the Minister trying to placate the Treasury. The reality is that we are failing our universities and we must change the system.
Lord Henley: My Lords, I stick to what I said. I think that there was a degree of exaggeration from the vice-chancellors. They have seen a small cut in capital amounting to £150 million. At the same time, we have increased expenditure on schools by £878 million. I believe that everyone would accept that schools have a slightly higher priority at this time.
Lord Pearson of Rannoch: My Lords, does my noble friend agree that there is some evidence that "so much more" has meant "quite a lot worse" in the
698
standards of higher education and that therefore the Government must he right to pause and take breath before going any further?
Lord Henley: My Lords, I am not sure that I necessarily accept my noble friend's supposition that "more" necessarily means "worse".

European Union Membership: Cost to UK
3.10 p.m.
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
What is the total annual cost to public funds of British membership of the European Union.
The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, the Government's most recent estimate of the United Kingdom's net contribution to the European Community Budget is £3.5 billion in the present financial year and £2.9 billion in the coming financial year.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for that impressive, if somewhat depressing, figure. Does it include the additional £40 million a year that flows from the decision of the Government to accept the ruling of the European Court on the subject of the benefit entitlement of men of 60?
Lord Mackay of Ardbrecknish: No, my Lords, it does not. My noble friend asked about our contribution to the European budget, and that was the answer I gave. The amount of money he mentioned which we shall have to spend as a result of the ruling of the European Court falls on the health budget in the United Kingdom.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that he is not answering my question? I did not ask what Britain's contribution was to the European Union; I asked what was the cost of our membership. Surely this particular item falls plumb in the middle of that.
Lord Mackay of Ardbrecknish: My Lords, my noble friend has slightly reinterpreted his Question. I did not interpret it in the way he mentioned. I interpreted him as meaning the contribution to the budget. I suppose one could go on to try to bring out a balance sheet of the costs, and the pluses and minuses of membership. The item my noble friend raises today, which I believe he raised with my noble friend Lady Cumberlege on a previous occasion, would I suppose go down as a cost. However, one would have to cite as a plus the considerable amount of inward investment that comes to this country and the jobs that come with it, thanks to our membership of the European Community.
Lord Brooks: My Lords, pursuant to the Question on the Order Paper, what is the gross per capita cost borne by citizens of Germany, France, Italy and the United Kingdom on an annualised basis?
Lord Mackay of Ardbrecknish: My Lords, I should need notice of that particular question. However, I hope

699
I can help the noble Lord in this regard. The major contributor, both in total and per capita, to the Community budget is Germany. The United Kingdom is also a major contributor to the Community but at a good deal lower level than is the Federal Republic of Germany.
Baroness Rawlings: My Lords, will the Minister agree that the cost of peace, which we now have within the European Union after centuries of war between those countries, is unquantifiable?
Lord Mackay of Ardbrecknish: My Lords, I am grateful to my noble friend for drawing the attention of the House to the broader aspects and importance of our membership of the European Union (the European Community as it was). It is an important bulwark. It helped us very much in our defences through NATO against the Soviet Union in former times. I believe it is a guarantee that the countries of Europe will never again go to war with each other. As my noble friend rightly said, that must be a unquantifiable advantage.
Lord Bruce of Donington: My Lords, is the Minister aware that his Answer to his noble friend Lord Boyd-Carpenter referred to a budgeted total cost? The Question put by the noble Lord, Lord Boyd-Carpenter, related to the total amount out of public funds. The two are not necessarily the same. In addition to the £3½ billion per annum—our net contribution to the budget as referred to by the noble Lord—is the Minister aware that other public funds are expended, notably salaries, expenses and a number of other expenditures on the civil servants and Ministers over here in trying to manage the whole thing from the British standpoint? Does he agree that that must amount to many millions of pounds more per annum than the figures he has already given.
Lord Mackay of Ardbrecknish: My Lords, no matter how many Ministers and civil servants travel to and from Brussels, I do not believe that the cost will in any way come near to the advantages that accrue to the UK, as a major trading nation, as a result of its membership of the most major group of trading countries in the world. I instanced inward investment as only one of the advantages to this country. The UK receives some 41 per cent. of all Japanese inward investment to the European Union. If this country were not a member of the European Union, that inward investment, to Scotland, Sunderland and Tyneside, would not be coming in.
Lord Monson: My Lords, is the noble Lord aware that last year the Swiss franc rose against every other currency including the deutschmark? Can he say what disadvantages are suffered by Switzerland and Norway as a result of their non-membership of the EU?
Lord Mackay of Ardbrecknish: My Lords, Switzerland and Norway are not entirely comparable with a country of 55 million people and one that so firmly bases its economic wealth and health on exports. It is quite false to compare this country with Switzerland and Norway. For a start, the relationship that the European Union can have with small countries such as Switzerland and
700
Norway outside it is completely different from the relationship that they would have with a major player like ourselves if we were outside.
Lord Hooson: My Lords, does the Minister agree that there is a contribution to public funds by taxpayers, for example, who invest in this country? Has any calculation been made of the total annual contribution to public funds from those sources?
Lord Mackay of Ardbrecknish: My Lords, many of these questions are very difficult to quantify. They are likely to be hedged around with so many caveats that I am not sure one would be able to give other than very broad ranges. There is absolutely no doubt that the amount of inward investment that comes to this country and the employment it generates will show through in inward revenue receipts, and therefore in the tax receipts of the Government.
Lord Eatwell: My Lords, is it not clear that one of the more unfortunate costs of membership of the European Union is the cost of fraud? As noble Lords will he aware, we have recently seen a very considerable increase in the cost of fraud here in the UK. Will the Minister explain why the Government have consistently failed to take up the full allowance of funds provided by the European Union to fight fraud, even though fraud is rising? Will he also explain why the Government are failing to support the European Parliament's proposals to amend the European Union agricultural budget to diminish fraud?
Lord Mackay of Ardbrecknish: My Lords, I will not take any lessons from the noble Lord about our determination to bite down on fraud, whether it be in the European Union or in the budget of the Department of Social Security.
The detection of fraud in the Community is left largely to individual countries and the figures therefore have to be viewed with a great deal of care. They can also reflect the care and determination with which an individual country pursues fraud. That is best illustrated by telling the noble Lord and the House that the United Kingdom detects a high number of irregularities, but for very small amounts. In 1994, in its report on fraud, the UK notified 15 per cent. of all common agricultural policy irregularities. But those represented only 3 per cent. by value of all frauds.

The Elgin Marbles
3.18 p.m.
Lord Jenkins of Putney Lord Jenkins of Putney asked Her Majesty's Government:
Whether it is the case that, as reported in the Art Newspaper No. 34 of January 1994, the Foreign Office in the 1960s was in favour of returning the Elgin Marbles to Greece despite opposition by the British Museum and whether they are now prepared to override any objection by the museum authorities.
The Parliamentary Under-Secretary of State, Department of National Heritage (Lord Inglewood): My Lords, I can confirm to the noble Lord that Foreign

701
Office officials took the view during the 1960s that there were arguments in favour of returning the Parthenon sculptures to Greece. However, that view was not endorsed by Her Majesty's Government. As now, Her Majesty's Government could not order the British Museum to return the sculptures to Greece. The sculptures are vested in the trustees of the British Museum, who are prevented under their governing statute from disposing of objects in their collections unless they are duplicates or worthless.
Lord Jenkins of Putney: My Lords, the noble Lord will be aware that it was contemplated in the Foreign Office at one time that a one-clause Bill should be presented to Parliament which would enable the trustees to return the Elgin Marbles to Greece. It was the opposition of the trustees rather than the Government which upset the matter. Can the noble Lord say why the decision to return the Marbles was rescinded? Was it a ministerial decision? If so, how did it come about?
Is the Minister aware also that since 1961 opinion generally in the world, and particularly in the museum world, has been in favour of returning rare objects of art which are of importance to the country of origin? We are now the pariahs of the world because we are unwilling to do so and uncertain about it. Finally, will the Minister take another look at the whole question?
Lord Inglewood: My Lords, I cannot speak for the exact reasoning of the Government in the early 1960s. However, I can confirm that it is the Government's wish and intention that the sculptures remain in the British Museum. They are the heart of the major museum in this country and part of our national heritage also.
Baroness O'Cathain: My Lords, is it not true that if the sculptures had been left in the Parthenon they would no longer exist due to pollution, marauding and everything else that has happened in Greece in the interim? Therefore, in the interests of conservation and evolutionary scholarship—certainly developing scholarship—the British Museum is the best place for them to be maintained.
Lord Inglewood: My Lords, I can confirm that the whole world owes a great debt to Lord Elgin for having done what he did with the statues; he has undoubtedly saved them for posterity. I reiterate that it is the Government's intention that they remain where they are.
Lord Strabolgi: My Lords, is the Minister aware that the Elgin Marbles were legally acquired by Lord Elgin and, as the noble Baroness said, would have deteriorated if they had been left where they were? Is he aware also that, if the Government followed the advice of my old and noble friend Lord Jenkins of Putney and returned all objects acquired from other countries, there would be very little left in our national museums?
Lord Inglewood: My Lords, I am extremely grateful to the noble Lord for underscoring all the points that the Government consider to be so important.
Baroness Rawlings: My Lords, does the Minister agree that, despite the Greeks having practically finished
702
the museum at the Parthenon for the Marbles, it would still make a mockery to return them, as it would to return the Giaconda to Italy or the Pergamon to Turkey?
Lord Inglewood: My Lords, the noble Baroness is absolutely right. If one builds a museum in anticipation of displaying objects that belong to somebody else, one does not need a great deal of foresight to see either that that particular part of the museum will remain empty or that it will have to be used for some other purpose.
Lord Donoughue: My Lords, I am sure that the whole House will have been reassured to be reminded by my noble friend of how robustly, then as now, the Foreign Office defends British interests and assets. However, does the Minister not agree that, were any decision to be taken to return such treasures from any international museum, it would be far better for it to be taken under an international agreement by international arrangement? For example, it could be done through UNESCO; it should certainly not be done through any unilateral gesture.
Lord Inglewood: My Lords, I am obliged to the noble Lord for underscoring the commitment and role of the Conservative Government over the years to looking after our country's best interests. There has been considerable international debate in respect of the illegal export and acquisition of stolen works of art. I merely draw to your Lordships' attention the fact that the scope of the debates at no stage took into account items such as the Parthenon sculptures about which we are concerned today, which were legally exported from their country of origin. The title of the British Museum to the Marbles is unimpeachable.
Lord Jenkins of Putney: My Lords, is the Minister aware that my noble friend Lord Donoughue is apparently ignorant of the fact that there is an existing agreement of an international character and that that agreement is being carried out? Countries throughout the world are restoring major objects—only major objects—of interest to their country of origin, and we are opting out of that agreement. We are a bunch of Scrooges and curmudgeons. The Government ought to be interested in our reputation in the world. They are sometimes interested in our reputation and trade for the wrong reasons; why cannot they be interested for the right reasons?
Lord Inglewood: My Lords, I am grateful to the noble Lord for drawing attention to the divisions on the Front Bench on the opposite side of the House.

Transport Research Laboratory: Purchaser
3.25 p.m.
Baroness Castle of Blackburn Baroness Castle of Blackburn asked Her Majesty's Government:
Whether they are now in a position to announce the successful bidder for the Transport Research Laboratory.
The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): My Lords, the Government announced yesterday that the Transport Research Foundation had been selected as the preferred purchaser for the final negotiations on the sale of the Transport Research Laboratory. I regret that the announcement was made in advance of the Question on the Order Paper, particularly in view of the noble Baroness's long-standing commitment to this issue.
Baroness Castle of Blackburn: I was going to thank the Government spokesman for a generous apology. However, it strikes me as being slightly lame in view of the fact that his argument was that he could not give an answer to my Question today because the Government were giving an answer to the Commons yesterday. It turns out that no such Question was tabled in the Commons yesterday—at least there is nothing on the Order Paper. But I accept that that is another example of the cock-up history of this Government rather than deliberate discourtesy.
I want to go on to congratulate the Government on having at last seen what has been obvious for a long time to everyone else; namely, that the only way to preserve this centre of excellence, the TRL, from the worst effects of privatisation was to allow its staff and management to form a non-profit-distributing company. It was thus able to give the Government, among others, impartial and independent advice. May I express the hope—
Noble Lords: No. Question!
Baroness Castle of Blackburn: May I express the hope? That is a question. I really think some honourable Lords—or whatever they are called—on the Benches opposite should take grammar lessons. That certainly was not a statement, though I am by no means over-confident. May I express the hope—
Noble Lords: Yes!
Baroness Castle of Blackburn:—that that highly welcome and enlightened decision of the Government means that they will now give wholehearted support to the research work of that splendid institution and devote more resources in future to research in general?
Viscount Goschen: My Lords, we have always supported the Transport Research Laboratory. We feel that the right decision was made and that the laboratory has a strong future in the private sector. It will be able to compete on its own terms. We believe that that is the right decision for the laboratory and look forward to a strong future for that institution.
Lord Clinton-Davis: My Lords, will the Minister join me in paying tribute to my noble friend Lady Castle for the relentless campaign she has waged in this matter to see that justice was done? Will he also agree that a lesson to he learnt by the Government from this is, "Don't mess with Barbara"?
Viscount Goschen: My Lords, I have no hesitation whatever in commending the noble Baroness for her long-standing campaign on this issue. She brought the issue to the attention of your Lordships' House on a number of occasions, not least recently in an Unstarred
704
Question. I believe that the lesson to be learnt from all this is that the competitive sale process is the right way to take an institution such as this laboratory into the private sector in order to guarantee it the best possible future.

Business
3.30 p.m.
Lord Strathclyde: My Lords, al a convenient moment after 3.30 p.m., my noble friend Lady Blatch will, with the leave of the House, repeat a Statement that is to be made in another place on prisoners in hospital.

Education (Student Loans) Bill
Brought from the Commons; read a first time, and to be printed.

Deer (Amendment) (Scotland) Bill [H.L.]
The Chairman of Committees (Lord Boston of Faversham): My Lords, I beg to move the first Motion standing in my name on the Order Paper. I should point out that the membership proposed differs in one respect from the membership agreed by the Committee of Selection last Thursday. It had nominated the noble Lord, Lord Glenarthur—and we are grateful to him for being willing to serve—but, unfortunately, the likely dates proved impossible for him. The noble Lord, Lord Bruntisfield, has kindly agreed to take his place.
Moved, That, as proposed by the Committee of Selection and on behalf of the Committee of Selection, the following Lords be named of the Scottish Select Committee on the Bill:

L. Bruntisfield (in place of L. Glenarthur),

E. Buchan,

L. Carmichael of Kelvingrove,

L. Ewing of Kirkford,

E. Kinnoull,

L. Mackie of Benshie,

L. Pearson of Rannoch,

Ly. Saltoun of Abernethy,

L. Wilson of Tillyorn (Chairman);

That the Minutes of Evidence taken before the Committee shall be printed and, if the Committee thinks fit, delivered out;
That the Committee have power to adjourn from place to place;
That the Committee do meet on Wednesday, 31st January at four o'clock in Committee Room 3.—(The Chairman of Committees.)
Lord Monkswell: My Lords, bearing in mind that it is generally understood that the Select Committee will be meeting in Scotland and taking evidence there, can the noble Lord the Chairman of Committees give the House some indication of, first, where the Committee is likely to meet in Scotland; secondly, the likely dates of those meetings; and, thirdly, whether the staff of this House who will be required to service the Select

705
Committee have been consulted and satisfactory arrangements made for their travelling and accommodation, and any extra payments for dislocation agreed?
The Chairman of Committees: My Lords, I am grateful to the noble Lord, Lord Monkswell, for having informed me this afternoon before we sat that he was proposing to raise these matters. As regards the meetings of the Committee, after the first one, which it is proposed in the Motion before the House shall take place on 31st January in the Palace of Westminster, it is hoped—although these details have to be finalised by the Committee when it meets, should your Lordships agree to this Motion this afternoon—that it will meet in Edinburgh in the Council Chamber there. It is also hoped that those meetings will take place between 5th and 7th February.
As regards the third question asked by the noble Lord, Lord Monkswell, yes, indeed, consultations have taken place. There is a Clerk to the Committee, Mr. Edward Wells, already in place awaiting your Lordships' decision this afternoon. Rather than trouble your Lordships with administrative detail now, perhaps it would be appropriate for me to say that it will be open to the noble Lord to consult the Clerk for any further details. I hope that that meets with the noble Lord's acceptance.
On Question, Motion agreed to.

House of Lords' Offices: Select Committee Report
3.35 p.m.
The Chairman of Committees: My Lords, I beg to move that the first report from the Select Committee on House of Lords Offices be agreed to. I should mention paragraph 5 on HMSO privatisation, the subject of the next Motion to be moved by the noble Viscount the Leader of the House. I should like to make two preliminary points which might be helpful to the House. Both the Finance and Staff subcommittee and the Offices Committee considered the Government's proposals for the privatisation of HMSO. Neither Committee took a view on the merits of the Government's proposals, as it is for your Lordships to express opinions in debate, as always. However, we did draw up stringent safeguards which we consider to be the minimum necessary if satisfactory arrangements are to be made for the future provision of printing and publishing services for Parliament. These are set out in the report as subparagraphs 1 to 4.
My other point is on the statement made by the noble Baroness, Lady Blatch, on 13th December, in which she confirmed that the Offices Committee will be invited to consider the detailed arrangements for a contractual relationship between the House and a privatised Stationery Office. This consideration will take place later in the year. The Offices Committee and, through that Committee's report, the whole House, will have the
706
chance to say whether the safeguards we are discussing today have been met by bidders for the Stationery Office business.
Moved, That the first report from the Select Committee be agreed to [HL Paper l2].—(The Chairman of Committees.)
Following is the report referred to:
I. Appointment of Sub-Committees
The Committee appointed the following Sub-Committees and Panel—
Finance and Staff Sub-Committee

L. Boston of Faversham (Chairman),

V. Cranborne (L. Privy Seal),

B. Gould of Potternewton,

L. Jenkins of Hillhead,

E. Northesk,

L. Peston,

L. Renfrew of Kaimsthorn,

L. Richard,

L. Rodgers of Quarry Bank,

B. Seccombe,

L. Weatherill,

with the Clerk of the Parliaments.
Administration and Works Sub-Committee

L. Boston of Faversham (Chairman),

E. Gowrie,

L. Graham of Edmonton,

L. Harris of Greenwich,

L. McColl of Dulwich,

L. Peston,

L. Renfrew of Kaimsthorn,

B. Serota,

B. Stedman,

L. Strathclyde,

V. Tenby,

L. Weatherill,

with the Clerk of the Parliaments and the Gentleman Usher of the Black Rod.
Library and Computers Sub-Committee

L. Avebury,

L. Brougham and Vaux,

L. Freyberg,

L. Holderness,

L. Lewis of Newnham,

B. Lockwood,

L. Lucas,

L. Macaulay of Bragar,

L. McIntosh of Haringey,

L. Mustill,

L. Renfrew of Kaimsthorn (Chairman),

with the Clerk of the Parliaments.
Refreshment Sub-Committee

V. Allenby of Megiddo,

E. Arran,

B. Birk,

L. Chesham,

L. Graham of Edmonton,

L. Harris of Greenwich,

L. Lawrence,

L. Mackie of Benshie,

L. Merlyn-Rees,

V. Montgomery of Alamein,

L. Peston (Chairman),

with the Clerk of the Parliaments.
Advisory Panel on Works of Art

L. Armstrong of Ilminster,

L. Cavendish of Furness,

V. De L' Isle,

L. Donoughue,

E. Gowrie (Chairman),

L. Morris of Castle Morris,

L. Palmer,

Ly. Saltoun of Abernethy,

B. Trumpington,

with the Clerk of the Parliaments.
2. PDVN cabling and other works
The Committee was informed of the programme for cabling for the Parliamentary Data and Video Network. To minimise disturbance and cost, this work is to be synchronised with associated works of automatic fire detection, fire stopping, electrical rewiring, telephone cabling and asbestos removal, and will for Lords' accommodation be completed by 2000 and for the state rooms by 2002. The programme for individual cabling requirements will remain flexible to allow for changes in priorities.
3. Overhaul of roofs over parts of the House of Lords
Following an inspection and survey by the Parliamentary Works Directorate, a project will be undertaken to carry out essential repairs and restoration to some of the House of Lords' roofs. The repairs will begin in summer 1996, with completion by autumn 1998. Disturbance and inconvenience to Lords and staff will be kept to a minimum.
4. HMSO Supply and Service Agreement
The Committee approved a new Supply and Service Agreement between the House of Lords and Her Majesty's Stationery Office for the provision of printing and publishing services.
5. HMSO privatisation
The Committee took note of the Government's intention to privatise Her Majesty's Stationery Office provided that satisfactory arrangements can be made for the future provision of services to Parliament and agreed that extensive safeguards would be necessary to protect the House's interests. Similar safeguards were being sought by the House of Commons' Commission for that House.
In any arrangements for privatisation, safeguards should be sought to secure the following:
1. Confidence that the business of the House will not be interrupted. This will require:

(a) adequate time for the preparation of one or more tightly drawn contracts;

(b) an assurance that overnight production facilities in inner London are retained for as long as the House continues to need them;

(c) sufficient continuity in the senior management of the relevant sections of the Stationery Office to ensure that the House's needs are understood;

(d) one or more individuals in the privatised Stationery Office who are answerable to the House for the service provided;

(e) alternative emergency arrangements for overnight printing in the event of the failure of contractors.

2. A publication regime which protects the interests of Parliament and does not leave the pricing of its publications to commercial interests. This should include a guarantee that a privatised Stationery Office will not seek any increase (in real terms) in the rates of charges paid by the House or the level of prices to the public above those negotiated for 1996 and that the House will he credited with a proportionate share of future savings arising from technological advances. It would be desirable to achieve a progressive reduction (in real terms) in the cost of Lords papers.
3. A requirement on any prospective purchaser of the Stationery Office to accept the substance of the provisions of the new Supply and Service Agreement between the House and HMSO, including the maintenance of existing service standards and delivery schedules and the rights of the House to regulate the production and reproduction of its documents in both paper and electronic form.
4. The administration of Parliamentary copyright, and the function of Queen's Printer of Acts of Parliament, not to be transferred to the private sector.
The Committee noted that alternative arrangements would have to be made by the House to replace its "intelligent customer" function. now performed by HMSO. This will probably require recruitment of staff by the House, to make good its competence to conduct dealings with the private sector and to commission work.
There should be a debate in the House, for the House to express its opinion on the Government's intentions to privatise HMSO.
6. Lords' reimbursement allowances
The Committee took note of new rates of subsistence and secretarial allowances, following the annual uprating on 1 August in line with the increase in the Retail Price Index:
Overnight subsistence by £2.50 to £74.00
Day subsistence by £1.00 to £33.00
Secretarial costs by £1.00 to £32.00
7. Parliamentary Office of Science and Technology
The Committee agreed that the current joint funding arrangements with the House of Commons, whereby this House contributes 22% of the running costs of the Parliamentary Office of Science and Technology, should be continued for a further five years from I April 1996.
8. Staff of the House
The Committee approved the extension for two years of the post of additional Temporary Clerk in the Committee Office. The Committee took note of the following:

—that Dr Christopher Kerse had succeeded Mrs Eileen Denza CMG as Second Counsel to the Chairman of Committees and Legal Adviser to the European Communities Committee on 9 October, following Mrs Denza's retirement. The Committee expressed their appreciation for the service which Mrs Denza had rendered the House;

—that Miss Marlene Barrett had been appointed a Temporary Library Clerk until July 1996, in substitution for Dr Victory who is on maternity leave;

— that Mr Norman Adamson CB QC, Assistant Counsel to the Chairman of Committees, had retired on 28 September 1995. The Committee expressed their appreciation for the service which Mr Adamson had rendered the House;

—that Mr Derek Rippengal CB QC and Sir James Nursaw KCB QC had agreed to continue to serve part-time, sharing the work of Counsel to the Chairman of Committees for a further year, ending 30 November 1996.

Lord Cocks of Hartcliffe: My Lords, I shall speak very briefly. On 19th October 1992 the House debated an Offices' Committee report and I drew attention to the fact that two people who had been seconded from English Heritage were now being taken on to the full complement. I did wonder at the time what two full-time people going around this Palace would find to do. I wondered whether in fact the tail would start wagging the dog. I also felt that it was time that somebody pointed out that the emperor had no clothes.
I wish to draw the attention of the House to two examples of what I meant at that time. The first comes from The Mail on Sunday and the feature article entitled "Black Dog" published last Sunday. One of the paragraphs states,
"My friends in the Commons catering department are wasting money again—but this time it's not their fault. English Heritage has ordered them to remove canvas pavilions on the terrace for six weeks a year because they are not part of the original palace. The annual cost of this gesture? £10,000".

709
I gave the Chairman of Committees notice that I was going to raise this in the fervent hope that he will be able to tell the House this afternoon that this is a lot of nonsense, because if it is not I really do not know how we can look the taxpayer in the face.
The second example I found during the Recess. I come into the House quite a lot during the Recess because of my duties with the BBC and the Docklands Development Corporation. One day I found someone photographing every tile in the Peers' Lobby. I enquired what was going on and I was told, "Some of the tiles are getting worn". I said, "There is a very good reason for that". The question was asked, "What is that?" I said, "They are being walked on". This is a place of work. If we try to turn it into a museum, it is ludicrous. We should make proper allowance for the fact that it has to be used as a workplace.
As regards paragraph 3 of the report entitled "Overhaul of roofs over parts of the House of Lords", I should like to ask, first, how extensive is that work and, secondly, what is going to be the cost of it? The report continues,
"a project will be undertaken to carry out essential repairs and restoration".
Are we really going to have restoration in the sense of restoring the roof to its original condition in places where nobody ever goes and where nobody will ever see it? Can we have some clarification on this?—because again, if that is so, it will be ludicrous.
Lastly, paragraph 3 concludes,
"disturbance and inconvenience to Lords and staff will be kept to a minimum".
We hear that phrase from time to time and it has now assumed just the importance of a punctuation mark because I see very little sign of it. During the Recess, Lift HOP13 was refurbished and finally it was working again. That work was done during the Recess in order not to inconvenience noble Lords more than necessary, but of course, Library staff and others have to go up to that second floor on a regular basis. Perhaps some consideration can be given to them sometimes.
On Monday 25th September, I came into this building early and was delighted to find that the lift was again in service. I made a very happy journey up to the second floor. I had a visitor coming at 11 o'clock and I went to take the lift down. There was a sign across the lift saying, "Lift requisitioned for removals". I went down to the ground floor. It is possible to get there from the second floor despite the enormously expensive staircase, which is now being put in and which is unnecessary. I found on the ground floor that a contractor was loading bricks into the lift. Not only was he loading bricks into the lift, but that was in full view of a very senior officer of the House who was standing two yards away. When I remonstrated about this and pointed out that this was how the lift had become damaged in the first place I was told by the senior officer, "If we do not use the lift, we shall need a scaffolding tower or have to carry the bricks up the stairs".
710
I do not accept that at all because that lift was ruined not so long ago by the people installing the air conditioning in the upper corridor of the Commons using it for materials and gear. When I was told that there was no alternative at that time to using the lift I made an expedition down the other end and I found a very much more substantial lift which could have been used if heavy articles had to be carried. But also it is the easiest thing in the world to sling a boom and a block and tackle out and the stuff could have been hoisted up without damage to anything. I am very unhappy about this because if contractors are told not to use these lifts and they disobey the instructions they should be dismissed, and we should make sure that they do not get work in the Palace again.
Finally, about this lift—if I seem obsessional to your Lordships it is because I am obsessional about it—when I inquired I was told by the director of works that there would be a complete refurbishment this summer and that it would include facilities for disabled people. Yesterday I tried to get a wheelchair into this lift. It is possible to get a wheelchair into the lift only if it goes in absolutely straight and then there is no clearance at all on either side. So someone who has to propel himself in a wheelchair by his own effort cannot possibly use the lift. How it has been adapted for the disabled, I do not understand. We now have a voice which tells us which floor we are arriving at, supposing it is working, so that may be helpful to someone who is blind. But if that is the only change that has been made, then it is sick.
I really do think that we are failing in our duty if we let reports like this go through on the nod when we know of abuses like this which have occurred.
The Chairman of Committees: My Lords, I am grateful to the noble Lord, Lord Cocks of Hartcliffe, for having informed me beforehand of the first matter to which he referred. I have to confess that I am always in some difficulty in your Lordships' House in dealing with matters which do not arise from a particular report. If I were to seek to assist one noble Lord, I would perhaps be in danger of offending all other noble Lords. However, with your Lordships' permission, I am prepared to make an exception in this case because it is a matter which has reached the public view and therefore it would perhaps be appropriate to use this opportunity to say something about it.
I am aware of and have seen the article in the Mail on Sunday to which the noble Lord referred. I know, too, that the Parliamentary Works Directorate made calculations two years ago to establish whether it would be more economic to put a permanent structure here or to erect and then take down at the end, as it were, of the useful season the terrace awnings. Perhaps to some noble Lords somewhat paradoxically, it is the case that it would be more expensive—indeed substantially more expensive: around one-third to two-thirds more expensive—to have a permanent structure than to have the structure put up and taken down each year. Furthermore, I would venture to suggest—I think this view is shared by the committee as well—that it would be very unlikely indeed, even if it were to be desired, that permission would be given for the creation of a

711
permanent structure. I do not have to hand separate figures for the cost of dismantling and re-erecting the awnings, but I have given some indication of the difference in the costs which would be likely to arise.
The noble Lord referred to photographs being taken of the tiles in the Peers' Lobby. I am not able to help him about that. However, I would only share his view that this place is not a museum. It is very much a working place. As we know from the duties which noble Lords perform in your Lordships' House, if I may speak on your Lordships' behalf for this end of the Palace of Westminster at any rate, it is very much a place of work and service to Parliament and the nation.
The noble Lord asked about the roofs. Yes, indeed, it is an extensive operation but it has to be done. I would not wish to take—I am sure no noble Lord would expect me to take—any undue risks which might affect your Lordships. It is essential that this workplace, reverting to the previous point, should be adequately maintained.
I take the noble Lord's point about avoiding disturbance. Although there was disturbance from time to time in the course of the very extensive operations carried out during the last Summer Recess—the largest the Palace has so far ever seen—that work was, if I may give a personal view, very successfully carried out on schedule. Very determined measures were taken, which I think were largely successful, to keep the promise we gave to keep disturbance to a minimum. I cannot pretend that there will be no disturbance when extensive restoration work is carried out in your Lordships' House and in the Palace generally, but on the basis of our past experience, I can say, I hope with some confidence, that the disturbance will be kept to a minimum. If any of your Lordships has reason to require additional steps to be taken, they will certainly be sympathetically considered by those concerned.
I shall have to let the noble Lord know outside the Chamber on the lift point because, again, I do not have any details about that to hand. But if there is any useful information I can pass on to him, I shall of course do so.
Lord Boyd-Carpenter: My Lords, before my noble friend sits down, would he care to comment on sub-paragraph 4 of paragraph 5? It states:
"The administration of Parliamentary copyright, and the function of Queen's Printer of Acts of Parliament, not to be transferred to the private sector".
Would he care to comment on that, or would he prefer to leave it to the next item?
The Chairman of Committees: My Lords, with the leave of the House, perhaps it would be best if I were to leave the noble Lord's point to the noble Viscount the Leader of the House, who will be dealing with these matters generally.
As a point has been raised on the debate which is to follow, perhaps I may add to what I have already said on this point. A welcome and encouraging consensus emerged at the meeting of the Offices Committee on the safeguards which are sought for preserving and protecting the service of HMSO to Parliament. The tone was set in the first intervention—I am sure the committee would allow me to say this—in our debate
712
on that matter by the noble Viscount the Leader of the House, followed and supported by the other leaders and the Convenor of the Cross-Bench Peers. That is encouraging. I would also add this personal point about welcoming that and finding it encouraging. It is this. Although your Lordships would not expect me to venture anything on the merits or otherwise of the privatisation proposals, I found it welcome and encouraging that the second half of the Motion to be moved this afternoon by the noble Viscount contains words about safeguards. I felt that that was an excellent part of the Motion to be moved this afternoon.
On Question, Motion agreed to.

HMSO: Privatisation
3.50 p.m.
The Lord Privy Seal (Viscount Cranborne): My Lords, I beg to move the Motion standing in my name on the Order Paper.
As anyone with a working knowledge of Parliament will recognise, Her Majesty's Stationery Office has a long and illustrious history. I believe I am right in saying that it is one of the oldest government departments still in existence, since it was established over 200 years ago. The Stationery Office has diversified and grown since then. It has acted as a printer to Parliament for more than 100 years and has established a reputation for providing a service of the highest quality and efficiency.
It has also a long-standing responsibility for legislative printing and the Controller of Her Majesty's Stationery Office is customarily appointed Queen's Printer of Acts of Parliament. As my noble friend Lord Boyd-Carpenter pointed out a moment ago, the Stationery Office also administers Crown copyright and, by agreement with this House and another place, parliamentary copyright too. With my noble friend's permission, I shall return shortly to the matter of Crown copyright. In all those areas, the Stationery Office has demonstrated and indeed enhanced its reputation for quality and reliability, which are now known way across the public sector and beyond.
Of course, if government is to be effective, the functions that I have just described are essential. But equally, they account for only a small proportion of the Stationery Office's business. Financially, it has always had to rely more on the mundane business of supplying stationery, printing services and so forth. In those areas it has consistently been guided by its founding principle of minimising the cost to government and therefore to the taxpayer, while maintaining the standards that its customers expect. The same principle has guided this Government's policy toward the Stationery Office and, I venture to suggest, must clearly be paramount in any decision on its future.
That was why, in 1982, the Government allowed the Stationery Office's customers to use other suppliers. Until then its business had been guaranteed and was paid for by an annual Vote rather than by the customers themselves. After customers were untied from the

713
Stationery Office, the private sector was quick to enter what had been a closed central government market. As a result, the Stationery Office found itself responding to competition with improvements in quality and price. Indeed, it is worth pointing out to your Lordships that there has been no increase in the cover price of parliamentary papers since 1991 and the price of Hansard has indeed been reduced. That is very good news for customers, who have benefited from great choice and lower costs, as well as being good news for the taxpayer.
The new regime faced the Stationery Office with quite a challenge. It found itself competing with suppliers well used to the rigours of the market place and who were not subject to the Stationery Office's public sector restraints. Nevertheless, your Lordships will not be surprised to hear that the staff responded remarkably. They improved efficiency and, indeed, the Stationery Office has doubled the number of transactions that it handles since 1980, while staff numbers have roughly halved. However, it still has to carry the incubus that any government-owned commercial enterprise must carry. It is still subject to public expenditure constraints and so cannot contemplate taking decisions which enable a private sector enterprise to grow and adapt. It cannot raise investment capital without appealing to the Treasury and cannot readily diversify its operations. Most importantly perhaps, it cannot generally trade with the private sector, despite the fact that its own central government market is diminishing.
I believe that those restrictions are certain to damage the Stationery Office's prosperity. Indeed, those restrictions have to some extent already done so. The turnover has fallen by some 10 per cent. since 1990. So, if we take no action now, the future will be bleak and staff numbers will continue to fall. That would be a grave disservice to the staff at the Stationery Office who have built the organisation's formidable reputation and now see their own future in jeopardy. Removing the incubus of government ownership will give the Stationery Office the chance to expand, to compete fully and, if it needs to, to diversify.
That is why my right honourable friend the Chancellor of the Duchy of Lancaster announced in another place last month that the Government intended to privatise the Stationery Office by competitive tender offer by the summer of this year. However, I believe that there will be other advantages flowing from that decision. The office's customers, and by extension the taxpayer, will benefit from greater efficiency and at the same time working in a well-found and prosperous business will offer more real security to the staff. The Government are, therefore, convinced that failure to take action will leave the business in a half-way house, which will harm the long-term interests of the business, its staff, its customers and the taxpayer.
Some have suggested that the Stationery Office should remain within government ownership but that the restrictions on its operation should be relaxed. I cannot help feeling that that is a suggestion without any serious merit. The history of the past 16 years has shown that
714
commercial enterprises in the public sector, which allegedly enjoy the unfair competitive advantages of being underwritten by the taxpayer, with access to cheap borrowing from the National Loans Fund and so forth, do not provide the advantages to their customers and their staff that firms in the private sector provide. In fact, those alleged advantages lead to rather the reverse, to sclerosis for the enterprise and higher taxes for the public.
On the other hand, we must recognise that any change such as the one that is contemplated must he a thoroughly unsettling process for the staff themselves. My right honourable friend the Chancellor of the Duchy of Lancaster has therefore already given an assurance that TUPE will apply at the point of sale to preserve all terms and conditions of employment. The day-to-day relationship between employer and employee will be maintained after privatisation. We shall maintain contact with staff representatives at the Stationery Office and keep employee interests firmly in mind as the sale proceeds.
As a member of the Government, I am concerned that we should make the right arrangements to ensure the future success of Her Majesty's Stationery Office as a business. I hope that I have already made that clear this afternoon. As Leader of your Lordships' House, my object above all must be to ensure that the House is provided with at least as good a service as that which we have received from the Stationery Office while it remained in the public sector. I also share the desire that has been expressed in all parts of your Lordships' House, most notably and recently by the noble Lord, Lord Lester of Herne Hill, that the price of Hansard should not be a barrier to public access to records of our proceedings and indeed the proceedings of another place.
Therefore, it is important for me to emphasise that operationally the day-to-day relationships between the House and the Stationery Office need not change significantly. The House already enjoys a broadly commercial relationship with the Stationery Office and the supply and service agreement which came into force at the start of the year will, I believe, provide a sound basis for agreeing a full contract with legal force.
The Government note the future requirements stipulated by the Offices Committee of this House and indeed by Madam Speaker in another place. We are confident that those requirements can be incorporated in the contracts between each House of Parliament and the new business. Those contracts could quite properly provide for the service to be given from the same premises and by the same staff as at present; for named officers of the privatised business to be accountable for its performance; and for emergency arrangements to be maintained. In short, current arrangements between the Stationery Office and this House could continue unchanged after privatisation if the contract is drawn up to that effect.
Officials of the House are already closely involved in planning for the change and have at the forefront of their minds the safeguarding of the interests of the House. Your Lordships will rightly wish to be kept informed of

715
progress, and it may well be that it is in the mind of the Offices Committee to receive a report on the progress which is being made towards meeting the requirements which it has already set out. Indeed, the Offices Committee may feel that contact with Ministers would help it to safeguard the interests of the House. I am pleased to be able to say that my right honourable friend the Chancellor of the Duchy of Lancaster has indicated to me that if the Offices Committee so wished, he would be willing to be examined by it at its convenience.
Of course, it would be for the Offices Committee, and ultimately for your Lordships' House, to judge whether the necessary safeguards were in place to meet your Lordships' requirements for printing and publishing services. I would not in any way wish to interfere with that—and even if I did wish to do so, your Lordships would deal shortly and effectively with me.
Perhaps I may touch briefly on the question of timing. I have said that the Government aim to privatise the Stationery Office by the summer of this year. Based on previous experience, that will allow enough time, we believe, for us to advertise the sale, to identify prospective bidders, to invite them to make indicative bids and then to chose a shortlist of those to be invited to make the final bids. As always, there is a lot to he done in the time, but we must balance the need for thorough preparation with the need to reduce uncertainty, which, as your Lordships will know, is highly debilitating. I venture to suggest that the position of the House would be strongest if we were able to identify quickly our preferred position in respect of the details of the contract into which we want to enter. We would then be providing bidders with what I suspect would be substantially a non-negotiable requirement.
Some have suggested that we should retain in the public sector not only the small residual body concerned primarily with the administration of Crown copyright—I believe that that is what my noble friend Lord Boyd-Carpenter referred to, and we shall, indeed, retain that—but also that those parts of the Stationery Office which supply the House with its services should be retained as well. That is perhaps superficially an attractive idea, but closer examination leads me to the inescapable conclusion that in the end that simply will not wash.
The principal services provided by HMSO for Parliament are publishing, urgent production and delivery, sales and customer services to buyers of parliamentary publications, innovation and development and close liaison with Parliament's Officers. Under the current integrated arrangements, this work is both profitable and, as the Americans say, prestigious. It offers potential purchasers of the business the possibility of increasing their use of the existing production capacity through expansion into new markets. I would therefore expect privatisation to lead to a downward pressure on costs as they are spread more widely.
If, on the other hand, we were to retain the parliamentary business in the public sector, we would quickly see its costs rising. It would no longer benefit from economies arising from a shared infrastructure. It would not he well positioned to win other business to
716
fill its spare capacity. The lower prices which we have recently achieved for parliamentary publications would he increased, while potential further price reductions, which could be in prospect as a result of the increased competitiveness of the Stationery Office in the private sector, would vanish.
The Government will seek a buyer who will maintain the independence and integrity of the present Stationery Office. Under no circumstances will we offer the printing and publishing businesses separately, and we shall maintain the provision to Parliament and other customers of an integrated service. We will publish the shortlist of buyers in due course, and I repeat that we shall continue to discuss with the authorities in this House and in another place the nature of Parliament's needs and how they can best be met.
As I have said, I believe that sale to the private sector is the only realistic course which safeguards the interests not only of this House and the Stationery Office, hut also its staff, its customers and the taxpayer. Without it, decline looks horribly inevitable. I therefore commend the Government's plans to the House.
Moved, that this House take note of Her Majesty's Government's plans for the future of HMSO, including safeguards proposed to meet Parliament's requirements for printing and publishing services.—(Viscount Cranborne.)
4.4 p.m.
Lord Richard: My Lords, I am grateful that the House is having a debate on this matter today. As your Lordships will remember, when the Government made a Statement on this some time before Christmas there seemed to be a general feeling that we should have an opportunity to look at this matter in greater detail. I am glad that we are now doing so.
I listened to the noble Lord the Leader of the House with interest and attention, as I always do, but I am bound to say that I found his speech strong on allegation but a bit short on evidence. It is all very well for the Government to say, "We think that this is what ought to happen", but at some stage I think that they have to produce evidence to show why it should happen.
There are, I think, four points that the House should consider this afternoon. First and pre-eminently, have the Government established a case for this privatisation? Secondly and associated with the first point, what are the alternatives? Thirdly, what are Parliament's interests and requirements? Fourthly—this is indeed important—who is to decide? What are they to decide? When are they to decide it, and how are they to decide it?
As I have said, the first two points are connected and I shall try to deal with them together. It is for the Government to establish the need for a change of the magnitude which is proposed. On the face of it, Her Majesty's Stationery Office is doing a good job, competing effectively and providing a first-class service. Indeed, it is that very competence and efficiency which would prove attractive to the private sector, but it is no response for the Government merely to say, "We think that it should he privatised". They have to estahlish

717
some substantial arguments to justify that statement otherwise it is a policy based solely on dogma and I had hoped that the political argument nationally had moved beyond that.
In answer to the question, "Who wants this privatisation?", it is difficult to find anyone who wants it, except Ministers. The staff voted on it and 95 per cent. were against it. The management, judging from some minutes I have seen recently, is acquiescent but hardly enthusiastic. There is no great upsurge of demand for change in the status of HMSO from within the organisation itself. I do not detect any great cries of "Freedom now" from the workers as they march through Norwich behind banners proclaiming, "Free us from the shackles of Government". That does not seem to be the approach of those most connected with the Stationery Office itself. Therefore, as far as I can ascertain, I repeat that there is no demand for any change in the status of HMSO either from within the organisation or from its customers.
If that is so, perhaps we should look elsewhere for the reason why. Is it to be found in the trading and financial position in which HMSO now finds itself? Are there any reasons there why this proposal suddenly becomes desirable? I think not. Through the Cabinet Office, the Government published an information pack on 30th November last year. The present position of HMSO was described as follows—these are not my words but are, I repeat, taken from the information pack which comes from the Government and the Cabinet Office:
"HMSO's staff has responded well to the new challenges and opportunities"
this is since 1980—
"and the business was refocused, resulting in an increase in sales and costs being driven down".
That is exactly what the Government are demanding that the whole of the rest of British industry should do.
The information pack continued:
"The experience of Trading Fund operation made HMSO a prime candidate for Executive Agency status under the Government's 'Next Steps' initiative, and this was achieved on 14 December 1988".
Again, the following are not my words, but come from the information pack which describes the present state of HMSO:
"A number of business developments took place during the period 1989 to 1993 including:
improved productivity through the introduction of a new pay and grading system with performance pay linked to key targets".
All the buzz words are there, words so beloved of the market-oriented Government opposite.
The quotation continues:
"improved motivation and flexibility through organisational restructuring to devolve responsibility and flatten the management structure".
I gather that flattening the management structure is considered a desirable thing—at least, that seems to be what is advocated in this document. And:
"and the introduction of business driven flexible working hours".
718
All that, HMSO has done. It goes on to tell me that there has been an:
"optimisation of business procedures by the introduction of Total Quality Management. HMSO"—
your Lordships will be glad to hear—
"will be ready for company-wide registration under ISO 9000 in 1996. Most business units within HMSO have already achieved accreditation".
I do not understand a word of that, but I am sure, due to the fact that it is presented so clearly with such a clarion cry of triumph in the memorandum, that it is obviously something that is thoroughly desirable, and which we should praise HMSO for having achieved.
What is more important, what HMSO has achieved—I quote from the document—is:
"reductions in overhead costs and lead times, by the simplification of critical business processes; a new focus on customer care to maintain customer loyalty; and the introduction of a pioneering public sector electronic trading system".
I have had a little fun with the memorandum so far, but I urge your Lordships to listen to the next paragraph because, in a sense, it is the starting point for the argument we are having today:
"Over the past 15 years HMSO's turnover has risen from £260 million per annum to over £375 million per annum. Over the same period staff numbers have been reduced from 6,300 to 2,900, with the result that sales per head have increased from £41,000 to £121,000. Since 1980 HMSO has met or exceeded the financial targets set by Treasury Ministers in all but 1991 and 1994 when it fell marginally short due to exceptional redundancy costs".
That is the verdict on HMSO in the memorandum pack produced by the Cabinet Office.
If one were looking for as good an account of a public sector success story as anyone could find, this would seem to be it. HMSO is highly regarded by its customers and suppliers and it has, by and large, met, or exceeded, the financial targets set by Treasury Ministers (even of this Government). It has developed considerable expertise in a number of areas in its 200 years of operation, resulting in a highly competitive business which functions well and in respect of which there seems to be universal approval. It is, in short, a very good record of an efficient public service, which inevitably invites the question: why on earth change it?
The argument put by the Government, and repeated again this afternoon by the Leader of the House, is that it is necessary to privatise HMSO because it faces an influx of competition from the private sector in the future—competition which, so far as I can see, up to now it has met successfully—and that in those circumstances there is a risk—it cannot be put higher than that—that the business will decline unless it can widen its markets. The memorandum from the Chancellor of the Duchy of Lancaster to the Finance and Services Committee of the other place then concludes—baldly, if I may say so, and with no supporting argument:
"privatisation will therefore"—
I invite your Lordships to note the word "therefore"—
"offer the best chance of a healthy and dynamic future for HMSO and its staff".

719
Where is the evidence for that? Certainly none is provided. The argument is not that HMSO faces those problems now, but that it might in the future. It is supposition that that will occur, and it is even greater supposition, built upon supposition, that the only way in which that can be dealt with is by privatisation, which will offer the best chance of a future for HMSO and its staff.
If it he thought that no public service can he unshackled because of its public nature—the noble Viscount repeated that again this afternoon—I would like to refer to what has been happening in the Post Office. When it became clear that privatisation of the Post Office was unpopular both in Parliament and with the general public, the Government then fell back upon arrangements which allowed the Post Office to compete more openly with the private sector and to seek new markets—exactly what they say they cannot do in respect of HMSO. If it is necessary, and I am not convinced at the moment that it is, why cannot the Government follow the Post Office's example?
I have to conclude therefore that the case for this privatisation is quite simply not made out. HMSO is in a unique position because of its parliamentary work. It is essential to the working of Parliament that there should be a flow of parliamentary documents and Hansard which is at least as efficient as that which takes place now.
As the House will know—it has been referred to already this afternoon—this has been a matter of some discussion both here and in the other place. Madam Speaker wrote to the Lord President of the Council setting out a number of safeguards and guarantees which, in the view of the other place, it will be necessary to receive before it can decide whether satisfactory arrangements have been made for the future provision of services to Parliament. The Offices Committee of this House has also considered the matter, and its views are set out in the report which has already been referred to this afternoon. It is important for the proper function of Parliament that those safeguards are provided and that those undertakings are given and can be trusted. Otherwise I would anticipate that the House would not he prepared to sanction the proposal.
Perhaps I may make one slightly peripheral point. I note that when Mr. Freeman gave evidence to the Finance and Services Committee of the other place in November he gave an assurance that he would supply to the Committee Clerk not merely the information pack but the information memorandum. However, in a letter to my noble friend Lord Dubs, dated 4th January this year, the noble Baroness, Lady Blatch, said:
"It is normal practice that this document is restricted to serious bidders and then only after they have signed a wide-reaching confidentiality agreement".
I have to make the basic point that I assume that the treatment of this House will be similar to the treatment of the other place. If the Select Committee of another place is to see that information memorandum—Mr. Freeman gave that firm assurance (he gave it twice actually)—then it must be right that the Offices
720
Committee here should see it too. I should be grateful if the noble Earl, Lord Howe, will give that assurance when he replies to the debate.
My last point is on the decision-making process. It must be right that Parliament should be consulted fully as to whether or not it approves of this type of legislation. Mr. Freeman has assured the other place that it will be involved with the decision as to who will he the eventual purchaser. Again, I assume that that will apply to this House too. We need to be clear about this aspect of the matter. Since the Government tell us that there is no need for primary legislation to proceed with this privatisation, how do the Government envisage that Parliament's approval should be given?
I assume that there will have to be a full debate on a Government Motion to approve, which, by its very nature, would be debatable, and upon which there could be a vote. Perhaps I may say quite clearly to the Leader of the House that we for our part do not regard today's proceedings as being in any way the definitive debate on this proposal. We are today discussing some of the principles behind the proposed sale; we are in no way giving our approval to the sale itself. I hope that the Government will confirm that also.
Finally, perhaps I may say that the more I look at this matter, the more I have come to regard the whole affair as a piece of dogmatic nonsense. HMSO is doing well. All the evidence proves that. It should be left alone to carry on providing the quality of service that Parliament and the country have come to expect.
4.19 p.m.
Lord Jenkins of Hillhead: My Lords, in the course of preparation for the debate I studied with even more care than I normally bestow upon that publication, Hansard for 13th December of this House and for 18th December of the other place. Hansard is of course a publication fairly central to the debate, but nonetheless it was those particular exchanges to which I paid attention.
Studying both of them left two strong impressions in my mind. First, in your Lordships' House I have never heard the noble Baroness, Lady Blatch—she was here a moment ago, and I wish that she were here now—less certain of herself. She is normally well briefed, lucid, and full of self certainty—indeed to an extent that she always hints that anyone who disagrees with her is guilty of some sort of delinquency. On 13th December she was extremely hesitant. Indeed, the noble Viscount the Leader of the House was very emollient and low-key today.
I turn to the other place. Apart from the fact that the Government appeared to have no support from the Conservative Back-Benchers who spoke, with I believe one exception, one was struck by the fact that the Chancellor of the Duchy, the Minister primarily responsible, was trying to ride two manifestly incompatible horses. His first proposition was that if the Stationery Office were to be saved from a dismal future of inevitable decline, it had to be set free from all trammels of government. It had to be a free-ranging beast of the free-market forest. Immediately afterwards

721
there were great assurances that, because it would continue to perform its parliamentary functions in an exemplary way, the nature of the contract would have to maintain the most rigid control over how the company performed in the future. The Chancellor of the Duchy said that the two Houses of Parliament would be entitled to lay down the location of the press, the staff and the way in which the business was structured and organised. There is such a manifest contradiction between those two propositions as to make it one of the most nonsensical arguments that one can imagine.
What supporting arguments were put forward? The first was that the unsatisfactory nature, so it was alleged, of the present regime was supported by the fact that the workforce had declined from 3,400 to 2,900 during the past five years. I wonder whether any Member of the Government or anyone opposite would like to guarantee that under privatisation the reduction in the workforce would be no more than 7 per cent. over the next five years. If any previous privatisation is any guide, what with so-called rationalisation (the hiving off of less profitable parts) the decline in the workforce is much more likely to be of the order of 30 or 40 per cent. than it is to be of the order of 7 per cent.
It was then suggested—and again it was a contradictory argument—that since the commercial considerations have been made more and more to apply to HMSO, beginning in 1980 and reinforced in 1988, the new considerations have been "good news"—a phrase which the noble Viscount repeated today—for the consumer. If one looks back it appears that the main good news for the consumer between 1980 and 1991 was the phenomenal rise in the price of Hansard from 45 pence to £7.50. That does not seem to be a good deal for the consumer during that period. Such a patchwork of contradictory and unconvincing arguments can stem only from a decision which is irrational at its core. The privatisation of HMSO is a twitch on a dying dogma. It is analogous to the supremely irrelevant measures of nationalisation which it was tried to force through in 1975 and 1976, with the IMF at the door and sterling in a very weak position indeed.
The best counter argument from the Government side, which we heard in the Commons debate more than we have heard here today, was that both Oppositions have always been very sceptical of any of the measures of privatisation, even those that have turned out to be successful. As a general argument, perhaps that has a certain force, but it is a profoundly unpragmatic argument. To say that, because a dose of some medicine may in certain circumstances do considerable good, limitless quantities in quite different circumstances must, as a matter of faith, be desirable is certainly a profoundly unpragmatic and ought to be a profoundly "unConservative" point of view. It is not one with which I would have associated traditional Conservative thought.
Nor would I have associated that with the modern development of a growing lack of respect for the state and a desire to strip it of its proper appurtenances. I blinked in amazement at last week's statement by the noble Baroness, Lady Thatcher, that the very existence
722
of the state is a potential threat to all the moral, cultural, social and economic benefits of freedom. When combined with her claim made in days of greater affluence—no, influence not affluence: the two do not necessarily go together, fortunately—that there is no such thing as society, it does not leave humanity with much prospect other than being a mass of inchoate protoplasms.
If those are the doctrines to be propitiated—and the relentless desire to strip the national state of its necessary services (and, perhaps I may say in parenthesis, its best buildings) suggests that this is so—our whole political and civic tradition is at risk. It is far more at risk from the nihilist Right than there is any question of it being at risk from Brussels.
It also leaves the noble Viscount, who in such a distinguished way carries on the Cecil tradition in this House, in a somewhat anomalous position. If there is one word that I would associate with the traditions of his family—certainly from the time of the first Elizabeth to the end of Queen Victoria's reign—it is "statecraft". However, one cannot have much statecraft without a state and one cannot have an effective state without leaving it some sinews of operation, such as a printing agency and even buildings, which are an expression of its tradition and authority, such as Greenwich and even Admiralty Arch.
At a more local level, it is not a pretty sight to go to almost any market town in England and to see in the centre a post office, mostly purpose-built 60 or 70 years ago in a not exciting but in a decent neo-Georgian style, boarded up and the business pushed into some newsagent in a back street. That would not happen in centralised France and it would not happen in decentralised America either because of the different manifestations of national pride in both cases. But it happens here and it shows the limitation of allowing a bottom-line approach to take over not only in areas where that is suitable but in areas where it is not.
Perhaps I may take another paradoxic example which for me is one fairly close to home. I sometimes thank God that the National Trust is an independent body operating under strict rules about the inalienability of its properties rather than under the direct ownership of this Government. If it had been a sitting target for taxation reductions, the immunity of the sale of its houses and coastline would be far less than it is at present.
I return to HMSO, which I have to keep reminding myself is not a ship. I make no apology for having put the foolishness which is proposed in the context of general thought and behaviour. The consolations that are offered are: first, that some control by both Houses of Parliament will remain over who will be the first purchaser; and, secondly, that if we do not like the parliamentary service provided, we can take away our business and place it elsewhere. But what happens when the first purchaser becomes the second purchaser and is taken over, hived off or goes out of business?
If this privatisation had taken place five or perhaps even seven years ago, by far the most likely purchaser would have been the Maxwell empire. That would have provided an interesting future for HMSO, but would

723
there have been any guarantees for us? What is the value of the opportunity to change when, the specialised services of HMSO having gone, there is no one suitable to switch back to? That would be a foolish and dogmatic scheme at the best of times. In present circumstances, with a tottering Government enjoying minimal support in the country and endeavouring desperately to fend off an election for as long as possible, it is sacrilege to destroy an institution with a 200 year-old tradition of successful public service. To paraphrase the words of Chesterton's immortal satire of an extravagance of Lord Birkenhead, I say, "Chuck it, Cecil".

Prisoners in Hospital
4.32 p.m.
The Minister of State, Home Office (Baroness Blatch): My Lords, with the leave of the House, I shall now repeat a Statement on prisoners in hospital which is being made in another place by my right honourable friend the Home Secretary. The Statement is as follows:
"With permission, Madam Speaker, I should like to make a Statement on the use of restraints on prisoners attending hospital, particularly women who are pregnant.
"The acting Director General of the Prison Service, Richard Tilt, met Caroline Flint, the President of the Royal College of Midwives, on Monday to discuss the use of physical restraints on women prisoners admitted to hospital to give birth. The discussions were constructive and I am very grateful to the Royal College for its help. I should like to make it clear that it has never been the intention of the Prison Service to apply handcuffs or chains to women who are confirmed as being in labour and never to apply restraints contrary to medical advice. That will continue to be the case. But the Royal College has asked for certain modifications to be made to the use of restraints on pregnant women and the Prison Service has accepted its recommendations.
"In future, women taken from prison to hospital to give birth will normally be escorted by two female members of prison staff. In exceptional circumstances, where this is operationally not practicable, at least one will be female. No restraints will be applied to the prisoner from the time at which she arrives at the hospital. No prison staff will be present in the delivery room unless the prisoner requests it. Governors will continue to be encouraged to liaise with hospital managers and midwives on these and all other security measures for women admitted to hospital to give birth.
"The Royal College of Midwives has also expressed concern about the application of physical restraints to pregnant women waiting in public areas in hospitals for antenatal checks. In future, all physical restraints will be removed from a prisoner on her arrival in a hospital waiting room unless she is judged to present a particularly high risk of escape and of course there is no medical objection to restraints being applied.
724
"The Prison Service has a responsibility to balance the need to hold prisoners securely with the duty to treat them with humanity and to maintain their dignity and privacy. The modifications I have announced will, I believe, allow the Prison Service to strike a reasonable balance on behalf of the public. We arc confident that this revised policy provides the correct balance without reducing security to unacceptable levels.
"The Prison Service has also taken this opportunity to review its policy of applying physical restraints to other prisoners. Following a thorough risk assessment, some prisoners already attend hospital appointments without an escort under the temporary licence scheme. This will continue to apply. When a prisoner is escorted to hospital, physical restraints will continue to be used in most cases unless there is a medical objection. But where, following a rigorous risk assessment, the governor comes to the conclusion that restraints are unnecessary, they will no longer be used. In such cases, the prisoner will, however, still be accompanied and supervised by Prison Service staff. This builds on the experience of the Prison Service in using risk assessments under the temporary licence arrangements introduced with great success last year.
"Let me summarise the new arrangements. First, no woman who goes into hospital to give birth will be restrained from the time she arrives at the hospital until she leaves. Secondly, a pregnant woman who goes to hospital for antenatal checks will have her restraints removed on arrival in the waiting room unless there is a particularly high risk of escape. Thirdly, in most other cases physical restraints will continue to be applied. But governors retain the discretion to release prisoners on temporary licence or to send them to hospital under the supervision of staff but without restraints being applied. I am confident that these revised arrangements will strike a better balance between the various considerations which the Prison Service has to take into account.
"The acting Director General of the Prison Service is writing to governors with details of the new arrangements. He will keep these arrangements under review and will monitor their operation."
My Lords, that concludes the Statement.
4.36 p.m.
Lord McIntosh of Haringey: My Lords, we are grateful to the Minister for repeating the Statement. It is tempting to say simply that this is a climb-down, indeed a humiliating climb-down, to thank the Minister for the concessions that have been made and to sit down. But I am afraid that my responsibilities go wider than that and I cannot take that easy course.
Of course, this Statement is welcome in so far as it meets the requirements of the Royal College of Midwives and follows the meeting between the acting Director of the Prison Service and Caroline Flint of the Royal College. We are grateful for the recognition that the Royal College was right in its protests and has been so for a number of months.

725
But we cannot allow this climb-down to pass without saying also that the policies which have now been abandoned were introduced deliberately by the Prison Service under the aegis of this Government no longer ago than April 1995. They were introduced presumably because of a panic reaction to the escapes from Parkhurst and Whitemoor which led to the setting up of the Learmont inquiry.
We cannot avoid noting that when the Learmont Report finally appeared it had references in paragraphs 5.38 to 5.40 to the position of women prisoners. But there is no suggestion that any of those physical restraints on women prisoners outside prison are a necessary addition to security or, indeed, that they are justified. Therefore, the action of the Government and the Prison Service in response to those escapes—all, of course, by men—was entirely unjustified and is shown to be unjustified by the inquiry which the Government themselves established.
Having introduced those new rules, which are very precise and rigid, the Prison Service then proceeded to ignore a number of warnings over a period of months that they were intolerable and inhumane. The Royal College of Midwives protested against the rules in July 1995. The particular example which has given rise to this change was the treatment of women prisoners from Holloway in Whittington. The Whittington Hospital wrote to the Prison Service in August 1995 making it clear that there were serious concerns among hospital staff and particularly among the midwifery staff, asking for talks about it and offering a community midwifery service within the walls of Holloway Prison.
So far as I know, no adequate response was given to those requests and the matter was allowed to continue with this inhumane treatment being applied right up until the present time, despite the fact that my noble friend Lady Hayman wrote to the Minister of State in December 1995 asking for a meeting and expressing her concern about the views of her staff regarding the conditions under which such pregnant women and women in labour were being treated.
At the very least, there ought to be an apology to the women and, indeed, to the hospital staff concerned for the way in which the women have been treated and also the way in which the hospitals have been treated in being forced to participate in and observe such inhumane treatment. I see no sign of any apology by the Government as a whole to those concerned, although there was of course an apology by the Minister of State to the House of Commons earlier this week.
As I say, in most respects the Statement reflects an agreement between the Prison Service and the Royal College of Midwives. However, can the Minister say why there is no reference to the demands from the Royal College for reform of the way in which women are treated in the case of post-natal care? The Royal College asked that there should be no restraints and no prison staff present at medical or midwifery examinations; or, indeed, when women were breast feeding. I see no reference to that in the Statement and I should be
726
grateful for an assurance from the Minister that the concerns of the Royal College have also been met in that respect.
The problem is very much wider than just a matter of pregnant women prisoners, as indeed the Statement recognises. The Statement says:
"When a prisoner is escorted to hospital, physical restraints will continue to be used in most cases unless there is medical objection".
There are two different problems in that respect. First, there is the assumption that, apart from exceptional circumstances, physical restraints will still continue to be used. Surely the presupposition must be that, unless there are really exceptional circumstances, women will not be taken to hospital in chains—and I do not mean pregnant women; indeed, I mean any women in need of medical help—or be in chains while in hospital. The recent release of the woman in St. Mary's Hospital who was in chains, despite suffering actively from AIDS, gives us hope that that must really be the intention, even though the Statement does not say so.
The second point is the bland claim in the Statement that "medical objection" is a relevant consideration. The Statement says that,
"it has never been the intention of the Prison Service to apply handcuffs or chains to women who are confirmed as being in labour"—
and that leads me to ask what is meant by the word "confirmed". There has been a suggestion that it means that a form must be filled in stating that the woman concerned is in labour and, therefore, should not be handcuffed—
"and never to apply restraints contrary to medical advice".
However, I am advised that there are many examples of restraints being applied contrary to medical advice. I believe—and the noble Lord, Lord Glenarthur, may wish to comment on this point later—that the staff at St. Mary's Hospital were not happy with the restraints being used on the woman in that hospital and that, certainly medical protests, as we know from the Whittington case, had been overruled by the rigid rules of the Prison Service.
We shall need to study the new rules laid down by the Prison Service to see how they differ from the existing rules, before we can be satisfied that there is a real change here. My understanding is that restraints have been used contrary to medical advice. I believe that it would have been more gracious of the Government to recognise that fact rather than to claim nothing was wrong in that respect.
Of course we welcome the Statement in so far as it goes, but it fails to show an adequate degree of contrition for the inhumane and degrading treatment which has been in place for a number of months now. Moreover, it fails to satisfy the remaining concerns about the civilised treatment of women prisoners leaving prison in order to go to hospital.
Lord Harris of Greenwich: My Lords, like the noble Lord, Lord McIntosh of Haringey, I am in the happy position of being able to welcome the Statement. Indeed, it is the first Home Office Statement for some substantial time where one has been in that position. It

727
is a grudging but almost total climbdown. For that all of us who have expressed concern about the matter are profoundly grateful. This has been a lamentable episode which has, undeservedly, done serious damage to the reputation of the Prison Service. I say "undeservedly" because the decision was taken not by officials but by Ministers of the Crown. That is what is so unjust so far as concerns many dedicated and honourable people in the Prison Service.
I wonder whether the Minister is able to comment on one particular point in the Home Secretary's Statement that I noticed with interest. I refer to the point where the Statement says that,
"where, following a rigorous risk assessment, the Governor comes to the conclusion that restraints are unnecessary they will no longer he used".
I am certainly in favour of risk assessment by governors because inevitably, so far as concerns male prisoners, some inmates may indeed represent a serious potential security threat. However, the use of the word "rigorous" is interesting. I understand the concept of risk assessment; on the other hand, I wonder what "rigorous risk assessment" means. I suspect that it probably means that when something goes wrong the governor will of course be attacked and Ministers will, as usual, hide behind that. I do not believe that Ministers have any realisation of the degree of scepticism—I put it as politely as possible—with which they are viewed by the Prison Service at present.
There will be a welcome by many civilised, decent and humane people in the Prison Service for the Statement. However, I must point out that extravagant rhetoric which gets Ministers standing ovations at party conferences is, unfortunately, a rather poor guide to implementing an intelligent policy in the prisons. Those who receive warm applause from the tabloids in October should not be surprised when the same tabloids denounce them in January.
Baroness Blatch: My Lords, I must say, first, how grateful I am for the way in which noble Lords have responded, albeit with a number of criticisms. However, notwithstanding that fact, I believe that both noble Lords have accepted and welcomed the Statement. Perhaps I may put one or two things right as regards several points made by the noble Lord, Lord McIntosh. I shall start with some chronology. Until 1994, the presumption was that female prisoners being escorted outside of the establishment were not handcuffed—I believe that the noble Lord is aware of that fact—unless the governor or the head of custody had reason to believe that the inmate would pose security or control problems during the escort.
The noble Lord seemed to think that there was no reason whatever for a review of that policy. However, it was in fact reviewed in April 1994. It has to be said that, in five years, 20 female prisoners escaped from hospital and seven of those women were in fact pregnant or had just given birth. That is no light matter for the Prison Service because not only myself, but certainly my predecessor in this office, have had to come to the Dispatch Box and account to the very noble Lords who are being critical today as to why it was that the Prison
728
Service had relaxed security to the extent that people were escaping from hospitals. Therefore it is proper that the Prison Service should always seek to balance the importance of protection of the public, security as regards the prisoner and the proper medical needs and dignity of the prisoner who may he experiencing some difficulties. The policy was reviewed in April 1994. Handcuffs were made mandatory for Category A female prisoners being escorted outside an establishment. However, for other female prisoners the policy was not changed.
There was indeed a further review in April 1995 and as a result of that all female prisoners are now handcuffed when they go outside an establishment, irrespective of the risk. Handcuffs are removed from female prisoners only at the request of a doctor and only for the shortest possible time. There has been a great deal of confusion, and a good deal of criticism has been bandied around, as regards how that policy has worked in practice. There has been only one serious breach of that policy—this incident was quite unacceptable in the view of both my right honourable friend and subsequently the Prison Service—when a lady was handcuffed throughout the birth of the baby. Apologies were made both to the lady concerned and in a letter to Mr. Alan Howarth back in the summer.
The noble Lord, Lord McIntosh of Haringey, was also quite wrong to say that we have not addressed the whole issue of the post-natal period. I said in the Statement that no woman who goes into hospital to give birth will be restrained from the time she arrives in hospital until she leaves hospital. That includes all of the post-natal attention to the baby, which of course includes feeding the baby and attending to the baby and the mother. Until the female prisoner leaves the hospital she will not be restrained.
Lord McIntosh of Haringey: My Lords, I am grateful to the Minister for giving way. I acknowledge that a manuscript amendment to the Statement uses the words "until she leaves". But of course post-natal care does not occur only on the occasion of giving birth. It can be given on later occasions. I would welcome an assurance that the request of the Royal College of Midwives that there should be no restraint or prison officers present during post-natal treatment, will be agreed to, whether or not that occurs on the occasion of the visit to hospital to give birth.
Baroness Blatch: My Lords, I have dealt with the period in hospital for the lady giving birth. I shall now refer to the post-natal period—which is just as important—when the female prisoner has returned to prison. We welcome what is contained within the statement of the Royal College of Midwives in that regard because we believe that is a basis not for me to make announcements at the Dispatch Box but for the proper operational liaison and collaborative workings between the hospital establishments and the prison institutions. We expect that situation to be improved. We know that the Royal College has said that it will do what it can to improve its services to female prisoners within prison, both before the baby is born and following the return of the female prisoner to prison.

729
I believe that we can look forward to better working relationships between the establishments because I believe that much of the criticism that has arisen has resulted from the way in which that relationship has worked out in practice in the past.
The noble Lord, Lord Harris of Greenwich, made reference to the word "rigorous". Female prisoners can come from many different parts of the Prison Service. They may come from open prisons where a prisoner may already de facto be trusted in open prison conditions. Therefore that prisoner may be unescorted when attending a hospital appointment outside the prison. Or there may be good reason for escorting that prisoner. However, for other prisoners whose situation may be more serious a more rigorous assessment is essential. There is a distinction between the kind of assessment one would make for a prisoner where there was such a degree of trust that the assessment need not be so rigorous and those prisoners in custody where assessments have to be made about the degree of security that is necessary when they move from prison to hospital. In that case I believe the word "rigorous" is appropriate.
4.55 p.m.
Lord Glenarthur: My Lords, I thank my noble friend for the Statement which she has made which I certainly found encouraging. My noble friend will be as aware as anyone of the considerable disquiet, anxiety and deep disgust held generally as regards some of the cases which have come to light of late. That is felt particularly among hospital staff treating prisoner patients and it is felt by other patients who are naturally aware of what is going on on these difficult occasions. I must declare an interest as chairman of St. Mary's NHS Trust. Indeed the noble Lord, Lord McIntosh of Haringey, referred in a sense to my knowledge of a particular case at St. Mary's which has recently been reported in the press. I believe that my noble friend would expect me not to give details of a particular case and I hope that the noble Lord will understand that. However, I can tell the noble Lord that it was certainly true to say that the circumstances of that case gave rise to a considerable amount of professional concern among the staff of St. Mary's. It was proper that that concern should have been raised. I am grateful to those who took note of those concerns when I made them known.
I should inform my noble friend that I am particularly aware, as a former Home Office Minister who 10 years ago had responsibility for prisons for 18 months or so, that this is a difficult matter to deal with. Ensuring that prisoners do not escape at times when they are more vulnerable in that respect is an important matter. However, this particular issue and the circumstances surrounding the cases that have arisen have given a clear impression that somehow procedures have gone rather over the top and have become excessive. I hope my noble friend would agree that the degree of security that is necessary must depend on the individual circumstances prevailing at the time and the clinical condition of the patient. The expert views of hospital staff must be taken seriously by the Prison Service staff
730
who otherwise would have the responsibility for the patient. Does my noble friend also agree that patients, prisoners or others, are entitled to dignity in their treatment? The same quality of care and consideration must apply universally to patients.
Finally, will my noble friend reinforce her assurance that wherever it is humanly possible women prisoners are escorted only by female prison staff when they arc in hospital and that male officers would be used only under exceptional circumstances, and those male officers would not be asked to be present—or think of being present—when certain treatments and procedures are being carried out during which their presence would be wholly inappropriate? That might well apply to female staff too. My noble friend has made an important Statement. Certain events have caused great concern among the hospital community and I am grateful to her for going a large way towards putting matters right.
Baroness Blatch: My Lords, I am grateful to my noble friend for his comments. I understand my noble friend's reticence in referring to a particular case. It was nevertheless raised by the noble Lord, Lord McIntosh of Haringey. It was the medical advice in that particular case which was discussed with members of the Prison Service which resulted in what I believe was a positive outcome. I know my noble friend will accept that I believe the process could have been smoother than it was. I believe that some of the contents of the Statement today and the pledges made by the Prison Service, the institutions and the Royal College to work together in a more practical way in the future, will ensure that that will be the case.
I absolutely agree with my noble friend that the degree of security that is necessary for prisoners must be a consideration for the Prison Service. That is an essential consideration as regards making judgments about how a person should be escorted to prison. For some time now it has been a part of the system that the advice of medical staff to the Prison Service should be taken into account. However, we believe it has not always been properly taken into account. Certainly under these new arrangements that advice will be taken into account. I totally agree that dignity in treatment is also an important factor in this regard.
I can reassure my noble friend in relation to his concern about escorts being female prison staff. The intention is that only female prison staff—two prison officers—will escort a female prisoner. However, we had to add the caveat concerning the possibility of not always being in a position to comply with that intention. For example, if a female prisoner became very sick in the middle of the night it might be impossible, without any flexibility, to find two female prison officers. We shall guarantee that one staff member will be female, but for the sake of getting someone to hospital quickly one of the escorts might be a male prison officer. However, neither the male prison officer nor the female prison staff would be present in the treatment room unless that was requested specifically by the female prisoner herself.
Baroness Hayman: My Lords, I should also declare an interest as chairman of the Whittington hospital,

731
which provides the majority of maternity care for Holloway Prison. I thank the Minister for her Statement today. Is she aware that the changes she announced will be very much welcomed by medical and midwifery staff? They have had great difficulty reconciling their professional duties to their patients within the rigid strictures imposed recently by the Prison Service. Is she aware that the issues of balance are very well understood within hospitals where the potential danger is felt very strongly at first instance by the staff and other patients within the hospital community and that this is not an issue in respect of which hospital staff are in any way cavalier? Therefore, will she look with some urgency at the proposals that have been made for taking more NHS services within prisons? I speak particularly about community midwifery services, but there are also opportunities for outreach clinics and the use of technology such as telemedicine for improving the medical services at present available within prisons without in any way endangering security?
Baroness Blatch: My Lords, I thank the noble Baroness for her welcome of the Statement. She made some important points. The first that she made goes to the heart of why this is a vexed issue, namely reconciling the professional concern of medical staff for the patient with the proper concern of the Prison Service for the security of both the public and of the prisoner when not in custody inside the prison walls. There is a tension there that needs to be reconciled. I do not believe that there is a difference between us. We want to see a reconciliation which is in the best interests of everybody, particularly, in this case, the mother and the baby.
The other point which the noble Baroness raised is equally important. I believe that there is scope for considerable improvement in services provided within prison for female prisoners. We know that the Royal College of Midwives will focus its mind on what can be done. We expect that the Prison Service will co-operate as fully as possible so that the tension in moving female prisoners outside prison for medical services is reduced.
Baroness Williams of Crosby: My Lords, in thanking the Minister I echo the remarks of the noble Lord, Lord Glenarthur. The House owes a debt of gratitude to those members of the hospital staff and the midwives who drew attention to their anxiety over this matter. We should not let that go unrecorded.
Will the Minister ask the Prison Service to consider seriously the issue of those female prisoners who go to hospital for medical treatment at times other than when they give birth? The majority of women prisoners are not serving time in prison for any act of violence. Many are in prison for civil debt such as default on poll tax and television licences. They have no violence in their record, and they go to prison at considerable public expense. Physical restraint is a humiliation and a demeaning of human beings, as the noble Lord, Lord Glenarthur, indicated. Therefore, will the Minister consider with the Prison Service looking at the whole issue of whether we should apply physical restraint to prisoners who have no history of violence or previous escapes? I say that in the light of the fact that I believe
732
that I am right in saying that the total number of escapes from escorts by women prisoners in the past two years is six.
Baroness Blatch: My Lords, there will always he a need to balance security, the public interest and the medical needs of the prisoner. We have said that if the medical advice is that a prisoner should riot be restrained then we believe that that advice should be heeded in the interests of the patient. The very people described by the noble Baroness, Lady Williams of Crosby—those who are not pregnant and who go to hospital for other reasons—are often more capable of escaping. I said that in five years 20 female prisoners had escaped. Seven of those female prisoners were pregnant. It is very difficult for prison Ministers to account to the other place or the House of Lords for prisoners escaping when security has been relaxed and to find good reasons for saying that they were not restrained because they were females. It will be necessary from time to time to restrain female prisoners. Approximately 50 or 60 children are born to female prisoners in any one year. We have met all the safeguards relating to the medical needs of the female prisoner and we have gone to great lengths to make sure that babies are not born in prison because that would be very undesirable in the interests of the baby.
We believe that risk assessment will go a long way to satisfy the noble Baroness. If the risk assessment indicates that the prisoner should be secured, then, I am afraid, the prisoner should be secured unless that is inconsistent with medical advice.
The Earl of Longford: My Lords, I applaud the statements from the Opposition Front Benches. I shall leave my further comments until I raise the matter again in the House on 30th January. Perhaps I may put one question of some importance to the noble Baroness. Do the Government take responsibility for the changes which, so far as they go, are welcome, or was the decision taken by the Prison Service without interference from the Government?
Baroness Blatch: My Lords, the decisions were taken by the Prison Service. My honourable friend in another place said in her Statement to the House earlier this week that the Prison Service would be meeting with the Royal College of Midwives. Thai meeting took place. It was a constructive meeting. It was the Prison Service which made the recommendations, and it is the Prison Service which will be responsible for carrying them out.
The noble Earl is being very discourteous, commenting from a sedentary position, especially if I heard him right. I can tell the noble Earl that I, my honourable friend who is responsible for prisons, and my right honourable friend fully support the changes that the Prison Service has agreed with the Royal College of Midwives.
Lord Monson: My Lords, in the light of the contention of the noble Lord, Lord McIntosh, that the revised procedures are still excessively strict, does the noble Baroness agree that throughout history, and in countries all over the world, prisoners plotting to escape have more often than not plotted to escape from

733
hospital, whether it be the prison hospital or any other hospital, for obvious reasons? In prisons, security is an overriding consideration; in hospitals it is not and never can be a primary consideration. In view of that fact, I suggest that it will seem to most fair-minded people that the Government have now got it about right.
Baroness Blatch: My Lords, I welcome what the noble Lord says. He is right. If one is plotting an escape it is relatively easier to do so from hospital than from prison. I am acutely conscious of the experience of my noble friend Lord Ferrers, who occupied this particular post before me and who was derided in this House when he had to come to the Dispatch Box to account for a prisoner escaping from hospital. On one occasion it was through a toilet window and on another from a wheelchair. Guffaws of laughter went round the Chamber as he tried to defend the Prison Service's role on those occasions.
It is difficult to address the proper considerations for the Prison Service: the security of the public and of other patients in hospitals. In 150 escapes from hospitals in the past five years, guns, sharp instruments and blunt instruments have been used as well as physical violence without instruments. It is a difficult position for prison staff to be in. The balance between the safety of prison staff, of other patients in the hospital, hospital staff and sometimes the safety of the prisoners themselves is difficult. Some prisoners even attempt self harm and restraining them is one way of preventing it. We need a balance in understanding, recognising and respecting the dignity of the prisoner in such circumstances, as well as proper consideration for security in other circumstances.
Lord Campbell of Alloway: My Lords, what would the reaction of the Government be if, on conviction, the medical evidence showed that the accused was pregnant but sentence was deferred until after the birth?
Baroness Blatch: My Lords, that would be entirely a matter for the courts.
Lord Monkswell: My Lords, I thank the Minister for her Statement. I wish to make a query about two points which she made in her supplementary answers. In one she said that a doctor may require the removal of handcuffs; in the other she mentioned that restraints might be removed on the basis of medical advice. Can she assure the House that the Government recognise that other professional people work in the National Health Service who may be in charge of patients at a certain time? I am thinking of midwives, nurses, physiotherapists and radiographers which are independent professions. May we have the assurance that any other professionals providing treatment and in charge of patients who require the removal of restraints would have their advice and requests acceded to?
Baroness Blatch: My Lords, we would expect the line management in the hospital to operate. The medical person responsible for any patient would be the arbiter as to whether the medical interests were such that the person should not be restrained. That would be the overriding consideration. I do not believe that that could
734
be delegated just to any member of staff in the hospital, but if staff were in any doubt as to whether the restraints should be removed, it would he for them to work through their line manager or whoever was in charge of the patient's medical treatment at the time.

HMSO: Privatisation
5.12 p.m.
Debate resumed.
Lord Jenkin of Roding: My Lords, we return to the Motion which my noble friend the Leader of the House moved some time ago. I am conscious that there is another debate to follow and I shall therefore not detain the House for long.
I listened with interest to the speeches of the noble Lords, Lord Richard and Lord Jenkins of Hillhead. I hope the latter will return to the debate as I have one or two points to address in relation to his speech. I believe that the Offices Committee was absolutely right to insist on stringent safeguards for the protection of parliamentary business by whoever will be responsible for handling it when the Stationery Office is privatised. It was said in paragraph 5, and the committee agreed, that extensive safeguards will be necessary to protect the interests of the House. The first safeguard is:
"Confidence that the business of the House will not be interrupted".
My memory goes back several years, to the time when I was Financial Secretary to the Treasury. In that office I was responsible for the Stationery Office. I have a clear recollection of having to come down to the House of Commons on a number of occasions to apologise profusely that the papers necessary for the conduct of the business of the House were not available, or were available in such small quantities and had been produced by methods other than normal printing because of industrial disruption by HMSO. In the historical glow about that venerable institution to which we were treated by the noble Lord, Lord Jenkins, there is sometimes a tendency to forget that life in the past has not always been quite so rosy as depicted in the sales prospectus. That is what the information pack is—a sales prospectus.
Even more recently, as Secretary of State for Health and Social Services, it fell to me to receive the Merrison report which was published very shortly after the 1979 election. The Stationery Office was on strike and I had to make a Statement to the House. We were about to publish the report and there was widespread interest both inside and outside the House as to what the Royal Commission would recommend. Therefore I had to indicate the Government's view. It would have been wholly inconceivable that a Secretary of State should have had to stand at the Dispatch Box in the House of Commons and make a Statement about a major government publication and confess that no copies of the report were available for Members in either House. Perhaps that little piece of history has never been written.

735
I saw the Civil Service in the department at its best on that occasion. Staff recognised early in the morning that we would not be able to obtain the copies which we had been promised through the normal channels. I did not inquire too deeply as to the methods used by my Private Office and some of the people who worked with it. All I know is that during the course of the morning they secured from the warehouses in Cornwall House—the other side of London Bridge—sufficient copies of the report to meet, they thought, the immediate needs of both Houses of Parliament.
There were pickets on the Carriage Gates ready to stop any van delivering papers to the House of Commons on behalf of the Stationery Office. So the device was chosen that we loaded all the copies into the boots of five ministerial cars which drove peacefully through the pickets and emerged into Speaker's Court. Happily, copies of the Royal Commission report were unloaded from the boots of the cars and transported upstairs by House of Commons staff and staff in this House so that by 3.30 p.m. when I rose to make my Statement no whisper needed to be made of the situation. There were sufficient copies in the Vote Office and the Printed Paper Office here for Members' needs. That was small thanks, I have to say, to the staff of the Stationery Office at that time.
Of course, things are much better today as a result of legislation passed over the last 15 years restoring a better balance between employers and trade unions in the conduct of industrial relations. The Stationery Office has progressively been exposed to some of the chill winds of competition, than which there is nothing better for injecting a sense of responsibility towards customers.
As we read in the information pack, the Stationery Office was first a trading fund. It then became open to government departments and other public sector customers of the Stationery Office to place their business elsewhere. They did that, in increasing numbers. As a result, now that the Stationery Office is an executive agency, the words quoted by the noble Lord, Lord Richard, could have been a vindication of the policy of putting large parts of the public sector into executive agencies. It has certainly had a benign effect on the efficiency of the Stationery Office.
One point to which neither noble Lord opposite addressed himself is that the Stationery Office is left in the position of having to compete for public sector custom against the entire rest of the industry—since, now, the public sector can place its orders wherever it chooses—while at the same time it is precluded from going out to the private sector to attract business. And why is that? Because it is a public sector organisation, subject to inevitable Treasury constraints, and also subject to the rules on public sector borrowing. It is therefore in a position of potentially competing unfairly with the private sector.
The noble Lord, Lord Richard, attempted to deal with that argument by asking: what about the Post Office? Virtually the entire custom of the Post Office is already private sector custom. There is no argument. The Post Office is there as an organisation to serve business,
736
individuals and a range of customers up and down the land. It still has the statutory monopoly over the letter post—the amount that is paid for delivery of a letter. It still has that monopoly and no competitors can come in on it. That gives the Post Office its favoured position. For the rest, it competes with business generally. That is not open to the Stationery Office.
I, too, read the debates in another place very carefully, as did the noble Lord, Lord Jenkins of Hillhead. Shadow spokesmen were challenged: if they were going to change the rules and allow the Stationery Office, notwithstanding that it was a public sector executive agency, to go out into the market and compete for private sector customers with the rest of the industry, was the Shadow Chancellor prepared to change the rules in order to allow it to do that? Mr. Brown made it very clear in his efforts to convince investors from Tokyo to Singapore and wherever, and in this country, that the rules were to be applied every bit as strictly as they have been. That has been said many times. Yet in relation to a particular case Opposition spokesmen cheerfully say that the rules can be broken to allow the Stationery Office to compete as much as it likes; it could still have access to privileged borrowing. Would that still be part of the public sector debt?
The trouble is, there is an enormous hole in the arguments of the two noble Lords opposite. They want to see the Stationery Office flourish; I accept completely their good faith in that matter—and indeed, reading from the sales puff in the information pack, the noble Lord, Lord Richard, pointed out that there would be a useful and successful organisation that would be offered for sale to the private sector. But if we want a successful Stationery Office, it must have the ability to compete for the other suppliers' customers, just as those other suppliers are now free to compete for the customers of the Stationery Office. We have faced this dilemma in the case of quite a number of industries. The answer was the same in every case. It needs to have the freedom to compete that is given to the private sector.
Furthermore, we have seen huge increases in efficiency following the privatisations. The disciplines of the market, of the financial world, are more effective in keeping an organisation up to scratch than is the ability to question a Minister at the Dispatch Box, or even having a Minister in front of a Select Committee upstairs. Those are the sanctions on a public sector organisation. If you know that you will go out of business if you fail, that is likely to be a very much better bet for the success of the business. The real argument here is that the Stationery Office is currently neither one thing nor another. Its customers can go elsewhere. It cannot. Therefore, the case for privatisation is overwhelming.
Perhaps I might just for a second have the attention of the noble Lord, Lord Jenkins of Hillhead, to respond to a point in his speech. I enjoyed it very much indeed, but we were led to believe that the privatisation of the Stationery Office spelt the end of the slate itself. It was seen as part of a huge process of dismantling the entire state edifice. The noble Lord took a number of selected texts from my noble friend Lady Thatcher and others to try to justify his statement. For all the noble Lord's

737
rigorous intellectual discipline, the heart of his argument was: you are trying to free the Stationery Office from the shackles of the Treasury while at the same time pinning down the purchaser with all sorts of restrictions and agreements. The noble Lord described them as totally contradictory objectives.
There is nothing contradictory about them at all. When it comes to supplying this House and another place, whether it is a matter of the provision of Hansard or the printing of papers or Acts of Parliament, the contract that will need to be made by the supplier has to be, as the Offices Committee recommends, very tight, very tough and very specific, with completely watertight conditions. We do not know that yet. There will be an opportunity.
That having been done--and there may be other public sector purchasers who will want similar tough contracts—I want the Stationery Office to be free to compete in the rest of the market as freely as it can, whatever it wishes to be called. There are any number of examples of public sector bodies that were privatised over recent years and achieved just that: first-class service to their continuing public sector customers, while at the same time being free to compete with their private sector competitors. I understand the objections, and it is interesting that it is both present and past members of the Labour Party who take this objection. They want to see the Stationery Office being competed against, but not free to compete with the rest of the market. That is the logic of what they say. To my mind, that is nonsense.
5.27 p.m.
Lord McNally: My Lords, as your Lordships will see from the Order Paper, this is a maiden speech. It gives me great personal pleasure to make my maiden in a debate opened by the noble Viscount, Lord Cranborne. I am afraid the McNallys have not troubled Garter King of Arms as often as the Cecils over the centuries, but our paths did cross in that we were part of that highly talented 1979 intake to the other place after the general election. The noble Viscount then left the other place voluntarily, and I left by public demand! Nevertheless, it is a pleasure to be back under the same roof.
The noble Lord, Lord Weatherill, tells the tale of, when he started his distinguished parliamentary career, overhearing two of his new colleagues saying, "Don't know what the place is coming to; they've let my tailor in now". I was worried over the past week that I might hear, "Don't know what the place is coming to; they've let my spin doctor in now". The truth is that over the past 30 years my career in Whitehall and Westminster has been spent trying to help a large number of noble Lords on both sides of the House get the right message to the right person at the right time. In case any of them are getting worried, I do not intend to start naming names this evening, except one. For seven years I had the honour and pleasure of working with the noble Lord, Lord Callaghan. Those were periods of great personal pride for me. The only thing that gives me any sense of embarrassment these days is that, with the impetuosity
738
of youth, I used to go round describing myself as "Lord Callaghan's political adviser". That is like describing yourself as "riding adviser to Willie Carson".
The only other comment I make on my past life is that, as someone who has worked and still works in public relations, I know that the relationship between my industry and this House is of continuing concern to your Lordships. From a personal point of view, I intend to set standards of probity for others to follow. But in considering that relationship and lobbying, I hope that the House, in a search for political correctness, does not cut itself off from ideas, information and opinion. Along that road the only winner is an already over-powerful and over-secretive Executive.
Today we are discussing one of those curious proposals which are often the death rattle of a dying administration. In his speech, the noble Lord, Lord Jenkin, could not understand the misgivings on this side of the House. I think they could be summarised in the phrase, "a sense of dignity". The proposal seems to be one of a collection of measures in which the Government have lost all sense of dignity in what they are trying to do. The noble Lord dismissed the information pack which was put out for the benefit of Members in preparation for this debate. I know that Ministers have not used it but this side of the House has done so. That information pack suddenly became, in the words of the noble Lord, Lord Jenkin, a sales prospectus and indeed a sales puff. I found the information extremely helpful, as I noticed did the noble Lord, Lord Richard. It tells us that HMSO is,
"a modern business with a highly skilled and experienced workforce, strategically well placed to benefit from a changing market place".
It is clear that we are not dealing with any lame duck but with a market leader. Not only that, it is a market leader which at the present time has the confidence of both Houses of Parliament in providing prompt, accurate and secure services which are essential to the efficient working of Parliament and Westminster. Ministers are willing to set that organisation adrift. As my noble friend Lord Jenkins said, there can be no guarantee of jobs, location or even ultimate ownership. Again, I disagree profoundly with the noble Lord, Lord Jenkin. There is a difference between what I would call a stable-door-shutting action after some mess and the accountability of Ministers in this House and in the other place at the Dispatch Box.
When he spoke on 13th December the noble Lord, Lord Hayhoe, made a valid point when he said that a decade ago undoubtedly Captain Robert Maxwell and his companies would have been the leading contenders for the purchase of HMSO. He rightly warned the House:
"Think of the difficulties that might arise if a future Mr. Maxwell were running the company responsible for printing all our parliamentary papers!"—[Official Report, 13/12/95; co1.1326.]
As I said, stable-door-slamming guarantees are of no value in such circumstances.
On these Benches we have acknowledged that over the past 15 years, through their process of privatisation, the Government have produced some outstanding British companies from the slumbering giants in the

739
state sector. The Government are entitled to take credit for that. On the other hand, we on these Benches are entitled to say that our criticisms and doubts do not come from doctrine or ideology. Where privatisation has succeeded, we have given the Government credit.
But in examining a case such as the one we are debating today, my mind goes back to over a decade ago when I switched on the television and saw one of the first television broadcasts from this House. There was a maiden speech by Lord Stockton. In that speech he made the remarks about privatisation and likened it to selling the family silver or a much loved Canaletto. It seems to me that having got rid of quite a lot of the family silver and Canalettos, we are now chopping up a Chippendale for firewood. It is the use and application of ideology to something which needs much more commonsense. I am still not clear as to how the Government intend to get the authority of both Houses for these plans. It would have been more straightforward, before they set off on elaborate consultations and putting out their puff pieces to the private sector, if they had asked in either House for a straight yes or no to the question "Do you want HMSO privatised?" I suspect that we all know why they did not do so. But this House has already indicated that this debate is not the last word on the subject. There will be need for further information and for a proper decision to be made by the House on whether or not it wants this privatisation to proceed.
The best that can be said from what we have heard today from the Government is a judgment—a judgment which perhaps the noble and learned Lord the Lord Chancellor would go along with—of "not proven". Until it is proven, Ministers can expect no support from these Benches, nor, I suspect, from many other parts of the House.
5.36 p.m.
Lord Bruce of Donington: My Lords, it falls to me to congratulate the noble Lord, Lord McNally, on the very thoughtful speech that he delivered to your Lordships. The noble Lord has been in public office for nearly 30 years. He first emerged into semi-public life, as noble Lords may well be aware, as chairman of the students' union at University College. He became a leading officer in the National Union of Students and thereafter went into politics, first, as a research assistant and later as an assistant secretary to the illustrious Fabian Society. Amongst its members there have been known to be members of the Government Benches. From there the noble Lord progressed into the Labour Party headquarters itself. He became an adviser to the Secretary of State for Foreign and Commonwealth Affairs and later to the Prime Minister of the day, Mr. Harold Wilson, and to the noble Lord, Lord Callaghan. During that time he became a Member of Parliament of the Labour interest. In 1981 he moved sideways from the Labour Party to the Social Democratic Party and has continued to serve in public life in that way.
With advancing years, many of your Lordships become accustomed to vertical movement up or down, as the case may be. The noble Lord, Lord McNally, has
740
shown an ability to move more laterally. We look forward to hearing his observations in the future, particularly in those fields of public affairs in which he is very well known indeed. Your Lordships will be only too pleased to hear frequently from the noble Lord on subjects of his choice.
Possibly because of his most attractive countenance and because of his history, I cast an eye over the noble Lord, Lord Jenkin of Roding, during the speech of the noble Lord, Lord Jenkins of Hillhead. If he felt some amusement or pleasure at the speech when listening, it certainly did not show in his face. He appeared to be most remarkably discomfited. But I must congratulate him on regaining his poise. Of course, I shall have to deal in due course with some of his arguments.
The Stationery Office first came under review in recent times when your Lordships were considering a development the government of the time called the Next Steps agencies. As the noble Baroness, Lady Blatch, indicated in her reply to me the other day, HMSO has been a Next Steps agency since 1980 and is subject to Next Steps agency rules. Your Lordships will recall that one of the purposes of the establishment of the Next Steps agencies was to rid Ministers of direct responsibility for the detailed operations of agencies under their control. The rules are carefully laid down.
In December 1989 the Treasury published a document seeking to allay what it foresaw as public apprehension about the accountability to Parliament of the Next Steps agencies. Paragraph 5.1 states:
"As the Prime Minister has made clear, Next Steps will involve no diminution in Ministerial accountability to Parliament. Indeed, the creation of Agencies will clarify managerial responsibilities and reinforce accountability to Ministers and to Parliament. This is true both of Agencies which are,"—
for example, HMSO—
"or become, trading funds and of Agencies financed through Parliamentary Supply".
Therefore the status of HMSO is not in any way in dispute. The Government gave an undertaking that all Next Steps agencies shall remain accountable to Parliament. The matter was discussed in your Lordships' House in early 1990, after a previous discussion in another place on the Government Trading Bill. The Government Trading Bill expressly provided for changes in financing procedure and also for the complete delegation of responsibility from Ministers down to the agencies, so much so that some of us were apprehensive at that time that the bringing in of the Next Steps agencies, whether existing or to be, under the Government Trading Act of that year, would expose them to privatisation.
It is in that regard that the Government gave a number of assurances, which I have no doubt were made in good faith at the time but which enabled that measure to go through, largely after consultation between Her Majesty's Opposition and Her Majesty's Government, in which at that time I played a leading part in conjunction with the noble Earl, Lord Caithness. During the course of the debate on Second Reading I asked if he would say whether the measure itself would lead to privatisation or was a first step in that direction. He replied,

741
"The noble Lord, Lord Bruce, spoke earlier about privatisation and will mention the matter in more detail at a later stage. Before agencies are set up all other options, including abolition and privatisation, are examined. In most cases the examination leads to the conclusion that the nature of the services provided by the agencies does not make privatisation a feasible or realistic option. That is not to say that some activities might not be contracted out, but generally our expectation is that most mainstream activities of Next Steps agencies will continue to remain within central government for the foreseeable future".—[Official Report, 8/3/90; col. 1292.]
That was the context within which the debates took place on the Next Steps agencies. The noble Earl went even further in making pertinent observations and giving undertakings which still have some validity today because HMSO is still a Next Steps agency. In the course of the Committee stage of the Government Trading Bill, I asked the Minister a question in these terms,
"I should like to be reassured that the other functions of the Minister in relation to the agency are not disturbed by that in any way and that we are talking about day-to-day management. I should also like to be reassured that the ultimate responsibility in terms of responsibility to Parliament and scrutiny and examination by the National Audit Office, remains intact in all cases and that … the final responsibility for accountability to Parliament will remain with the Minister of the Crown".
The noble Earl was kind enough to give an undertaking in these terms,
"On the noble Lord's second point, I am sure that I can give him the assurance that he seeks".—[Official Report, 12/6/90; col. 228.]
All the way through the proceedings on the Next Steps agencies, including those existing which includes HMSO, those undertakings still hold; they have not been repudiated in any way. Speaking again on 12th June 1990 the noble Earl said,
"With regard to privatisation, I note that Amendments Nos. 4 and 7 tabled in the name of the noble Lord, Lord Bruce, deal more specifically with this matter. I can give the noble Lord an absolute assurance on privatisation: namely, that the Bill does not contain power to enable a trading fund to be privatised without subsequent primary legislation".—[Col. 231.]
It has never been suggested—indeed it has almost been denied—that the passing of any primary legislation will be necessary to effect the change. That is something to which we all should pay attention.
I could go on for a long time, almost to the point of being repetitious, on government undertakings given at that time regarding privatisation; that if it ever did happen—with increasing remoteness—it would need primary legislation. I sincerely hope that the Leader of the House will take note of the demand by my noble friend the Leader of the Opposition that we are given a proper occasion upon which a vote may be taken as to whether privatisation shall be allowed to proceed. In the light of their own undertakings, I should have thought it would be at least honourable for primary legislation to be brought forward, as was originally stated in this House.
The principal reason for the Government deciding to privatise appears to have been omitted. I hate to mention it—one does not like to mention money too much in this place. However, in view of government finances at the present time it may not have escaped your Lordships'
742
notice that the Government would dearly like to have an extra £100 million or so—or whatever the price of it may be, unless it is knocked down to a price which the Government ultimately have to accept for it. The sales prospects have not been enhanced by some of the remarks that fell from the lips of noble Lords opposite this afternoon. Nevertheless, that remains the position.
Why do not noble Lords come clean about this and admit that we are in the dying stages of a Parliament and that what the Government are desperately trying to do now, aside from raising money, is to make quite sure that when the next Labour Government come into office power will be retained in the private sector, where, increasingly, the Government's own placemen have been put over the past two or three years, who are likely to be reinforced by those who have already volunteered that they will not be standing again at the next election?
This is a disreputable step by the Government of which they should be thoroughly ashamed and which goes against every undertaking expressed or implied when the matter was considered in 1990. I sincerely hope that even at this stage they will have the decency and honour to withdraw it.
5.51 p.m.
Lord Burnham: My Lords, in the debate following the Minister's Statement in the summer I asked by noble friend Lady Blatch by what name the privatised HMSO was likely to be known. This was not, as I pointed out at the time, a frivolous remark—and I repeat that now—but because I wished to ascertain where the new organisation would stand in the commercial world.
Although I note from the information pack that last year HMSO Manchester Print and Logistics lost an Inland Revenue contract, HMSO—considerable parts of HMSO, I should say—is largely protected against competition. The successful applicant for the privatised business is unlikely to enjoy this protection. It would be illogical to offer such protection in any aspect of the work because a company either is or is not privatised. It cannot have it both ways. My noble friend the Leader of the House said that it would now be able to compete fully, but it is also likely to be competed with fully. It cannot have it both ways; or if it attempted to do so it would be likely to face strong comments from the Opposition.
Although it is not the convention so to do, I should like to congratulate the noble Lord, Lord McNally, who, sadly, is not in his place, on his powerful and reasoned maiden speech. I would say that he showed all the traditional non-controversial air of F.E. Smith in another place.
In his speech the noble Lord, Lord Richard, commended the information pack and, if I may sum up what he said, asked why the Government wished to privatise HMSO when the information pack spoke so highly of it. As my noble friend Lord Jenkin of Roding pointed out, this is a sales document. The opening words of the information pack are:
"The Government is considering the privatisation of HMSO".

743
In those circumstances, they were bound to produce what is in effect a prospectus for sale. The information pack is produced by Coopers & Lybrand and I am only too well aware of the case that Coopers & Lybrand seeks to make on any company which it wishes to sell. Therefore, what the information pack said, and what the noble Lord, Lord Richard, said, must be treated with a certain amount of reserve.
In the December debate the noble Lord, Lord Bruce of Donington, noted the increase in the cost of Hansard in another place of 1,500 per cent. between 1979 and 1995—from 45p to £7.50. I have not made quite certain of the new pricing policy for Hansard, although of course the price of Hansard in this House today is £2.50 compared with £4.20 on 13th December, the day of the Statement. But, overall, I can find very little justification for the high prices charged by HMSO for its publications.
Going through my bookshelves—this may show my interest—I find that the Employment Protection (Consolidation) Act 1978, reprinted in 1993, costs £23.80; the Broadcasting Act 1990, reprinted in 1995, costs £19.90. In contrast, the Health and Safety at Work etc. Act 1974, reprinted in 1980, costs £4.50 and the Betting, Gaming and Lotteries Act 1963, reprinted in 1984, costs £6.
These costs and these increases are too high. Newsprint and paper of similar grades cost £220 a tonne in 1979. As the noble Lord said, Hansard cost 45p. Newsprint went up to £425 a tonne in 1988–89 but then dropped by up to 35 per cent. with discounts which were accepted throughout the industry. In 1996 the cost is £495 a tonne. Hansard costs £7.20. These figures—an increase of 125 per cent.—may be said to be less than the increase in the cost of living.
Paper is the highest cost in printing. Behind it comes labour. The major reduction in the number of staff employed in the industry over the same period means that there has been a massive reduction in costs. So there should be. There has been a massive reduction in print costs everywhere because of the introduction of what has laughingly been known as new technology, and it is very surprising that the reduction in costs for HMSO for those aspects of HMSO which concern purely printing has not been very much greater.
The Official Report and other HMSO publications require speed of printing since they have to be immediately distributed. Other print work does not quite have the same requirements. While delay cannot be accepted, it is possible to fit publication into a schedule and by so doing achieve enormous economies of cost. In the case of newspapers, the demise of hot metal has, curiously, made the newspapers less up-to-date than they were. But the fact that a publisher no longer has to store quantities of lead over a considerable area, with considerable weight and considerable costs, means that reproduction of papers of all kinds, largely achieved by facsimile, is easier and far quicker, with little need to carry the vast stocks which were necessary in the past.
I suspect that any possible purchaser, on looking at the books and operation of HMSO, will find himself in an Aladdin's cave. In the debate the other day on the
744
Broadcasting Bill it was suggested that Channel 4 might just possibly need funding at some stage in the future because circumstances might change. But think of any printer given the Highway Code, for instance, to produce, with a totally guaranteed sale and repeated updates as new regulations are thought up. He would consider it to be hand rubbing time.
It is difficult not to avoid the view that the products of certain parts of HMSO—not, of course, all, for much of the business is in competition with the private sector—are overpriced or uncompetitively priced or inefficiently managed. As a newspaper manager of the 1970s and 1980s, as the noble Baroness, Lady Dean, will confirm, I know inefficient management of a printing business when I see it. However, it has to be said, to be fair to managers of those days, that life was not made easy by the noble Baroness's predecessors, particularly Lord Briginshaw, and her colleagues in other print unions.
But in all the conclusion is inescapable. The privatised HMSO will be very different from the one we know today and probably thinner and more profitable, with increased sales and turnover resulting from reduced costs and prices. There must be very many who, like myself before I entered your Lordships' House, would have liked to have acquired many of the HMSO publications but were prevented by the excessive charges made. It must be in everyone' s interest for the public to be better informed about the operation of government and ancillary matters. It cannot be impossible by keeping HMSO in the public sector, but by paying greater attention as to how it operates. But if it can be done without risk by privatisation and at no cost, provided standards are maintained—and that is the all important matter to which all noble Lords have paid great attention—the view I take on the matter is, "Why not?".
6 p.m.
Baroness Dean of Thornton-le-Fylde: My Lords, before I make my contribution I would like to declare an interest which I regard as an honourable one. I was a regional secretary for the printing union that covered the north west. In fact in the north west we had a large HMSO establishment, but it is much diminished now. I later became general secretary and negotiated across the board the national agreement that we had with HMSO. I am today still a member of that union.
I address my remarks to the welfare of the employees of HMSO and how they and I see the proposed changes. As the noble Viscount the Leader of the House said, HMSO employed about 6,000 people and there are now just over 2,000. Similar reductions are true of a whole range of manufacturing industries. As change has been introduced, numbers have been reduced. Much of the debate both here and in the other place has concentrated, understandably, on London. But there are establishments in Wales, Scotland, Northern Ireland, Bristol, Birmingham and Norwich, which has been mentioned. In Norwich there are about 900 people employed, mainly civil servants. There are also establishments in Leeds and Manchester, where I come from—and, by the

745
way, where the boxes for a general election are stored. That is not something that we have discussed. It is not all simply a question of printing and paper. The security printing establishment where our passports are produced is in Manchester, as indeed is the bookshop. There is also of course London where the parliamentary press is in particular.
As has already been said in this debate, HMSO was founded in 1786 to make sure that corruption in public purchasing did not occur in parliamentary work. The reason it was set up was an honourable one. It is perhaps right that the age of the organisation is mentioned. I say that because today we tend to think that if something is very old—I do not include this Chamber—it is not necessarily relevant to a modern market place. But one can look at the matter in another way, and I do. HMSO would not have survived all that time if it had not changed and kept up with the times. That is why the employees feel that this move by the Government is potentially destructive for them.
It is not as though the employees have not changed. The noble Viscount referred—rightly—to the reduction in the workforce. If one looks at the statement of accounts annually presented to Parliament by HMSO, in 1993 there was £9.5 million for redundancy and early retirement paid out of the profit that HMSO made, not paid by the taxpayer. Last year's accounts, the latest ones, show that £8.2 million has been set aside for redundancies; so there is continual revision.
It is not as though HMSO has not met the targets set by the Treasury; it has met them. It is not as though HMSO has not made a profit; it has made a profit. It is still the largest print buyer in the United Kingdom. Much of the work that comes through HMSO is produced in the private sector. I say to the noble Lord, Lord Jenkin of Roding, that the private sector benefits substantially through HMSO and the contracts it negotiates.
From the point of view of employees working at HMSO, they faced the trading fund that my noble friend Lord Bruce of Donington mentioned, agency status, market testing and only a few months ago the establishment of what is called "free standing businesses", obviously approved in discussion. Yet before the ink was dry on the paper what happens? We have the announcement about privatisation.
Much has been said about government departments being given the opportunity in the early 1980s to purchase their print anywhere. I was a union officer at that time. I can remember people saying, "Of course, you know what the real name of the game is, don't you? HMSO will not get any contracts. It will be wiped off the surface of the earth because it will not be able to compete". All those prophets of doom and gloom are absolutely wrong. HMSO has competed, has changed considerably and has been and is making a profit.
Among the papers put in the Printed Paper Office for noble Lords was the Coopers & Lybrand review. I am sure that the noble Lord, Lord Burnham, was not saying, "Well, this is a prospectus. It has a lot of good news, but we do not believe a word of it". Coopers & Lybrand
746
might take exception to that. But the union representatives met with the company this week and raised the issue of market testing. Market testing is government policy and HMSO has gone through it. Equally, government policy is to have regular market testing.
One of the biggest accounts of HMSO is the Ministry of Defence. Its market testing contract is due for renewal in six months' time, just around the time when, if this privatisation goes through, the prospectus will probably be available. I ask the Minister who is to reply what will happen about that. Are the Government going to put that out for market testing? That would certainly be something that I would want to know if I was buying a company which was going through privatisation.
Much has been made in the debate about the 10 per cent. drop in the turnover of HMSO. But we cannot treat the organisation in isolation. We have to look at the recession and the cut-backs by the Government in some of their efficiency moves. If we consider printing generally in the United Kingdom, thousands of jobs have been lost and much work has been cut back because of the recession. I do not accept that there are any sound, proven business reasons why HMSO should be privatised. I do not ask noble Lords to take my word for that. In his reply it will be interesting if the Minister can confirm that as many as 40 approaches have already been made expressing an interest in purchasing the organisation. I was told today that the figure is 60. One does not get that number of bids for a lame duck. It is quite clear that this is a very ripe cherry for the picking as far as the private sector is concerned.
On 18th December in another place the Minister said:
"I fully recognise that a change in ownership is a source of concern for staff. However, I am convinced that it is the best means of safeguarding their future".—[Official Report, Commons, 18/12/95; col. 1282.]
On what grounds did the Minister make that statement? What proof, what evidence did the Minister have for making that statement? All the evidence is that in a privatisation, as the noble Lord, Lord Jenkins of Hillhead, said, people face increasing redundancies. As regards the Minister's view that that is the best way of safeguarding the future of the staff, I have to tell noble Lords that they feel betrayed by this decision. If the Government are so sure that it is in the best interests of the staff, why not ask them at this time of empowerment? Why not ask the staff what they think? Do they not have a stake in this business? Have they not made a major contribution in its development?
The noble Viscount said that the TUPE protection would be there. What protection? It is minimal, and does not apply to reorganisation. I say that because the Government's decision is to privatise the printing and publishing sides together as one arm. Anyone who knows the printing industry is aware that that is not the model which is applied today. Printing and publishing are separate. One just needs to look at what has happened. Printing contracts are hived off to another company; the publishing is dealt with by a separate company. In that kind of reorganisation clearly a coach and horses could be driven through TUPE. There would

747
be no protection for the staff. Of course, there will he plenty of bidders wanting to buy both because they will he able to see the benefits for themselves.
Understandably, one of the major concerns of the staff is their pension scheme. The Minister in another place said that the pension scheme is non-contributory. It is not. Employees do not have pension contributions deducted from their salaries, but in the annual negotiation a notional amount of 9 per cent. is allocated for pension contributions. So, the Government aim to hive off the organisation, with TUPE protecting wages at the pay-cheque level, on top of which is a notional 9 per cent., and the Minister says that "broadly comparable" terms will be agreed for the pension scheme. What does "broadly comparable" mean? At the moment the HMSO pension scheme is salary and service-related. However, the drift in the private sector is towards money purchase schemes. Furthermore, the fact that the pension scheme is to be transferred is no guarantee that it will remain the same. Perhaps that is why the Minister said that it will be "broadly comparable". Understandably, that is a key issue for the employees.
I say that that is a key issue because if one considers the age and service profiles of HMSO's employees, one sees that long service is the norm in that organisation. Indeed, I do not know of many organisations with a turnover of over £300 million a year in which the highest paid executive receives £73,000. Is this to be another privatisation involving "golden eggs" for the company that buys the organisation? "Public service" means something at HMSO. It means something because the employees have invested their life's work in it.
Perhaps I may touch briefly on another important issue from the perspective of the employees. In both another place and this place, understandably I suppose, Members have been concerned about parliamentary publications and about "our" Hansard which we want every day, preferably being delivered before 7.30 a.m. Although I understand that, the parliamentary publications side of HMSO accounts for only 10 per cent. of the business. HMSO is accountable to Parliament. I suggest that that accountability carries with it a responsibility on Parliament to the employees of that organisation. When considering this privatisation, I suggest that we cannot consider only the parliamentary area; we must look at the organisation in the round and bear in mind Parliament's responsibility to the employees. In effect, we are the board of directors.
The noble Viscount referred to TUPE and pensions. However, with the greatest of respect to him, I must say that those undertakings were not assurances from the employees' point of view. Furthermore, I am not clear what is meant by "Parliament deciding". Does that mean that Parliament will decide what happens to the parliamentary publications side of HMSO's contracts—that is, to 10 per cent. of its contracts—or does it mean that Parliament will decide what happens to HMSO in the round? I should like an answer to that question.
I should also like the Minister to answer a question that was put to him by a number of noble Lords. I refer to the matter of who is going to decide. As my noble
748
friend Lord Richard asked: who will decide? I know that it has been said that Parliament will decide, but how and under what procedure? Will there he a vote? Will we consider a Motion and will we have a debate on the Floor of this House? I hope so. However, the key question relates to what that debate will cover. Will it relate only to the very narrow area of parliamentary publications or will it cover HMSO as a whole being accountable to Parliament? In my view, this matter must be subject to the decision of both Houses of Parliament. It should not be a government decision.
Looking back, I can only come to the conclusion that the decision was not really made in 1995. The decision to privatise HMSO was taken all those years ago at the beginning of the 1980s. This has been a step-by-step approach, seeking to get the organisation into shape in order to privatise it. I hope that I am wrong, but I think that that is a reasonable assessment. If that is the case, I would regard it as an act of vandalism and dogma. That is what the employees will feel about it. I urge the Government to think again. Why sell off something which does not cost the nation anything, which provides an adequate and full service to the nation and which has a loyal workforce?
6.15 p.m.
Lord Hayhoe: My Lords, first I must add my congratulations to a personal friend of some 30 years' standing who in this House I must refer to as the noble Lord, Lord McNally. We have co-operated together across party lines and for non-party activities in a variety of situations for a long time and I am delighted to see him join us in this place.
I begin by paying tribute to HMSO. I had ministerial responsibility for it in rather happier tunes than those referred to by my noble friend Lord Jenkin of Roding, as I had that responsibility from 1981 to 1985. It was a time of rapid change which was extremely well managed by the then controller and chief executive, Bill Sharp. We managed to bring the whole operation up to date, to make it much more efficient and to win our contracts within the public service because of the quality and pricing of the service offered. I say that in response to the predictions which the noble Baroness, Lady Dean, has just made. I think that in those days HMSO did extremely well.
Change has continued apace, however, and the public sector market has declined. The turnover of HMSO has reduced by some 10 per cent. since 1990. The figures quoted by the noble Lord, Lord Richard, when he said that turnover had risen from £260 million to over £375 million over 15 years disguised the fact that HMSO's turnover has been in decline for the past five years. One needs to take that into account if one is to have a proper appreciation of the situation. However, I well understand that that point was not made baldly in what was essentially a selling document prepared by Coopers and Lybrand.
Alas, job losses have become more likely as a result of the changes that have taken place. As I understand the position, the Government believe that by allowing access to new markets, privatisation will protect jobs,

749
lead to improved efficiency and maximise value for money for the taxpayer who, inevitably, will remain a substantial purchaser through ministries and Parliament.
All that is of the essence of political controversy, as was manifestly clear from the speech of the noble Lord, Lord Richard, and from the somewhat over-the-top rhetorical flourishes of the noble Lord, Lord Jenkins of Hillhead.
I want to stand back from those political issues and to concentrate on the special requirements of Parliament. Having come from another place, I can testify, as can others, to the vital role that HMSO has played over the years in providing Hansard, Order Papers, Bills, amendments, committee reports and the rest. One also recalls the awful difficulties when supplies were disrupted by industrial action several years ago. Those incidents were referred to specifically by my noble friend Lord Jenkin of Roding. Taking all that into account, I am delighted that the Government have made it abundantly clear that the requirements of Parliament will be paramount—that meeting those requirements is an essential prerequisite to proceeding with the sale of what will become the Stationery Office. That has been said clearly and in terms in both Houses of Parliament and repeated at different levels of ministerial and government involvement.
Parliamentary requirements and concerns were well set out in another place in Madam Speaker's letter to the Lord President of the Council dated 28th November 1995; and in the report of the Offices Committee, which we accepted earlier today, those requirements so far as concerns this House were also specified.
The questions that need to be answered are: how will the Government and the House authorities guarantee that those onerous parliamentary requirements will be met? I accept of course that that amounts to only roughly 10 per cent. of HMSO's total activity, but so far as concerns Parliament, those are vital matters, and Ministers have made it clear that the thing will not proceed unless the parliamentary requirements are met. They have to be met, not just for a few years, not just until some financial difficulties threaten the privatised Stationery Office, or if it becomes subject to a takeover bid, but for decades to come. What long-term safeguards can be established to ensure that that will happen? How will the safeguards be structured and maintained? What sanctions will be available to this House or to another place if things go wrong? Will the availability of parliamentary papers be guaranteed if things go wrong in some way or another with the new, privatised Stationery Office? What will happen if the service becomes rather shoddy, and the papers begin to be delayed? How do we deal with that? Will it he possible for contractual arrangements to he entered into, which will ensure, so far as is humanly possible, that both Houses of Parliament will receive the service they demand and which has been made the essential prerequisite to proceeding with these matters?
I wonder whether the lawyers will be able to devise what is described by my noble friend Lady Blatch as the comprehensive contractual package that will take full account of the needs of Parliament. It is easy to say
750
those words, but, it will be jolly difficult to devise the system that will deliver upon them. I have some doubts about the future, but, nevertheless, I shall be following developments with great care. I hope that effective ways will be found to provide both Houses of Parliament with the effective safeguards that they properly demand.
6.23 p.m.
The Earl of Northesk: My Lords, I shall be brief, if only because my contribution is somewhat more mundane than that of noble Lords who have already spoken. I speak from my interest in information technology. The particular role upon which I wish to focus is the role of HMSO as printer and publisher of the Official Report, which amounts, as the noble Baroness said, to 10 per cent. of the business of HMSO.
It could be argued that the newspaper media are no longer the natural vehicle of mass communication; that they have been superseded by the broadcast media. In a very real sense therefore, the principle of communicating our business to the people, via the expedient of the printed page, may be something of an anachronism. That begs all sorts of questions. Should our proceedings be broadcast in full by both television and radio on a national basis? Perhaps a little more facetiously (but not, it must be said beyond the realms of possibility, and a question that I pose in all seriousness) should Parliament go digital?
More than that, even as we speak, there is in all probability bandwidth on the Internet that is being used to discuss the issue of whether Hansard should be on-line. I know that to be the case, because I have been following precisely that thread in the uk.politics newsgroup. It is that that intrigues me. Whatever the future of HMSO, can our proceedings be delivered to the public in a medium appropriate to our information age? Can we expect that the Official Report will be available on floppy disc, on CD-Rom, or on both? Will Hansard establish its own "web" site?
I appreciate that such developments are not without their problems; for example, with respect to copyright. Nor would I anticipate that any IT-driven method of communicating our proceedings could or would replace the printed page entirely. Be that as it may, we need to consider carefully how it is that we wish to deliver the text of our proceedings to the wider world. In considering that we should ask ourselves whether government—any government—would meet the costs involved. My impression is that history suggests that they would not.
I conclude with a salutary observation from the "Interface" section of The Times of 22nd November last year:
"According to manufacturers, you would need to chop down 11 trees to get enough paper to store the same information held on just one CD. The trees would, in total, take 220 years to grow, but the CD is made in just 1.9 seconds".
In our era of environmentalist concern, of sustainable development, of financial constraint, that fact should guide our thinking as to how our proceedings will be delivered to the general public in the future and as to the future of HMSO.
6.28 p.m.
Lord Pearson of Rannoch: My Lords, I rise to support the arguments put forward by my noble friend the Leader of the House. I have to say also that I very much enjoyed the speech of the noble Lord, Lord Richard, when he exposed so much management-speak gobbledegook of the kind with which we are all so much afflicted nowadays. I must say also that if HMSO has been subjected to all the rubbish that the noble Lord so wittily exposed, I am a little surprised that it has become the commercial success that he appeared to accept that it has become.
I fear that I part company with the noble Lord, Lord Richard, when he seems to indicate—perhaps I misunderstood him—that partly because HMSO has become a commercial success, it should not be privatised. That is a point which was made by other noble Lords. I do not follow the argument that only over-manned and loss-making old state industries are those which are suitable for privatisation. I should have thought that it was more advantageous to privatise what the noble Baroness, Lady Dean of Thornton-le-Fylde, described as a "ripe cherry". Surely that will allow more stringent guarantees as to future quality to be inserted into the sale agreement. I believe that was an argument which troubled my noble friend Lord Hayhoe.
The main question I wish to put to my noble friend on the Front Bench concerns what I hope may be one aspect of HMSO's increased innovation and development, which my noble friend the Leader of the House rightly pointed out should flow from privatisation.
It is at the moment very difficult fully to understand your Lordships' proceedings as printed in Hansard for all our Committee, Report, and Third Reading debates. I say that because the Marshalled List and the groupings of amendments are not printed in Hansard. So if someone outside your Lordships' House just acquires Hansard—at a price which I agree with my noble friend should reduce after privatisation—but does not have those additional items, your Lordships' debates are, in parts, very difficult to follow. For instance, only the first amendment in a grouping is at the moment printed, and noble Lords do not always repeat their amendments when they come to speak to them.
I would like to use this opportunity briefly to pay tribute to the endless courtesy, accuracy and good humour of our Hansard writers and the Hansard office—
Noble Lords: Hear, hear!
Lord Pearson of Rannoch: They seem to make sense even of some of my own speeches in your Lordships' House and I have great confidence that they will manage to do so with this one.
I would have thought that with modern technology, to which my noble friend Lord Northesk referred, the additional printing is probably not all that expensive. I hope that my additional suggestion can be borne in mind and perhaps comprise part of the future service, which I have every confidence will be as good as the one we have received so far.
6.30 p.m.
The Parliamentary Under-Secretary of State, Ministry of Defence (Earl Howe): My Lords, this has been a useful and lively debate on a subject which I well recognise to he of direct importance to your Lordships' House and another place. I listened carefully to all the views expressed and I am grateful to all noble Lords who have spoken. In particular, I wish to add my compliments to the noble Lord, Lord McNally, on his maiden speech. Delivered so soon after his arrival in your Lordships' House, it is a happy foretaste of elegant and trenchant contributions from him to which we can look forward.
Noble Lords: Hear, hear!
Earl Howe: Listening to the debate today, I detected two principal themes in the concerns expressed about the Government's plans to put HMSO into the private sector; first, the need to do it in the first place and, secondly, once the process is taken forward, the mechanisms which might be put in place to safeguard the interests of Parliament and HMSO's employees.
The opening speech of my noble friend the Leader of the House took us through much of the terrain in detail and with clarity. I do not propose to repeat what he said. However, it is clear that there are matters on which your Lordships would welcome further elucidation and I shall do my best to provide it.
These days HMSO is not just, as it once was, a purchasing agent and a printer for Government. It is a substantial, multifarious, commercial enterprise, competing actively with the private sector in areas as diverse as IT procurement, the provision of own-brand contract stationery, the provision of all types of reprographic services and the supply to government and the public of a wide range of publication. Its turnover in 1995 is estimated at £375 million.
However, at the same time as it is gaining in efficiency terms, its core market, the central government market, is shrinking. It cannot trade generally with the private sector, being specifically prohibited from doing so, nor, even if that prohibition were to be lifted, could it do so in all equity as part of government. In those circumstances, HMSO, effectively underwritten by taxpayers in all that it did, would enjoy unacceptable competitive advantages while at the same time putting taxpayers' money at commercial risk.
The decision to privatise is therefore not in any way a product of dogma, as the noble Lord, Lord Richard, and others suggested. As my noble friend Lord Jenkin so eloquently argued, it is the natural and sensible consequence of a situation which sees a business trying its hardest to prosper and to compete fully with the private sector but which is unable to do so because it is constrained. It is constrained from seeking wider markets and constrained from being able to invest, to borrow or to expand its activities should it choose to, because of the artificial operating environment attendant upon public sector ownership.
In those circumstances, privatisation is the only remedy which will safeguard HMSO's business and the jobs which accompany it into the long term.

753
Furthermore, it is the one course which is in the best interests of customers and taxpayers because of the savings it is likely to facilitate. That has been proved time and again.
It is in the latter context in particular that your Lordships can find considerable reassurance on the questions which most closely affect this House. A more efficient Stationery Office able to spread its costs over a wider base will deliver better value to its customers. As a most prestigious customer of HMSO, as well as being a financially important one, Parliament is in an unrivalled position to insist through the contract which it enters into with its publisher and printer that cost savings resulting from privatisation should be reflected in the prices charged to the House and to the general public. We have already had a taste of what might be achievable. As my noble friend said at the outset, the price of Hansard has come down, after remaining unchanged since 1991, directly as a result of HMSO's internal efficiencies. My noble friend Lord Burnham remarked that in 1979 Hansard was priced at 45 pence. Yes, it was, but it was also very heavily subsidised, which is no longer true.
It is through a legally binding and enforceable contract that each House of Parliament can stipulate precisely the level of service it requires from its printer and publisher. Indeed, that applies to all customers of the privatised Stationery Office. Furthermore, the buyer of HMSO will have to be fully acceptable to Parliament before either House concludes a contract. The shortlist of bidders will be published.
However, the effective delivery of services to Parliament will not rest simply on legal obligations. No new owner will put at risk the relationship that he has with his most prestigious customer. He will wish to ensure that that customer remains a satisfied customer. Indeed, without the parliamentary work other business would be less secure and less efficiently executed, creating a greater risk of future job losses. It will be of key importance.
The noble Lord, Lord Jenkins of Hillhead, entertained us all with his customary verve and style. I know that running through his amusing and discursive rhetoric he intended to make a serious point. However, I must say to him with all respect that rhetoric is no substitute for logical argument. He referred to HMSO as a proper appurtenance of the state. On what basis? He said that the Government were putting our civic traditions at risk. That, I suggest, is silly. We are talking about a Stationery Office; no more and no less.
I listened with great care to the speech of the noble Baroness, Lady Dean. The noble Baroness was correct in saying that HMSO is a diverse business. It employs about 2,900 people across England, Wales, Scotland and Northern Ireland. When HMSO's customers were freed from the tie to HMSO it did indeed have to win business. In order to do so, it had to improve efficiency and to reduce costs. It was inefficient and costly until the discipline of competition was brought to bear. HMSO is certainly not a lame duck as it stands, although I believe that its best days in the public sector
754
are probably over because the market is changing. But it may well become a lame duck if it stays in the public sector.
The noble Lords, Lord Richard and Lord Jenkins, compared HMSO with the Post Office and suggested that there was a way short of privatisation to bring the Stationery Office the benefits for which we are looking. The analogy with the Post Office is not sound. HMSO and the Post Office are different organisations, as my noble friend Lord Jenkin of Roding concisely argued, with quite different markets. The solutions to optimise their future must be tailored according to their circumstances and not according to dogma. I need hardly add that I am not here today to discuss the Post Office, but I can say that the solution for HMSO which we are here to debate is privatisation. As I said, that solution will give the best opportunities for the future.
The noble Lord, Lord Jenkins of Hillhead, asked why HMSO cannot be given more freedom in the public sector. I was surprised that he, of all people, with his long experience of government, should be asking that question. To allow HMSO carte blanche to borrow investment capital and take other commercial risks would overturn the public expenditure disciplines which quite properly exist to protect the taxpayer. That is the first point. At the same time, the fact that HMSO was ultimately underwritten by the taxpayer means that its competitors would rightly suspect unfair competition. It is worth observing that, as a trading fund, HMSO benefits from cheap national loan fund borrowing and from not having to pay corporation tax on its profits.
I should say to the noble Lord, Lord Bruce, that there is no presumption that Next Steps agencies should remain in the public sector. All agencies are reviewed every five years to assess whether they should he abolished, privatised, contracted out or remain in the public sector.
Perhaps I may correct one factual part of the speech of the noble Lord, Lord Jenkins of Hillhead. He said that there had been staff reductions of 7 per cent. since 1990. In fact, during the past five years, staff reductions have been over 15 per cent. If one looks at the picture since 1980 when the staff numbered 6,300, the reduction amounts to about 60 per cent. over 15 years.
The noble Lord, Lord Jenkins, asked what redundancies might be in prospect once privatisation takes place. I am sure that he will understand that no guarantees can be given as regards future staffing levels at the Stationery Office. However, in June 1994, the then chief executive warned that there could be further reductions of up to 30 per cent. That is the future in the public sector. While there may be reductions in the private sector, as I have argued, the long-term future will be more secure because of the opportunity to grow in wider markets.
I can say emphatically, in particular to my noble friend Lord Jenkin of Roding, that the past 16 years of Conservative government have made a thing of the past the difficulties arising from industrial disputes. My noble friend was absolutely right in what he said because, thanks to the policies of previous Conservative administrations, industrial relations problems are very much a thing of the past.

755
The noble Lords, Lord Richard and Lord McNally, place stress on having further parliamentary scrutiny of the Government's proposals. There are two strands to that point: the first is the selection of the buyer; the second is the proposal itself. The Speaker in another place made clear to my right honourable friend the Chancellor of the Duchy that the selection of a buyer is for the Government and not for the other place. The question for Parliament is with whom it should contract for its services and on what terms.
I can say to the noble Lord, Lord Richard, in particular, that the information memorandum will indeed be made available to your Lordships. This House will be treated the same as the other place. The Clerk to the Offices Committee will be sent a copy of the information memorandum when it is available. That will be a commercially sensitive document and there will need to be certain conditions attached to its handling. But I hope that that is some reassurance to the noble Lord.
Lord Richard: My Lords, I am grateful to the noble Earl for giving way because I wish to be clear about this matter. Is he telling the House that there will be no opportunity for this House to take a decision on the merits or otherwise of the Government's proposals and that we are limited to taking a decision on who should be the buyer and also the contract in relation to parliamentary papers? Is that what we shall be confined to? If so, I do not believe that he will find that acceptable on this side of the House.
Earl Howe: My Lords, perhaps I may clarify what I have said. As I mentioned, the question of parliamentary scrutiny has two strands. The second strand is the privatisation proposal itself.
Perhaps I may deal with something which the noble Lord, Lord Bruce, said before I directly answer the noble Lord, Lord Richard. The noble Lord, Lord Bruce, referred to the Government's undertaking in 1990 to introduce primary legislation whenever a trading fund was to be privatised. I believe that he will have received an answer to the question on this subject which he raised in the debate in December from my right honourable friend the Chancellor of the Duchy, so he will already know the position. But, for the benefit of all your Lordships, perhaps I may say that the Trading Act will not be used to privatise HMSO. The undertaking in 1990 was given in a context when primary legislation was always required for privatisation for technical reasons associated with the terms on which civil servants would transfer to their new employment. Those shortcomings have been resolved and there is no need for primary legislation. The 1990 undertaking is not breached because it is simply not relevant.
The fact is that the House heard the Statement last month and has now had a debate. The question of privatisation is now for the Government while the question for the House is that of the contract for the supply of services.
Lord McNally: My Lords, as a new boy, I really am confused. However, I believe that the Minister's reply is no to the question put by the noble Lord,
756
Lord Richard, the noble Baroness, Lady Dean, and others as to whether the House is to have an opportunity to debate the matter.
Earl Howe: My Lords, my understanding is that there is no legal need for Parliament to vote on the matter. But, of course, Parliament and your Lordships' House are free to debate it again if that is decided through the usual channels. I am certainly not pre-empting such a decision.
The more fundamental point is that the Government want the best buyer to take forward successfully the Stationery Office. The House will want the best possible supplier of services. I suggest that it is right and proper for the Government and both Houses of Parliament to work in concert to see that their mutual objectives are attained.
The noble Lord, Lord McNally, was worried that after privatisation Parliament would no longer be able to call upon a Minister to explain the performance of HMSO. Ministers are accountable only for matters based on government policy. Day-to-day operational matters arc already quite properly the responsibility of the chief executive. There is little difference between that system and the appropriate representative of the privatised company being called to account by the House under its contract with the company. Private sector companies are quite used to such arrangements in their daily relationships. Indeed, the House already buys services from the private sector and I am not aware that the absence of a Minister to answer on the provision of those services has led to a poorer service. However, there would continue to be a Minister responsible for the residual HMSO which would, if the House and another place so wished, administer parliamentary copyright.
Lord Harris of Greenwich: My Lords, I apologise for returning to this point but I am in a state of mild confusion. The discussion of the Offices Committee on this matter resulted in the laying down of a number of conditions which, in its view, would have to be met in order to ensure that the rights of this House were preserved. Is it being said that ultimately, there is not to be a debate in this House on the very question dealt with by the Offices Committee; namely, whether that which we are to be offered by the new private sector supplier of those services meets those conditions or not? Surely that is the least that we can ask for.
Earl Howe: My Lords, there could well be such a debate. As I said, I would not wish to pre-empt a decision of your Lordships through the usual channels to that effect.
Lord Peston: My Lords, I apologise for interrupting the Minister. Although I have heard only about half the speeches in the debate, I did hear that of the noble Lord the Lord Privy Seal. I understood him to say, not that there could be, but that there certainly would be, such a debate. It seems to me that there is a certain amount of backtracking going on. It ought to be absolutely clear-cut.

757
I should, perhaps, declare an interest as I too am a member of the Offices Committee. I was never in any doubt until this minute that we would debate the report of the Offices Committee on a Motion to be put before your Lordships. However, I now find myself astonished at the noble Earl's current replies. They do not correspond with anything I understood to be the case.
Earl Howe: My Lords, I am sorry for that fact. The noble Lord, Lord Peston, was indeed present for the opening speech, but I did not see him in his place for the rest of the debate. It is a matter for the usual channels to decide. With great respect to my noble friend the Leader of the House, I must point out that he could not have given such an undertaking because it is not within his personal gift to do so. We are perfectly open on this side of the House to such a suggestion from the Benches opposite. We shall listen constructively to any proposals.
Lord Jenkin of Roding: My Lords, I expressed strong support for the Government's policy in this regard. However, in the course of my speech I said that it was enormously important that we achieved the safeguards spelt out in the report of the Offices Committee. It seems to me to be inconceivable that the Government could expect to proceed with the matter without giving the House the opportunity to have a yea or a nay as to whether or not the proposed terms are acceptable. I hope that my noble friend the Minister would feel able to give that undertaking.
Earl Howe: My Lords, I entirely take my noble friend's point. However, I return to the fact that it is a matter for the House to decide. Indeed, it is for your Lordships to decide.
Lord Jenkins of Hillhead: My Lords, with the greatest respect, I believe that the noble Earl is talking nonsense. When the Leader of the Opposition—and I take the same view as the noble Lord—says strongly to the noble Viscount the Leader of the House that there must be a debate on the matter it is plain nonsense for the noble Earl, sitting alongside the Leader of the House and the Government spokesman, to say that a government undertaking cannot be given on the issue.
Earl Howe: My Lords, I believe that the message has reached these Benches very loudly that there is a general desire in your Lordships' House for a debate to take place on the matter. That is no more and no less than I would have said earlier. Indeed, I am neither oblivious nor deaf to the proposals that have been made.
Lord Richard: My Lords, I am sorry to interrupt the noble Earl, but, with the greatest of respect, the matter will go on until. we receive a little more satisfaction. I know that I am irritating the people who are participating in the next debate, but I believe that the Government must give the undertaking that they will provide time for a debate on the matter at the appropriate time. For heaven's sake, why on earth can they not do so? I thought that they had already agreed to do so half a dozen times. Indeed, they said so in another place. It seems to me that the Government must
758
be in a position tonight to satisfy the obvious desire of the House to have a debate on the matter when, if necessary, a vote can take place.
Earl Howe: My Lords, I do not believe that there is any distance at all between myself and the noble Lord. As I said, the House has expressed a wish to have further debate on the matter. I am sure that from our side of the House we have no objection to that at all. It is not within my personal gift to agree to it, but my noble friend the Leader of the House—and, indeed, the usual channels on all sides of the House—will no doubt decide the question after today's debate is concluded.
Lord Bruce of Donington: My Lords, a little earlier in his speech the noble Earl was kind enough to indicate that he disputed my account of the undertakings given to this House about the necessity for primary legislation before any of the Next Steps agencies were privatised. I should like to give the Minister notice that I intend to persist in my contention that the undertaking that was given ought to apply. The utmost pressure will be exerted through whatever channels necessary, either in this or the other place, to ensure that the Government honour obligations that were freely given.
Earl Howe: My Lords, I suggest that the noble Lord reads what I have said in Hansard. I was not in the least suggesting that the undertaking was not given; I was saying that it was no longer relevant because the law has changed and there is now no legal need for primary legislation.
I am aware that my time is slipping away, and I do not wish to detain your Lordships for longer than need be. Perhaps I may continue by saying that we have already begun consultations with the authorities here and in another place on the contractual and other safeguards which will be needed. We shall continue those consultations throughout the sale process. My right honourable friend the Chancellor of the Duchy of Lancaster has also given evidence in another place to the Finance and Services Select Committee on the sale, and, as my noble friend the Leader of the House said, he would be happy to appear before other Select Committees as required. Parliamentary officials will advise the Government on Parliament's needs which will assist the Government in drawing up criteria for selecting a new owner and, indeed, in the choice of the new owner.
The noble Lord, Lord Jenkins of Hillhead, asked what would happen if there were a future takeover following privatisation. I believe that there are several answers to that question, but the most powerful one is that the contract with this House can provide for termination in the event of a change of ownership. Given the importance of parliamentary business to the company, I suggest that that is a powerful deterrent.
My noble friend Lord Northesk identified one of the most interesting issues of the day in raising the question of the developing relationship between electronic and paper media. He was right to suggest that that is an important matter for the House. The Government already put information on to the Internet and the policy in that area is developing. However, Hansard is a matter

759
for your Lordships' House. Certainly the contract with the privatised business should allow the House to take advantage of any technological developments which offer benefit to the public interest.
My noble friend Lord Pearson asked whether editions of Hansard might include publishing our Committee, Report and Third Reading procedures, complete with a Marshalled List and amendment groupings for the day. At the risk of repeating myself, I believe that that is essentially a matter for the House authorities. If the material can be made available for printing at the appropriate time, I am advised that there would be no practical difficulty whatever to that suggestion; indeed, I am grateful to my noble friend for making it.
The noble Baroness, Lady Dean, asked what was happening to the market testing of MoD business. The MoD is currently taking advice from consultants on future arrangements for its stationery and printing requirements. It is likely that the present agreement will be extended for a short period—that is, one or two years—so that the MoD can plan and execute a well-structured market test.
The noble Baroness also spoke about TUPE. I believe that the essence of what she said was that TUPE offers only vague and inadequate protection to employees, especially in respect of pensions. I do not accept that argument. Both the Government and likely bidders are well acquainted with implementing TUPE and ensuring that staff are treated fairly as a result. I see that the noble Baroness wishes to intervene. I give way.
Baroness Dean of Thornton-le-Fylde: My Lords, I am most grateful, we must have the record straight. I should point out that TUPE does not cover pensions.
Earl Howe: Indeed, my Lords; I was about to say that the noble Baroness was perfectly right to say that pensions are not covered by TUPE. However, as she said, bidders will be required to offer staff a broadly comparable pension scheme, certified by the Government Actuary. The noble Baroness also asked what we meant by the phrase "broadly comparable". The Government Actuary will examine the buyer's pension scheme to ensure that, from an actuarial standpoint, it is broadly comparable. Of course, the Government Actuary is experienced in assessing such proposals. The assessment includes a comparison of the level of contributions and ensures that any increase in contributions is offset by compensation elsewhere in the package, for example, a salary rise. As regards TUPE, I must point out that staff cannot be worse off solely as a result of the transfer. That is the strongest protection that anyone could sensibly give.
HMSO has operated on a commercial basis from within government for many years. Its customers are perfectly well used to market testing its services and entering into formal agreements with it. Privatisation will not change that and the new business will be under the same imperatives to provide the best possible service and to keep all its customers satisfied. However, it will allow the business to capitalise fully on its reputation for quality and reliability and thus safeguard the future of a distinguished organisation.
760
The fundamental point which I must reiterate is that HMSO is in decline in the public sector. As long ago as June 1994, the then chief executive warned that up to 30 per cent. of the then current jobs would have to be lost. It is worth repeating what he also said; namely, that staffing levels critically depend upon the level of business that is won. But, as I have indicated, HMSO's core market is shrinking. To allow it unfettered freedom to seek new market opportunities underwritten by the public purse would be unfair to private sector businesses. But without such opportunities there is a real risk of a downward spiral in HMSO's fortunes with all that that means in terms of job losses despite HMSO's outstanding reputation and the undoubted dedication of its staff.
Retaining HMSO in government would only do one thing; it would jeopardise the future of the business and its staff and do them a gross disservice. That is not a route which commends itself to Her Majesty's Government. Privatisation is the only means of securing the best interests not only of the business and its staff but also of its customers and therefore the taxpayer too. I commend the Government's plans to the House.
On Question, Motion agreed to.

Arbitration Bill [H.L.]
7 p.m.
The Minister of State, Department of Trade and Industry (Lord Fraser of Carmyllie): My Lords, I beg to move that this Bill be now read a second time.
This Bill represents the culmination of a great deal of work by a large number of people over several years. I will not delve too deeply into the history of the Bill but it was back in 1989 that the noble and learned Lord, Lord Mustill, in his capacity as chairman of the DTI's Advisory Committee on Arbitration Law, first recommended that the law on arbitration needed an overhaul. Work on a new Bill started first in the private sector and was taken over by my department in 1992. In February 1994 we issued a text for consultation which aimed to consolidate existing legislation with only relatively minor amendments. The message which came back was that a bolder approach was needed.
In November last year Lord Justice Saville took over the chairmanship of the advisory committee and accepted the challenge of working with my department and Parliamentary Counsel in preparing a text which more closely reflected the needs of the business and arbitration communities. I know that he has devoted countless long hours to work on the Bill over and above his judicial commitments. We owe him and members of his committee a special debt of gratitude. I should also like to thank the noble and learned Lords, Lord Mustill and Lord Steyn, the predecessors as chairman of the Advisory Committee, for their immensely valuable contributions.
Noble Lords may find it helpful if 1 outline some of the thinking behind the Bill. If noble Lords have read the definitive textbook on arbitration law by the noble

761
and learned Lord, Lord Mustill and Mr. Stewart Boyd QC, they will have come across in the first few pages the following words:
"Anyone coming for the first time into contact with an English arbitration, and wishing to acquaint himself with the relevant principles of law, might reasonably look to the current Arbitration Acts (those of 1950, 1975 and 1979) for a coherent exposition of the central principles of arbitration law. If so, he would be disappointed".
Those noble Lords who have looked at these Acts will readily agree. The very fact that the law is spread over three statutes is unhelpful and the language used is far from accessible to the layman. However, the problem goes deeper than that. The statutes do not seek to present a coherent picture but represent legislative reaction to particular issues as they have come up from time to time. We are simply failing in our duty to the business community to assist companies to resolve their disputes with the minimum of difficulty. I believe this Bill will bring about a significant improvement.
Our objective has been to set out a comprehensive and coherent statement of the principles and practice of arbitration in England, Wales and Northern Ireland. The Bill combines a restatement of the current statute law with codification of the more important principles of arbitration law developed through case law. It means that business people will have set out for them in a single document the key aspects of arbitration law in England, Wales and Northern Ireland. Without this Bill the present unsatisfactory situation could also have had serious repercussions for the future of London as a world centre for the arbitration of international commercial disputes. The business of arbitration is highly mobile in an international sense. A number of other countries have been making efforts to make their legislation more accessible to the business user. We must do the same if we are to safeguard the future competitiveness of London as a world arbitration centre.
Those noble Lords who have had an opportunity to take a look at the text will have been struck by the way it is presented. It follows a logical sequence. The language is clear and simple. Above all it is based on the proposition that arbitration is a valid alternative to litigation as a means of resolving those disputes which inevitably arise in trade and business. This is a significant step forward from the present position.
The principle of party autonomy is central to the Bill. The parties who are in dispute are able to decide how the arbitration should be conducted. The flexibility and control which this freedom gives to the parties is of critical importance. Having said that, the freedom is not absolute. There are a small number of provisions which for reasons of public policy cannot he overridden. We thought it right when looking at the current law on arbitration to propose to the House certain changes. These are designed to improve the attractiveness of arbitration to potential users. What they want is a system which is speedy and cost-effective, is final and fair at the same time.
We started from the principle that if parties have chosen arbitration rather than the courts to resolve their dispute, this decision must be respected. We propose
762
therefore to curtail the ability of the court to intervene in the arbitral process except where the assistance of the court is clearly necessary to move the arbitration forward or where there has been a manifest injustice. It is thus a deregulatory measure in that we are freeing up the process from unwarranted reference to the courts or unwanted interference by them. Intervention by the courts slows down the whole process, which inevitably adds to costs.
In framing the Bill we have tried as far as possible to reflect the format and provisions of the Model Law on Commercial Arbitration developed by the United Nations Commission on International Trade Law, which is well known by its acronym of UNCITRAL. The noble and learned Lord, Lord Mustill, recommended in the report I mentioned at the start of my speech that it would be problematic to import that model law wholesale into the law of England and Wales. At the same time we accepted his advice that any new statute should incorporate as far as possible the structure and language of the model law.
Having outlined briefly the main principles on which the Bill is based it might be helpful if I mention some of the more important clauses. Clause 1 is important in that it sets out right at the start of the text the principles on which the Bill is based. Clause 2 is equally important in that it defines the scope of the Bill.
I would particularly draw your Lordships' attention to Clause 29. It confers immunity from suit upon arbitrators except where they act in bad faith. This is a new statutory provision. There has been considerable doubt whether, and if so to what extent, the immunity of arbitrators can be relied upon at English common law and we propose to put the matter beyond question. Your Lordships will see from Clause 74 that we intend also to extend limited immunity to arbitral and other institutions. Clause 33 provides a check and a balance on the powers of the arbitrators set out elsewhere in the Bill. Arbitrators must have their obligations under this clause at the forefront of their minds throughout the arbitration.
Clauses 34 and 38 break new ground in arbitration statute law by providing a non-exhaustive list of matters which the tribunal can decide and powers exercisable by the tribunal in the absence of agreement by the parties.
Clauses 46 to 58 deal with various aspects of the award of the tribunal. I draw your Lordships' attention to two changes we propose here. The first concerns Clause 49. At present a tribunal has the power only to award simple interest. We propose that the tribunal shall be able to award compound interest and simple interest at rates other than the judgment debt rate. The second concerns Clause 52, where we propose that the tribunal should be under an obligation to state the reasons for the award it has made. I contend that it is a basic rule of justice that those charged with determining the rights and obligations of others should give reasons for their decisions.
Clauses 59 to 65 deal with how costs of the arbitration are to be met. We have adopted the principle of "reasonableness". Only such costs as are

763
reasonable can be recovered. Clause 65 contains a new power to enable the tribunal to limit the recoverable costs of the arbitration. That is in keeping with our aim of making arbitration a cost-effective way of resolving disputes.
Clauses 66 to 71 cover the powers of the court in relation to the award. Clause 69 tightens the criteria which must be met before the court can grant leave to appeal on a point of law arising out of the award. At the same time we have removed from the Bill the restrictions placed upon the "special categories", as they have come to be known, to exclude the jurisdiction of the court.
Your Lordships will see from Clause 84 that we propose to make the new Act apply to all arbitration proceedings commenced on or after the day it comes into force regardless of when the arbitration agreement was made. That follows the precedent of previous Acts.
Part II provides for domestic arbitration agreements, and to make the Bill comprehensive we have restated at Clauses 89 to 93, without making any changes of law, the provisions of the Consumer Arbitration Agreements Act 1988.
Part III restates the New York convention of 1958 on the recognition and enforcement of foreign arbitral awards. That was given effect in our statute law by the Arbitration Act 1975.
I hope that that brief summary of the contents of the Bill has given your Lordships something of the flavour of the Bill. It will be apparent to all that it is a highly technical and complex draft. At the same time, I believe it to be a vital and important part of our commercial law.
Your Lordships will have observed that there is a Motion in my name, which will follow the conclusion of this Second Reading debate, that the Bill should he committed to a Special Public Bill Committee. The purpose of the proposal is to allow further views to be sought and to give your Lordships the opportunity to examine the matters carefully. I understand that a number of your Lordships have reservations about that. Perhaps we can leave that issue until the conclusion of the substance of the Bill in the Second Reading debate. However, may I indicate that if the Motion were to be agreed to, this would be the first time that the procedure has been used for a Bill other than those arising from recommendations of the Law Commission, a development which was recommended by the Procedure Committee and endorsed by your Lordships.
At this point in our proceedings I am concerned principally that UK competitiveness—not only of the arbitration community but of the business community generally—depends on our getting our arbitration law right. In the list of those to speak in this Second Reading debate there are experts in this matter. I look forward with the greatest of interest to those contributions and any observations that might be made on the procedure that we have it in mind to follow after the Second Reading.
764
Moved, That the Bill be now read a second time.—(Lord Fraser of Carmyllie.)
7.15 p.m.
Lord Lester of Herne Hill: My Lords, this is an admirable, much-needed Bill. It is well designed and well drafted in a refreshingly lucid and open style, after full and effective consultation during a long period of gestation. The Bill's outstanding qualities are a tribute to the dedicated work done by an extraordinarily talented and experienced departmental advisory committee on arbitration law under the chairmanship of Lord Justice Saville and his predecessors, the noble and learned Lords, Lord Mustill and Lord Steyn, working in close partnership with the Department of Trade and Industry. I most warmly congratulate the noble and learned Lord the Minister and his advisers on sponsoring the Bill. I am delighted that the Government have heeded the powerful plea of the noble and learned Lord, Lord Wilberforce, made during the gracious Speech to introduce a measure which is readable, sensible and up to date. It will surely travel through the legislative process, by whatever procedure, speedily, free of friction, moving on oiled castors.
Since five noble and learned, and expert, noble Lords will participate in the debate, I shall be brief, even by the standards of an utter barrister.
The three general principles on which the Bill is rightly founded are of fundamental importance: first, to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense; secondly, to leave the parties free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest; and, thirdly, where an arbitration takes place in accordance with Part I of the Bill, confining judicial intervention to the circumstances prescribed in that part of the Bill. I welcome the fact that the general principles are set forth in Clause 1 as a useful aid to the proper understanding and interpretation of the Bill as a whole. They are principles which will surely enjoy universal support.
Speaking entirely for myself, and without having heard other noble Lords, I welcome the, fact that the Bill may be considered by a Special Public Bill Committee so as to allow evidence to be taken from experts on what is an important and complex Bill. However, I appreciate that the Bill has had a very long period of gestation and a huge amount of evidence will already have been taken into account.
I have one question about the first general principle. It refers to an impartial tribunal. However, unlike the guarantee in Article 6 of the European Convention on Human Rights, it does not refer to an independent and impartial tribunal. I wonder whether that is right, and I have written to the noble and learned Lord the Minister seeking clarification.
I realise that most arbitrations under the Bill will be consensual arbitrations to which Article 6 of the Convention would not normally apply directly. I realise that the concept of independence overlaps to a substantial extent with the concept of impartiality. I also

765
realise that an award may be challenged before the independent and impartial courts in the circumstances prescribed by Clauses 67 to 71. My query relates principally to statutory arbitrations under Part H which may be compulsory in nature.
Where a statutory arbitration is compulsory and not consensual, it is clear from the case law that Article 6 of the Convention applies directly and that the arbitration tribunal must be independent as well as impartial. It must be independent of the executive and also of the parties. Its awards must be given effect by the Crown. I should therefore be grateful for guidance from the Minister as to the manner in which the first general principle, read with the provisions governing statutory compulsory arbitrations, complies with the guarantee of independence in Article 6 of the convention.
The arbitral process—the process by which a dispute is determined judicially and with binding effect by an arbitration tribunal instead of by a court of law—is of great importance and great value to the commercial community. The City of London is the natural home for international arbitration. We take justifiable pride in the integrity, efficiency and accessibility of the financial and legal services provided by the City of London. We also have the great benefit of judges, arbitrators, advocates and solicitors of outstandingly high quality. It must be in our national interests, as well as in the interests of the commercial community, that we make the very best use of those considerable assets.
Commercial arbitration is a consensual process. Foreign users of arbitration will choose this country as the forum only if they like the system and the way it works. I agree with the Minister that if London is to remain one of the pre-eminent centres for international commercial arbitration, in the face of strong competition from other countries, it is essential that the legal framework is simple, straightforward and user-friendly, serving the interests of the parties to commercial disputes.
I have consulted the Commercial Bar Association (COMBAR), which represents some 700 members of the Bar of England and Wales who specialise in commercial law, to discover their views about the Bill. I have done so because their members have vast experience, mainly as advocates, but also sometimes as arbitrators of a wide variety of commercial and other arbitrations. I am particularly grateful to Mr. Michael Collins QC, who chaired a COMBAR working party during the consultation process.
The members of COMBAR have no doubt of the pressing need for a new Arbitration Act. Many who have in the past written English arbitration into their contracts have become disenchanted with the cost, complexity and delay inherent in all but the simplest of arbitrations in England. If we are to remain one of the pre-eminent centres for international arbitration, a simpler, more straightforward, more user-friendly system has to be introduced as a matter of urgency.
COMBAR believes, and I agree with it, that the Bill will in large measure achieve those objectives. That is because in a number of areas much needed reforms have
766
been introduced and many anomalies that exist in the present law have been eradicated. It is because the logical structure of the model law has been adopted, while preserving the more important features of the present system which differentiate the English law of arbitration from its international counterparts. It is because the style and language employed are user-friendly and are designed to he understood by those unfamiliar with English arbitration law, and not only the regular user. It is because, in the words of the Minister, party autonomy has been given greater emphasis and importance than is the case under the existing law; and the supporting role of the courts has been limited only to those areas where it is really necessary that they become involved.
The enactment of the Bill is likely to bring much more business to London, provided always that those who operate within its framework ensure that the costs of arbitration are justifiable and competitive. The Bill will enable London to continue to be one of the principal international centres for arbitration and it will enhance its reputation. It may well become a model to be followed in other countries.
The Bill has been 10 years in gestation. It combines the best of our existing arbitration law with a number of innovative and far-reaching reforms. Practically every other major arbitration centre has recently reviewed, or is in the process of reviewing, its arbitration law. I believe that the combined effects of consolidation and innovation have been gathered together in the Bill in a logical and comprehensible form, in harmony with the cogent recommendations recently made by the noble and learned Lord, Lord Woolf, in his report entitled: Access to Justice. It is truly a Bill designed to take English arbitration into the 21st century. It deserves wholehearted support.
There is, however, one further point which relates back to the earlier debate on the future of HMSO and public access to parliamentary material which I think is relevant. In a number of Questions I have pressed the Government and the authorities of the House to promote widespread public access to parliamentary material covered by parliamentary copyright, including Bills such as the present one. As it happens, Lord Justice Saville spoke to me this morning and told me that the House authorities had refused his request that this Bill should be put on the Internet. He has authorised me to express his disappointment about that. I respectfully and strongly agree with him. The Bill is designed to make this part of the law more accessible and to encourage those abroad to arbitrate their disputes here. It is something which should surely be available to all by the most efficient, modern and cheapest means. Indeed, Lord Justice Saville finds it difficult to understand—and I share his mystification—how in a democratic society this (or indeed any piece of proposed legislation) should not be made available on the Internet.
The draft Bill has attracted worldwide interest and support which can do nothing but good for our country. But, in the words of the learned Lord Justice Saville,
"the same cannot be said for a failure to make it available by electronic means to all who would like to see it".

767
It is absurd that it is available without charge, as I understand it, in printed form, hut not available by electronic means, I suppose for Treasury-driven reasons. I very much hope that the powers that be might reconsider their decision. I fully appreciate that it has wider implications. I have unqualified support for the Bill hut I hope that it may be the first Bill to be put on the Internet and made widely available to an admiring world.
7.27 p.m.
Lord Donaldson of Lymington: My Lords, in warmly welcoming the Bill, perhaps I should declare my interest as an occasional arbitrator and a past president of the Chartered Institute of Arbitrators.
The Bill is an extremely important measure for a number of reasons. The administration of civil justice in this country is in the hands of a partnership between the public sector—the courts—and the private sector provided by arbitration. At least since the Second World War, that partnership has been wholly amicable and has been based upon mutual respect. The plain fact is that each sector requires the other. The capacity of the courts to deal with large numbers of civil disputes is distinctly limited. Without arbitration, the whole system would grind to a halt. On the other hand, arbitrators need the assistance of the courts for some purposes such as resolving disputes as to their appointment and the enforcement of their awards.
As has been pointed out, the Bill modernises and clarifies the law relating to arbitration. In addition, so far as possible it harmonises our law with the provisions of the UNCITRAL model law and emphasises the right of disputants to agree on how the arbitration should he conducted, and whether or not that accords with normal procedures. Both those features are of extreme importance, not only in themselves but in encouraging foreigners to use English arbitration for the resolution of international commercial disputes. This is and has been for some years a major export service industry which makes a significant contribution to our balance of payments. Much draft legislation coming before this House is, I am ashamed to say, ill thought out and requires extensive revision. Not so this Bill. It is based upon the detailed advice of an extremely expert advisory committee, chaired by my noble and learned friends Lord Mustill and Lord Steyn successively in earlier in times and currently by Lord Justice Saville. All those concerned, including in particular those I have named, are vastly experienced in commercial arbitration and arbitration generally.
I echo the tributes paid by the noble and learned Lord the Minister to all that they have done and all that members of the advisory committee have done. May I also pay special tribute to the extent to which the Bill is logically arranged and expressed in plain English. It is a joy to read. It also contains a notable innovation in that it employs bracketed cross-references between sections. I wish that the same practice had been adopted by the draftsman of the Industrial Relations Act 1971. At one stage I was completely puzzled as to how a particular section in Part I fitted into the scheme of the
768
Act. With gross irregularity, which I have never before revealed in public, I rang up the Department of Employment and asked them to search their wastepaper baskets to see whether they could find instructions to parliamentary counsel. They came up with the answer, whether from the wastepaper basket or not, and referred me to a section some 50 or 60 sections later and in a different part of the Act, suggesting that I might like to read the two sections together. When I did so, all was perfectly plain. If only it had had a bracketed cross-reference I should not have been forced into such an impropriety.
That is not to say that the Bill may not be capable of small improvements in Committee. But I emphasise that they would be very small indeed in the light of the enormous amount of work that has already gone into this Bill, and in the light of the expertise of the advisory committee and the context its members have with everybody who works in this industry. In those circumstances, I beg leave to doubt whether the right course is to send this Bill to a Special Public Bill Committee which would inevitably duplicate a vast amount of the work already undertaken by the advisory committee and possibly risk creating confusion where no confusion presently exists.
I said that one or two small amendments may be needed. I should like to mention one area which I think needs some slight further consideration. It turns on three clauses of the Bill: Clause 48, which gives arbitrators very wide powers to make declaratory awards and awards rectifying documents—powers which are in themselves very welcome; Clause 51, which provides for the arbitrator to make an agreed award when the parties settle their differences—again, a very welcome provision; and Clause 66, which enables the parties to obtain a judgment in terms of the award, subject only to obtaining leave—again, a provision with which I have no quarrel. While those powers in general terms are essential, one does want to look a little closely at the way in which they might be used.
I do not think that it should be possible to obtain a declaratory award as to the status of the parties—for example, whether X is married to Y or not; or whether A has a right of abode in the United) Kingdom. It is perfectly true that if you had an award in those terms, there is little doubt that the courts would refuse leave to turn it into a judgment.
In the field of rectification, the matter is a little less simple. Perhaps it is because I have a potentially criminal mind, restrained only by my professional upbringing, but it seems to me that there are intriguing possibilities for tax evasion using the machinery of an agreed award of rectification of contractual documents coupled with a judgment to the like effect. Both the arbitrator and the court might well be unaware that rectification was being used fraudulently as a means of creating an amended and backdated document which was more taxpayer friendly than the original. I am sure that some very small amendment could safeguard that position, and I understand that one is already under consideration.

769
May I repeat my warm welcome to this Bill and again express the hope that it will not be thrown back into the maelstrom of consultation.
7.35 p.m.
Lord Hacking: My Lords, it was first brought home to me that there was a need to reform English arbitration law when I was in New York in the late 1970s. One day, in conversation with an American lawyer colleague, I received the comment that it was deemed to be an act of professional negligence in New York, and certainly in his practice, to include in a contract an English arbitration clause. So I remember very well being lucky in the ballot and opening a short debate here in May 1978 on the problems that were then adversely affecting the conduct of English arbitration proceedings. It is therefore very nice to speak after the noble and learned Lord, Lord Donaldson, who was then the presiding judge of the commercial court and chairman of the commercial court committee and who was the producer of such an excellent report in July 1978. That report was the forerunner of the Arbitration Act 1979, which was really the first step in our present arbitration law reform. It was interesting today to examine the contents of that report and to be reminded of the thoughts then upon arbitration reform.
It is also interesting to note that among the representatives of the Bar there was a Mr. M. J. Mustill QC, who was then a member of the noble and learned Lord's committee.
The gestation of further arbitration reform, and this Bill, has taken a little time—10 years, dating back to the DAC committee, or just over 17 years, dating back to the Second Reading of the Arbitration Bill, as it then was in 1979, on 12th December 1978. I do not complain about the delay; we are all very grateful for its arrival, and we acknowledge the large amount of work that has been done by a lot of people in bringing it before the House. It is therefore very nice to be able to express thanks to members of the DAC committee, to Mr. Arthur Marriott and his group and to the current chairmen of the DAC committee, Lord Justice Saville, in their presence, all of whom have done us the honour of coming to hear our debate this afternoon.
I pay particular tribute to the courage of the DAC committee in redrafting the whole Bill after its first airing in King's College in July 1994—an occasion on which I believe I made myself slightly unpopular, though I hope only temporarily.
There is much in this Bill to be commended: the quality and clarity of the drafting, I agree with the noble and learned Lord, is a joy to read. In the quality of its drafting I believe it measures up to some of the great statutes at the end of the 19th century, the Bills of Exchange Act 1882 or the Sale of Goods Act 1893. It is splendid to read the clear statements of principle in Clause I of the Bill, where we find the words at the very beginning of the Bill setting out the clear principles under which our arbitration law is to be governed:
"the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense";
770
or to turn to the clear statement of principle in Clause 33 in relation to the conduct of arbitration proceedings:
"The tribunal shall … act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent";
or, turning to Clause 40 of the Bill:
"The parties shall do all things necessary for the proper and expeditious conduct of the arbitral proceedings".
It is good, too, to find the freedom in which arbitration tribunals are entitled to conduct proceedings before them. I refer to Clause 34(2)(f) of the Bill, where the arbitral tribunal is stated to be free,
"to apply strict rules of evidence (or any other rules) as to the admissibility, relevance or weight of any material (oral, written or other) sought to be tendered on any matters of fact or opinion, and the time, manner and form in which such material should be exchanged and presented".
It is good too that the treatment of the special category arbitrations has now been dropped. It was only intended as a temporary measure for two or three years and its time is rightly up. It is also good to find other good provisions in the Bill: the parties' rights to consolidate proceedings (Clause 35); and the new rights to award interest (Clause 49). The Bill has even changed those rather unfortunate words about the arbitrator "misconducting himself or the proceedings", when he had only committed technical misconduct which enabled certain steps to be taken against him under Section 23 of the Act. So now, in Clause 68, the much happier word "irregularity" is used. That in fact was the word recommended by the noble and learned Lord, Lord Donaldson, 17½ years ago in his Commercial Committee report.
But all is not perfect in the garden. To a degree, the drafting of the Bill has been overworked. The Bill has certainly grown in length. Part I of the Arbitration Act 1950 contains 34 sections or clauses; Part I of the draft Bill, which was presented to the conference in King's College in July 1995, contains 69 clauses; and Parts I and II of this Bill, which cover the same area, contain 101 clauses. Also, in places, it has succumbed to the particularity of drafting, which is the bane of so much parliamentary drafting. I shall first give a very slight example in Clause 24(4). In the draft Bill, Clause 21(4)—the part of the Bill that deals with the removal of the arbitrator—reads:
"Where the court removes an arbitrator it may give such directions as it thinks fit with respect to his entitlement (if any) to fees or expenses".
But when that clause came into the Bill—that is to say into Clause 24(4)—we find superfluous words being added at the end:
"or the repayment of any fees or expenses already paid".
That example of overdrafting is not so harmful, but it becomes more harmful when one deals with the issue of costs. In the draft Bill on the issue of costs the following phrases are to be found. In Clause 47(1) of the draft Bill:
"The parties are free to agree on the powers of the tribunal as regards the award of costs".
In Clause 47(4):
"The tribunal shall determine the costs of the arbitration and decide which of the parties should bear the costs or in what proportion the costs should be borne by the parties".

771
However, when one looks at the Bill as it is now before the House, there is a greater particularity of drafting, which I believe has unfortunate consequences.
It says in Clause 61(2):
"the tribunal shall award costs on the general principle that costs should follow the event except where it appears to the tribunal that in the circumstances this is not appropriate in relation to the whole or part of the costs".
The court's rule of costs following the event is not always a fair rule. Sometimes decisions are made marginally one way or the other and, even though the plaintiff may be found to be 51 per cent. right and the defendant to be 49 per cent. wrong, the court's rule following the event visits on the defendant the full burden of costs. Therefore, it is unfortunate that the arbitrators should have to start by following a rule which is not fair. I believe also that it is an error that their discretion should be thus fettered.
The matter becomes more serious when one examines the issue of security of costs. There can be seen in the draft Bill of last July in Clause 37(3) the following words:
"The tribunal may order a claimant (or counter-claimant) to provide security, of such description and on such terms as it may direct, for the legal or other costs of any party (including the fees and expenses of the arbitrators)".
However, when one comes to the matter of security of costs in the Bill, one finds in Clause 38(3) the following words:
"The tribunal may order a party to provide security for the costs of the arbitration wherever the court would have power (in proceedings before the court) to order a party to provide security for costs".
What does that mean? One has then to look at Order 23, Rule I of the Supreme Court Practice, where on application for costs the plaintiff is found to be ordinarily resident out of the jurisdiction that is a ground for granting an order for security for costs. That is precisely the device which is used hostilely against a foreign plaintiff who may have a perfectly good case against an English defendant. Will not that measure alone deter overseas parties from coming to England or seeking an English arbitration seat for their arbitration?
I make one final plea, which relates to the different treatment in the Bill of domestic and international arbitrations. It relates to the stay of arbitration proceedings and the right to contract out by an exclusion agreement from court intervention upon determination of preliminary points of law under Clause 45 and appeals on points of law under Clause 69. The distinction only came about when we put into force in United Kingdom law the New York Convention on Recognition and Enforcement of Foreign Arbitration Awards of 1958. We did that in the Arbitration Act of 1975. Then in the Arbitration Act of 1979 it was thought that the distinction should be extended to exclusion clauses. But at that time we were working our way through new arbitration reforms and the feeling was that, certainly for the present, we should leave domestic arbitrations and special category arbitrations still under the umbrella of the English courts.
But the question is whether that is any longer wise or sensible. Apart from any issue relating to breaches of Community law, what is the logic of that distinction,
772
with one set of rights for one category of parties and another set of rights for another category of parties? Perhaps I may take an example. In the United Kingdom, we have some very fine construction companies, one of whom so beautifully restored the canopy above us. Why should those companies be subject to one set of rules in a dispute with another English construction company and a different set of rules in a dispute with a European construction company? I venture to suggest that that is a matter at which the Special Public Bill Committee should look. I am very happy to commend the Bill to your Lordships but I ask the House to be ready to make a few amendments to it.
7.48 p.m.
Lord Roskill: My Lords, like my noble and learned friend Lord Donaldson of Lymington, I ought perhaps to begin by declaring an interest. Since I retired, from time to time I have acted both in this country and abroad as an arbitrator. While I was still a Lord of Appeal in Ordinary, at the request of a number of solicitors, I was made chairman of a body which they set up called the London International Arbitration Trust, whose purpose was to continue to attract work to London.
Having said that, perhaps I may respectfully echo every word of compliment that has been said to the noble and learned Lord the Minister for introducing the Bill and to my noble and learned friends Lord Mustill, Lord Steyn and Lord Justice Saville for the work that they have put in in producing a Bill which, if I may say so, is a masterpiece of drafting clarity and a model for future draftsmen. If only, in the past, what Lord Justice Harman once called "the marsh gas of Rent Acts" had been drafted with such skill, or some of the finance Acts had been drafted that way now, some of us would have had less trouble in trying to interpret the meaning of parliamentary language.
That said, perhaps I may raise one question of principle that has not yet been touched on. The Bill covers so much that it seems ungracious to criticise one omission. But I venture to suggest that it is an extremely serious omission; that is, the issue of confidentiality of everything to do with what happens relating to arbitration and awards.
Until recently I do not believe anybody would have thought of questioning in an English court the duty of confidentiality imposed by implication in contract upon arbitrators, umpires, counsel, solicitors and indeed the parties and witnesses. But two decisions were recently made in Australia. It is not for anybody in this country to criticise those decisions, but they are decisions which query the applicability of confidentiality.
Privacy and confidentiality have been assumed as a general principle in English commercial arbitrations for many years. Perhaps I may venture to quote words used recently by no less an authority than the former Warden of All Souls College Oxford, Sir Patrick Neill, in his Bernstein Lecture, when he said,
"it would be difficult to conceive of any greater threat to the success of English arbitration than the removal of the general principles of confidentiality and privacy".

773
I know that this issue has been considered by the committee of Lord Justice Saville, which decided in its wisdom to leave it alone. I respectfully question whether, in the light of those Australian decisions, that is wise. I quite see the difficulties. But surely it would be better to add to the statements of general principle, which are so clearly set out in the Bill, a general statement of principle that, unless the parties otherwise agree, the principles of confidentiality as long understood in English arbitration, should apply to all arbitrations to which this Act applies.
I realise that that is general language. I am not attempting to draft specifically—it would be silly to try to do that on one's feet in a Second Reading debate. But the problem exists and I am nervous that, unless it is dealt with, someone will come along afterwards and invite the courts to waive the issue of confidentiality because those Australian cases should be applied here.
Those of us who have dealt with a number of highly confidential arbitrations in recent years cannot fail to be conscious of the importance of confidentiality. Many of us have been involved in cases, the result of which could affect share prices, commodity prices and heaven knows what. I venture to add that my own six years' experience as chairman of the Take-over Panel Appeal Committee led me to realise the crucial importance of observing utmost secrecy and confidentiality.
Your Lordships may remember the old hymn warning Christians to beware of the hordes of Midian who prowl and prowl around. The hordes who now prowl around looking for leaks and hints do not necessarily come from Midian any longer, but they are and can be a great danger. They can give rise to leaks, suggestions of insider-dealing and all sorts of problems. This is an issue of principle which should be faced whether the Bill goes to the suggested committee or the Committee stage takes place on the Floor of the House.
Once again I venture to say that everybody concerned is to be congratulated. I hope it is not out of place—I remembered this with a nasty shock when I was reading the Bill over the past two or three days—to say that it is 61 years since I was first involved in an arbitration as a newly-called barrister. So far as I remember, the fee was one guinea. It would be rather different nowadays but the arbitration was very short.
I make my comments in the light of my experience of arbitration work as a barrister, as a judge in charge of the commercial list and, since I retired, as an arbitrator and in other capacities. If it were said, on the question of confidentiality, that there is no precedent for this, I would venture to invite your Lordships to recall that this Bill preserves in the second schedule the provision for a judicial arbitrator. That was introduced in 1970 or perhaps a little before.
People today may not be aware of what led to that provision. Lord Goddard, when he was Lord Chancellor, with the enthusiastic approval of the then Lord Chief Justice, Lord Parker, and the then commercial judges, of whom I was one, were faced with criticism from the City that they would not use the Commercial Court because of the necessity of disclosing commercial
774
confidential information. Lord Gardiner suggested that provision should be made for the commercial judge to sit in private, in camera. That passed through your Lordships' House but failed in another place. The then Opposition managed to knock it out on a majority of those who thought that no court ought ever to sit in private.
The present provision was a substitute. It has been little used because of the difficulty which successive Lord Chief Justices have had in finding a judge to release to conduct arbitrations. But the principle of confidentiality lies behind the provision. It was accepted by Parliament then and there is no reason, whatever words are used, why it should not be used now.
7.57 p.m.
Lord Byron: My Lords, I ought also to declare an interest. I have once or twice been appointed as an arbitrator myself, though primarily my interest in the Bill is as a practising solicitor in the field of international trade.
A few months ago I was in Italy trying to settle a dispute between my German client and an Italian company. If one asks what an English solicitor was doing in a dispute between a German and Italian company, your Lordships may not be surprised to learn that the contract was in the English language; it was subject to English law and also to London arbitration. Having successfully concluded a settlement, we all retired to a restaurant and began discussing the role of English law and English arbitration.
My German client said, "I suppose it is strange that we should still use London arbitration; after all, you don't build many ships now; you are no longer dominant in world trade and we do not buy many televisions or computers from you". My Italian opponent chipped in, "And we don't think much of your food either". However, they both agreed that when it came to the law and to our courts and arbitration systems, they both had a great deal of confidence in us. Lest your Lordships think that this story suggests complacency, I should add that they did not find everything in the garden rosy. There were aspects of our system which they did not like and there were familiar complaints about delay and expense which are never far beneath the surface.
The point of my story is to re-emphasise the central place that English arbitration has in the resolution of disputes, particularly in the international field. Not only is dispute resolution in the City of London a major industry and major earner of foreign currency, but it is also a vital lubricant to other forms of commerce.
There is no doubt that government have an important role in keeping the wheels well oiled. A few years ago many of us became concerned that congestion in the Commercial Court could jeopardise London's reputation. I am glad that that problem seems to have been remedied. I should like therefore to congratulate the Government on bringing forward the Bill and to thank my noble and learned friend on the Front Bench for the remarks he made in introducing it.

775
However, it should not be forgotten that the Bill has its genesis as a private venture, although I have no doubt that it would not have reached this stage by now if it had not been taken over by the departmental advisory committee under the chairmanship of the noble and learned Lord, Lord Mustill. Indeed, I should like to pay a special tribute to the noble and learned Lord for everything that he has done, both in relation to this Bill and in relation to the cause of arbitration generally. I should also like to pay tribute to his successor on the departmental advisory committee, the noble and learned Lord, Lord Steyn, and in particular to the present chairman of that committee, Lord Justice Saville. I do not know whether there are many other precedents of a serving Lord Justice of Appeal taking a major role in drafting legislation; but all I can say is, if this is going to be the result, let us have it more often; that is, if the system and my noble and learned friend on the Woolsack will permit it.
A year or two ago I was asked to write an article for Lloyd's List newspaper on the then draft Arbitration Bill and I began by saying that Lord Justice Saville, who at that time was just about to take over chairmanship of the DAC, had an unenviable task. But there is no doubt that he and his committee have achieved a startling transformation from the earlier draft which, while admirable in many ways, was also in some respects a rather cumbersome consolidation Bill. This is now a model of clarity and contains a number of important changes and innovations in English arbitral law.
Although London is still the leading world centre for arbitration there are plenty of competitors only too anxious to attract arbitrations to their own jurisdictions. It is now more than 10 years since the UNCITRAI, Model Law was introduced and adopted by a number of countries without this country doing anything to improve its statutory framework except for the odd change here and there. It has been widely perceived in the commercial and legal communities where arbitration is used that unless something was done fairly quickly London's position could be seriously eroded.
Turning to the Bill itself, as has already been said, the great theme running through it is the principle of party autonomy. But party autonomy is all very well when the parties have either agreed expressly or by the incorporation of a set of standard terms as to how a particular matter should be dealt with. In reality there are a great many instances where that is not the case and once an arbitration has started it is often difficult for the parties to agree on anything at all. Indeed, the extent to which arbitration inevitably becomes a process similar to litigation is a point often overlooked or misunderstood by academic commentators. Because arbitration is consensual in origin it seems to be imagined that the whole process takes place in an atmosphere of co-operation, where agreements are easy to obtain. In reality arbitrations can become a pitched battle where agreement, even on relatively straightforward matters, is difficult to obtain.
The great balancing act which this Bill has had to perform is between those who wish to exclude the courts from all aspects of arbitration procedure and those who would like to preserve a significant measure of court
776
supervision. Generally I believe that this Bill has got that balancing act about right. When it comes to the question of appeal the so-called Nema guidelines have been enacted, although there seems to have been some further tightening of the appeal process. I am a little troubled by the additional provision in Clause 69(3)(d) that,
"despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the court to determine the question".
One can well understand the thinking behind those words, but I wonder whether it is sensible to introduce a new and rather subjective concept into what is otherwise well trodden ground.
I do not think this is the right time to raise particular hobby horses of our own. It is a quite radical Bill. It contains a great many changes to the way we do things at present. Some of those changes are very obvious; some of them are quite subtle. Above all it allows the parties to agree to almost any procedure they like without interference from the courts. I doubt whether it has been widely appreciated quite how far reaching this may be. I assume that the parties will be deemed to have agreed to something if they have agreed to arbitrate pursuant to a set of rules which contain that provision. I suspect that every arbitral body will now wish to reconsider its own rules. I am sure that once the Bill has been enacted all arbitral bodies will do that to see what special rules or special powers may be suitable for their particular users. While this has great benefits in terms of flexibility, those who seek to arbitrate will need to take care that they know exactly what they are letting themselves in for.
There is one point I would like to make in relation to what is, I think everyone agrees, a quite exceptionally good Bill. It relates to the question of a sole arbitrator. English law has always provided that a simple reference to "Arbitration London"—that is by no means unusual—is deemed to be a reference to a sole arbitrator. This provision seems to have been kept in Clause 15 of the Bill. I know that two organisations with which I am involved—the British Maritime Law Association and the London Maritime Arbitrators Association—made submissions suggesting that a simple reference to arbitration should be deemed to be a reference to three arbitrators. This is the approach in Article 10 of the model law. While I am not an uncritical fan of the model law I think that on this occasion the model law is to be preferred. I wonder why the various representations on that point could not be accepted.
Finally, I should like to echo what was said by the noble and learned Lord, Lord Roskill, in relation to confidentiality. Sometimes people try to compare litigating in the commercial court and arbitrating and they wonder what is the advantage, one over the other. But the one point which is always mentioned in relation to arbitration—perhaps it is the only point on which everyone is agreed that arbitration has a potential benefit—is confidentiality. It is quite arguable that arbitration would almost be lost or would go out of the window—people would not bother with it—if confidentiality was lost. I am not sure what the right

777
answer is here but I would echo the words of the noble and learned Lord that if there is any doubt about it the matter should be revisited.
This is undoubtedly an excellent Bill. I welcome it. I hope it has a speedy passage toward the statute hook.
8.7 p.m.
Lord Wilberforce: My Lords, I should not have thought of troubling your Lordships in the presence of so many much brighter luminaries than myself with any observations on this Bill were it not that I owe the Government a debt of gratitude. The Bill was not in the Queen's Speech for the legislative programme of this Session and I did, as the noble Lord, Lord Lester, was kind enough to mention, suggest in the debate on the Address that this was an important Bill for which the Government might, one hoped, find a place in their programme. I am therefore more than delighted that so soon after the start of the Session, in prime time as one may say, this Bill has been brought forward with the support of the Government and of the noble and learned Lord.
It is indeed, as has been said by many noble Lords, an important Bill from two aspects. I venture to restate them in the hope of attracting the interest of the noble Lord, Lord Peston, whom I know, as an economist, is somewhat less than enthusiastic about purely dry legal instruments. There is first the point that it is an essential piece in our legal system and must he capable of being used not only by lawyers in the interests of lawyers but by laymen. Many laymen have to participate in arbitrations and many arbitrations are conducted by people who are not lawyers. It is therefore absolutely essential that any arbitration law should be user friendly to the maximum extent. I noticed that the noble Lord, Lord Peston, nodded his head when emphasis was placed by one of your Lordships on the extreme readability and intelligibility of the Bill.
The second aspect has already been touched on very brilliantly by the noble Lord, Lord Byron, who has just spoken, and that is the need for a good arbitration system to be there in the way of lubricating trade. It is an extraordinary fact, referred to by the noble Lord, that with an out-of-date, cumbrous, defective and piecemeal arbitration law such as we have—it was improved in 1979, but these points remain valid—so many people with no connection with this country at all should have been willing to entrust their disputes to settlement by arbitration in this country. That tendency is undoubtedly bound to be increased by this Bill if, as I believe it does, it complies with the wishes of traders, using that word in its very widest sense, and businessmen generally through placing such emphasis as it does on the will of the parties.
That runs throughout the Bill. It is stated in Clause 1 at the beginning as one of the objectives of the Bill. All the way through the Bill one finds references to "unless the parties otherwise agree" or "as the parties otherwise agree". Nobody can say that this Bill does not give maximum effect, in spite of a few mandatory provisions, to the will of the parties.
778
Since I so heartily welcome this Bill and agree with its provisions, I do not propose to comment in any detail on it. I would like to dwell for a moment on one point to which I personally attach some importance. That is the relation between arbitration and the courts. I have never taken the view that arbitration is a kind of annex, appendix or poor relation to court proceedings. I have always wished to see arbitration, as far as possible, and subject to statutory guidelines no doubt, regarded as a freestanding system, free to settle its own procedure and free to develop its own substantive law—yes. its substantive law. I have always hoped to see arbitration law moving in that direction. That is not the position generally which has been taken by English law, which adopts a broadly supervisory attitude, giving substantial powers to the court of correction and otherwise, and not really defining with any exactitude the relative positions of the arbitrators and the courts.
Other countries adopt a different attitude and so does the UNCITRAL model law. The difference between our system and that of others has been and is, I believe, quite a substantial deterrent to people to sending arbitrations here. The noble Lord's Italian and German friends brought that point out very well.
How then does this Bill stand in that respect? After reading the debates and the various drafts that have been moving from one point to another, I find that on the whole, although not going quite as far as I should personally like, it has moved very substantially in this direction. It has given to the court only those essential powers which I believe the court should have; that is, rendering assistance when the arbitrators cannot act in the way of enforcement or procedural steps, or, alternatively, in the direction of correcting very fundamental errors.
What this Bill does is stated in Clause 1, the objective clause. It states that, in matters governed by Part I no intervention except as provided shall be made by the court. In effect that reflects Article 5 of the model law and excludes any further reliance on common law. The body of the Bill in Part I continues to give paramountcy to the will of the parties unless they otherwise agree. Clause 34 is extremely valuable and gives effect to the best institutional practices. Other examples are easy to find.
The problem of exclusion clauses and special categories, which I need not expand in this company, has been very adroitly solved by the Bill. It might perhaps have been a little less complex and prescriptive, but in general I believe that the Bill is well balanced, very intelligible and reflective of modern needs.
There is one other point I wish to make which relates to the matter raised by my noble and learned friend Lord Donaldson of Lymington. Many noble Lords have commented on the vast amount of research work and inquiry which has been done in this country since the monumental report of my noble and learned friend Lord Mustill in 1989. The noble and learned Lord knows about this perfectly well without my having to enumerate it. The department has worked very hard, with the assistance of all those people to whom tribute has been justly paid.

779
But the matter does not even stop there. My noble and learned friend Lord Mustill and I were both present, in different capacities, in Vienna about 10 years ago when the UNCITRAL model law was being drawn up in its final stages. That had been preceded by years of deliberation and consultation all around the international world, with British lawyers, including my noble and learned friend, being consulted. So the history goes hack even further than the report of my noble and learned friend in 1989. It goes back more than a decade. We have all the benefit of that behind us. We must not lose that benefit by reopening difficult questions.
It was with a little misgiving that I saw on the Order Paper the Motion in the name of the noble and learned Lord to commit this matter to a Special Public Bill Committee, which would involve the taking of evidence and the opening of many questions which have been settled with difficulty, but still settled. With the utmost deference, I venture to suggest to the noble and learned Lord that he might, if other speakers from these Benches agree with what I said and with what the noble Lord has said, he willing to defer his Motion on the Order Paper for a little further consideration. One day next week perhaps he could then come forward with a Motion, either in the form of that on the Order Paper or in the form of a normal Motion that the Bill be committed to a Committee of the Whole House. This is rather a different case to that of Law Commission Bills which come from a non-governmental body. This Bill has been under consideration by a powerful department of state with all the resources available to it. Since the Bill has got very great agreement in most laudatory terms, with only a few unweighty points, which could perfectly well be dealt with on the Floor of this House, the noble and learned Lord might think it wise to give further consideration to that particular part of today's proceedings. Of course, I heartily support the Second Reading of the Bill.
8.17 p.m.
Lord Noel-Buxton: My Lords, I give strong support to the Bill. As a commercial solicitor, although not currently in practice, I have had considerable experience of litigation. Litigation as a way of resolving disputes is often unfair, very slow and cost-ineffective. I have recently taken an interest in arbitration as an alternative to litigation. In my view arbitration can indeed be a fairer, more speedy and more cost-effective way of resolving disputes. A Bill to improve arbitration as an option in dispute resolution in these respects deserves strong support accordingly.
I would like to see arbitration recognised by the entire business world as a viable alternative to litigation. Arbitration can provide a cheap, speedy and cost-effective Method of resolving disputes. Further, arbitration is private. It is particularly suited where a dispute arises between parties who have a continuing relationship which neither wishes to prejudice.
More generally, it must surely he desirable, if London in particular is to continue to he a leading centre for arbitration, even for disputes which have no other connection with London, and is to maintain its position
780
as an important financial and commercial centre, that England and Wales have an arbitration law suited to modern conditions and to the international needs of businessmen.
I welcome the Bill because it addresses the matters to which I refer. The Bill will streamline the arbitration procedure by further restricting the ability of a party to prolong proceedings by seeking a recourse to the courts both during the hearing and after the award has been given. The Bill extends the autonomy of the parties in establishing an arbitration procedure suited to their needs. It clarifies many important technical issues of law previously unresolved and it provides a more user-friendly code which for the first time makes arbitration both accessible and understandable.
The Bill would also bring the laws of England and Wales closer to the laws of those countries, including Scotland, which have adopted the United Nations model law on arbitration. The Bill deals with a form of dispute resolution founded on the agreement of those concerned. That the agreement itself should form the main basis of the general principles of any statutory framework has been recognised by the draftsman. It is the basis, after all, of the United Nations model law. However, like most general principles, that concept—the so-called party autonomy or contractual, as contrasted with the juridical, theory of arbitration—is easier to state in the abstract than to apply to specific legislation.
In my view, the Bill in general well states the party autonomy concept in specific legislative terms without going too far. I am pleased to note that in the Bill before your Lordships today Clause 34(l) now reads:
"It shall be for the tribunal to decide all procedural and evidential matters",
albeit that that is qualified by the words,
"subject to the right of the parties to agree any matter"
whatever that may mean in practice. I believe that tribunals should he in charge in these matters and not the parties as seemed to he contemplated in an earlier draft of the subsection.
I like the tenor of Clause 5 headed "Agreements to be in writing", which seeks in effect to expand the usual meaning of the phrase "in writing" and the definition of arbitration agreements in Clause 6. I suspect, however, that the exact wording of those clauses—and, indeed, of others in the Bill—will be considered in detail at later stages, but not in too much detail because, as many noble Lords have said, the drafting is impeccable.
As I understand it, an agreement is in writing if it is inter alia evidenced in writing, which includes it being recorded by any means. Would a tape recording of a meeting between the parties, recorded by one party with the acquiescence of but without the formal authority of the other or others, during which it was orally agreed to include an arbitration clause in common form, be a sufficient agreement in writing? Would Clause 5(4) bite? Would the word "submit" or a phrase something like "submit any dispute to arbitration" have to be uttered to fall within Clause 6? I wonder.
I also like the substitution of the phrase "is obviously wrong" in Clause 69(3)(c) which deals with an appeal on point of law for the phrase,

781
"has in all probability reached the wrong conclusion on the question of law",
contained in the previous draft. If the contractual theory of arbitration is to be substantially followed, any right to appeal to the court should indeed be subject to robust restriction.
Turning away from the specifics of the Bill, I should like to see arbitration become far more widespread as a means of dispute resolution. Although I have no direct experience of arbitration, I understand that it is widely adopted only in relation to building contracts, maritime matters and certain other rather specialised contractual arrangements. In my experience, it is not adopted in England and Wales in the fields of intellectual property, insolvency, or for general company or commercial disputes in relation to warranties and indemnities given in connection with the sale and purchase of shares in companies.
When I was in practice in the company, commercial and intellectual property fields, I must confess that I tended to advise clients not to include an arbitration clause in their contracts. I feared that any time and money spent on pursuing arbitration would more likely than not be a waste of time and money because the party against whom a tribunal found would only appeal to the court, so one might as well start with the court.
I believe that that perception of arbitration by many lawyers, somewhat misconceived as it is already, would he much less tenable if this Bill became law substantially as drafted. If commercial lawyers in particular recognised the undoubted merits of arbitration as an option—an option that I hope will be enhanced by the passage of the Bill into law—perhaps they will more frequently draw their clients' attention to arbitration as a potentially quicker and cheaper private route to commercial dispute resolution than that afforded by litigation.
If arbitration clauses were more widely included in contracts or if arbitration agreements were more widely entered into when a dispute arises, surely much of the pressure on the commercial court in particular could be released and one might even see more win/win resolutions in commercial disputes effected in private behind closed doors rather than the inevitable win/lose resolution of disputes fought out in open court. As I said, I welcome the Bill and give it my strong general support.
8.27 p.m.
Lord Mustill: My Lords, in offering a hearty welcome to the Bill, I will not occupy time by repeating what has already been said so cogently by the noble and learned Lord the Minister and the noble Lords who have followed. I will simply emphasise two points, add two acknowledgments and make one disclaimer.
The first point is that England must have a new Arbitration Act. Literally for centuries the arbitration statutes of England and Wales led the world. Paradoxically, one of their strengths was their incompleteness, which left room for the development of flexible and diverse procedures, and allowed the judges
782
to respond to practical problems in the interstices of the Acts. So far so good, but as with all judge-made law you need skill and experience to find it, and to understand it when found. By now the judge-made law has become so voluminous as to be almost impenetrable to anyone except the specialist English lawyer. That is splendid for the authors of textbooks, but not for anyone else. English arbitration law is, I believe, basically sound, but it needs to be made accessible to its users, including its very substantial foreign client base. That can be done only by a complete springclean in the shape of a comprehensive new Act.
There is another reason why we must have a new Act. Throughout the long debates on the development of the UNCITRAL model law, at which I had the honour to be one of those speaking for the United Kingdom and to which my noble and learned friend Lord Wilberforce added his unique authority, it was the consistent stance of the United Kingdom that the project was worthy of full support. That view was honestly held and remains so today. For countries with no established and elaborated fund of arbitration law and practice, the model law offers an excellent means of obtaining a ready-made and internationally recognised partial code of arbitration law. But for reasons unnecessary now to describe, the departmental advisory committee felt that it was not appropriate for the UK, and recommended that there should not be a simple enactment of the model law for England and Wales, but that instead there should be a comprehensive new statute, reflecting the existing law of England, but nevertheless following as closely as possible the shape and language of the model law.
That proposal, put forward seven years ago, was intended as a package, but for rather a long time it seemed that only half of the package would be adopted, and that the UK, having supported the model law publicly, would neither enact it nor put anything in its place. To some foreign observers that seemed, if not an example of perfide Albion, at least a display of the Luddite tendency which critics have liked to attribute to our arbitration law. That could not be allowed to continue, and, more importantly, this country simply could not afford to leave its statute law in a condition which was acknowledged to be out of date and which was rapidly being overtaken by new laws in other countries.
Happily we are, I hope, well on the way towards a new Act of the kind contemplated by the departmental committee. That leads to my second point; namely, that we must have this Arbitration Act. It is a quite outstanding piece of draftsmanship, and an outstanding work of scholarship. True, it is long, but it is ambitious and all-embracing, in marked contrast to the meagre and inadequate legislation which it is designed to supplant: and also in contrast with the model law which, for all its merits, covers only some of the legal aspects of arbitration. It is not surprising that the Bill is more elaborate than both.
The Bill combines thoroughness and accuracy in all its contents, with remarkable felicity and clarity of expression. For the first time, a user or potential user, whether in England or abroad, will be able to take up the statute and find what he needs to know about the

783
structures and methods of English arbitration law. Anyone familiar with the model law will, I believe, be completely at home with the new text.
Moreover, the Bill is the fruit of what must be an unprecedented degree of public consultation, at least in the field of international commercial law. It is a consultation which has extended far beyond our geographical boundaries. I would respectfully congratulate the Minister and his department on having enterprised and carried through that onerous task. After that consultation, we must now forge ahead. That is not to say that I agree with everything in the Bill. I do not, but will rest content to follow what I believe to be the majority opinions of those who really matter; namely, the users.
I earnestly hope that any noble Lords who may have substantial rather than technical reservations on certain aspects of the Bill will feel able to submerge their own opinions in the interests of bringing this excellent work speedily to the statute book.
As a member of the Procedure Committee of this House, a keen proponent of the procedure by Special Bill Committee, I should think it inappropriate to express a personal opinion on the species of Committee to which the Bill should be remitted, beyond respectfully agreeing with previous speakers that the matter could profitably be given another look.
No doubt changes will be made consequent upon the debates in Committee, but I should be surprised and disappointed if there were any resulting amendments of major effect. At all events, I believe that the philosophy, shape, language, and substance of the Bill arc basically sound, and I hope that the House will give it a following wind of gale force strength.
It remains to add two names to those whose contributions have already been generously acknowledged. As the Minister has said, the Bill is the fruit of consecutive efforts by both the private and the public sector. They were not without their squalls and shoals, but those have been successfully navigated. The first stage of this distinctly unusual process would never have happened without the energy, hard work and financial support of Mr. Arthur Marriott and his working group, to whom tribute has already been paid. I should like in particular to stress the contribution of Mr. Basil Eckersley of counsel who produced for that group an impressive draft Bill. In the event, that draft did not go forward, but it encouraged all future workers by showing that the job proposed by the departmental committee could be done and done well.
Finally, I know that all those involved in the great efforts made after Mr. Marriott's group had handed over the baton would like the House to be aware of the invaluable assistance given to those already mentioned by Mr. Toby Landau of counsel, whose encyclopaedic grasp of this complex subject has excited the respect of all.
I add one disclaimer. I am proud to be the current president of the Chartered Institute of Arbitrators. It has a very large membership, and encompasses a wide variety of views, often vigorously expressed. I have no
784
mandate to speak for the institute. The views offered are my own. I warmly welcome the Bill, and congratulate all those concerned in it.
8.35 p.m.
Lord Ackner: My Lords, I too, like some of my retired judicial brothers, must start with a disclosure, although I do it with no diffidence at all, but with marked enthusiasm. I am engaged in a number of arbitrations. I shall be sitting as an arbitrator next week. I am involved in a new organisation called the City Disputes Panel which involves arbitration and evaluation, which is a new process, by a number of judicial figures, supported by experts from the City.
I am aware that the noble Lord, Lord Peston, has some ammunition saved up on the basis that that is a very attractive way of keeping the wolf from the door, but I should like to say that I enjoy it for other reasons. For 14 years, until I retired, I listened to no witnesses. All my work was then appellate work. There was only one exception during that 14-year period when I was sitting in the Court of Appeal (Criminal Division), chaired by a very senior judge. We had, rather inadvisedly, allowed in fresh evidence. As I listened to the unimpressive material then being provided by the witness, I received a note from the very experienced presiding judge, which read:
"Isn't it nice to hear a real live liar again?"
The speakers' list discloses that there could be provided a full complement for the Appellate Committee. We have, including myself, four Law Lords, present and past, and the benefit of the former Master of the Rolls. Therefore I could quite properly merely say, "I agree, and have nothing to add". Certainly as the judicial long stop on this list I should avoid causing your Lordships to stop long on my behalf, but I should like to make one or two short points.
My noble and learned friend Lord Wilberforce has referred to the readability of the Bill. That is terribly important, because there are many, many lay arbitrators in the domestic field in this country. That is particularly so with regard to the construction and the commercial real estate industry. For them to have available the relevant law, easily assimilable, is a tremendous advantage. Of course it will add to our invisible earnings by making this readable by those from overseas who had difficulty in the past. That is a great advantage, but that is not the sole advantage.
Clause 1 sets out the three principles. I suggest that the draftsman and those involved in the Bill have ensured that those three principles are realisable by the provisions they have made in the Bill. Unnecessary delay should be avoided, and they have set out a number of provisions which prevent technical points or delay through failure to comply with orders any longer holding up proceedings.
Expense, which they wish to keep down, can be achieved effectively in an arbitration only by speeding up the process and if more autonomy is given to the arbitrator. If there is a greater degree of interactivity between the parties, their legal advisers and the arbitrators the speeding up will occur. Short time limits

785
can be laid down and enforced. In an international commercial arbitration in which I was involved the parties agreed that they would each have only one day during which they would call or cross-examine the witnesses and make their speeches. Courteously, they allowed one day for the tribunal to ask its questions. We on the tribunal did not need to ask any questions but they needed longer time and they had the extra day which had been allocated to us. The whole hearing was over in three days.
I wish to add the following to the tributes which have been paid. First, the parliamentary draftsman, Mr. Geoffrey Sellers, has played an enormous part in making the Bill as accessible and intelligible as he has. There are two others involved; Professor Uff, QC, and Dr. Julian Lew were instrumental in arranging a highly successful conference recently when views in regard to the draft were discussed at length. A great deal was achieved.
Finally, I take the same view as that which has been put forward by my noble and learned friends Lord Donaldson and Lord Wilberforce; that, in view of the near unanimity on a Bill whose clarity has been praised to the rooftops, to allocate it to the Public Bill procedure would involve a great waste of time and may breathe into the discussion complications which should not exist and which would not occur if the matter were taken on the Floor of the House.
8.43 p.m.
Lord Peston: My Lords, I have the distinction, or lack of distinction, of being the only non-lawyer taking part in your Lordships' debate. Furthermore, I have no interests to declare. I say that with regret because, having listened to the noble and learned Lord, Lord Ackner, I gather that there is quite a decent income to be earned in this area of activity.
My heart sank when I was told that this was a DTI Bill and that it was my responsibility to deal with it for the Opposition. However, I was mistaken in my view. I have done a lot of work in preparation for the Bill and I have become fascinated by the subject of arbitration. I hasten to add that at this late hour I shall not cover everything that now exercises my mind on the subject. I shall return to many of the topics in which I have become interested when your Lordships sit as a Committee.
I have learnt a great deal in preparing for the debate. I must confess that until recently I had never heard of the Chartered Institute of Arbitrators. Since we have the current president and the former president with us tonight I must apologise to them and to their chartered institute. I did not know at all of the existence of what my advisers have referred to as the arbitral institutions or of something called the arbitral community. I can go further. I had never seen the word "arbitral" until the end of last year and tonight is the first time the word has ever passed my lips. I have to say that it is not a word I like and I am not sure that once we have finished the Bill I shall ever allow it to pass my lips again.
786
There is an economic side to all this; there is a large amount of high-powered mathematical economic analysis of principles of fair division, for example, as well as of the likely outcome of different formal arbitration procedures. Unhappily, I know of little empirical research by economist lawyers or others on actual arbitration perhaps because the relevant data are not easily available or not in the public domain.
I take most seriously the point made by the noble and learned Lord, Lord Roskill, on confidentiality. I shall reflect on it. More generally, I favour openness as a principle here and elsewhere. However we sit as a Committee, I hope that we can return to that matter. I agree, and I said, "Hear, hear", when it was remarked by the noble and learned Lord, Lord Donaldson, that the Bill is a model of clarity. I and other noble Lords approve of that. I am also a trifle worried because from many years' experience I have learnt that whenever something seems to be clear beyond doubt I should pause and wonder whether I have really understood what I have read.
Perhaps I may give an example. Clause 24 refers to the power of the court to remove the arbitrator. Subsection (1)(a) refers to the ground,
"that circumstances exist that give rise to justifiable doubts as to his impartiality",
paragraph (b) to the ground,
"that he does not possess the qualifications required by the arbitration agreement",
and paragraph (c) to the ground,
"that he is physically or mentally incapable of conducting the proceedings".
It is curious that the statement that the tribunal shall act fairly and impartially comes later in the Bill. It is odd that the requirement appears later than the conditions under which one makes use of the requirement. As a layman, I am concerned by the fact that, for example, the word "impartially" is not defined in the Bill.
The noble Lord, Lord Lester, referred to independence which, as he says, is not mentioned in the Bill. As a layman, it seems to me that what matters is impartiality, which lies at the heart of the Bill. I would have argued to the noble Lord, Lord Lester, that independence is logically a possible means to that end of impartiality but I cannot see it as an end in its own right. However, I have learnt from experience of many other Bills in your Lordships' House that the legal community uses language in its own peculiar way. Therefore, there may be some meaning as to what the noble Lord, Lord Lester, said about independence and our need to clarify what is meant by "impartiality". I say that in preparation for making a more general remark about how we will handle the Committee stage of the Bill in your Lordships' House. Until tonight I was unaware that there was any objection to our proceeding by way of a Public Bill Committee. As someone who would expect to sit on that Committee, it had not occurred to me that it would lead to delay. Quite the contrary; I had thought that it would operate expeditiously and quickly. Speaking as a busy person who must also earn his living, I would regard that as an absolute prerequisite of how we carry on.

787
Given the distinction of the noble and learned Lords who have expressed doubts on the matter, however, I have become somewhat concerned. I believe that what the Minister proposes to put forward is right but perhaps we ought to follow what was said by the noble and learned Lord, Lord Wilberforce, and not necessarily make up our minds tonight. I do not know but my immediate response is to say that there is no problem. However, the thought of not going along the lines of the noble and learned Lord, Lord Wilberforce, in particular, would, to put it mildly, trouble me. Therefore, I shall listen with interest to the Minister's reply. I should add that the central issue is the point which everybody has made; namely, that we must get a move on and deal with the matter one way or another.
En passant, something which intrigues me is that I have discovered—several noble Lords have pointed this out—that a great deal of arbitration work is carried out by non-lawyers. Lawyers seem to be in the minority in the arbitration field. In rhe construction industry, which seems to be one of the main sources of work in that sphere, the majority of arbitrators are people like surveyors and architects. They are appointed by the president of the Royal Institution of Chartered Surveyors and other such organisations which carry out that kind of work. Therefore, we must not think of this Bill as being a bonanza for lawyers or as being entirely a matter for lawyers. In fact, as the Minister emphasised, we wish to see disputes resolved with a minimum of difficulty—I echo his words—and to see arbitration as a valid alternative to litigation. I would go further and say that we should see it as a preferred alternative to litigation. I take that to be very much at the heart of the Bill.
I dwell on that partly because of the views of the departmental advisory committee on arbitration law which has been referred to with approval by noble Lords. The members of that committee have been referred to as people of great distinction. I am sure they are. I do not wish to make any defamatory remarks about them either as individuals or jointly. But looking at the list of members I have before me, I am staggered to see that the majority are lawyers. There are other members whose provenance I do not know; therefore, they may also be lawyers. This is an area in which we all agree lawyers are not of the essence. And yet the department's advisory committee whose members helped to prepare the Bill contains a small minority of people who are not lawyers. I do not believe that that is right. When the Minister reappoints members to the committee, perhaps he will consider a broader range of people. I could recommend one or two intelligent, sensible economists whom he might wish to appoint to the committee.
I turn now to one or two points of detail. I am intrigued by and very interested in the clause of the Bill which deals with consumer arbitration agreements. Quite separate from that, my advice has been that within the county court there is something called small claims arbitration. Until recently, those claims were limited to £1,000 or less but I believe that that has now been raised to £3,000 or less.
788
I am sure that I am right to say that those county court arbitrations are exempt from the operation of the Bill. That is in Clause 94. I am very keen on small claims work. Therefore, it seems to me that we should remember that much of the small claims work is a model of how we should proceed more generally. When we sit as a Committee, I should like to look at Clause 89 which deals with consumer arbitration. As an economist and someone who believes that the consumer is paramount in everything, I am surprised to see that in the Bill the consumer is defined negatively as someone who is not a business and who is involved with goods of a type ordinarily supplied for private use or consumption. I wish to have that matter clarified.
I echo all the laudatory remarks made about the people who have helped with the Bill. I shall not repeat all the names. Many are people known to me; they are all first class. However, perhaps I may be my usual acid self and observe that the committee of the noble and learned Lord, Lord Mustill, reported in 1989. It seems to me that it has taken a long time between his committee telling us what to do and reaching the present situation. By any standards, seven years is a long time. I certainly wish to see this legislation reach the statute book in 1996. It would be dreadful if there was a drift from seven years to eight years before its enactment.
I believe that we should proceed expeditiously. There are some changes that we may wish to make in Committee but we do not wish to undermine the fundamental structure of the Bill. As I say, we wish to see the Bill speedily reach the statute book. All of those who take part in the proceedings on the Bill will take the matter seriously. But, speaking for the Official Opposition, I shall do nothing that would delay the Bill and prevent it becoming law during this Session of Parliament.
8.56 p.m.
Lord Fraser of Carmyllie: My Lords, I reflect somewhat ruefully that when I once had responsibility for the activities of some of the draftsmen, I can never recollect an occasion when the drafting of a Bill was approved of in such a magnificent form and which secured the approval of so many distinguished judges. Nevertheless, as the departmental Minister responsible for this Bill in your Lordships' House. I am delighted that there has been such a universal degree of approval for the fashion in which the Bill has been drafted. I am particularly grateful to the noble and learned Lord, Lord Ackner. A number of people were rightly complimented on their contributions, but it was good of the noble and learned Lord to mention the way in which parliamentary counsel finally drew the Bill together in such an acceptable form. I have no doubt that those who have contributed to the drafting will be particularly flattered that my noble friend Lord Hacking should go so far as to compare it with the great statutes, with which we are all familiar, of the 19th century.
The noble Lord, Lord Hacking, made a number of comments about some over-drafting. In July, a draft was put out for consultation. We made a number of changes subsequently in response to the points made then.

789
I am delighted that, having engaged in some study of this matter, the noble Lord, Lord Peston, who has singled himself out as being the only non-lawyer to contribute to the debate, has become so intrigued by it. It is an extremely important subject and the way that it is set out in the Bill lends itself to an appreciation of just what is at issue.
I shall try to deal with a number of the points raised but I hope that I shall be forgiven if I do not seek to answer them all. Clearly, a number of the points were raised as pointers or markers as to what noble Lords may wish to discuss during later stages of the Bill.
A very important point was raised early by the noble Lord, Lord Lester. He referred to the provisions dealing with statutory arbitrations and the obligations which we undoubtedly have under Article 6 of the European Convention which refers to a right to a hearing before an independent and impartial tribunal.
As the noble Lord noted, the Bill requires the tribunal here to be impartial but not, on the face of it, to be both independent and impartial. I shall briefly outline the thinking on that point before considering the case of statutory arbitrations.
The recommendation to include impartiality alone was made by the departmental advisory committee on arbitration law after careful consideration of the issue. It reached the conclusion that lack of independence, unless it gives rise to doubts about the impartiality of the arbitrator, is of no significance. Independence is a difficult concept to define precisely and there are considerable doubts as to its exact meaning. In countries such as the United States and Sweden, parties have used that vagueness to mount endless arguments on the point. Almost any connection, however remote, has been put forward to challenge the independence of the arbitrator.
Furthermore, in the small world of arbitration, it may he difficult to find arbitrators who have no connection with anyone else involved. Indeed, the parties may want an arbitrator who has close links with their industry for the knowledge and expertise that they can bring to bear on the dispute. It is undoubtedly correct to say that it is vital for the tribunal to be utterly impartial. If there is any suggestion that a connection of some kind exists between an arbitrator and a party which raises doubts on that point, then the requirement for impartiality will not be met.
I turn now to the more specific issue of statutory arbitrations. With respect, I would question whether Article 6 applies in all such cases. There are many cases where, although the provision for arbitration is set out in primary or secondary legislation, the state is not involved in settling the dispute. One example is arbitration under the Agricultural Tenancies Act and, indeed, there are many more. I would suggest that Article 6 may not be relevant in that respect. If, however, the dispute is between the Executive and a party, then I more clearly see the argument that Article 6 might apply. However, much will depend on the particular wording of the provision in question, which is what will normally govern the appointment.
790
The Bill is only applied to statutory arbitrations for certain purposes. I conclude then that there should not be a problem with the Bill itself. However, I was most grateful to the noble Lord for his courtesy in warning me of his intention to raise the point. Indeed, before we reach the Committee stage, the noble Lord may wish to expand on his thinking to me.
The noble and learned Lord, Lord Roskill, raised a point which was echoed by my noble friend Lord Byron, on the lack of provision within the Bill on confidentiality. I am aware of the Australian cases to which he made reference. I have to tell the noble and learned Lord, if he did not already know, that that is also a question which the advisory committee wrestled with at some length. The committee's advice ultimately was that the Bill should not attempt to codify the common law on such matters. We were content to accept that advice. Confidentiality—and, indeed, privacy—are highly complex issues. It would be difficult to get it right and all too easy to get it wrong. Rather than meeting our objective of improving arbitration as a method of resolving disputes, we would run the risk of creating new problems and adding to litigation.
While I would accept that it is desirable to give a statutory framework to the general principles which have developed on the matter and which have been upheld by the courts, the dangers of so doing are also significant. We would have to ensure that the provisions were comprehensive. The exceptions to the general requirement for confidentiality are numerous and partly open to question. I shall give your Lordships just two examples: arbitration awards become public in legal proceedings or abroad under the New York Convention; equally, there are important exceptions to privacy. I am convinced that the better way forward would be to leave it to the courts to develop the matter on a case-by-case basis, rather than run the risk of hindering the development of arbitration here by an inadequate statutory provision.
Perhaps I may deal with a number of other points raised during the debate. My noble friend Lord Noel-Buxton expressed his concern about the agreement in writing. I recognise that we have adopted a wide definition here. However, our object was to ensure, in what is essentially, as my noble friend correctly identified, a consensual matter, that there was sufficient to identify what the parties have agreed. We have no interest in importing the formalism which has sometimes arisen with requirements for writing.
My noble friend Lord Hacking raised the matter of the distinction between domestic and international matters. Perhaps I may point out to my noble friend that Clause 88 would provide the opportunity for that distinction to be removed, possibly along the lines that he suggested. However, as I am sure he is aware, I must remind my noble friend that there are a number of implications. Before taking such a step, we would intend to consult.
I turn now to a rather different point; namely, publication on the Internet. If the noble Lord, Lord Lester, is not aware of the fact, perhaps I may

791
advise him that the issue of electronic publishing of parliamentary material more generally is under active consideration, not only in your Lordships' House but also in another place. I am sure that the noble Lord will recognise that the broader policy issues are complex. However, they are being considered as a matter of urgency. Until such time as that work is complete, in our view it would not be appropriate to approach the matter in a piecemeal or ad hoc fashion.
As I have indicated, there seem to me to be a number of other points raised during the debate to which I could respond, but which are probably better left to a later stage. I only wish to conclude on the substance of the Second Reading debate by thanking your Lordships for the erudite contributions which have been made. It is a long and complex Bill, but I doubt whether—and certainly not in my time—such a complicated Bill has ever received such a warm welcome at the point of its introduction.
I should like briefly to deal with what should be the next stage—
Lord Donaldson of Lymington: My Lords, before the noble and learned Lord continues, perhaps I may ask him one question. If the Minister is giving consideration during the interim period between now and the Committee stage to including the word "independent", would he bear in mind the position in traditional English arbitration with one arbitrator appointed by each party and the two appointing an umpire? I believe that there may be problems in that respect.
Lord Fraser of Carmyllie: My Lords, I hope that I did not give any indication that I was inclined to move in the direction suggested by the noble Lord, Lord Lester. All I sought to address to him was where I took issue with his views on the application of Article 6 necessarily to all statutory arbitrations. I hope that I left it satisfactorily enough for the noble Lord on the basis that, if wishes to develop the argument further with me, it might be conveniently done between now and the next stage.
Lord Lester of Herne Hill: My Lords, I should, perhaps, make it quite clear that I was not advocating including the notion of independence for ordinary, private commercial arbitrations for the reasons given by the Minister with which I respectfully agree. However, the problem is that there are some kinds of compulsory arbitrations regarding the case law of the European Court of Justice—in milk quota cases, to take an obvious example—where, for one reason or another, the Government do not abide by the award, or something of that nature, and where the European Court has said that independence is different from impartiality, that there must be independence from the Executive and a binding effect given to the award. I am confident that we can deal with those problems. My only concern was that if on the face of the Bill there was a mismatch between European criteria and ours it might lead to trouble later. It was only to be reassured about that that I raised the issue in the first place.
Lord Fraser of Carmyllie: My Lords, I am grateful to the noble Lord for his further explanation of his
792
position. That was indeed what I understood were his concerns. One recognises clearly enough that where the Executive or government are involved there is that requirement in the jurisprudence of that court that there should be an independent tribunal. We may have to consider, either in Clause 1 or at some other point where we have to deal with that limited class of statutory tribunals, whether the word "independence" needs to he imported onto the face of the Bill. It is a complicated question and I do not think I can offer a conclusive answer at the moment.
I was going to deal with the next stage. The noble and learned Lord, Lord Donaldson, expressed his concern when he said that he did not wish there now to be—if I have noted his words correctly—a maelstrom of consultation, given the long period of gestation that this work has already been subjected to. I am obviously open to further observations from your Lordships, but I should like to move my Motion this evening, not least because it is a procedure that has been recommended to your Lordships by the Procedure Committee indicating it should be used for Bills other than Law Commission Bills. It was one that the usual channels had identified as being a suitable candidate for the procedure. I would hope the procedure would provide an opportunity for careful, informed scrutiny in essentially a non-adversarial forum. The contributions this evening seem to me to indicate that that is certainly possible. It does not follow from committing it to this procedure that there necessarily has to be—nor indeed can there be—an unlimited period for the taking of evidence. What I would propose is to move my Motion unless I receive a clear indication from the House that that would not be acceptable. I suggest that in the course of the next week we might consider in an informal way whether what I have proposed is desirable and whether there is a sufficient restriction that can be put on the proceedings of the committee to make it acceptable to one and all.
What I am anxious to avoid is that if I do not move my Motion now that might mean that on the face of it we are committing this Bill to a Committee stage on the Floor of the House. I would certainly wish to avoid that. There may be a third option that is available to us, but if your Lordships will accept my undertaking that we will engage in informal discussions with all those who have an interest in this, having moved the Second Reading that would be the step I propose to take.
On Question, Bill read a second time.
Lord Fraser of Carmyllie: My Lords, I beg to move that the Bill be committed to a Special Public Bill Committee.
Moved, That the Bill be committed to a Special Public Bill Committee.—(Lord Fraser of Carmyllie.)
Lord Peston: My Lords, before we proceed I was rather hoping that several noble and learned Lords would get up and at least utter a response to the Minister as to whether what he was saying was acceptable to them because, as I said, I certainly would not wish to

793
act in a way that they felt was wholly unacceptable. I am hoping to encourage at least one of the noble and learned Lords to get up and say something.
Lord Ackner: My Lords, I rise merely to ask a question which demonstrates my well-known ignorance. How does one uncommit it once it is committed?
Lord Fraser of Carmyllie: My Lords, one simply puts down another Motion to uncommit it. I should emphasise that because an opportunity would be given to that committee to take evidence it is not bound so to do. I think there may be some misunderstanding about the extent to which the mastery of procedure resides within the committee. It is entirely open to it to determine what evidence it receives in what form and whether it receives oral evidence. However, it seems to me that the informal discussions that I have suggested to your Lordships as being appropriate would be the better occasion on which to work out exactly what would be suitable rather than try to engage in that discussion on the Floor of the House at this stage.
Lord Lester of Herne Hill: My Lords, I hope it would not be impertinent of me as a relative boy in this
794
world to say something in support of the attitude taken by the Minister. When the Special Public Bill Committee procedure was used for the private international law Bill under the expert chairmanship of the noble and learned Lord, Lord Brightman, there was controversy and evidence was taken, but it was dealt with in an expeditious way. It seems to me that there will be much less controversy with the present Bill, although one can never be sure of anything.
The great advantage of that procedure is that there would be a specialist committee, not composed only of lawyers and judges but nevertheless specialists. Provided it was skilfully chaired, as I am sure it would be, and provided that the proper safeguards were built into the procedure, I see no reason why it could not be—in the words of somebody else—dealt with on oiled castors, speedily, with more expert consideration than might be possible on the Floor of the House. My view is that that seems a sensible way forward.
On Question, Motion agreed to, and Bill committed to a Special Public Bill Committee.
House adjourned at a quarter-past nine o'clock.