Lords Sitting of 29 January 1996

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

The Lord Archbishop of York
David Michael, Lord Archbishop of York—Was (in the usual manner) introduced between the Lord Bishop of Chelmsford and the Lord Bishop of Southwark.

European Court of Human Rights
2.42 p.m.
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
Whether they intend to withdraw their recognition of the European Court of Human Rights.
Lord Chesham: My Lords, we have renewed for the usual five years our acceptance of the right of individual petition and the compulsory jurisdiction of the European Court of Human Rights. We are unhappy with some recent Strasbourg judgments, and are initiating discussions in the Council of Europe to improve the way the convention system works.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for that moderately encouraging reply. Is he aware of the fact that many of us very much resent the operation of this so-called "Court" in altering the age of entitlement to free drugs in respect of a male section of our population? Is he further aware that most of us feel that that is the business of this country and of this Government and that interference of this kind by a so-called "Court" is quite intolerable?
Lord Chesham: My Lords, as the Prime Minister made clear in another place on 7th December, the Government are certainly unhappy with some Strasbourg rulings. We are initiating discussions with other members of the Council of Europe and representatives of this institution to improve the way in which the convention works.
Lord Campbell of Alloway: My Lords, may I ask my noble friend whether a special protocol which derogates from recognition of the distinction over all aspects of the conduct of our Armed Forces may be made, quite apart from the derogation to which my noble friend Lord Boyd-Carpenter referred?
Lord Chesham: My Lords, we are attempting to change certain aspects of the Court. Protocol 11, which will come into effect in a few years' time, will mean that the right of the individual to take a case to Strasbourg will no longer be optional. We have
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accepted that situation by ratifying that protocol, but it would be inconsistent not to accept that right in the intervening period.
Lord Richard: My Lords, I was a little surprised to hear the noble Lord, Lord Boyd-Carpenter, say that he was moderately satisfied with what the Government have said on this since I was about to congratulate the Government on doing what they have just done.
Lord Chesham: My Lords, I am grateful for that.
Lord Lester of Herne Hill: My Lords, perhaps I may add to those congratulations. As I am sure the noble Lord knows, successive governments since 1966 have renewed the right of petition. Although many of us have reservations about particular judgments made by the European Court of Human Rights, especially in the "Death on the Rock" case, which seemed a most unfortunate judgment, is the Minister aware that there is nevertheless widespread support throughout the country for the right of access to the European Court, especially given that we do not have a British Bill of Rights which could be interpreted and applied by British judges? I wonder whether the noble Lord appreciates that the case referred to by the noble Lord, Lord Boyd-Carpenter, had nothing to do with the European Court of Human Rights; it was the European Court of Justice which dealt with prescription charges.
Lord Chesham: My Lords, I thank the noble Lord for his comments. We have no quarrel with the European Convention on Human Rights. Flawed judgments by the Court were not sufficient to justify the very serious step of withdrawing.
Lord Renton: My Lords, bearing in mind that, as my noble friend just said, we have no quarrel with the European Convention on Human Rights, which we signed 40 years ago, would it not be better and achieve greater justice in cases where justice is needed if jurisdiction were given to our own courts to hear cases under the convention?
Lord Chesham: My Lords, I do not see that that is relevant to this Question.
Lord Bruce of Donington: My Lords, does the noble Lord agree that it would be unfortunate if there were to be any confusion between the European Court of Human Rights and the European Court of Justice? Does he accept that many of us who might conceivably approve in normal circumstances of the European Court of Human Rights have strong reservations about the European Court of Justice?
Lord Chesham: My Lords, that is slightly wide of the Question, but I am well aware of the noble Lord's strong reservations.
Lord Beloff: My Lords, does my noble friend agree that we should get back to the flavour of the month, which is education? What is his comment upon the fact that, owing to a mistaken and foolish judgment of the Strasbourg Court of Human Rights, corporal punishment in our schools was abolished, with the result that we have all seen?
Lord Chesham: My Lords, I think that we are going even wider of the Question on the Order Paper.
Lord Cledwyn of Penrhos: My Lords, the noble Lord referred to some change which he expects will take place in a few years time. What change does he expect and how many years will it take?
Lord Chesham: My Lords, the changes which are being negotiated at the moment are designed to improve fairness and ensure that all factors are taken into account. The discussions will concentrate on fact finding; procedures for the new full-time court to be set up in a few years under Protocol 11; the replacement of the present part-time commission and court; and ensuring the quality of judges In the new court and procedures for their selection. It will come into effect one year after ratification by all countries in the Council of Europe, which will probably be 1998.
Baroness Seear: My Lords, does the noble Lord recall that on more than one occasion your Lordships' House has agreed to the incorporation of the European Convention into British law? Does he agree that it will be a good thing to have the other place follow the House of Lords in this matter?
Lord Chesham: My Lords, I can hardly comment upon what should happen in the other place.
Lord Stoddart of Swindon: My Lords, will the noble Lord make it absolutely clear, because he did not do so in answer to the noble Lord, Lord Lester, that the case referred to by his noble friend Lord Boyd-Carpenter did not relate to the Court of Human Rights but was a case brought and declared upon by the European Court of Justice, arising from a European directive made in 1979?
Lord Chesham: My Lords, I can confirm what the noble Lord just said.
Earl Russell: My Lords, will the Minister confirm that any court whose judgments were all acceptable to this country might risk being construed in other places as lacking in impartiality?
Lord Chesham: My Lords, I believe that I can agree with the noble Lord, but, on the other hand, if one has decisions with which one is not happy one is entitled to say so.

International Development Association
2.52 p.m.
Lord Redesdale Lord Redesdale asked Her Majesty's Government:
What are their intentions concerning the replenishment of the International Development Association (IDA).
Lord Chesham: My Lords, we are working closely with other donors to ensure an early and satisfactory outcome to the negotiations on the 11th replenishment of the International Development Association.
Lord Redesdale: My Lords, I thank the noble Lord for that reply. Will he give an assurance that there will be no pro rata reduction in Britain's commitment to IDA 10 in line with the cut in America's contributions?
Lord Chesham: My Lords, I can confirm that there will be no cut in the British contribution to IDA 10. What we are now discussing is IDA 11 and the interim arrangements to be made until we find out what is coming from the USA in particular.
Lord Rea: My Lords, will the noble Lord confirm that if the cuts that the USA has made in IDA 10 were to be applied to IDA 11, the world would be 6 billion dollars short compared to what it has had in the past? Would that not be a disaster, considering the additional needs of credit-hungry countries from the former Soviet Union and Yugoslavia, not to mention the on-going needs in sub-Saharan Africa? Will the Government assure us that, as the noble Lord hinted, urgent discussions will be arranged with other countries, especially other members of the EU, to ensure that that dangerous shortfall does not occur?
Lord Chesham: My Lords, we cannot at this stage comment upon what the USA's commitments will he. President Clinton has expressed strong backing for IDA, but funding is caught up in the current impasse in the fiscal 1996 budget negotiations. However, other donors, the UK included, are working to ensure that those difficulties do not disrupt IDA's operations which are vital to so many of the poorest countries.

Coal Imports and Exports: Statistics
2.55 p.m.
Lord Ezra Lord Ezra asked Her Majesty's Government:
What were the imports and exports of coal in 1995, and what are the prospects for 1996.
The Minister of State, Department of Trade and Industry (Lord Fraser of Carmyllie): My Lords, firm figures for 1995 are not yet available. Provisional figures for the first 11 months of 1995 show imports of coal as 13.2 million tonnes and coal exports as 698,000 tonnes. The future prospects for coal imports and exports are matters for coal consumers and coal producers respectively.
Lord Ezra: My Lords, is the Minister aware that about half the tonnage of imports to which he referred,

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and an additional 2 million tonnes of exports, could have been provided from coal, of which ample reserves exist in this country but for which the capacity is lacking? Is he aware that had that capacity been available and had those actions been taken, it would have benefited the balance of payments by some £220 million last year, and have provided employment for an extra 2,500 mine workers? In those circumstances, is it not regrettable that in the run-up to privatisation the capacity of the coal industry between 1993 and 1994 was run down to such an extent? Had an extra 10 million tonnes of capacity been retained, the benefits to which I have referred would have been achieved.
Lord Fraser of Carmyllie: My Lords, no, I cannot accept that, unless what was to be provided within the UK was going to be achieved at an unacceptable level of subsidy. What is important in the UK is coal which, as the noble Lord well knows, is particularly important in the production or generation of electricity. If that were to be the case and prices were to go up or there was subsidy, there would be, directly or indirectly, a significant effect on consumers. What I do welcome is that, while clearly a number of adjustments have had to be made, the provisional figures for deep-mined production for 1995 show that there has been a 10 per cent. increase compared to 1994. Total coal production is expected to have increased by over some 7 per cent. in the same period.
Lord Stoddart of Swindon: My Lords, is the Minister aware that there is considerable concern, particularly among old people, at the statement made today by the National Grid that it could not guarantee to meet maximum demand this evening and in future cold weather? Is he further aware that one of the reasons for that is the closing down of coal-powered stations and their replacement with gas-fired stations which have interruptible supply contracts? Will the Government do something about that? Will they insist that the regulator ensures that the electricity authorities do the job which the Government said they would do when they were privatised, instead of doing a far worse job than was done when the industry was nationalised?
Lord Fraser of Carmyllie: My Lords, I congratulate the noble Lord on his ingenuity in moving from a Question on the import and export of coal to the generation of electricity. Neither the regulator nor the Government can do anything about the present particularly cold weather. It is reasonable for those who are responsible to give some indication of the levels of difficulty that might be experienced were the cold snap to continue. It is worthy of note that there has been no cut off of power in this recent cold snap, or the previous one, attributable to the lack of generating capacity.
Lord Stoddart of Swindon: My Lords, is the Minister aware that I was not asking him to play God. I know that God decrees what the weather will be. I ask the Minister to ensure that the electricity authorities
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have sufficient supplies to guarantee production when the weather is cold. That is all I am asking him to do—to meet demand.
Lord Fraser of Carmyllie: My Lords, it did seem that the noble Lord was asking the Government to play God. Difficult issues of balance between the total amount of generating capacity that is required and demand have to be set in the context of the weather, which is unpredictable. As I have said, there are difficult questions of balance to be achieved unless consumers, both domestic and industrial, pay for a large amount of generating capacity against an eventuality that may occur only infrequently. It is for those responsible to determine whether they have achieved the right balance. Notwithstanding the present exceptionally cold weather, it would appear that they have achieved the right balance.
Lord Monkswell: My Lords, bearing in mind that those who import coal as opposed to using indigenous coal receive a cost benefit, and bearing in mind that the mineworkers who would otherwise produce the coal fall as a charge on the public revenue as a result of unemployment benefits and loss of tax receipts, will the Government provide us with figures for the savings to the private companies on importing coal and the cost to the Exchequer of paying people to be unemployed?
Lord Fraser of Carmyllie: My Lords, no. In a roundabout way the noble Lord says that he wishes to see the reintroduction of massive subsidies. I venture to suggest that he stands somewhat alone in that position. If coal imports were revealed to he massively subsidised, there might be cause for concern. So far as we are aware, there is no convincing evidence that the imports from the main exporting market economies—that is the United States, Australia and parts of South America—are heavily subsidised.
Lord Dubs: My Lords, is not the problem that the decline in the British coal industry has meant that British electricity generation has become increasingly dependent on gas? Will the Minister confirm that Transco, the distribution company of British Gas, has announced that it may not be able to meet all the needs of the power stations, which has led to concerns that there might be power cuts in parts of the country today? Have we not reached the situation in which our energy policy is in a bit of a mess?
Lord Fraser of Carmyllie: My Lords, no. The noble Lord is at risk of getting cause and effect tangled up. There has been a move to gas because it is an extremely efficient fuel; it is environmentally friendly; and it allows for electricity to be generated at a lower price to the consumer. I would have thought that that was to be welcomed. I have already indicated my view on the balance that must be struck by those responsible for generating during these exceptionally cold snaps.
Lord Marsh: My Lords, does the Minister accept that we have had more than 30 years' experience of seeking to change the market for coal by keeping pits

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open with massive subsidies and that the net result has been no recognisable economic or social benefit whatever?
Lord Fraser of Carmyllie: My Lords, the noble Lord made the point better than I could.
Lord Ezra: My Lords, the Minister misconstrued the purpose of my Question. It is implied that, had extra capacity been retained in 1993–94, that would have had to be subsidised. Is the Minister aware that I have had detailed discussions with the Confederation of United Kingdom Coal Producers? Is he further aware that they are confident that prices of world coal have risen while the price of UK coal has come down and that, had there been more capacity, they could have bitten deeply into the imports? That was the point that I was making. I was in no way suggesting the reintroduction of subsidy.
Lord Fraser of Carmyllie: My Lords, the noble Lord includes in his further supplementary question the assumption that world coal prices will increase. He will be aware of the independent report that was provided in 1993 at the time of our coal review. It indicated that if world prices for coal increased there might be a greater opportunity for greater production in the United Kingdom. As the noble Lord is well aware, since 1993, sadly, that has not been the case.

HGV Drivers: Vision Tests
3.4 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
Whether British drivers of heavy goods vehicles will, after 1st July, have to take vision tests, without their spectacles or contact lenses, when applying to renew their driving licences.
The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): My Lords, drivers of large goods and passenger-carrying vehicles are already required to pass a vision test in one eye, without corrective lenses, before obtaining or renewing their licence. From 1st July they will have to meet the standard in both eyes.
Lord Campbell of Croy: My Lords, I thank my noble friend for that Answer. It seems that the press report on 19th January overstated the likely effects of the EC directive and his reply should help to dispel misapprehensions. While safety must be paramount, would not a preferable regulation require reliable reserve spectacles to be instantly to hand in drivers' cabs since the danger foreseen arises from a sudden collapse of the spectacle or contact lenses being worn? Can we afford to lose the services of drivers with long and good records who can see perfectly with glasses?
Viscount Goschen: My Lords, my noble friend makes the point that important road safety issues are
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involved. The real question is what happens in the event of an accident if a driver's glasses are dislodged? It might not always be possible to reach for the second pair in time. The directive is designed so that in the event of glasses being knocked off during an accident, or whatever, the driver will be able to bring the vehicle satisfactorily to a halt. That is the important consideration and I believe that these new requirements are the best way to achieve that.
Lord Clinton-Davis: My Lords, does the Minister agree that as regards the use of contact lenses it might be difficult to insert a new set if the originals are lost or misplaced as a result of an accident? Will the Minister indicate the basis on which the Government have apparently calculated that a small number of drivers, about 0.2 per cent., are likely to he affected by the new standards? Furthermore, is he able to suggest any method of compensation which might apply to drivers, in particular those who have been working for a long time, who have little opportunity of alternative employment if they are disqualified as a result of what, essentially, is a sensible new code?
Viscount Goschen: My Lords, I welcome the noble Lord's support of the new requirement and we agree that there are important road safety issues. Compensation will be determinant on the terms of the individual driver's contract with his employer. The noble Lord was right about contact lenses. Trying to put on the spare pair of glasses after a lens has fallen out might make the situation worse. It is true that our estimate is that some 3,000 drivers—approximately 0.2 per cent. of the total—could be affected by the directive. That is based on our existing information and records.
Lord Clinton-Davis: My Lords, the Minister has not indicated how that information has been collated. He has dealt in part with the question of the employed driver but what about the self-employed driver who may have no such compensation available and whose business may be totally ruined?
Viscount Goschen: My Lords, as with other health failings, if a driver falls below the required health standard it must be true that he must no longer be at the wheel of a large vehicle. We all know that substantial casualties can result from a heavy goods vehicle that is incorrectly driven. I can only reiterate that our estimate is based on the records that we hold and on advice and information from the Chief Medical Adviser.
Lord Monson: My Lords, does the Minister agree that the EC directive in question breaches the principle of subsidiarity, bearing in mind that in the United States, Canada and Australia different states and different provinces have different road traffic laws and regulations? Does not that demonstrate that the zealots

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in Brussels and Strasbourg are hell bent on creating not just a federal Europe, which would be bad enough, but a tightly centralised, standardised, unitary Europe?
Viscount Goschen: My Lords, the noble Lord completely overstates the case. We believe that this is an extremely sensible measure which will result in better road safety.

Jobseeker's Allowance Regulations 1996
3.9 p.m.
The Minister of State, Department of Social Security The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish) rose to move, That the draft regulations laid before the House on 19th December be approved [5th Report from the Joint Committee].
The noble Lord said: My Lords, I am also speaking to the four other regulations on the Order Paper. The jobseeker's allowance is a major step forward in creating a labour market in Britain which generates jobs and in helping unemployed people to get those jobs. It is the next stage in the Government's strategy whose success is now clear for all to see.
Unemployment has now fallen for 28 successive months. The Government's economic policy has created an exceptionally favourable climate for the start of new businesses and inward investment into the UK. The fall in unemployment is set against a background where this country now has lower unemployment and more people in work than any other major European Union country. Employment has grown substantially over recent years. New vacancies continue to be notified to Jobcentres at record levels and the number of people getting jobs through the help of Employment Service staff is also at record levels. We are determined to reinforce that success.
The benefit system has a vital role to play in helping unemployed people into jobs. It should help and motivate every jobseeker. The current system of unemployment benefit and income support does not always do so. It contains disincentives to work. It is complex, out of date and confusing for claimants. It fails to target help on those who need it most. Above all, it was designed to support people while they are out of work. Unemployed people want help to get back to work. That is what the jobseeker's allowance will provide. That is what the regulations are about.
In our White Paper in October 1994 the Government set out the three main aims for the new, modern benefit. First, we aim to improve the operation of the labour market by helping people in their search for work, while ensuring that they understand and fulfil the conditions for the receipt of benefit. JSA emphasises the responsibilities of unemployed people to take every advantage of the opportunities open to them to get back to work.
Secondly, we aim to secure better value for money for the taxpayer by a streamlined administration, closer targeting on those who need financial support and a regime which more effectively helps them find jobs.
Thirdly, we aim to improve the service we give to unemployed people through a clearer, coherent benefit structure and a better integration of the payment of benefits with the delivery of help and advice to find work. We want to give jobseekers the most effective and up-to-date support that we can devise. Through the new labour market computer system, employment advisers will have unprecedented access to information on vacancies and other opportunities which they will be able to match against the needs of the individual jobseeker.
In achieving those aims with the implementation of JSA in October this year, we will make jobs—the pursuit of jobs and the winning of jobs—the focus of our efforts on behalf of unemployed people.
We debated at length, in this House and in another place, our proposals during the passage of the Jobseekers Bill last year. The regulations provide a further level of detail, setting out the rules which will apply when jobseeker's allowance is introduced in October. In view of those earlier debates, and of the extensive nature of the regulations, I thought it best to cover matters in a general introductory speech. I shall, of course, listen most carefully to comments made during the debate and will, as far as I possibly can, endeavour to answer the points raised in my response.
Part II of the regulations deals with the labour market tests which are at the heart of the allowance and upon which we spent many hours in debate. They are designed to ensure that all jobseekers are open to the full range of job opportunities and are making all reasonable efforts to find work. There will be no change in JSA to the basic availability condition that people must be willing and able to take up immediately any offer of employment. That has been a requirement for unemployment benefits for a long time. To allow jobseekers to adapt to the flexible nature of the modern labour market, Regulation 7 will permit them to agree an individual pattern of availability across the week. That easement is balanced by a new requirement that jobseekers should normally be available for employment of at least 40 hours a week.
Regulation 13 makes particular provision for people who wish to restrict their availability on religious or conscientious grounds, for those with caring responsibilities for children or sick or elderly relatives, and for people with disabilities. In line with the commitments that we made during the passage of the Bill, disabled people may restrict their availability in any way, provided that the restrictions are reasonable in the light of their physical or mental condition.
Jobseekers must actively seek employment in every week that they are unemployed. We are making no significant departures from the approach adopted since the benefit reforms of the 1980s. Indeed, that has now become accepted as a key responsibility of jobseekers. But in searching for work, jobseekers must adopt a flexible approach. So Regulation 18 broadens the range of steps expected of a jobseeker so that they include actions to improve prospects of employment, such as drawing up a CV or seeking specialist advice. At the

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same time, we are ensuring that jobseekers who deliberately undermine their chances of finding work may be penalised.
As a new condition of entitlement, claimants must enter into a jobseeker's agreement with the Employment Service. Each agreement will be individually tailored, recording how each jobseeker will be available for work and the best route for him or her to find a job. The agreement will ensure that jobseekers have information about the expert advice and services available at Jobcentres. Trials of a prototype of the agreement have already been conducted in some Jobcentres, with very encouraging reactions from jobseekers. As some noble Lords will recall, many of the provisions relating to the agreement, and the access to independent adjudication for the resolution of disputes, lie in the Act itself. The regulations before the House today cover a number of more minor details such as the prescribed contents and the circumstances relevant for the backdating of an agreement.
The vast majority of unemployed people make every effort to find work, but we need effective measures against the minority who do not. Social security law has always included penalties for those who break the rules. It is wholly reasonable that those who pay taxes should not subsidise those who make little attempt to get a job.
The sanctions regime in JSA is detailed in Part V of the regulations. These will make it crystal clear that those who do not meet their obligations will suffer a loss of benefit. The Act sets out those obligations and the sanctions which may be imposed. However, we also recognise that sanctions should not be imposed where a jobseeker has good cause for his actions in, for example, refusing the offer of a job or a place on an employment course. Regulations 72 and 73 set out the circumstances that we expect independent adjudication officers to consider and the circumstances in which a jobseeker is to be regarded as having good cause.
A balance also has to be struck between protecting the taxpayer and protecting the vulnerable from loss of benefit which may subject them to unreasonable hardship. Part IX covers the regulations on how we shall protect those most at risk of hardship, who are listed in Regulation 140. Claimants with children, those who are sick, disabled or pregnant—or who have partners in that position—and those with caring responsibilities will at any time be able to receive reduced payments if they would otherwise suffer hardship. Regulations 141 to 144 detail the circumstances in which payments may be made, which include protection against delays in the system of deciding entitlement to benefit.
The Government guarantee every young person under the age of 18 who wants one a suitable youth training place. We are spending £676 million on youth training this year in England alone. There is no reason why young people need to be unemployed.
The Government's guarantee to 16 and 17 year-olds removes the need for general access to benefits. Indeed, we do not wish to encourage dependency on benefit at such an early age. The current approach in income support will, therefore, be followed in JSA. We
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recognise, of course, that there are circumstances when young people do need to claim benefits. We provide for them and will continue in JSA to do so. Part IV provides that young people in vulnerable groups—for example, those who have recently left local authority care—will be able to claim JSA for a period to allow them to overcome their temporary difficulties. Young people who are waiting for a suitable youth training place will be able to claim JSA if they would otherwise suffer severe hardship.
We also aim to improve the help and service to young people. A specially tailored jobseeker's agreement will be introduced under Regulation 66. The agreement will reflect the Government's commitment to the importance of training for young people. It will build on a form completed at the Careers Service and will include details of the type of training and work the young person is seeking and the action agreed to achieve his goals. The vital role of the Careers Service will continue but now as part of a two-stop service; a young person need only have contact with the Careers Service and the Jobcentre to make a claim for JSA. He will no longer also have to attend the Benefits Agency.
The new allowance will provide financial help for unemployed people and their dependants according to their needs, and this will be paid as long as they need it. Those who have paid sufficient national insurance contributions will receive a personal rate, irrespective of their capital or their partner's earnings, for up to six months—the point by which the majority of jobseekers have left unemployment. The majority of unemployed people will, we expect, receive the income-based element of JSA. In bringing together contribution-based and income-based elements, we will provide a single coherent benefit for unemployed people. There will be an end to the confusion where unemployed people could be entitled to one or the other benefit, with different rules and handled by different agencies, or even to both benefits at the same time.
Much of the content of the regulations before the House today deals with the assessment of the amounts of benefit to which people are entitled: for instance Part VII deals with the applicable amounts, and Part VIII with the treatment of income, of capital or of earnings. In the majority of cases we have had the example of income support to follow. There will, however, be some significant improvements. For instance, we will provide new help for couples, enabling partners of JSA claimants to work up to 24 hours—not 16 as now—which will encourage partners to remain in or take part-time work. Couples will also be able to earn £10 without their allowance being affected, even if only one is working.
Many unemployed people get substantial occupational pensions from their previous employer. Pensions are already fully taken into account in income support and it is right, too, that larger occupational and personal pensions should reduce the amount of contribution-based benefit for people of any age. But the present limit is too severe. Regulation 81, therefore, removes the arbitrary age threshold and raises the amount of pension that can be paid without affecting benefit from £35 to £50 a week.
Throughout the passage of the Jobseekers Bill we emphasised that JSA should be seen as one of a far-reaching package of work incentive measures. The other sets of regulations before the House today complete the picture. The unemployment and poverty traps have been significantly alleviated over recent years. Only a tiny proportion of the working population would not be better off in work than remaining on out-of-work benefits. This imaginative package of regulations we have today addresses three big issues. II gives direct encouragement to unemployed people to undertake part-time work and to use that as a stepping stone to full-time work. It removes uncertainty at the point of moving into work, and it encourages employers to look more favourably on the long-term unemployed.
The back-to-work bonus is a clear demonstration of our resolve to remove disincentives within the benefit system. At present unemployed people who take part-time jobs can lose benefit almost pound for pound. Yet if they could keep their full benefit on top of their part-time earnings they would have little incentive to go on to full-time work. The back-to-work bonus squares this circle. It is a far more effective and better targeted measure than would be raising earnings disregards across the board.
Jobseekers and their partners who take small amounts of work while on benefit can build up entitlement to a lump sum bonus of up to —1,000. They can cash this in when they move off benefit into work. The bonus will be paid to people who move off JSA at pension age, and at the age of 60 to income support claimants who have participated in the scheme, so that the bonus will not be lost. Following commitments which I made, and which my honourable friends made in another place during the passage of the Bill, the regulations provide for extensive linking rules to protect the position of many people who leave JSA for incapacity benefit during long periods of sickness or disability. We expect to pay at least 150,000 bonuses each year once the scheme is up and running. This scheme will encourage people to stay in touch with the world of work while they are on benefit and to keep their skills up to date. It will give claimants a financial boost at a crucial time by helping them to meet the expenses connected with the move back to work.
Building on the incentives for the long-term unemployed already provided by programmes funded by the Department for Education and Employment, today's regulations also provide for a national insurance contribution holiday of up to 12 months for employers who employ someone who has been out of work for two years or more. This will encourage employers to take on long-term unemployed people. Some 130,000 people are likely to be helped in this scheme and it is worth some £50 million a year to employers in national insurance savings.
Finally, I commend to the House the amendments to housing benefit and council tax benefit regulations. These underpin the measures being introduced by my right honourable friend the Secretary of State for Social Security to enable housing and council tax benefits to run on for four weeks regardless of earnings for people who leave unemployment for work. The purpose of the measure is twofold. First, it enahles authorities to
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exchange information about housing benefit and council tax benefit details. Secondly, it ensures that local authorities give priority to dealing with claims from those who take advantage of the run-on. Any on-going entitlement to benefit will be established before the end of the run-on period so that there is no delay in the payment of housing benefit if an individual is entitled to it. In this way the claimant is protected from the sort of gap in income which currently causes concern and difficulties on returning to work. That fear can sometimes act as a deterrent to taking a job.
Before I sit down your Lordships should be aware that the Joint Committee on Statutory Instruments has drawn the special attention of the House to the JSA regulations. The fifth report has drawn attention to Regulation 150 where there are two printers' errors in the formulae and the committee has reported Regulation 152 as being defectively drafted to both Houses. The correct formulae are reproduced in a memorandum which was sent to the JCSI by the Department of Social Security and is attached as an annex to the fifth report. As both mistakes were as a result of printers' error we have undertaken to correct these errors in the version of the regulations published following approval of both Houses. Quite simply two numbers—in both cases a seven—have been printed in the final copy in the wrong place.
With regard to the defective drafting, it would appear that the gremlins which affected our regulations have also been busy in the JCSI report. The absence of the definition of the variable "N" for which Regulation 152 was reported as being defectively drafted is in fact missing from Regulation 151. It appears that both the committee and ourselves have suffered from the same printing gremlins. The committee pointed out that the meaning of "N" is reasonably clear but nevertheless should have been included. I wish to give an undertaking that this deficiency will be corrected by means of an amending instrument as soon as possible.
This is an extensive and far reaching package of legislation being debated today. I recall that at one stage someone urged me not to introduce secondary legislation and to incorporate everything on the face of the Bill as it passed through the House. I indicated that that would make the Bill a great deal bigger than it was. If one looks at the regulations before us today, that goes some way towards vindicating my position. As I said, this is an extensive and a far-reaching package. There is, however, one simple, common theme to all the regulations; it is the Government's commitment to offer every help, every encouragement and every incentive to unemployed people to find work as quickly as possible. We are already offering 1.5 million opportunities to unemployed people on government programmes and will continue that commitment next year. The Employment Service is already placing record numbers of people into jobs. We want to build on that achievement. The introduction of JSA will further that success and I commend the regulations to noble Lords.
Moved, That the draft regulations laid before the House on 19th December be approved [5th Report from the Joint Committees].—(Lord Mackay of Ardbrecknish.)
3.30 p.m.
Baroness Williams of Crosby: My Lords, Whenever I listen to the noble Lord, Lord Mackay of Ardbrecknish, I am persuaded by nearly everything he says; he is one of the most convincing speakers on the Government Front Bench. However, it is only after having spent hours reading the Act and the regulations that I find an extraordinary gulf between what the Minister says will be the effects of the regulations and the legislation on which they are based and what appears to be spelt out in the paper.
I ask for the indulgence of the Minister and noble Lords while I explore the detail of the regulations, which is of concern to myself and other noble Lords.
The Minister began by making a couple of Second Reading points and I hope that he will forgive me if I do the same. The first of those points is that unemployment is very much a function of the definition of unemployment. Noble Lords should be concerned that the legislation accepts that there may be decent, honourable men and women who are unemployed through no fault of their own. They should not be defined out of existence by governments of all colours in order to show that unemployment is falling. Unemployment has been redefined on many occasions and each definition has affected the statistics.
The next Second Reading point is that I totally accept the noble Lord's submission that the proper and responsible administration of public expenditure is the responsibility of noble Lords and of another place. That however is not our sole duty and obligation. It is our obligation to balance that responsibility against ensuring that each citizen enjoys as much liberty as is constant with his acceptance of the rule of law and the rights of other people. It is in regard to that second criterion that I am profoundly concerned about the Bill because it imposes a level of petty restrictions on individuals which goes far beyond the spirit of the concept of citizenship in this country.
The noble Lord, Lord Mackay, referred to my third objection; that secondary legislation is the vehicle for so much legislation that affects ordinary citizens in their daily lives. The noble Lord indicated that significant legislation has to be in a secondary legislation form; that is, regulations and not primary legislation. It is incumbent upon both Houses of Parliament to properly scrutinise and explore that legislation when it affects tens of thousands of our fellow citizens. With great respect, two-and-a-half hours on the Floor of the Upper House is not an adequate scrutiny of these significant regulations.
I apologise to the Minister because I shall be asking him questions by rapid fire, for reasons of time, to explain or enlighten us on critical points.
The Minister was kind enough to take note of noble Lords' objections and accepts that, in regard to availability, notice given under Regulation 5 to those doing voluntary work could be extended from 24 hours to 48 hours. All those who live in the real world know that 24 hours' notice to make oneself available for work, or even 48 hours if one is undertaking a voluntary job, is a very short time. I am concerned that the 48-hour
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rule applies to those who may be caring for dependent children or elderly dependants. Any married woman knows that finding alternative satisfactory childcare arrangements, let alone alternative care for elderly dependants, is one of the most difficult tasks that one can undertake. I hope that the noble Lord can assure the House that the 24-hour and 48-hour conditions, under which one can lose a jobseeker's allowance if one does not satisfy them, will be interpreted generously in the case of men and women who are responsibly undertaking care of their dependants.
The Minister referred to Regulation 13, which concerns the availability for work of people who have a disability or incapacity or who cannot be invariably available for work. The Minister assured noble Lords that people could draw up a jobseeker's agreement whereby it would be understood that they could not always be available for work. Can the Minister interpret Regulation 7(3) which states that if someone is unavailable for one day or more each week they can be treated as being not available for work at all, which means that they are not entitled to jobseeker's allowance?
Can the Minister say whether there is a conflict between Regulation 9 and Regulation 16? We welcome Regulation 9. It introduces the concept that somebody may not put a floor to the remuneration they expect under a period of 26 weeks. Regulation 16 relates back to existing legislation under which the permitted period is 13 weeks. Can the Minister state whether the words "permitted period" refer to 13 weeks or 26 weeks, because that is a matter of great importance?
I turn to the area of civil liberties and Regulation 18(3) and (4). We are told that somebody could be regarded as not properly actively seeking work on the grounds of their behaviour or appearance. That aspect caused a great deal of concern when noble Lords discussed the primary legislation, because the judgment of behaviour and appearance is subjective. Many people of my generation deeply dislike seeing young men with an earring, but that is not a reason for saying that they are not actively seeking work; indeed, to their generation they may be thought only to be actively seeking certain kinds of work in the popular music field. Can the Minister assure noble Lords that this very wide phrase "behaviour and appearance" will be interpreted in a way that will not impose the employment officer's view as to what is proper behaviour and appearance, which may be different from what the hulk of our fellow citizens regard as acceptable? There are many anxieties about that matter.
Chapter 4 states that the Secretary of State will indicate who shall attend, and when, and that he can ask for such information as may be required. If they do not appear twice, having been given due notice, they can be struck off the rolls and lose their entitlement to JSA.
I am concerned that there is no reference to the ability of a jobseeker who may genuinely have become ill, or whose wife or child may have become ill, to attend at the time and place specified. I do not understand why a phrase like "without reasonable grounds" cannot be written into the legislation. We are talking about people's income and in some cases their entire means of livelihood.

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There is an issue under Chapter 5 in relation to so-called notional income. I ask noble Lords to give me a moment's attention. This is one of the most outrageous aspects of the regulations. Regulation 105(13) states that a jobseeker who does a service for another person will be treated as having been paid the market rate for that service if that person is able to pay that rate or, indeed, to pay at all. The regulation states that,
"the adjudication officer shall treat the claimant as possessing such earnings … as is reasonable for that employment unless the claimant satisfies him that the means of that person are insufficient for him to pay or to pay more for the service".
In other words, if I do my neighbour a service—I do her shopping for her or decide to drive her to the local medical centre—I shall be assumed to have made the income that would be paid to a person doing that trip on a strictly commercial basis. That sum will then be deducted on the basis that it is notional income. I can think of nothing more calculated to penalise the good neighbour than this extraordinary regulation. I beg the Minister to read it again, to tell me that my interpretation is wrong, if it is, but if it is right to ensure that the regulation is withdrawn. Surely in this day and age we do not want to force good and well-meaning people to have to charge for everything they do for their neighbours when otherwise it will be held against them.
Finally, I come to a regulation which I believe is quite extraordinarily mean. I refer to the regulation on what income will be disregarded for the purposes of income related benefit. Among those sources of income where we are graciously told that –10 a week will be allowed are war widows' pensions, war disability pensions and—almost as an ironic twist to the list—the allowances provided for those who have suffered from persecution at the hands of the Nazi regime. I cannot believe that the Government really want to pinch pennies from these most deserving of all our fellow citizens.
In conclusion, I ask the Government to consider these specific regulations which appear to me to fly in the face of everything we mean by good neighbourliness and good citizenship.
3.42 p.m.
Lord Chorley: My Lords, I propose to restrict my remarks to Regulation 12, which deals with voluntary work, and consequential parts of the instrument. I begin by declaring an interest as chairman of the National Trust, a body which will be intimately affected by this statutory instrument.
During the passage of the Bill last May, I and other noble Lords drew attention to the effect that the proposed regulations would have on the voluntary sector; that is to say, on our training programmes which can offer volunteers the opportunity of working towards gaining national vocational qualifications. Those programmes are an important way for young people to enter into employment as well, of course, as benefiting the charity concerned through the useful work that the volunteers carry out.
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There was support from all sides of the House for the important role that the voluntary sector can play in this regard. Indeed, the Minister was good enough to recognise that when he gave a commitment to reflect and consult the main voluntary organisations involved.
In August we duly received the consultation document. I have to say that yet again there seemed to us to be a fundamental lack of understanding of the nature of the training work that we give to volunteers; namely, a positive way of gaining real work experience, training and skills through these programmes which for many volunteers were a route—possibly their only route—to their first job. I said during the passage of the Bill, and I say it again, that some 80 per cent. of the National Trust's unemployed volunteers go on to full time employment—and that is several hundred young people a year. All of that we reiterated in our reply to the consultation document.
We now have the draft instrument itself. I have read with care and with some difficulty the relevant parts of the document. I find it an extremely difficult document to construe and to work one's way through. I shall come back to that point later.
First, we welcome the formal recognition in Regulation 12 of the existence of the voluntary sector. But the detail of this section is not encouraging. It appears extremely restrictive. To put the point quite simply, one cannot expect organisations to take people on to training schemes when the individual may, at any moment—that is, at 48 hours' notice—be required to leave his uncompleted training programme to take up full time employment, which incidentally may be quite unrelated to the skills or experience for which he has been trained. That appears to be the effect of Regulation 12, so far as I understand it.
That is not encouraging, but we find a ray of comfort when we move to Regulation 18 under Steps to be taken by persons actively seeking employment. Regulation 18(3) states:
"In determining whether, in relation to any steps taken by a person, the requirements of section 7(1)"
—that is the section which requires a person to be available for at least 40 hours' employment—
"are satisfied in any week, regard shall be had to all the circumstances of the case, including"—
we then move to sub-paragraph (g)—
"any time during which he was engaged in voluntary work and the extent to which it may have improved his prospects of securing employment".
In other words, if the volunteer's job prospects are improved by his voluntary work programme, he can be allowed to go ahead with his training. That sounds good, but it is crucial that it is administered in a wise and sensible manner. If so, we ought to be able to relax. However, I come back to my earlier remark regarding the complexity of the document.
It is a document which runs to 160 pages of extreme complexity, at least to me. I really wonder how the ordinary clerical officer in an employment centre can hope to carry out and, in many cases, to understand the huge amount of detail in the instrument. He will need considerable guidance.

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The situation is difficult enough already. We find our volunteers' schemes increasingly constricted by contradictions and confusions of current benefits rules; and we are not alone in that finding. We find much evidence up and down the country of inconsistencies in the local interpretation of the rules, and an over-rigid exercise—perhaps one should say a lack of exercise—of discretion by agency officials. How much more difficult will it be with the extremely complex rules now proposed?
In another place the Minister recently stated, in reply to a question, that training is being given and will be given to staff to implement the new regulations. I fear nevertheless that such is the length, detail and complexity of the new regulations that they will give rise to even more difficulties than those that we have experienced in recent years.
I refer to Regulation 18(2)(g). How can we get over the important point that is not brought out: that this voluntary work is training for job skills? All along this has been the message that we do not seem to be able to put over. It will be extremely difficult to get the message and the explanation of the value of structured training for volunteers across to the hundreds of clerical officers up and down the country. Therefore I conclude by asking the Minister whether the employment office will consult the main voluntary sector bodies on how job training schemes will be covered in the training and guidance to its staff. If the voluntary sector can be of any help in this respect, we would be only too happy to give whatever help we can.
3.49 p.m.
Lord Swinfen: My Lords, I wish to raise one point on the Jobseeker's Allowance Regulations. It deals with hardship payments to people with mental health problems. At the Third Reading of the Bill, when dealing with Amendment No. 7 (which I moved) the Minister stated that the Government intended to exclude "single, healthy claimants" from benefit if they failed to meet the basic conditions of entitlement. That is from the Official Report of 23rd May 1995, at col. 956. Amendments were tabled at that stage to define "hardship" and "serious medical condition" for the purpose of hardship payments. The concern raised during the debate was the exclusion of people with mental health problems from the definition of hardship. Regulation 140(1)(g) of the regulations refers only to "physical impairment".
At Third Reading my noble friend indicated that the Government were not convinced that it was necessary to include mental health problems, as people with serious mental health problems would be treated as incapable of work and exempt from the all-work test for incapacity benefit. However, the problem is likely to arise with people whose condition may be less severe but which, none-the-less, prevents their functioning in everyday society. Already my advisers have encountered examples of people with mental health problems who have received incapacity benefit all-work test questionnaires and have been so struck with anxiety that
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they have been unable to complete and return them. Others have been too afraid to go for a medical examination with a strange doctor.
The incapacity benefit regulations state that if the claimant fails to attend for an examination without good cause, benefit will cease immediately. But as the onus is on the claimant to prove good cause, unless an advocate or adviser can explain the situation to the Benefits Agency, benefit could be wrongly withdrawn, with no incapacity benefit. The only option for such people is to sign on.
But people with mental health problems may have difficulty in satisfying the conditions of actively seeking work or may fail to follow a direction because of the state of their mental health rather than from any deliberate intention. The Jobseeker's Allowance Regulations will preclude anyone from claiming a hardship payment in such circumstances.
Regulation 28 ignores illness and disability as factors to be taken into account in establishing whether the claimant had good cause for not complying with a notice to attend at such place and time as specified. Taken with Regulation 140, many disabled people could fall foul of these regulations and yet be unable to claim a hardship payment as a last resort.
The definition of who is eligible for a hardship payment is further limited to people with a physical disability, a chronic medical condition which has lasted or is likely to last for 26 weeks. Can my noble friend indicate whether the 26 weeks is continuous, or would someone with an intermittent or fluctuating condition still fall within that provision? For example, what about someone with ME or arthritis who is not considered to be sufficiently "incapable of work"? Do the regulations exclude such people from hardship payments?
The noble Baroness, Lady Williams, and the noble Lord, Lord Chorley, pointed out the difficulties we are having with secondary legislation. As was mentioned, the regulations are 160 pages long, but the Act under which the regulations are laid is only 52 pages long. The regulations are three times as long as the Act, yet we are spending only a short time this afternoon on them when we spent several days, working long into the night, at various stages of the Bill as it went through the House.
I wonder whether it would be sensible to have a Select Committee to examine regulations in draft. If the committee thought fit, it could take evidence as to the effects of the regulations before it. I know that it is not within my noble friend's remit to respond to that when answering the debate, but it is worth putting the comment on the record so that those who have the task of examining the matter can consider it in due course.
3.55 p.m.
Lord Skelmersdale: My Lords, unlike most of the previous speakers, apart from the beginning of the speech of the noble Baroness, Lady Williams, I wish to turn from the particular to the general. I have never made any secret of the fact that I believe that the state in general and the social security system in particular should be the basic insurance system for everyone in

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this country. For the purposes of this debate, I agree with the noble Baroness, Lady Williams, that we are considering what happens when people—usually, these days, through no fault of their own—lose their jobs or fail to start on the path to work.
I should like in particular to consider the first category. At the moment, assuming that enough contributions have been paid into the National Insurance Fund, the unemployed worker receives £46.45 a week for the first year—though the ever burgeoning cost of social security has made it necessary to reduce that to six months, as we find under the order. We must not forget that for half the people who lose their jobs six months is long enough. They will be re-employed by the end of that period. The state insurance scheme has worked for them, although they will almost certainly have had to tighten their belts and exist on a reduced income. Most of them will have savings; some will have a working partner. I have mentioned it in this House before but I must tell my noble friend that I still fail to understand why we should bother with them at all. Why can we not have a means-tested benefit from the beginning, with the quid pro quo of a reduced national insurance payment? That has never been answered to my satisfaction and I may return to the point later, either today or on another occasion.
That said, three months later (that is nine months after redundancy or whatever the reason there may be for unemployment) another half—in other words three-quarters of the original—will be back in work. The Government have gone some way towards my ideal here. From six months and a day, benefit is means-tested and the equivalent of income support comes into play. Quite right, say I. The trouble is that there have been times when that is paid at a different rate. When it happens, it is either unfair or generous, depending on whether the unemployment benefit or the income support is the higher. Unless my information is terribly out of date, at today's rate income support for a single man of 25 years or over is £46.50; unemployment benefit is 5 pence lower. On the other hand, a couple on income support will receive £73, but on unemployment benefit it will be £75.10. We should have done something about that years ago.
From October, we are to have a unified benefit for the jobseeker's allowance. It will not matter whether an individual is impoverished, the payments will, as 1 understand it, be the same in the first six months. If the individual falls below the means test level it will remain the same thereafter, always supposing that there is no part-time work available. If so, there is a new and welcome carrot in the jobseeker's allowance. Although, as heretofore, the allowance is to be reduced by the amount of earnings, a credit of half the amount taken away is to be credited to the claimant and may be redeemed up to —1,000 when he or she gets into full-time work.
From the point of view of the operation of the scheme, that is a complication. We will only know whether it will work after it has been operating for a while. Will people claim it? Will it be paid promptly? I was grateful for my noble friend's commitment on that latter point. We do not know, but on paper at least it
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should be a winner. That complication, though, in the operation of the scheme must pale into insignificance when one considers the costs of currently operating what are two schemes, with two bank accounts, two sets of rules and two sets of civil servants to operate them.
I know that putative savings were given in the Financial and Explanatory Memorandum to the Bill which underpins today's orders; but I should be grateful if my noble friend could give us the figures, revised as they should have been, now that more thought has been given to them. Not only will there be a saving to the taxpayer in administration costs; there will also be a lot more clarity for claimants. My noble friend probably has at his fingertips the number of different rules now in place, depending on whether a claim is being made for income support or unemployment benefit. If he does not, they jolly well ought to be at arm's length.
Under JSA there is to be only one set of rules, and normally one benefit office—the Jobcentre. Incidentally, I wonder what "normally" means. I also wonder what pressure could be put on those out of benefit not receiving the JSA after the first six months. At the same time, I reiterate a point already made several times that these regulations are extremely lengthy and extremely complicated. Not only will they be extremely difficult for the adjudication officers; they will be even more difficult for claimants. I should like to be told that there will be produced, as quickly as these regulations have been, a claimant's guide so that people know what the rules and regulations are as they affect them.
That said, JSA is a better, clearer system of state aid for the unemployed. The noble Earl, Lord Russell, and I will never agree that it is right that 18 to 24 year-olds should be paid less under any scheme, and I am sure that the noble Earl is about to regret that that has been continued. We shall see. I realise I am putting words into his mouth. The arguments pro and con have been set out endlessly over many years and we shall just have to agree to differ.
However, what matters is not so much the insurance policy but the success rate in getting people back to work. Unemployment benefit, income support or the new jobseeker's allowance should not be seen as a right but as the government side of a contract. Claimants should do all in their power to help themselves back into work, and if necessary Jobcentres should help them. That, after all, is their commensurate duty. In other words, there should be, as I say, a contract between the unemployed and the Government. While I have never heard it expressed quite like that, that is in effect what we now have under these regulations. Unemployed people already have to be available for and actively seeking work for 40 hours or more a week. They can, if necessary, be instructed to take certain steps to find work. That is quite right. After all, in any other sphere rights and duties go together. Why not here?
During the lifetime of this Government there have been several major improvements to the social security system, both to help people find work and to help them while they are in work. It has, in a word, become more attractive to be in work. Under the Fowler reforms the structure of income-related benefits was streamlined, so

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workers keep more of every pound earned. National insurance payments have been progressively reduced. Family credit was a successful reformulation of the old family allowances scheme, for people who had children and were in low-paid work. More recently, the disabled workers' allowance, of which I am particularly proud, was introduced—not only for families with a disabled earner but for single disabled people. Also, family credit has been extended to those working between 16 and 24 hours a week. Those examples are on the financial side.
On the practical side, we now have training for work, job clubs, the job interview guarantee, work trials, job plan workshops, restart courses, the jobfinder's grant and the travel to interview scheme. They may not be perfect, and one can no doubt pick holes in any one of them. But it is undeniable that at the last count they covered 1,226,000 people. The Opposition will no doubt comment rather sourly that they need to. Yes, I agree with them; they do need to. But surely the point is that whatever the level of unemployment, for the individual it is always demoralising and always descends into a dismal spiral.
Where were the equivalent schemes when we entered government? Where are the great ideas to replace them after the election that the Labour Party believe they will win? Or perhaps they believe that they do not need replacing because they are working. Are we to have a blinding admission that they are here to stay? After all, a constant reduction in the unemployment figures for the past 28 months, with an average fall of over 12,000 a month in the past six months, at a time of low growth does not just happen, does it? There must be a reason for it. I am no economist, and I should love to know an economist's view on that. I see the noble Lord, Lord Desai, in his place. Perhaps he can make a three-minute intervention when I have sat down.
The only consistent policy I have heard of from the party opposite is the national minimum wage and the social chapter. When I had that thought on the train this morning travelling to London I remembered that the noble Lord, Lord Peston, had made remarks on the minimum wage in a debate some time ago. I asked him if I could quote him, to which he replied that he would be delighted. That is what I now propose to do, very briefly. The noble Lord said:
"A minimum wage policy raises the average cost per employee, but it lowers the marginal cost of an employee … If I had a blackboard I could demonstrate as part of elementary economic theory that a minimum wage may just as likely be employment-creating as employment-destroying. Therefore, one needs to look at the evidence … the evidence does not tell us one way or the other. There are studies showing that a minimum wage can lose jobs and other studies, interestingly enough, showing that such a policy can create jobs. Therefore, I am a hit puzzled by the strength of some noble Lords' opposition to a minimum wage. To put it at its mildest, which is all that I want to do today, the point is arguable".—[Official Report, 7/12/94; col. 963.]
From that, I draw the conclusion that if the point is at least arguable, the Opposition will do it anyway, and I should not have thought that that was exactly conviction politics. The other matter to mention in this regard is the social chapter. It sits rather oddly—does it not?—
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with the attitude sometimes exhibited from the Front Bench opposite on the subject of part-time work. Probably, both those matters ought to be left alone.
What no one can afford to leave alone is the costs and benefits of our social security provision. How easy it is to find improvements for people less fortunate than ourselves. How hard it is becoming to find the money to pay for that. I have been convinced for some time now that there are ways by which both can be reconciled. At the beginning of my speech, I mentioned the first six months of unemployment and my belief that for a lot of people it is simply not necessary.
There are of course other ideas that come to the fore from time to time, some of which have had a lot of effort put into them by the party opposite. I wonder, for instance, what happened to the idea of taxing child allowance. Perhaps it will re-emerge in the Opposition's third look at social security. Perhaps not—in the circumstances it is not an obvious vote winner.
What has emerged from my right honourable friend Mr. Lilley and his department is a very useful and very fair tidying up exercise which will—given that, as I hope, my noble friend will announce today a claimant's guide—benefit both the taxpayer and the claimant. I wish them well with the jobseeker's allowance.
4.8 p.m.
Baroness Seear: My Lords, I wish very much to reinforce the remarks made by the noble Baroness, Lady Williams, and by the noble Lord, Lord Chorley, about the 48-hour limit, both for people with caring responsibilities and for volunteers. If these were not regulations but had been part of the Bill on which we could vote, I believe that the 48-hour limit would be a matter on which an amendment would have been tabled, and on which I suspect the Government would have lost.
That is a good argument in itself for saying that there is much in the regulations which ought not to be in the form of regulations but ought to be in primary legislation so that the House could amend and change some of these very, very important matters. They are not minor details. They are not matters that should be in regulations because they can and need to be changed at frequent intervals. They are in themselves matters of principle and should therefore be in primary legislation.
I was most interested in the proposal put forward by the noble Lord, Lord Swinfen; namely, if we are to have regulations of this detail and this length, a procedure should be developed—perhaps the usual channels and those who consider the way in which this House is run could examine the matter—so that we are not again landed with a mammoth document of this kind, not only in length but in the importance of its detail. I wish to speak about some of the details. I will stop if the Minister wishes to finish his conversation; I do not know whether that is convenient to him. I have not spent years teaching in a university without knowing how to stop people who gossip!
I refer to the 48-hour limit for carers. The noble Lord, Lord Mackay, is a man of considerable imagination and sympathy. I am sure he must be aware that if a person looks after an elderly or infirm

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person or a good child—or, more likely, a fractious child—to get someone else to take on the job is not something that can be done in a great many cases in a matter of 48 hours. There are not queues of people lined up wanting to do the job. A conscientious carer of an old, ill or young person will make good arrangements—not just any old arrangements, dumping the person on the first carer who happens to be around. He or she will wish to find a suitable person. When I had such a responsibility I was convinced that I could not possibly find a satisfactory carer for a stroke victim within 48 hours. One is not prepared to abandon a person for whom one cares unless very good arrangements can be made. I beg the noble Lord to think about it again.
Today volunteers are an important part of the way in which voluntary organisations are run. The noble Lord, Lord Chorley, spoke about this in relation to the National Trust. We in the Apex Trust have been using volunteers to very good effect. They are valuable to us. It would be extremely awkward if, in order to comply with the 48-hour rule, they had to down tools and go at two days' notice.
There is another reason, with which I am sure the noble Lord will sympathise, why we want volunteers to be encouraged and not discouraged and to be able to carry out voluntary obligations satisfactorily. With the new methods of training and examining which come with the NVQs—I speak as chairman of the administration lead body—people receive training in voluntary work which enables them to comply with the requirements of NVQ and obtain a qualification. That is exactly the kind of thing that the noble Lord wants them to do. It will enable them to get jobs. To achieve level 1 or level 2 of an NVQ can greatly enhance a person's opportunity to obtain work. The regulations ought to be such as to give the greatest possible encouragement to volunteers; they should not make the requirements so tight and restrictive as to discourage voluntary work. I beg the noble Lord to look again at that limitation, which will prove to be very severe for a great many people. The disadvantages spread beyond the particular disadvantage to the individual concerned.
I should like to support what the noble Baroness, Lady Williams, said about behaviour and appearance. She quoted the case of a man who had one earring who might be somewhat unacceptable to a regular employment officer in the Employment Service. I am not familiar with the kind of work that is carried out by people with one earring. However, if I am not mistaken, I believe that there are some jobs in which it may be a disqualification not to wear one earring. There is a whole market for one-earring clients. If such people turned up for work looking more like the noble Lord, they probably would not get the job. They would have to go home to redress and equip themselves with one earring in order to be satisfactory employees in that field. That is perhaps slightly frivolous, but today there are a number of jobs on the periphery of normal employment. There are still jobs for those who do not look like those who obtain jobs in banks or the more usual areas of employment.
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Finally, the noble Lord claims that this measure will make it easier—I am sure it will—for people who are at present unemployed and will give them greater encouragement to get back to work. However, in my view, it does not go anything like far enough. Our present social security provisions are such that there is a real disincentive to take on jobs. I remind the noble Lord that not so long ago the applied economics unit at Cambridge came up with some figures—I accept that this Act will modify the position, but only to a very mild extent—which showed that if a man and his wife were both unemployed and had two children at school, in order to increase the family income by £20 they would have to earn £170 because of the limitations of the benefits system and the passport benefits which went with income support. While I accept that the Act goes a little way to alleviate this ridiculous situation, I ask whether there is any Member of your Lordships' House who will do —170 worth of work in order to get £20. As long as that situation obtains, no changes in the system of benefits will make a great deal of difference. This is a step in the right direction, but a very small one.
4.17 p.m.
Lord Desai: My Lords, when the noble Lord, Lord Skelmersdale, invited me to comment I saw the Minister vigorously shaking his hand in the hope that I would not do any such thing because it would only delay matters further. I shall try to be brief.
This is not a simple matter of social insurance; it is jointly a matter of social insurance and a bureaucratic set of rules. We have 160 pages of rules for what should be a much simpler matter. While the Government try to encourage jobseeking, they still believe that people are unemployed because there are jobs that they are not seeking. I believe that that is a fallacy. If unemployment has been going down for the past 28 months it is because we have had a recovery during that time and for the 36 months before that the number of jobs was going down because of recession.
Whether or not jobs are there does not have so much effect on the behaviour of jobseekers as does the macro economy. Whether or not you have a minimum wage, the effect on employment will depend on what else you do to encourage the economy. In general, if you do not do anything to encourage the economy unemployment will increase—jobseeker's allowance or no jobseeker's allowance. That point has not yet been understood by the Government. The general climate of investment and recovery and what one does about taxation and interest rates are the matters which determine unemployment, not these rules, desirable though they may be.
The problem that the Government have not thought through for the past 16 years is that if they wish to encourage good behaviour they should stop suspecting, as the welfare state inevitably does, citizens of being out to cheat. We have 160 pages of regulations

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because the state begins with the suspicion that honest citizens are about to cheat. Without that suspicion one would not need 160 pages but perhaps only two.
4.20 p.m.
Earl Russell: My Lords, I was very interested in the suggestion of a claimant's guide from the noble Lord, Lord Skelmersdale. I entirely agree with him and with the noble Lord, Lord Swinfen, about the difficulty of understanding many of the regulations. If that suggestion were adopted, I should welcome it. I wonder whether the Minister would place that—or, at the very least, the guidance for the employment officers and adjudication officers—in the Library of your Lordships' House. He might find that it would save him a good deal of unnecessary correspondence.
I congratulate the Minister on the lucid way in which he introduced the regulations. However, he made one comment which surprised me a little. He described the regulations as "minor details". Details they may be, but they will affect the lives of more people in a more significant way than will perhaps any Bill that is likely to come before us this Session. Under those circumstances they need individual examination, regulation by regulation.
Your Lordships' House collectively possesses a considerable amount of expertise. I regret that we are not using a procedure that enables us to scrutinise the regulations one by one. In that context, I was most interested in the remarks of the noble Lord, Lord Swinfen. I hope that more thought will be given to them all around the House.
I shall attempt to resist the temptation to make a Second Reading speech and I shall address the regulations one by one. I take first the transitional provisions under Statutory Instrument No. 3276. I was a little taken aback by Regulation 16 of those regulations concerning "Questions not immediately ascertainable". It provides first that the housing costs which are to be included in the claimant's applicable amount are those which are immediately ascertainable. I dare say that, before we have gone through the Leasehold (Reform) Bill, which I understand is likely to be laid before us shortly, we may have heard a good deal more of that provision.
The second half of that regulation provides that, where any of the questions cannot be immediately determined, the adjudication officer,
"shall proceed to determine the … question on the assumption that the determination of that question will be adverse to the claimant".
I find it somewhat hard to reconcile that statement with the principles of natural justice, as I understand them.
Your Lordships may be aware that there has been a learned exchange taking place in the columns of Public Law about the relationship between statute and the principles of natural justice. It is an arcane question in which, wearing my other hat, I have some interest. In the course of that exchange, I was taken to task by Mr. Justice Laws for giving too much weight to the doctrine of parliamentary sovereignty. The Minister
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does not always realise when he is well off. But, in the light of that debate, I cannot help but wonder whether that regulation was drafted in order to lead Her Majesty's judges into temptation. I am sure that they can resist it, but it is not always wise to lead people into temptation.
In the income support consequential amendments regulations, I was struck by a regulation which dealt with those people over 50 who had not worked for over 10 years. It occurred to me to check how many people might be affected by the regulation. According to a Written Answer last Tuesday, the number is 2,594,000. That is rather a lot of people. It helps to explain why the number of people on income support is rising, even though the number of people unemployed is going down. That is a matter to which we may return on another occasion.
I warmly welcome the housing benefit and council tax benefit run-on regulations. I shall not follow the noble Lord, Lord Skelmersdale, into the interstices of the minimum wage, save only to draw to the Minister's attention the report in yesterday's Independent on Sunday that the state is now spending on in-work benefits to subsidise low wages —2.9 billion every year. I should be glad of a comment on the accuracy or otherwise of that figure.
With regard to Regulation 5 on carers and availability, I agree with everything said by my noble friends Lady Seear and Lady Williams of Crosby. I point out that the 48 hours covers days of non-availability, such as Sunday. One cannot normally ring up a nursery on a Sunday. I thought that that provision was a little unnecessary and could perhaps have been dispensed with.
I want to raise a point of interpretation on Regulation 11 about part-time students. There is an obligation on a part-time student to rearrange his course in order to adjust his availability, if necessary. Is there a parallel obligation on the teacher of the course to accept the rearrangement? It is a question in which I should declare an interest. If there is not, it puts the claimant in an intolerable position between the upper and the nether millstone; and if there is an obligation on the teacher, with many different people in the class it may be that there will be no time at all when the classes can be held. We need communication between the two departments on that point, and indeed on many others.
Regulation 13(2) allows an exemption to availability regulations for "a sincerely held religious belief". Who is to decide whether a religious belief is sincerely held? It is not an area in which the competence of the state is immediately obvious to me. Were the right reverend Prelate still in the Chamber I should be interested to hear his comments on that regulation. Also, such an exception for sincerely held religious belief is allowed provided the claimant can show real prospects of employment. I am reminded of the speech in the debate on the Address in the Session before last made by the right reverend Prelate the Bishop of Liverpool. He drew attention to the danger that Sunday working, especially in the retail trade, might become so normal that someone with a conscientious objection to it might not have a

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real prospect of employment. I should be grateful if the Government could once again consult the Churches and other concerned bodies on that matter. I am anxious about the drafting of that point.
Regulations 16 and 9 raise the conflict to which my noble friend Lady Williams of Crosby referred. My understanding—I hope that the Minister will correct me if I am wrong—is that there is flexibility within the period of six months. I am interested in the flexibility provided by Regulation 16. It is an example of Rentonian principles of drafting in regulation, which is a rare swallow that I welcome. I hope that it may make a summer. But I should like to know whether the interpretation will be made by the discretion of the adjudication officer or whether it will all be covered in guidance.
Regulation 14, as I understand it, deals with male carers caring for children during a spouse's absence from the country for a period not over eight weeks. If I have understood that aright, it is not applied on a sex-blind basis. A woman may be exempt from availability regulations if she is caring for a child. But If a man may be exempt only when caring for a child during that period of eight weeks, that is not on a level basis. We know that 9 per cent. of single parents are male. Their rights need attention and the drafting of that regulation needs attention.
Like other people, I have some doubts about Regulation 18(4). It covers steps for seeking work which may be disregarded if the claimant is guilty of violent or abusive behaviour. There is no dispute about the objective of that regulation. But "abusive behaviour", especially for someone who knows that hope deferred maketh the heart grow sick, presents a difficulty.
Let me put to the Minister a case which happened at my local Jobcentre. Can he say whether this is abusive behaviour within the meaning of the proverbial Act? A woman, late on a Friday afternoon, was attempting to obtain benefit. She was told that she could not obtain anything until after the weekend. She dumped her baby on the counter and said, "All right, you feed him then" and ran out of the door. Mother and baby were subsequently reunited but, meanwhile, the Jobcentre staff had fed the baby over the weekend. Was that woman guilty of abusive behaviour or not? It is perhaps a case where the prerogative of mercy might have been relevant.
On behaviour or appearance I agree strongly with the points made by my noble friend Lady Seear. I have heard it said that in the Old Bailey the surest way to be disqualified as a juror is to turn up wearing a pinstriped suit with a rolled umbrella and carrying a copy of the Daily Telegraph. Dress codes are appropriate to specific contexts. We have all misjudged the dress code in contexts with which we are not familiar. That is why I should have liked the regulation to have a provision for mens rea; dress codes in order to make themselves less suitable for employment. It would of course make proof more difficult, but that is simply the real world.
There are some parts that I welcome. Regulation 61(f), providing a concession for 16 and 17 year-olds who are enlisting in the Army, is a case in point. I thank the
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Minister and the noble Lord, Lord Inglewood, and also the noble Lord, Lord Boyd-Carpenter, who said that this was the only one of my amendments on that subject which he thought was not wholly without merit. It is the most delightfully back-handed support I have ever received. I think it was effective and I am grateful for it.
Regulation 63 provides for a 40 per cent. reduction in benefit for those refusing training. It does not include the words for which my noble friend Lady Seear has asked over and over again; that is, "suitable training". It raises the prospect of a case like the one once raised by the noble Lord, Lord Murray of Epping Forest, of the young man who asked to work with animals and was sent to work in an abattoir. Would that person be subjected to a 40 per cent. reduction in benefit?
The other point on which I cannot resist commenting in relation to the 40 per cent. reduction for refusing training is that I am most intrigued to find Mr. Gordon Brown writing government policy. That truly is a resurrection of Butskellism.
Regulation 72, the good cause provision, is better than we thought it might be during the passage of the Bill. I owe a great deal of thanks to both Ministers and to the noble Lord, Lord Inglewood, who is especially responsible for that clause. The good cause provisions specify that good causes for refusing or leaving a job "shall include" the ones specified. That means that they allow for the possibility that there may be other good causes.
I am delighted to see the provisions allowing people to refuse a job if the cost of travelling to work or the job expenses are too high. That is valuable. I am also delighted to see that one is not to be forced to take a job paying commission only. That again was a concession made in the course of the Bill by the noble Lord, Lord Inglewood, and I am delighted it has been included. It is not a big concession, but it is a great deal better than nothing and I am pleased about it.
In relation to Part VII I want to ask who is to be responsible for up-rating the benefits. I do not want it to be like the Walcheren Expedition:
"Great Chatham with his sabre drawn Stood waiting for Sir Richard Strachan; Sir Richard, longing to be at 'em, Stood waiting for the Earl of Chatham".
I hope that well before the public expenditure round begins we will know who is to up-rate the benefits and that something will be done about it.
The applicable amount for 16 and 17 year-olds who receive income support is —28.85 a week. That is derisory. I want to know why, when severe hardship payments are allowed, the 40 per cent. reduction applies equally to 16 and 17 year-olds even though the amount being reduced is itself smaller, That is a subsistence payment. It is a hardship payment. The Government's justifications of the distinction between the older and the younger rates of benefit simply do not apply to a hardship payment. They had better think of a new one quickly and I shall he interested to see whether they have done so before the Minister sits down.

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Regulation 95(2) on royalty income needs rewriting. In relation to Regulation 140 I have asked the Minister before why it is government policy that the single cannot suffer hardship. I hope that this time we may receive an answer.
There are genuinely small mercies in these regulations. I thank the Minister for them. But they are small mercies and I hope the Minister will understand that the fact that I have not made the Second Reading speech the noble Lord, Lord Skelmersdale, expected, does not mean that I have in any way retreated from the points I would have made. I still think them, though I have not bothered to make them at the moment.
Lord Skelmersdale: My Lords, I know that I accused myself earlier this afternoon of putting words into the mouths of other noble Lords, but I did not put those words into the mouth of the noble Earl.
Earl Russell: My Lords, what I said was a paraphrase. If it was an inaccurate one, I apologise.
4.36 p.m.
Baroness Hollis of Heigham: My Lords, these regulations comprise 160 pages and are 10,000 lines long—three times longer than the original Bill. I trust therefore that your Lordships will understand if, instead of picking away at some of the quite serious misprints to which the Minister drew our attention in Regulations 150 and 151, or the inconsistencies between Regulations 9 and 16, to which the noble Baroness, Lady Williams of Crosby, drew our attention, I instead seek to revisit some of the principal issues that are detailed here and made explicit for the first time. In that process I hope to persuade the Minister, even at this late stage, of how profoundly wrong are both the Act and these regulations.
We accept that some regulations are indeed welcome; for example, the rollover of housing and council tax benefits. We wait to see the effect of other regulations, such as the back-to-work bonus. Let us recall that what the regulations make explicit is how the Government propose to integrate, to bring together, unemployment benefit (the contributory national insurance benefit) and income support (the means-tested benefit for the unemployed) into one jobseeker's benefit.
Two hundred and fifty thousand people will be worse off as a result of the regulations. People who have paid their national insurance contribution, who have seen the contribution go up by 50 per cent. (it was 6.5 per cent. in 1979 and is now 10 per cent.) and who kept their side of the national insurance contract, now find that the contributory unemployment benefit time period has been halved. After six months, not 12 months, it will be means tested. If they claim for a wife or an adult dependant, it will be means tested from the very start, as though they had never paid any national insurance contributions at all for that purpose. Had any private employer, insurer or pension provider tried to do the same, they may have found themselves being taken to court.
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In addition, as we see from the regulations, not only is the insured benefit cut, but the conditions of receiving it have been made more stringent and arduous. Regulation 79 relates to young people under 25. Though they pay the same national insurance contribution as everyone else, their benefit will be reduced—not because they need less than the rest, but merely because they are younger than the rest.
As regards Regulation 107, any older men leaving with redundancy payments of £3,000 or more when their employment folds, will now find after, say, six months, that that may well make them ineligible for JSA until they have lived off and eaten up their redundancy payment as it takes them above the capital limit. Any claimant who has a partner working more than 24 hours a week, however little that partner may earn, will, after six months, find himself ineligible for JSA.
Regulation 13 affects the chronically sick and disabled. Of that group 250,000 have been removed from invalidity benefit and are being told to apply for the jobseeker's allowance. They may find themselves not disabled enough to claim incapacity benefit, but insufficiently fit to claim the jobseeker's allowance. I do not doubt that the Minister will assure us that that will not happen. We hope he is right, but if he is wrong, I can promise him that he will know about it. Anyone who has learning difficulties; anyone for whom English is a second language, and anyone less than competent to cope with the benefits system, is at risk of being assessed as not actively seeking work and losing his or her benefit.
Why are the Government doing this? Basically, we have been offered two reasons. The first is to create a flexible labour market, as the Minister told us today. The second, as the Minister has told us on other occasions, is to end welfare dependency. If those are the Government's objectives, their strategy is profoundly wrong.
As regards a flexible labour market, the Government have always insisted that if people were flexible about their wages—in other words, were prepared to accept poverty wages—they would somehow price themselves into jobs. Jobs will appear by magic out of the woodwork. Even now the Director-General of the CBI does not believe that. Pay has fallen: over I million people now earn less than £2.50 an hour and one-third of a million people earn less than £1.50 an hour. People have accepted poverty wages. If the Government were right, that would generate more jobs. But has it? On the contrary, when the minimum wages set by the wages councils were abolished, pay fell by up to one-quarter, while at the same time about 18,000 jobs in the industries covered by the wages councils were lost.
No, poverty pay does not increase employment. It simply pays poverty wages for the same work. What it does do—and this was touched on by previous speakers—is increase the social security bill so that family credit, housing benefit and council tax are needed to turn a poverty wage into a living wage. The number of people on family credit in the past five years has doubled; the bill has trebled. Every pound sliced off the wages bill under the pressure of JSA could add an extra

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70p or 80p in the pound to the social security bill. The result is a soaring social security budget, and the Government then complain about the rise in costs that they themselves have engineered.
The Government tell us that registered unemployment has fallen. They are right and we welcome that. But labour market research suggests that that is not so much because more jobs have been created, but because, in addition to the factors mentioned by my noble friend Lord Desai, fewer young people are leaving school and a higher proportion of them are going into further and higher education. Demography rather than a strengthened economy is the reason. I suggest that much more significantly, since the Prime Minister took office five years ago, unemployment has grown by 32 per cent. and long-term unemployment by 70 per cent. In Britain male unemployment in the age group 25 to 54—a group about which I believe we are all especially concerned—is nearly 15 per cent.; in the United States of America and Germany it is 12 per cent.; and in France it is 9 per cent. If the Government count that as success, what do they suggest would count as failure? So the first argument that the Government have adduced for these regulations is a flexible labour market to push down wages and to create more jobs. They have certainly pushed down wages, but they have not created more jobs. They have added to the social security bill.
The second proposition offered to us behind these regulations is the need to end welfare dependency. The assumption seems to be that if only people searched harder and accepted lower wages, they would find work, but instead benefits have made life too cosy and comfortable; that the unemployed need to be "braced" by benefit cuts into entering the real world of zero-hour contracts; namely, "Hang around for 40 hours so that I can employ you for any 15 of them" or of temporary work, or portfolios of fragments of jobs, with no pension, no sick pay, no holiday entitlement and no security.
What evidence is there that the benefit system discourages people from seeking and taking up work? The answer is, none. All the evidence, much of it commissioned by government, runs the other way. Benefit levels in Britain, relative to wages, are among the lowest in Europe and in the OECD. When people go on benefit most find their income halved. Most people would return to work if their wage passed the benefit level by only modest amounts. Men and women in Britain are on benefit not because they are idle and will riot work, which is the assumption of the JSA and these regulations, but because they are unemployed and cannot find work.
There are 12 people in Britain today chasing every single registered vacancy. There are 20 people in London today chasing every single registered vacancy. Recently 700 men queued for one job as a van driver. That is why men and women are dependent on benefit. They are demoralised by the Government's mismanagement of the economy and not by their own lack of moral fibre. The JSA will cut the benefit bill, certainly, by taking money away from the unemployed on which they need to live.
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What shred of evidence do the Government have that the harshness of JSA and these regulations will create even one extra job? Instead of 12 people chasing each registered vacancy today, let us say that JSA dragoons one extra person and 13 people chase the registered vacancies, each and every day. How will that create one single extra job? Only when the Government can point to jobs paying an adequate wage, left unfilled by men and women who choose instead to remain on benefit, will the Government be entitled to talk about welfare dependency. Meanwhile the government strategy is indeed creating welfare dependency—that of the employer on the welfare system to subsidise his wages bill. In that respect our employers are among the most subsidised and our unemployed among the least supported anywhere in the OECD. It is perverse. Every regulation in this document makes the situation worse.
What does the Government's own research tell us is the best way back to work and to expand the labour market? As the Government know, the first is to educate and skill yourself. For example, recent research into lone parents shows that those left behind when their children go to school and who wish to re-enter the labour market, are precisely those with no educational qualifications. What do the Government do in these regulations? They promptly cut the number of hours from 21 to 16 for which one may study and still retain benefit. Any other country would encourage the unemployed to train, to study and to build up qualifications. Only in Britain do we penalise the unemployed by removing benefit. It is quite perverse.
Secondly, we know that the only really effective way to get a job is to have somebody in the family with a job and, through them, to remain attached to the labour market. All the research shows that what helps someone into the labour market is who the family knows. So, a wise government would be doing everything possible to keep at least one member of a family in work in order to help the others back into the labour market. But what do the regulations do? They construct a benefit system which, by means-testing, penalises the partner who is in work by removing benefit pound for pound from the one who is unemployed. Not surprisingly, therefore, any partner who has part-time work will leave that work and both partners will drop out of the labour market. Again, that is perverse.
Thirdly, we also know that it makes sense to share out what work there is. We know that it is work that floats people out of poverty. Yet 20 per cent. of all households of working age do not have an adult in work, while some 60 per cent. of such households have two people in work. We have work-rich and work-poor families. The divide is getting worse and the regulations will make it even worse. Why? Because JSA and the deduction of benefit pound for pound means that only the wives of men in full-time work can afford to work part-time without losing benefit. If a man works full-time, his wife can work; otherwise she cannot afford to take work and both are trapped. That too is perverse.
Fourthly, we also know—the noble Lord, Lord Chorley, reminded us of this—that if people cannot obtain waged work, the next best thing is to mimic the labour market with unwaged work and to volunteer. Any

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sensible strategy would encourage volunteering and would regard placements with training in an approved voluntary organisation as a positive outcome to the JSA agreement. Everyone knows that the. alternative, the Government's training programmes, have a reputation for being pretty disastrous in many cases. Only three people in every 200 get a job as a result of the Government's Restart programme—that is only 1.5 per cent. By contrast, as the noble Lord, Lord Chorley, told us, the majority of National Trust volunteers obtain full-time work having completed their stint. Let us hope that Regulation 18/3/g bears the interpretation which the noble Lord put on it; nevertheless is its still not the case that volunteers are expected to give up their voluntary work with only 48 hours' notice, although that volunteering could equip them for a proper job, and instead have to accept a dead-end temporary job or lose their benefit?
These regulations are as malign and as perverse as the Act which fathered them. Essentially, they blame the unemployed for their unemployment. The unemployed will be required, on pain of forfeiting their benefit, to make themselves endlessly available to search for jobs that do not exist in a labour market that is overstocked. I repeat that 12 people go after every registered job vacancy today. If the harshness of JSA dragoons one extra person into the labour market so that 13 people are pursuing each vacancy, what have we achieved? What single extra job have we created? Why are we doing this? I ask the Minister to tell me why. Until the Minister can show that the regulations will generate one additional job (other than any extra jobs in social security offices), we on these Benches are utterly opposed to them.
4.54 p.m.
Lord Mackay of Ardbrecknish: My Lords, we have had an interesting debate. In fact, I think that we have had two debates. The majority of noble Lords spoke about the regulations, and their comments clearly indicated that they had read the regulations—or at least part of them. We then had almost another debate, which seemed to be a rerun of the Second Reading of the Jobseekers Act. Without seeking to be unfair to the noble Baroness, Lady Hollis, I think that that is what we had in the past 17 minutes. I believe that I answered most of the points that she raised while the Bill was proceeding through your Lordships' House and that I did so to the satisfaction of the House, just as my right honourable and honourable friends in another place answered such points to the satisfaction of their House so that the Bill became an Act.
I do not intend to go over all the points of principle that we discussed then. I should rather turn my attention to the questions that I have been asked about the detail of the regulations. I do not know whether I dare say this to the noble Baroness, but many of the details are necessary for the running of any system involving social security, unemployment benefit, income support or whatever name she may decide to give it. Therefore, to say that all the provisions are malign is to overstate the case by about a million miles.
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However, I was grateful to the noble Baroness for indicating her welcome for the roll-over of housing benefit and council tax benefit. I believe that she also indicated a welcome for the back-to-work bonus although I suspect that she qualified that welcome when she said that she would wait to see whether it actually worked. I shall take that as being as near a welcome as I am likely to get from the noble Baroness.
My noble friend Lord Skelmersdale was a great deal more forthcoming and I am grateful to him for the positive welcome that he gave to the back-to-work bonus and to a number of other provisions in the package of regulations. My noble friend made a valid point which was echoed by the noble Earl, Lord Russell, about a claimant's guide. I am happy to be able to tell them that leaflets for jobseekers will be available at Jobcentres from early March. The first leaflet will give basic guidance to help to alert claimants to the changes that will come about in October. A second leaflet will give more detail and will invite claimants to speak to Jobcentre staff if they would like further guidance. That leaflet will be given to claimants from July onwards. At the same time they will also be given a brief explanation of the changes. The chief adjudication officer's guide, which gives guidance on all the benefit entitlement decisions to be made under JSA, will also be in the "public domain" to use the modern jargon. I mustry to think of a better phrase than that. I assure the noble Earl that the public domain appears to include the Library of your Lordships' House, so I shall keep him to his word that he will not bother me quite so much on the detail if that report is placed in the Library.
Perhaps I may turn to a number of the points that have been raised. I shall try to answer them as quickly as I can. If that means "shorthanding" the question, I hope that the noble Lord who asked that question will appreciate that the answer is directed at him. Perhaps I may start with the noble Earl, Lord Russell, who mentioned the Income Support (General) (Jobseeker's Allowance Consequential Amendments) Regulations—not the main regulations—and who asked a question about the over-50s. I do not want to get into a debate about this, but 1 must advise the noble Earl—I thought this when I answered the question—that he makes the assumption that all those people over 50 but below retirement age who have not been in paid employment during the past 10 years are necessarily seeking paid employment. I am afraid that that is not necessarily the case. That group will include people who have retired early, as well as non-working wives and a variety of other categories. I do not think that we can assume that all those people will be looking for work. I give the noble Earl that slight warning in case he wants to use those figures again.
Perhaps I may turn to the regulations about which the noble Baronesses, Lady Williams and Lady Seear, asked a number of questions. Perhaps I should advise the noble Baroness, Lady Seear, who intervened in the gap in the speakers' list, that I have had a great deal of experience of listening to "gap" speakers and that that experience has enabled me to listen to the speaker while having an intelligent conversation with the colleague to my right at the same time. I had better be careful in case I meet

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one of those speakers, but I think that I can safely say that I have never heard a speaker quite as stimulating as the noble Baroness—and certainly not one who does not use notes. As I recall, many of my lecturers seemed even more hidebound by their notes than I sometimes feel I am.
The noble Baronesses, Lady Seear and Lady Williams, and one or two other noble Lords, mentioned the issue of 48 hours. The point made was that 48 hours was not long enough to allow carers to rearrange their caring responsibilities when they received an offer of employment. As I said during the Bill's passage, people with caring responsibilities who want to participate in the labour market will need to plan in advance the best way of arranging their caring responsibilities if and when they receive a job offer.
We recognise that it would be unreasonable to expect people with caring responsibilities to be available for employment immediately. That is why we have extended the current concession, which is 24 hours, to 48 hours. With advance planning, we believe that 48 hours' notice should be adequate for carers to rearrange their caring responsibilities and be available for employment or an interview.
Baroness Seear: My Lords, I am sorry to interrupt the Minister, but he must think about this again. I beg him to do so. He says that carers should make arrangements. That means that they should have someone lined up to do the job, but they do not know when they will obtain a job. One cannot line up one's substitute and expect them to stand by until one has a job. One hopes that they will be off doing something else themselves. One may get a place in a nursery, and that place may be gone by the time the job is offered. One cannot make these arrangements, and I ask the Minister to reconsider this. One may make one's arrangements and not get the job. The arrangements then collapse.
Lord Mackay of Ardbrecknish: My Lords, I think that the noble Baroness has missed two points that I made. The first point is that this is a concession. We are making a concession, because for everyone else it is immediate. If they find a job, they are expected to take it the following day, if that is when the employer wants them to start. The chances are that the employer will want them to start on Monday. An interview today would probably lead to a job being started next Monday. It is in fact already a concession. The point I made is that the current concession is 24 hours. If that were a real problem and not an imagined one, dare I suggest that some examples of the problem of the 24 hours might have come forward. We understand the point being made. We have made a concession that extends the immediate not just to 24 hours, as it is at present, but to 48 hours.
I will always look at any cases that suggest that even 48 hours is not enough, but if no examples can be given of the current 24 hours being inadequate, then I find it difficult to be persuaded that I should go further than 48 hours.
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On Regulation 7, the noble Baroness, Lady Williams of Crosby, asked me what Regulation 7(3) means. Regulation 7(3) provides that once a person has agreed a pattern of availability, he should not be able to abuse that flexibility by not being available on the days agreed. If the person fails to be available on such a day he will lose benefit for the week. That does not bear upon pattern of availability which a person with a disability might agree under the regulations. He might agree a pattern of availability which may exclude a day. That is fine. If he has already agreed that, he cannot then say, "That day I have already agreed, I shall not be available for this particular job".
On Regulation 11, the noble Earl, Lord Russell, asked me—I believe for his own protection more than anything else—to give him a considered view on what would happen in the case of part-time students having to rearrange their course hours. Part-time students have normally to be available for employment in the same way as other jobseekers. Regulation 11 modifies the availability rule for certain jobseekers—broadly those who have been unemployed for three months or more in the previous six—if they are willing and able to rearrange their course to take a job within the pattern of hours that they have agreed.
If someone cannot, or does not wish to take advantage of Regulation 11, he will have to be available in the normal way. Regulation 11 is therefore a concession. It is not an obligation. There will be no obligation on the teacher, but we hope that the increasing flexibility of education will mean that Regulation 11 will he a helpful provision.
The noble Lord, Lord Chorley, and other noble Lords asked about volunteers. They come particularly under Regulation 12, although they come elsewhere as well. I was grateful to the noble Lord for saying that we had gone some way. He wants me to try to go a little further. I have already made the point about 48 hours' notice. What I have said is as applicable to this category as it is to carers. He asked me about the training and guidance we should be giving to our staff. All the staff involved in delivering JSA will be given training. That training will ensure that they give consistent advice everywhere in the country. The crucial aspect of the particular issue addressed is to ensure that the regulations are easy and clear to interpret. We have done that with the help of the consultation we have had with the voluntary bodies.
The Employment Service guidance will be based squarely on the regulations. I do not see a need for further consultation, but in line with our commitment to open government, we shall be making the relevant elements of the completed guidance available to the voluntary organisations if they wish to have a copy. The guidance to adjudication officers who make the decisions over benefit entitlement is a matter for the Chief Adjudication Officer who is of course independent of government. That guidance is published and readily available, but I understand that the normal practice of the Central Adjudication Service is not to consult on its guidance to adjudication officers.

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I was asked why I should not recognise the value of training in voluntary work. As I think I said during the course of the Bill's passage, we recognise that voluntary work can help unemployed people stay in touch with the labour market and provide an opportunity for them to maintain and develop their skills. Our approach strikes a sensible and workable balance. It recognises the importance and the important role of voluntary work, without losing sight of the fact that all the time the person is doing voluntary work he or she still has as his or her first priority finding paid employment.
Although voluntary work may enhance a jobseeker's employability, we cannot count it as an active step towards finding a job. The regulations are however explicit that an adjudication officer should take into account the value of any voluntary work undertaken in determining whether a jobseeker has met the actively-seeking-work condition. However important the training benefit of voluntary work, the priority for all jobseekers has to remain to take a job if it is offered.
On Regulation 13, the noble Earl, Lord Russell, asked me who was to judge whether a religious belief was sincerely held. Adjudication officers currently make that judgment when determining whether a claimant has good cause for refusing a job. We are not aware of any difficulties. Adjudication officers may ask for any information or evidence that they see fit. Current guidance points them to examine the length of time a person has held to his faith or evidence of that religious observance.
The flexibility in the regulations to determine a pattern of availability through the week will enable people who do not wish to work on Sundays to restrict their availability in that way provided that they retain reasonable prospects of securing work. The regulations provide also for religious considerations to be taken into account in determining good cause for turning down the offer of a job. I hope that that is helpful to the noble Earl.
Regulation 16 was linked to Regulation 9. I could not decide whether to put the matter in Regulation 9 or Regulation 16. It is the same point. The noble Baroness, Lady Williams, and the noble Earl, Lord Russell, asked me about it. I do not believe that there is a contradiction. Regulation 16 allows jobseekers to restrict their availability to their usual rate of pay for a permitted period of up to 13 weeks. Regulation 8 allows them to continue placing restrictions on the rate of pay for which they are available, provided that they retain reasonable prospects of securing employment. Regulation 9 merely sets an overall limit of six months to such restrictions.
In fact Regulations 8 and 9 taken together are more generous to jobseekers than the current rules which allow no restrictions on pay after the permitted period. The permitted period will be determined in accordance with the adjudication officers' guidance and recorded in the jobseeker's agreement. If there is any dispute
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about the terms of the jobseeker's agreement, the dispute can be referred to the adjudicator by the jobseeker or the adviser.
As regards Regulation 14, the noble Earl, Lord Russell, raised a specific point about whether we were treating males and females differently. I believe that "he" means "she" and "she" means "he". In fact, that provision can be read for men or women. I suppose that "sexless" is the word I should use.
As regards Regulation 18, I was asked about the meaning of "violent" and "abusive" and about appearance and behaviour. We have had a great deal of debate about that. Regulation 18(4) deals with claimants who through unreasonable behaviour at a job interview or during the process of making an application to an employer effectively negate their actions to seek work. The words "violent" and "abusive" carry the clear dictionary meaning.
The noble Earl asked me about mens rea. Regulation 18(4) provides that the adjudication officer should not disregard the steps in which the circumstances were due to reasons beyond his control. It is clear from the words of the regulation—words such as "spoilt" and "undermined"—that we are not seeking to tackle accidental mistakes.
Baroness Williams of Crosby: My Lords, before the Minister completes his references to Regulation 18, perhaps I may press him on a crucial point. May we take it that if the pattern of behaviour of the claimant indicated an effort to try to find a job but that his appearance is one which the unemployment officer does not find totally attractive he will be given the benefit of the doubt on the basis of the consistent pattern of action?
Lord Mackay of Ardbrecknish: My Lords, it is always difficult to be totally theoretical. If someone is seriously looking for a job of course the adjudication officer will take that seriously into account. However, if someone says, "I am seriously looking for a job" but she goes for a job where appearance is important, such as working in the food industry—I made this point at length during debates on the Bill—and says to the employer, "No, I refuse to take off my earrings", I suggest that she would not properly be looking for a job. There are many parts of the food industry in which all employees must remove rings, watches, earrings and so forth because no one would like to find those items in a prepared meal. Producers can be taken to court by a customer who finds such odd objects. Many people in the food industry in particular have become very wary about the new rules and regulations concerning food hygiene. It is difficult for me, standing at the Dispatch Box, to say that in some hypothetical cases it will not matter but in others it will. There will be many cases in which as regards doing the job a person's appearance will not matter but in many other cases appearance will matter. One would not like to see someone with extremely dirty hands and clothes serving one's morning rolls, for example.
My noble friend Lord Swinfen asked a number of questions about disability, a subject in which he is greatly interested. He asked me why disability is not listed in Regulation 28 as regards failure to attend a

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Jobcentre. We provide for special postal arrangements for anyone who is not able to travel to a Jobcentre. They may sign on by post and many disabled people will benefit from the provision and will not be required to go to the Jobcentre in person.
Claiming incapacity benefit represents a significantly better buy for the claimant with a mental condition than does a JSA hardship payment because IB is paid at a higher rate. In most cases, an award for IB can be made at once upon receipt of a declaration for incapacity without a need to take appropriate incapacity tests immediately. Even where the claimant has recently been found capable for work and transferred from IB, IB can still be awarded if the condition has deteriorated or the claimant declares a different condition. Given the extensive safety net in IB for mental health conditions, we cannot envisage situations in which a person unable to qualify for IB will be seen as vulnerable for hardship purposes. There is therefore no reason to subject them to the lengthy and detailed JSA hardship procedures.
As regards the 26 weeks, that is continuous. The chronic condition must last or be likely to last for 26 weeks. However, that does not preclude the possibility that the symptoms may fluctuate in their intensity during that period. Thus, someone with arthritis need not necessarily be excluded. The decision as to the chronic nature of the condition will be made by the adjudication officer on the basis of the evidence available and would therefore be subject to appeal.
Dealing with Regulations 28 and 30, the noble Baroness, Lady Williams, asked why people should lose benefit if they failed to attend a Jobcentre because they were ill or looking after a person who was ill. A person who is ill cannot be available for work and therefore is not entitled to JSA. It is right that in Regulation 28 we should not make provision for good cause for not attending. If the jobseeker is temporarily sick or is looking after a sick person he will be treated as available and therefore will be regarded as having good cause for failing to attend the Jobcentre. I hope that the good cause point will help to answer the worries expressed by the noble Baroness.
As regards Part VII, the noble Earl asked who would carry out the up-rating. I do not know whether my answer will add to his confidence, but I can tell him that the up-rating will be done by my right honourable friend the Secretary of State for Social Security and his ever wise Ministers.
Turning to Regulation 105(13), the noble Baroness, Lady Williams, asked about the good neighbour provision. When she read out the provision she missed out an important word. It reads:
"the adjudication officer shall treat the claimant as possessing such earnings (if any) as is reasonable for that employment".
In the case of a person carrying out voluntary work of ihe kind she has in mind, the notional earnings provision does not apply provided that the adjudication officer is satisfied that it is reasonable for the service to be carried out free of charge. I believe that I can put the noble Baroness's mind at ease and reassure her that a person merely acting as a good neighbour will not be penalised by the notional earnings rule.
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I have spoken for 22 minutes and I believe that I have answered most of the points that were raised. If I have missed any I shall be happy to write to noble Lords. If noble Lords feel that a point has not been properly answered no doubt they will write to me. I am sure that I do not need to encourage them to do that—
Baroness Williams of Crosby: My Lords, I thank the Minister for giving way. I apologise for interrupting again. I wish to draw his attention to Schedule 7, relating to the disregards for war widows, war disability, war pensions and so forth. He may not wish to reply now, but I wish to urge him to consider the very modest disregard in these crucial areas of pension.
Lord Mackay of Ardbrecknish: My Lords, from the Dispatch Box I have answered the point in a wider sphere on a number of occasions. The disregard for war widows is considerably better than £10 because the £49.50, which I believe is the post-1973 payment, is also disregarded. As regards war disabled pensions, many additional payments which a severely disabled person can receive are also disregarded.
In the general case of disregards, my view and that of the Government is that the pensions which come from public funds are to help people with their day-to-day living expenses, as are all the benefits. It is not justified to allow one group which already receives significantly higher benefits in addition to receive a disregard. That is doing them a double favour. Those in other groups receiving widow's benefit, incapacity benefit and so forth could easily ask, "Why, if they receive a generous disregard, should we not receive it'?". That begins to open up considerable sums of money to the benefits bill.
Finally, the noble Baroness, Lady Hollis, made a more general speech about the regulations. A number of her points related to unemployment and to whether employment was available. We in this country are doing a good deal better than most of our competitors. As I said in my original speech, half the people who become unemployed find work again within three months, while two-thirds of them find work again within six months. A comparison with all the major industrialised countries—certainly all the major European countries—shows that we are up towards the top as regards the number of our people in employment. In fact, our unemployment rate is now better than that of the four "biggies" (if I may call them that); in other words, it is better than our big friends in the European Union—namely, Spain, Italy, France and Germany.
Indeed, not only is our unemployment rate better in general, but our youth unemployment rate is better and our unemployment among women is better. Moreover, in comparison with the EU as a whole, our long-term unemployment rate is better. Therefore, I shall not take any lessons from the noble Baroness who would impose a minimum wage and a social chapter on employment opportunities in this country and, perhaps, push our 8.2 per cent. current unemployment rate up to the levels of France with 11.4 percent. and Spain with 22.6 per cent.
I believe that the regulations and the allowance will help people who are unemployed and who want to work; as, indeed, they all do. It will help them find those jobs. It

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is an active employment measure which will encourage and help people and enable them to take up the jobs which are available. I commend the regulations to the House.
On Question, Motion agreed to.

Income Support (General)(Jobseeker's Allowance Consequential Amendments) Regulations 1996
Lord Mackay of Ardbrecknish: My Lords, I beg to move.
Moved, That the draft regulations laid before the House on 19th December be approved—[5th Report from the Joint Committee]
On Question, Motion agreed to.

Social Security (Back to Work Bonus) Regulations 1996
Lord Mackay of Ardbrecknish: My Lords, I beg to move.
Moved, That the draft regulations laid before the House on 10th January be approved [5th Report from the Joint Committee].
On Question, Motion agreed to.

Housing Benefit, Supply of Information and Council Tax Benefit (Amendment) Regulations 1996
Lord Mackay of Ardbrecknish: My Lords, I beg to move.
Moved, That the draft regulations laid before the House on 19th December be approved [5th Report from the Joint Committee].
On Question, Motion agreed to.

Employer's Contributions Re-imbursement Regulations 1996
Lord Mackay of Ardbrecknish: My Lords, I beg to move.
Moved, That the draft regulations laid before the House on 12th December be approved [4th Report from the Joint Committee].
On Question, Motion agreed to.

Health Service Commissioners (Amendment) Bill
Brought from the Commons; read a first time, and to be printed.
Wild Mammals (Protection) Bill
Brought from the Commons; read a first time, and to be printed.

Hong Kong (Overseas Public Servants) Bill
5.22 p.m.
Lord Chesham: My Lords, I beg to move that this Bill be now read a second time. The Bill is an enabling measure which would allow the British Government to provide a package of benefits to certain overseas public servants in Hong Kong. My purpose today is to explain the background to this proposal and to set out the package of benefits which we propose to implement by Order in Council after enactment of the legislation.
In 1954, the government of the day published a White Paper on the future of the Colonial Civil Service. That White Paper anticipated the process of decolonisation and considered how civil servants recruited from this country to work on pensionable terms in the colonies, and other dependent territories, should be treated when a colony moved to independence. The White Paper recognised that the British Government had a special obligation towards members of the colonial service. To give officers confidence about their future, the White Paper set out conditions which they could expect to be observed upon independence. The conditions included maintenance of their terms and conditions of service, safeguarding of their pensions, the ability to retire prematurely, and the payment to them of compensation. The White Paper also renamed the Colonial Service as Her Majesty's Overseas Civil Service, or HMOCS. A further White Paper of 1960 refined those arrangements.
There are some 700 members of HMOCS in Hong Kong. They have contributed enormously to the success of Hong Kong and many of them wish to continue in the service of the Hong Kong Special Administrative Region Government after 30th June 1997. But, like their predecessors in other territories, they are concerned about their future and need to know how they will he treated. To give those officers a guarantee that their services would he welcomed by the future Hong Kong Special Administrative Region (SAR) Government, China and Britain agreed and the Joint Declaration makes it clear that, after 30th June 1997, foreign nationals could continue in the service of the SAR Government on terms and conditions of service no worse than before.
The Joint Declaration also provides that the pensions of all Hong Kong civil servants, which includes members of HMOCS and their dependants, would continue to he paid by the SAR Government. However, the Joint Declaration also provides that, after 30th June 1997, the top 20 to 30 posts in the Hong Kong public service should he held by Chinese nationals. Those members of HMOCS who stay on will not he able to aspire to those senior positions. The process of constitutional change will, therefore, inevitably limit their career prospects.
By 1989, Hong Kong HMOCS were pressing the British Government to give them the same package of benefits provided to their predecessors in other former dependent territories. Their representative body, the Hong Kong HMOCS Association, argued forcefully that its members were in the same position as their

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predecessors and that the British Government were honour bound to treat them in the same way. They were supported by the Overseas Service Pensioners' Association, known as OSPA. OSPA represents the interests of former members of HMOCS from Hong Kong and elsewhere.
After careful consideration, the British Government accepted the association's request for an HMOCS package of benefits. In formulating detailed proposals, we considered the arrangements made in 42 previous cases as well as the particular circumstances of Hong Kong. The package which we propose to implement reflects those considerations as well as the outcome of discussions with the two associations, and, of course, the Government's responsibility to balance the interests of Hong Kong HMOCS and those of British taxpayers.
Subject to Parliament's agreement, it is proposed that Hong Kong HMOCS members and pensioners should be offered the following benefits. HMOCS members would be allowed to retire before the resumption of sovereignty by China with immediate payment of pension. To enable the Governor to phase departures, officers would be allowed to retire prematurely between 1st July 1996 and 30th June 1997.
HMOCS members would be paid compensation for loss of the Secretary of State's protection and career prospects. The proposed compensation arrangements would be broadly similar to previous HMOCS compensation schemes. There would be a cap on compensation of £120,000 at 1992 prices and HMOCS members would be paid their compensation gross. The cost of any UK tax liability would be met directly by the British Government. The compensation arrangements would cost about £47 million at current prices.
HMOCS pensions will continue to be paid in Hong Kong dollars by the Hong Kong Special Administrative Region Government after 30th June 1997. In line with the policy in the 1954 and 1960 White Papers, and subsequent practice, the British Government intend to provide Hong Kong HMOCS with pension protection. But, unlike previous cases, Her Majesty's Government have decided not to protect the full sterling value of Hong Kong HMOCS pensions at the date of change in sovereignty.
As Hong Kong HMOCS receive salaries which have a greater purchasing power than those of their predecessors and their British counterparts, the Government propose that their pensions be protected at a level broadly equivalent to the pensions received by officers in equivalent grades in the British public service. This principle of broad comparability underlies the proposed sterling pension safeguard scheme.
The British Government would not incur any significant liability under this particular scheme unless the Hong Kong dollar fell substantially in value. This is most unlikely to happen in the foreseeable future in view of Hong Kong's economic stability and the publicly stated commitment by both the Hong Kong authorities and the Chinese Government to maintain the linked exchange rate between the Hong Kong dollar and he US dollar. Copies of the proposed compensation
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schemes and the proposed sterling pension safeguard scheme were placed in the Libraries of both Houses before Second Reading in the House of Commons.
HMOCS officers who retire prematurely would be given financial help in finding re-employment or retraining. This help would be limited to £2,500 per officer, and subject to an overall cost ceiling of £750,000. The Chinese Government have been informed of the proposal to provide benefits to members of HMOCS in Hong Kong. They have accepted that this is a matter for the British Government.
An additional element of the package which does not depend on the Bill for its implementation is a proposed amendment to the regulations on supplementary pension for overseas service, known as SPOS. These regulations ensure that increases in all HMOCS pensions, and not just those of Hong Kong, keep pace with inflation in Britain. The regulations as applied to Hong Kong are complex and technical. But in essence what we propose is an amendment which would allow the payments under SPOS to take into account small reductions in the value of the Hong Kong dollar relative to sterling. This should provide real benefits to Hong Kong pensioners, particularly over the long term.
The HMOCS Association has accepted the package and has urged the Government to enact the Bill as soon as possible. OSPA also supports the Bill, but it has argued that the Government should propose a more generous pension safeguard scheme. We have considered carefully OSPA's arguments but we believe that our current proposal strikes a fair balance between the interests of HMOCS pensioners and British taxpayers.
In conclusion, I urge noble Lords, in considering the Hong Kong (Overseas Public Servants) Bill, to bear in mind the contribution which HMOCS officers have made to Hong Kong, and the honourable record which the British Government have established in providing a reasonable package of benefits to HMOCS upon the ending of British sovereignty. It is only right that HMOCS officers in Hong Kong should receive benefits similar to those provided to their predecessors. I beg to move.
Moved, That the Bill be now read a second time.—(Lord Cheshani.)
5.33 p.m.
Baroness Blackstone: My Lords, from these Benches I welcome the Bill. Indeed, the Labour Party is happy to accept it in its present form without amendment. The noble Lord, speaking for the Government, has made absolutely clear the need to provide a package of benefits for expatriates serving in the Hong Kong Civil Service and judiciary. As he said, there are around 700 men and women in the overseas service in Hong Kong who were recruited on pensionable terms before the Sino-British Joint Declaration. I wish to ask for clarification on one matter. The preamble to the Bill makes clear that there are about 500 officers and members of the judiciary who arc likely to benefit under the provisions of Clauses 2 and 3(1) of the Bill. Perhaps the noble Lord can explain, when he replies to the

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debate, the difference between the figure of 700 he mentioned and the figure of 500 which appears in the preamble. However, we accept both the scheme for those who will retire prematurely and the second scheme for those who wish to continue after 30th June 1997 when Hong Kong is handed back to China and becomes a Special Administrative Region Government within China.
If I may say so, the Chinese Government will have the good fortune to inherit a civil service of the utmost integrity, untainted by the corruption which has become all too common in some other parts of the region. We on this side of the House are grateful to the Hong Kong Overseas Civil Service for the vital role it has played in recent years while Hong Kong has continued as a dependent territory. It has been of enormous—indeed crucial—importance in providing back-up and support to the joint liaison group in the difficult path to the transfer of sovereignty. I have no doubt that it will continue to play an important part in the remaining 18 months before the hand-over finally takes place. There are still many complex issues that require monitoring and negotiation, including the major infrastructure projects of the container port and the new airport.
When I was in Hong Kong a couple of years ago I met a number of expatriate and Hong Kong Chinese senior civil servants who gave up their time to brief me on a wide range of policy questions affecting Hong Kong at the time. I was enormously impressed by their expertise and their judgment in dealing with a variety of difficult policy problems. If I had any criticism at all, it was of their tendency—at least as I perceived it—to be unnecessarily cautious about some areas of public spending. Given Hong Kong's huge reserves, it seemed to me that more ought to have been spent to provide, for example, public housing of a higher quality and to improve educational provision. As regards poor standards of English—the subject of frequent lamenting in Hong Kong today—large classes in Hong Kong's primary and secondary schools can hardly help. There are many classes of between 40 and 50 pupils. A lack of government generosity in the provision of adult education can hardly help. either. However, those are hobby horses of mine which it would be wrong to pursue further today.
It would also be wrong to raise any of the important questions about which there is some uncertainty concerning the future of Hong Kong after July next year. This is Second Reading of a short, specific and rather technical Bill. I believe, however, it would be right to have a wide-ranging debate on Hong Kong some time in the next few months before we get too close to the hand-over period.
I understand that the Bill is acceptable to the Hong Kong Overseas Civil Service Association which is happy that it should go through in its existing form. Indeed, the noble Lord speaking for the Government assured the House that that was the case. As he made clear, the Bill is apparently in line with the 42 similar schemes introduced over the past 40 years in dependent territories when sovereignty has been handed over. It
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seems perfectly proper that Hong Kong civil servants should have the same treatment as those who have served elsewhere overseas.
We are also satisfied with the principle of broad comparability with officials at a similar level in the British public service, which I gather underlies the proposed sterling pension safeguard scheme. I hope very much that those overseas civil servants who decide to stay in Hong Kong after 1997 will be able to go on contributing to a system which adheres to the rule of law; which protects the freedom of the press; which remains uncorrupt; and which, as an administration, is publicly accountable for its actions. That is the system which these men and women have served and which they have worked hard to sustain. Let us hope that they can continue to maintain it after 1997. Without it, Hong Kong's prosperity could be jeopardised, and that is something the Chinese leadership in Beijing surely wishes to avoid.
5.40 p.m.
Lord Redesdale: My Lords, the Bill has broad support from all parties. However, there is an area that causes a degree of concern to the Hong Kong pensioners that could be rectified. The issue that I wish to discuss is whether the pensions of Her Majesty's overseas civil servants should be linked to sterling or to the Hong Kong dollar.
The question that springs to mind is why Hong Kong pensioners are being treated differently to those in other former colonies. Since 1960, 42 former dependent British territories have become independent. In almost every case the pensions payable to the overseas civil servants have been paid at a fixed rate of sterling exchange. That pension liability was then taken over by the British Government and paid in sterling. Therefore, civil servants returning to live in the United Kingdom, would be no worse off than their British-based equivalent.
For people facing retirement from Hong Kong in 1997, their pension will be subject to different arrangements: the sterling pensions safeguard scheme. Civil servants' pensions will continue to be paid in Hong Kong dollars after June 1997, but the full sterling value at the change of sovereignty will not be protected.
Calculation is made on the basis of the salary; in Hong Kong dollars in 1991 for the grade at which the civil servant retires, and divided by 21 to give the protected pension in sterling as at 1991. The amount is then up-rated in line with UK inflation since 1991, to give the protected pension figure, described as the notional pension. If at any point the sterling value of the pension falls below the value of the notional pension the Government will make up the shortfall.
If the Government argue, as they did in the other place, that it is unlikely that pensioners will suffer by having their pensions linked to Hong Kong dollars, there will be no extra cost to the Government or the British taxpayer if they are linked to sterling.
However, if, as many of the Hong Kong pensioners fear, there is a drastic fall in the value of the Hong Kong dollar after 1997, that situation will not be covered

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comprehensively by the Bill. The British taxpayer will make savings at the expense of the former civil servants. I hope that that reasoning does not form the basis of this provision in the Bill.
Furthermore, the Government have sought to limit their liability. The maximum contingent liability, based on the proposition that the Hong Kong dollar would be worthless in 1997, would be £130 million spread over 50 years. The liability would diminish rapidly with the passage of time and could be expected to halve within only eight years.
The fundamental provision of the proposed scheme is that all overseas pensions should be redetermined nationally on the basis of the officers' retirement post, converted into sterling by a divisor of 21, using an exchange rate of 21 Hong Kong dollars to the pound. If in the future, due to a fall in the sterling value of the Hong Kong dollar, a pensioner's monthly pension payment in sterling is less than his notional sterling pension, then the British Government will pay a balancing supplement.
There has been considerable concern among Hong Kong pensioners about the exchange rate figure of 21 Hong Kong dollars that has been chosen by the British Government. On 1st January 1992 the exchange rate was approximately 14.6 Hong Kong dollars to the pound, but using the exchange rate of 21 Hong Kong dollars to the pound a pensioner would receive only 69.5 per cent. of his pension in sterling. Can the Government explain why that nominal figure has been chosen? I suggest that the deal does not represent a fair balance between the interest of the pensioners and the British taxpayer.
This is a retrogressive scheme as the greatest protection is provided to the Hong Kong civil servants who are the most highly paid in relation to their UK counterparts. The level of protection decreases in line with the decline in the extent by which Hong Kong salaries exceed or are below the UK civil servant equivalent. Therefore, those whose pensions are lowest will have the difference made up the least, which is the opposite of the precept of fair play which the scheme is said to promote. The variation is 136 per cent. at the top end and 52 per cent. at the bottom end.
It would give the Hong Kong pensioners peace of mind if the Hong Kong dollar provision could be amended. The future of Hong Kong after reversion to China in 1997 could have unforeseen effects on the Hong Kong dollar and it would be unfortunate if the British Government were to leave former civil servants in a state of anxiety.
5.45 p.m.
Lord Blaker: My Lords, as a former Foreign Office Minister with responsibility for Hong Kong and a former chairman of the All-Party Hong Kong Parliamentary Group, I am happy to support the Bill. However, I have two reservations which reflect the concerns of the Overseas Pensioners' Association (OSPA) and it is right that those concerns should be fully expressed.
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Fifty years ago Hong Kong's economy was in ruins. Hong Kong has achieved an economic miracle, as remarkable as that of any other country in the world. Two factors led to that miracle: the energy and skills of the people of Hong Kong; and, secondly, the rule of law, the absence of corruption, the fairness, integrity and wisdom of the administration of Hong Kong. The people responsible for that administration are those who are the subject of the Bill.
Hong Kong is executive-led in a way that other colonies were not as they approached independence. There is no period of ministerial government in Hong Kong preceding the transfer out of British sovereignty. Therefore, Parliament has an obligation to ensure that Hong Kong civil servants, police and judiciary, are fairly treated.
The second respect in which Hong Kong differs from other colonies is economic aid. Over the past 50 years Hong Kong has received no economic aid from the United Kingdom apart from some trivial sums after the Second World War. That situation was due to a large extent to the people who are concerned in the Bill: police, civil servants and the judiciary. Vast amounts of aid have been given to other former colonies. The UK has paid, as a form of aid, all the pensions of United Kingdom civil servants from most other ex-colonies. That point is worth bearing in mind as we consider the Bill.
The normal practice with other colonies approaching separation from the United Kingdom has been for a public officers' agreement to be signed which guaranteed maintenance of pensions of overseas service officers at a rate which reflected the official rate of exchange at or near the date of independence. In Hong Kong notional pensions are to be calculated from a base of notional salaries from 1st January 1992, five-and-a-half years before independence. The value of the pension is to be safeguarded only at a level of 21 Hong Kong dollars to the pound. That figure, to which the Hong Kong dollar has never sunk, has been chosen to bring Hong Kong pensions roughly in line with those of UK civil servants of broadly comparable grades.
It is the view of OSPA that it would be fairer to follow the precedent that was set for other countries. If the date of 1st January 1992 is to be taken as a base, why is the figure not 14.6, which was the rate of exchange for the Hong Kong dollar at that date?
If the reasoning behind those arrangements is that Hong Kong pensions are higher than those of UK civil servants, has that principle been applied to any other colony? If the pensions of those from any other colony have been below the level of UK civil servants' pensions, has the relevant public officers' agreement brought their pensions up to UK levels? OSPA believes that the divider of 21 is unfair, that the methodology for arriving at that figure is unsound, and that it will favour those who are most highly paid in relation to their British counterparts and disfavour those who receive less than their British counterparts.
My second reservation is as regards the choice as the base date of 1st January 1992. As my noble friend will he aware, this has adverse implications for those who

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retire after that date. The notional pension as at that date is increased only by the increase in the retail prices index in the United Kingdom, and not by the increase in the salary of the Hong Kong or United Kingdom officer. It is well known that salaries increase at a faster rate than the cost of living in general.
That is particularly relevant in the case of the Hong Kong police. I have a letter from a senior Hong Kong police officer who retired in July 1995, whose counterpart's salary increased by 22 per cent. between 1992 and 1995. The Hong Kong officer will lose the benefit of the increase received by his UK counterpart. Incidentally, that retired Hong Kong officer's pension will be safeguarded under the Government's plan at only 44 per cent. of its present level.
Therefore OSPA asks, and I ask, why was 1st January 1992 chosen? Why is it not a date in 1997, or even 1st July 1997? No doubt many calculations have to be made because of the many civil servants involved. But that must have been true for any colony as it approached independence. I understand that OSPA suggested that if the base date had to be 1st January 1992, the divider should be 14.6 which was the rate of exchange at that date.
I welcome the Bill, but I believe that the safeguard scheme needs further examination. I hope that my noble friend will consider what I have said, and that Ministers will be prepared to meet again with OSPA to see whether its concerns can be met.
5.52 p.m.
Lord Wilson of Tillyorn: My Lords, perhaps I should start by declaring that I have no financial interest in the Bill. Although I have had the privilege, and indeed the great pleasure, of serving with the Hong Kong Government for nine or more years in different capacities, my pension does not depend on the Hong Kong Government—more is the pity.
The Bill is an enabling measure. However, as I see it, it is an enabling measure in two parts. One has immediate effect once the Order in Council is brought in. The other is hypothetical and a contingency case. I should like to deal with those two separate aspects.
Hong Kong is immensely fortunate in its public service. It would be quite wrong to say that the dynamism of the territory—the extraordinary way in which it can seize any opportunity and not be fazed by problems which would completely destroy a different society—is simply due to the public service. It is due to the people of Hong Kong, but those people are operating within an environment created by the public service. Hong Kong owes a great deal to its public servants, whatever their particular nationality and from wherever they come.
I was in Hong Kong last week. I had not been there for some three and a half years. It was enormously impressive to see what is being achieved despite the political bickering in which China, Britain and Hong Kong are sometimes engaged and which is a sad diversion from the practical issues that have to be faced. To see a new airport literally rising out of the sea, a
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beautiful, remarkable new bridge almost complete—it will be one of the wonders of east Asia—roads, reclamation, and university development, which no doubt impressed the noble Baroness, Lady Blackstone, is immensely encouraging. Again, those achievements are not due to the Hong Kong public service alone. They can be attributed to the energy, the dynamism and the positive attitude of the people of Hong Kong. However, Hong Kong's public service, which has continued to serve with a high degree of efficiency despite political uncertainties, has contributed in no small measure to that success.
It is perhaps invidious that we should be dealing with only one part of the public service, Her Majesty's Overseas Civil Service, because the prosperity and success of Hong Kong has depended on all the Civil Service. However, we have a particular obligation to HMOCS. As the Minister said, there is no doubt that the civil servants' position is in some ways changed by the transfer of sovereignty and by the provisions of the Joint Declaration. They cannot rise to the top jobs in Hong Kong. It is right that we should make provision, as has been made in analogous circumstances in other territories.
It is good that the compensation arrangements are made in such a way that those who wish to stay on can do so. They are not obliged to retire before 1st July 1997. It is encouraging, too, that substantial numbers of members of HMOCS in Hong Kong are willing to stay on. To confuse matters, the figures that I have indicate that there are some 550 members of HMOCS in Hong Kong. Of those 250 have said that they wish to stay on; 150 are undecided; and 140 have said they will definitely leave. For that number to stay will he very much to the advantage of Hong Kong.
We have an obligation to the individuals in HMOCS. We have a strong obligation also to ensure that the new Hong Kong, the Hong Kong Special Administrative Region, is set up on 1st July 1997 in the best possible way. I believe that the provisions in the Bill for compensation and the arrangements to help those who leave to gain other jobs are good and, from my discussions in Hong Kong, much welcomed by members of HMOCS.
The second element of the Bill concerns the safeguarding of the sterling value of pensions of members of HMOCS in Hong Kong. Like all noble Lords who have spoken I believe that that contingency element is unlikely to arise. At present the Hong Kong dollar is strong against the UK currency. The Hong Kong dollar is tied to the US dollar. I do not see reason to believe that there will be a sudden crash in the value of the Hong Kong dollar. Nevertheless, many people fear that that might occur. In previous analogous circumstances, arrangements have been made to safeguard the sterling value of pensions. Therefore it is right that there should he arrangements for members of HMOCS in Hong Kong. But those arrangements should be fair, and accepted as fair by the people affected.
There can be no better suggestion than that of the noble Lord, Lord Blaker, who knows a great deal about Hong Kong and who has been a good friend of the

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colony at Westminster. It is not apparent to me that the arrangements now being considered—that is, a divider of 21 dollars to the pound—works out as being fair and an arrangement which would he broadly acceptable.
It is difficult to make comparisons between the Hong Kong Civil Service and the UK Civil Service. I have served in both, in Whitehall and in Hong Kong. I have immense respect for both civil services, but they are different. If one wanted a civil servant to write a brilliant submission, I should choose Whitehall. If one wanted a person to go out to deal with a typhoon, the arrival of millions of people at the border, or the development of a public housing system, a new airport or new universities, I should choose the Hong Kong Civil Service. One cannot compare the two. As the noble Lord, Lord Blaker, said, Hong Kong is different. A senior civil servant or what would be called in Hong Kong a secretary is equivalent to a Minister in this country and is in a front line position. It is therefore difficult to make comparisons.
The other difficulty is that if one chooses a divider like 21 dollars to the pound and tries to bring the guaranteed pension down to the level of the equivalent in the UK, there will be cases of hardship. I am sure that many Members of your Lordships' House will have received letters expressing anxiety. A person on a relatively low pension may find that the guarantee is at a very low level. I hope that we will not simply be guided by jealousy about the high salaries paid in Hong Kong nor by jealousy about the resulting high pensions. I hope that it will be possible to consider previous analogous cases in other dependent territories and to find a system which is nearer to what will be accepted as fair. I am conscious that for those who retired some years ago the Government would rightly say that they have benefited from windfall gains because they have had increases in pensions dependent on inflation in Hong Kong which has been much higher than inflation in the UK. However, I cannot believe that it is beyond he wit of man or those who devise such schemes to come up with a better way of dealing with the problem and perhaps a better divider along lines suggested by many of those involved.
I warmly welcome the Bill. I hope and trust that it will be enacted soon so that all those involved can be certain about their future and the Hong Kong Government can make the necessary arrangements for filling the places of those who leave. I also hope that the Minister will be prepared to consider the arguments put forward, both in your Lordships' House this evening and elsewhere, and will be prepared to look again at the precise way in which the sterling safeguard arrangement will work.
6.4 p.m.
Lord Marlesford: My Lords, with your Lordships' permission I wish to take a few moments in the gap to support the remarks made by my noble friend Lord Blaker and the noble Lord, Lord Wilson of Tillyorn. I have been lucky enough to be associated in one way or another with Hong Kong since the early 1960s. I remember, when I was a journalist for the Economist, writing a survey in 1975 or 1976. I said
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specifically that the quality of civil servants in Hong Kong was in my opinion absolutely equal to the best in Whitehall.
Therefore, we are talking about people of enormous quality and calibre. We are also talking about people who have given great service to Hong Kong. We must remember that for several decades Hong Kong has been a place where much money has been made for the benefit of those making it but also for the benefit of the people of Hong Kong and the people of China.
It is worth remembering that, in comparison with the sums of money made by people in business in Hong Kong, the Civil Service has not been highly paid. Yet, so far as I am aware—and I am not talking about the unfortunate period involving the police—on the administrative side of the Civil Service the administration has been of the utmost integrity and of the highest quality. I hope that it would be unacceptable to your Lordships' House if this evening the Government were not prepared to say that they would consider some of the arguments put forward that the arrangements proposed in the Bill as drafted are not adequate to give total fairness or were not prepared to pay tribute to those who have served Hong Kong and Her Majesty's Government so magnificently for many years.
6.6 p.m.
Lord Chesham: My Lords, I am pleased that the Hong Kong (Overseas Public Servants) Bill has received a broad welcome from the House. It is essentially a non-political, technical, good housekeeping measure which recognises the British Government's responsibilities to the last serving members of HMOCS. I am sure that Hong Kong HMOCS officers and pensioners will appreciate the warm tributes that noble Lords paid to their commitment and contribution to Hong Kong over many years.
I was not surprised that the House focused on the detail of the package of benefits, rather than on the principle of providing Hong Kong HMOCS with a package in the first place. After all, we are not doing anything for Hong Kong HMOCS which was not done for their predecessors in many other former territories. I note that no speaker questioned whether such benefits should be provided at all and thus doubted the need for this piece of enabling legislation. All noble Lords recognised that this Bill is needed and must be implemented without delay.
Some noble Lords questioned certain aspects of the proposed package. It may be helpful if I say a little more about our approach to the benefits, in particular compensation and pension protection. I wish to answer the point made by the noble Baroness, Lady Blackstone. The figure of 700 is the number of HMOCS officers in Hong Kong when the Bill was drafted; 500 is the approximate number of officers who will not have reached the normal retirement age by 1st July 1997. They will therefore be eligible for compensation.
The noble Lord, Lord Wilson, mentioned compensation. We believe that officers who decide to stay on after 1997 should he compensated because

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HMOCS officers, whether they leave or stay on, will suffer a loss as a result of constitutional change. Even if they stay on, their promotion prospects will in most cases be seriously affected. Also, if compensation were offered only to those who left, it would encourage officers who might otherwise stay on to leave the service of Hong Kong. It would be bad if Hong Kong lost the benefit of their extensive knowledge and experience at this critical stage of the transition.
I come now to the sterling pension safeguard scheme on which a number of interesting points have been made. I understand why some noble Lords have sympathy with the case put forward by the OSPA, but it is important to look at the facts. Let me explain a little more about the proposed scheme and why the Government believe that it strikes a fair balance between the interests of HMOCS pensioners and British taxpayers.
At present Hong Kong pensions are paid by the Hong Kong Government in Hong Kong dollars. Pensioners who have retired to Britain are not paid their pensions in sterling. Neither the Hong Kong Government nor the British Government provide them with any guarantee of the sterling value of their pensions.
The Sino-British Joint Declaration provides solid guarantees on the continued payment of pensions by the autonomous Hong Kong authorities after 1997. Thus Hong Kong pensioners will be in exactly the same position after 1997 as they are at the moment. What we are therefore talking about is the British Government providing a pension protection scheme which does not exist at the moment. And we are not asking HMOCS pensioners to give up in exchange any increases in the sterling value of their pensions as a result of an appreciation in the value of the Hong Kong dollar.
My noble friend Lord Blaker spoke about similar treatment. Hong Kong pensioners are not in the same position as their predecessors. Their pensions are not paid on the basis of the fixed exchange rate with sterling; their pensions are, on average, far higher. The issue therefore was what additional protection over and above that which exists at the moment the British Government should provide for Hong Kong HMOCS pensioners.
As to why 1992 was taken as the marker date, that was when we first proposed the scheme. Because of Hong Kong's varying exchange rate, a fixed date had to be set in order to work out the contingent liability involved. Pensions linked to 1992 would be increased in line with UK inflation.
In reply to the noble Lord, Lord Redesdale, unlike in other former British territories, the salaries of HMOCS in Hong Kong, and thus their pension levels, are on average far higher than those received by public servants in this country. Also, Hong Kong pensioners have received, and are likely to continue to receive, large pension increases awarded by the Hong Kong authorities. These increases are based on the rate of inflation in Hong Kong, which has for some years been over 8 per cent., and which of course has no relevance to the circumstances of pensioners who have retired to
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Britain. We therefore had to ask ourselves whether it would be fair to ask British taxpayers to protect the full sterling value of Hong Kong HMOCS pensions and any future pension increases.
Therefore, we have proposed an amendment to the SPOS regulations which would for the majority of HMOCS pensioners protect their pensions at 100 per cent. of the original sterling purchasing power, unless there was a severe fall in the value of the Hong Kong dollar. Over time, this amendment will provide real benefits to Hong Kong pensioners.
Against that background, we concluded that the British Government should not guarantee the full sterling value of Hong Kong HMOCS pensions, and that we should provide a protection scheme which would act as a safety net in the most unlikely circumstances of a severe decline in the value of the Hong Kong dollar. We considered various options for this scheme. We looked, for example, at protecting a percentage of the original sterling purchasing power of HMOCS pensions. But we decided that this would not be fair to pensioners who had retired from Hong Kong when the Hong Kong dollar was weak. We also looked at protecting a percentage of the current sterling value of pensions, but rejected this as the potential liability would depend on future pension increases awarded by Hong Kong over which we have no control.
In the end we settled on a scheme based on comparability. The operations of the scheme are complex. But the intention is to set sterling pension protection for Hong Kong HMOCS at a level broadly comparable to the pensions received by officers in equivalent grades in the Home Civil Service. To respond to the noble Lord, Lord Wilson, it is on broad comparability. There cannot be specific ones.
I know that OSPA has criticised certain technical aspects of our approach, such as the grade comparison used to determine comparability. But the fact is that the exercise was, if anything, generous to Hong Kong HMOCS. For example, some of the grade comparisons were favourable to Hong Kong officers and pensioners, and we did not take account of Hong Kong pension earning rates which are, on average, about 20 per cent. higher than those of their British counterparts.
OSPA has pointed out that under our scheme the protected pensions of some Hong Kong pensioners would be less than the pensions received by their British counterparts. The fact is that over 75 per cent. of Hong Kong serving officers and pensioners would have their pension protected at a level higher than their counterparts in this country, and indeed higher than the pensions received by pensioners from other former dependent territories. In my view, our proposed scheme, taken together with the SPOS amendment is not ungenerous.
There are two other proposals in the Bill, to allow officers to take early retirement and to receive some help in finding new employment. We are not proposing anything extra for Hong Kong HMOCS. Their predecessors were allowed to retire prematurely, and it is understandable that some members of HMOCS in Hong Kong would not wish to continue in service when

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British sovereignty over the territory comes to an end. We have proposed that HMOCS officers who take premature retirement should be given some help, possibly by a consultant, to find new employment, and that the British Government should make a cash-limited contribution to the costs involved.
The Governor of Hong Kong cannot allow members of HMOCS to take premature retirement until the legislation and one of the Orders in Council are in place. Officers have been told that the intention is to allow them to retire from 1st July 1996 in order to phase departures before the transfer of sovereignty on 1st July 1997. The HMOCS Association, which is aware of the urgency attached to the Bill, supports its proposals and its early enactment. I commend it to noble Lords in the hope that it can complete its passage through this House as quickly as possible.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Abnormal Loads On Motorways
6.16 p.m.
Lord Mason of Barnsley Lord Mason of Barnsley rose to ask Her Majesty's Government what action they propose to reduce the problems caused by daytime movements of abnormal loads on motorways.
The noble Lord said: My Lords, I raise this Question to ask the Government what are the prospects of the Government, in co-operation with the police and the Freight Transport Association, agreeing to ban the movements of abnormal and wide loads on roads during the day; and whether they should be escorted by the police or private escort companies. Consideration might also be given to whether a set of public national guidelines should be laid down governing abnormal load movements on the roads.
We are all aware of some of the problems. Abnormal loads under police supervision reduce three-lane motorways down to two. The result is miles of tailbacks, frustration, impatience, bumper accidents, road rage and the ruination of schedules—all caused by abnormal loads. We see giant pieces of machinery on transporters—even army tank transporters—being moved on the motorway at five o'clock in the evening. Even during the course of a working weekday, havoc can he created over long stretches of main roads. Undoubtedly also, though not so important, caravans on the move on coastal roads are not only a major frustration to holidaymakers but cause accidents through impatience and ruin holidays as well.
Worse still are abnormal indivisible loads. I refer to loads which cannot, without undue expense or risk of damage, be divided into two or more loads for the purpose of carriage on the roads. They travel under escort at 15 to 20 miles an hour. One police officer has said that the sheer number of abnormal loads currently being escorted on a daily basis across Great Britain makes for an inefficient and costly system. It affects the police service, the haulage industry and the consigners of loads, and a large part of the country at the same time.
In one year, 1,781 abnormal loads were escorted by the police in South Yorkshire alone. A survey of 16 forces over a nine-year period showed that notifications of abnormal load movements increased by 12 per cent. That is typical of the national trend. The burden on the police is significantly increasing, and the frustration of road users, especially in commerce and business, is rising accordingly.
How and when an abnormal load can he moved varies from force to force. Before an abnormal load can be moved it necessitates two working days' notice, giving time, date and route, dimensions length and width, and the chief officer of police may vary the timings in the interests of road safety and to avoid undue traffic congestion. I can tell your Lordships from experience that that cannot be avoided on the MI during the day. Above all, there does not appear to be a national policy on the movement of these loads that covers all divisional forces.
What is of concern in the police service is the possibility of the national privatisation of these operations. Studies have taken place between the police and the Home Office in regard to the privatisation, civilianisation and rationalisation of many key traffic policy functions. Some are still under consideration; others are gradually being introduced. What is of major concern and crucial importance is the safety and security of the movement of abnormal loads.
The Freight Transport Association has let it be known that policing, particularly on high-speed roads, calls for special skills and sophisticated equipment. It says that the job must be left entirely in the hands of the police—with which view I concur—and that it would be folly to abandon it. Naturally, operators do not like paying for escorts, but prefer to pay for the security and safety of a police escort than a private sector service. I believe that there should be more open, acceptable liaison hetween the different divisional forces on motorways. The Freight Transport Association suggests that it is questionable whether six forces sharing the policing of the 120 miles of the M25, or 12 forces patrolling different sections of the Al between London and Scotland, make for the best use of resources.
Is not some privatisation going on already? In North Wales road hauliers are being told to provide their own escorts. In such cases, what is the view of the Home Office as to the supervision of private firms, whether they be Group 4, Securicor or individual firms? What of the safety and security of loads? Under what special proviso can a private haulier move an abnormal load on the M1? Will not the police still have to travel with private escorts to ensure the safety of the public? Will not the routeing, authorisation and administration still be in the hands of the police? Does not all of this suggest that these operations should remain in the hands of the police? Given their powers of arrest, if the police were not involved, hijackers and roadway robbers would have a field day. It would be a godsend to the criminal fraternity.
On the 21st February 1995 the Minister the noble Baroness, Lady Blatch, said in a Written Answer at column 64:

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"A Police Community Liaison Committee has suggested that the movement of abnormal loads on motorways should be limited to night time only, and a few similar letters have been received from members of the public."
What are the prospects of a nationally recognised policy on abnormal load movements at night only with police escorts, recognising that the costs incurred by police are wholly covered by the companies concerned? I believe that the majority of hauliers would accept movements at night as national policy, with all forces complying with national guidelines. I believe that the Police Federation agrees in principle. The Association of Chief Police Officers believes it to be the logical next step. I believe that the motorist would be delighted.
6.23 p.m.
Lord Lucas of Chilworth: My Lords, your Lordships will be grateful to the noble Lord, Lord Mason, for putting down this interesting and somewhat intriguing Question. I am sure the noble Lord will forgive me if I do not share the criticism in his earlier remarks. My researches and knowledge of the problem of abnormal loads do not suggest to me quite the difficulties that he mentioned in the earlier part of his remarks—miles of tailbacks, frustration, road rage, accidents, and so on. There is no record of any extreme abnormality under any of the headings that he mentioned.
The noble Lord fails to remind your Lordships that under the Authorisation of Special Types (General) Order 1979 it is incumbent upon hauliers to give notice of any abnormal loads to be transported by road. It is then for the chief constables of police authorities to determine which loads shall be escorted. My understanding is that some 150,000 escorted movements are carried out on motorways and urban roadways in the course of a year out of approximately 1,350,000 notifiable movements. From that, we can see that only a small number of the notifiable movements have to be escorted.
I do not believe that there is any question as to the police abrogating this responsibility. The police responsibility in this matter is an historical one. There is no law which says that the police should undertake these tasks. In some cases, due to pressure on resources, various police authorities now take a different view. I have no doubt that my noble friend the Minister will tell us the exact position. In any event, whoever does the job at the moment, whether loads are escorted or not, the police authorities determine and control all details of movements: whether they be by day or by night, the speeds, the times, and upon which days. It is exceptional for hauliers to pay for this service. I understand that there is an exception in the case of Siemens and National Power in relation to the transportation of generating plant from Avonmouth to Didcot. My honourable friend the Minister for Transport in another place gave an Answer to this question on 24th November. Whatever arrangements National Power and Siemens came to with regard to payment, it would be interesting for the House to know whether that money
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accrued to the police authorities involved in the escort duties or fell into the bottomless pit known as the Treasury.
I believe that the Association of Chief Police Officers carried out an experiment in respect of escort duties. I understand from the Freight Transport Association that the experiment was successful. It tested the ability of a private contractor with the use of a non-police vehicle to carry out a movement from the north of England to the south coast. For that purpose, both motorways and inter-urban motorways were used. There is no difficulty provided that escorting companies or persons are properly trained. Essentially, there is no policing obligation here. It is a matter of escort duties. The noble Lord, Lord Clinton-Davies, shakes his head. No doubt a little later he will give his views. If there were to be an accident both the escorting body, whether it be the police or anybody else, would be obliged to call upon the police to deal with it.
Lord Clinton-Davies: My Lords, I thank the noble Lord for giving way. Does it not occur to the noble Lord that sometimes it is very difficult to distinguish between simple escort duties and the prevention of crime? Does he appreciate that particularly the large convoys can constitute very vulnerable targets for villains? Therefore, it is important to have the police at hand, not miles away. They are capable of coming to arrest any miscreant.
Lord Lucas of Chilworth: I am sure that that is a point which the noble Lord might have brought up in his response, but we are time limited. Frankly, I do not see the connection. An escorting body on the motorway does not preclude the police from discharging their ordinary policing functions on the motorway. We are not talking here about crime but about escorting abnormal loads. That is the subject of the Question of the noble Lord, Lord Mason. We are not talking about crime as such.
I understand that the Home Office has produced a report, following a review of traffic policy, from which I quote:
"The work being taken forward with ACPO aims to encourage the unescorted movement of abnormal loads at night-time on motorways and linking dual carriageways and the private escorting of such loads on those roads during the daytime".
Consultants have been appointed to undertake a review of the kind of skills, qualities, and so on, that would be required of a private body.
That issue has been broached with the road haulage industry and its views have been made clear. The haulage industry would prefer—as most of us might well prefer—the police to undertake those duties. But police resources are scarce. I would sooner the police went about their business of catching criminals and wrongdoers than have them undertake escort duties which could be carried out by somebody else.
I should be quite happy if we could find a method by which the haulage industry could pay for the police to undertake those duties and have the money retained in the police authorities, so that they could perhaps recruit their own motorway escorting police service. Perhaps

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my noble friend can tell me whether or not that is possible. If it is not, we should resort to using other services, which are properly trained, properly monitored and which abide by the guidance given by chief constables under the provisions of the order to which I referred.
I should like to ask my noble friend some questions and I shall understand if he is not able to give a full answer to them this evening, but perhaps he will let me know in due course. How far advanced is the work of the review body? In the event of private escorting, will arty primary or secondary legislation be required? Further, how will the fee structure, whether it is in the private domain or through the police, be constructed and by whom? I have mentioned the escort duties remaining with the police and the charging system. Perhaps my noble friend will be able to answer those questions.
My final question is perhaps not germane to the noble Lord's Question but is, I think, germane to the general subject of police and traffic. Can my noble friend tell me whether the review has dealt with any further police tasks concerned with vehicles and traffic? Are there any further tasks contemplated, and in what area?
6.35 p.m.
Earl Attlee: My Lords, I thank the noble Lord, Lord Mason of Barnsley, for tabling this Question for debate. It might not appear to be of earth-shattering importance to many in your Lordships' House, but it is to the motorist, who is undoubtedly affected by such loads and to those who are involved in or with the heavy haulage industry.
Before saying anything of substance, I should remind your Lordships of my interest. I am president of the Heavy Transport Association; I own a Thornycroft Antar that can operate only under a special types order; and, finally, my Territorial Army unit has a transporter operating under special types rules.
The whole question is that of striking the right balance between the interests of industry that needs to be able to move the loads, the safety and convenience of the ordinary motorist, which are largely looked after by the police, and finally the bridge and highways authorities.
I start with the need to move the loads. The need revolves around economy of size. A large generator is more efficient than a small one, as is a large piece of construction equipment. The cost and inconvenience of moving a large piece of equipment usually pales into insignificance compared with the efficiency savings that come from using such a large piece of equipment. It should not be forgotten that the vehicles used for carrying abnormal loads are taxed at the rate of £5,000 per annum. That goes some way toward paying for the police escort, though not—I accept—all the way.
We are still a world player in the heavy engineering industry, but the product still has to be moved to a port for export. I repeat the word "export" and remind your Lordships how significant that can be for foreign exchange and job security in areas of traditionally high unemployment.
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The noble Lord addressed the problem of the inconvenience to the ordinary motorist and the need to avoid accidents. Those matters are in the hands of the police, as was so well explained by the noble Lord. The police have the power to vary the time of the move and to decide whether they need to escort the load. As the noble Lord, Lord Lucas, said, there is no legislative requirement for them to escort it and one can escort it oneself. In general, abnormal loads are not allowed to move during rush hour. But a major question is whether they should be allowed to move at night. For many years, the Metropolitan Police encouraged moves between 7 p.m. and 7 a.m. and all day Sunday. However, it is only recently that other police forces have allowed night moves on motorways and dual carriageways. During a night move, the load is lit up like a Christmas tree.
The road conditions within each constabulary vary enormously. For instance, Norfolk has few good roads and no motorways, whereas in the industrial heartlands of the country there are very good roads. Therefore, it is not surprising that all the constabularies have differing policies. Sometimes, they are too rigidly applied. without technical consideration. The problem of night moves is one of them. I have to advise the House that in general the heavy haulage industry is well pleased with the service provided by the police.
There is one area where there is still some police dogmatism; namely, running at night. The noble Lord, Lord Mason, suggested that approach as a means of reducing congestion. I wholeheartedly support him. We are talking only about a load on motorways and dual carriageways, with or without an escort, be it private, police or the haulier himself.
I have listened carefully to what the noble Lord, Lord Mason, said. It makes a lot of sense to me. I do not propose to deal in any detail with the matter of private escorts. I must say that it is a very difficult subject, with the pros and cons very finely balanced. It seems to me that all concerned—the police, the heavy hauliers and the trade associations—are ambivalent about it. But I should like to make some observations on this issue.
First, only the police should be allowed to stop the traffic, whether for the purpose of escorting an abnormal load or for making multi-agency checks on goods vehicles. Secondly, private escorting is only suitable for motorways and linked dual carriageways without roundabouts. Where roundabouts occur, one must involve the police in order to stop the traffic from entering the roundabout. Thirdly, if we decide to go towards private escorting, we must not create a monopoly; the contract must not be given only to the AA or to the RAC. I am pleased that the Government did not adopt that route with the Transport Research Laboratory; they gave the contract to the laboratory itself. I suggest also that we leave the option open to the heavy hauliers to escort their own loads.
One problem on the motorway to which I should draw your Lordships' attention is that sometimes the load has to be moved into the middle of the carriageway. Bearing in mind the speed at which the traffic moves on

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motorways, one is likely to need a police escort in that situation; only the police have the skill and ability to interfere with traffic to that extent.
The movement of abnormal loads outside of the Construction and Use Regulations (C & U) and under 150 tonnes, as the noble Lord, Lord Lucas, said, is permitted by the Authorisation of Special Types (General) Order 1979, referred to as STGO. The STGO is designed to cover the vast majority of—dare I say it?—ordinary, abnormal loads. It is of a permissive nature and if the driver of an abnormal load breaks one of the conditions of the order, even very slightly, he can be prosecuted for C & U offences. In other words, he loses the protection of the STGO. For example, if he was running at 76 tonnes gross train weight and there was an error in the paperwork, he could be prosecuted for being 100 per cent. overloaded. The courts' sentencing policy is not consistent and the outcome is often a lottery.
A serious anomaly has developed regarding the maximum weight and notice requirements. When the original order was laid in 1979, the maximum weight under C & U was 32 tonnes. That was increased to 38 tonnes and was recognised in an amendment to STGO. However, operation at 44 tonnes is now permitted for inter-modal work under C & U. No notice is required to any authority. The anomaly is that an operator who needs to carry an abnormal load at 39 tonnes gross weight has to notify all and sundry, whereas the inter-modal operator does not.
I am reliably informed that a six-axle 46-tonne artic operating under category one of STGO causes no more stress on the road structures than does a 44-tonner on inter-modal work. Allowing 44 tonnes for abnormal loads under C & U is not recommended as it will be the thin end of the wedge for even higher weights for general construction and use, which I cannot support. Thirty-eight tonnes is quite sufficient. There are other technical difficulties with the current STGO but I do not propose to test your Lordships' patience by going through them. I therefore ask the Minister whether he intends to draft and lay a revised STGO before Parliament which will address those well-known problems.
I mentioned the role of the bridge and highways authorities. They include British Waterways, Railtrack, BR Property Board, London Underground and the local councils. They have the power to reroute abnormal loads to avoid going over weak bridges. Unfortunately, the council highways authorities do not appear to have a realistic attitude to routeing. The staff involved do not appear to have sufficient technical knowledge for their responsibilities. But there is no easy solution to the problem. Theoretically the councils should be in an ideal position to deal with these matters because they have local knowledge.
There is another problem which is similar, but more wide-ranging. I mentioned the importance of the heavy engineering industry. Most of the output needs to go to an east-coast port such as Imingham and thence to Rotterdam which then gives access to anywhere in the world at economical rates. Very heavy electrical
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equipment has to be delivered to power stations around the country. Other very large pieces have to be moved around the country. Most of those moves have to be authorised by the Secretary of State.
In the past the Department of Transport tried to maintain a network of high and heavy load routes, but it is not easy and there is no legal duty to do so. Another problem is that the department is not in a good position to persuade a highways or bridge authority to accept a load on their structures. Therefore the local authorities can ignore the department's and industry's national considerations and adopt a NIMBY attitude. So the question I ask the Minister is: what is the policy regarding high and heavy load route networks?
Once again, I thank the noble Lord, Lord Mason of Barnsley, for introducing this matter for debate and look forward to hearing the Minister's reply.
6.46 p.m.
Lord Berkeley: My Lords, I congratulate the noble Lord, Lord Mason of Barnsley, on introducing this debate. I want to talk this evening about trains on the road. This is part of the overall problem of abnormal loads. But it is particularly aggravating and irritating to motorists to see trains being delivered on the road, mainly because it is unnecessary. As a general principle, trains should go by rail.
I must declare an interest in relation to my connection with Eurotunnel. Eurotunnel had a large number of shuttle locomotives delivered by road from the Midlands to the Channel Tunnel, sometimes to the port and sometimes to the tunnel. They were of too big a gauge to travel on British Rail lines and possibly the company may be excused for doing that.
I was responsible for ordering two coaches which were condemned. They were being delivered from Yorkshire to Folkestone, and it was interesting to note that when they arrived they were at that time the newest coaches in the whole of the Kent network. That was before the latest delivery, but at that time they had already been scrapped elsewhere when the Kent network owned nothing beyond a Mark One.
Obviously some large loads need to go by motorway; but why trains? Some preserved railway trains need to be taken by road because they are not suitable for rail. But many steam specials travel on the railways these days and trains involved in accidents sometimes need to go for repair. The most apt example, which happens quite frequently, is the InterCity Great Western 125 high speed trains which are based in Plymouth and are sent regularly to Crewe for overhaul of their engines. They go by road. They are capable of travel by rail when they are hauling coaches, but somehow, when they are on their own—perhaps they are lonely—they have to go by road. It normally takes two-and-a-half days. I gather that a police escort is usually involved. It is incredible that a 50 year-old coal-fired steam train is safe on the railway, but a modern diesel locomotive that hauls passengers most of the time is deemed unsafe.
There are two reasons for the carriage of trains on the road. The first is safety and the second is cost. In the new semi-privatised railway all operators are charged

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for all movements. They need to find a locomotive; a driver with route knowledge (it does not only apply to taxis); and a special contract needs to be drawn up between the operator and Railtrack.
Safety on the railway is of vital importance, but it must be affordable safety. We are in danger of forgetting that safety is meant to be in the interests of the passengers rather than in the interests of the operator protecting himself or herself from claims.
The principle now is that all trains must have a safety case before they can operate. That is obviously very important, but how safe should they he? Should they be safer than by road and accidents caused by heavy load movements? Shall we say, affordable safety? This month Modern Railways devotes several pages to safety cases under the headline "— storm imminent". I believe that that sums it up. Several years ago Railtrack, or its predecessor, had to apply for a safety case for the electrification of the Tonbridge-Redhill line in order to demonstrate that third-rail electrification was safe. The third-rail has probably been around for 60 years or more, so why did they have to make another case to demonstrate that it was safe?
There are three types of trains awaiting a safety case in which we all want to travel—that is to say, North Kent and Great Northern; the Regional Railway's 323s between Manchester and Liverpool and, of course, the Royal Mail multiple unit trains. They all have something in common: they are all awaiting safety certificates to enable them to operate. Some of them have had to submit 1,000 pages or more of paper work and most of the cases have cost half a million pounds. It can take a year to obtain a certificate, which is a year's loss of revenue. That compares with several days for an application to take a train on the road, which probably explains why that is happening. We are getting very close to a system where safety is becoming impossible to achieve. It is safer to close the system because then one has 100 per cent. safety: one cannot have an accident if nothing is running.
That is probably London Underground's argument to justify closing the Northern and Bakerloo Lines across the Thames, which they recently announced. It is certainly safer for the operator, but is it safer for the passenger? In the very unlikely event of a flood in the Underground, is the risk of being killed greater than that of being killed by a road vehicle while walking across a Thames bridge because the Underground is closed? I believe that the same applies to trains being taken by road. Does the operator have to give the police a year's notice, spend half a million pounds on a 1,000 page safety case for each journey and each load, in order to prove that the load is safe? We have heard the answer tonight from several noble Lords, and that is no. Two days are needed and at the moment it appears to be free.
If my two condemned coaches which were delivered from Rotherham to Folkestone were unsafe on the railway system, why should they be safe on the roads? It must be roughly the same low risk of something falling off and injuring another traveller, whichever way one goes. Does the road operator have to pay the full cost of delay to the other motorway users and the full
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cost of police escorts? I believe that the answer is no. The difference is that we, the road users and taxpayers, have no choice and have to carry the road costs and the risks of accidents, whereas on rail, the corporate operator, he it Railtrack, London Underground or one of the many train operators, have lawyers who tell them that it is better not to operate the system at all than risk anything happening, however remote. It would be equally logical, but also equally ridiculous, to suggest closing the motorways to avoid accidents because one would not have any accidents if the motorways were closed. But that is where this blinkered approach to safety is leading and I repeat, "storm imminent".
In conclusion, at a time when the Government are actually encouraging freight from road to rail, the regular carriage of trains and locomotives on the motorways must be one of the most bizarre examples of the consequences of this policy. I really urge the Government to institute an urgent review of this rather ridiculous situation.
6.53 p.m.
Baroness Thomas of Walliswood: My Lords, I too would like to thank the noble Lord, Lord Mason of Barnsley, for introducing this very interesting subject. I shall briefly comment on some of the points that have been made by previous speakers and that, hopefully, will help me cut down on the list of points that I intended to make.
The noble Lord, Lord Mason, was extremely convincing when he referred to the lack of a national policy for determining how these loads should he managed while they are on the network. It was an extremely interesting point and I hope that the Minister will respond to it. I also agree with noble Lords who said that it would be sensible to try to ensure that these very heavy loads are carried at night. As the road system becomes fuller it is right that the Government are no longer prepared to build their way out of this particular problem, on the ground that they never could.
There is, therefore, a greater need to manage the traffic on the roads. That means rationing the road space at certain times for certain kinds of users. Given the incredibly rapid and damaging effect that any hold-up can cause not only on the motorway system but on the surrounding network—and we have only to look at what happened as a result of the first lot of snow and how that ricocheted back from Kent into Surrey, causing enormous damage to people's schedules with whole nights wasted sitting in motorway cafes and so on—we see how useful it will be if we can separate the use of the motorways by these abnormal loads from use by other traffic, such as rush hour, business and daily traffic. That is an excellent approach and I hope that the Minister will be able to respond in a positive way on that matter.
I disagree with the suggestion made, I believe, by the noble Lord, Lord Lucas. In common with other speakers, I believe that it is important for the police to he in charge of abnormal loads. It is not so much to stop crime being committed—although I can see that for certain loads that might be important—but that in the

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event of an accident one of the emergency services is already present at the scene. That is an enormous advantage in this particular case. I hope that the Minister will be able to respond to that point. It is idiotic to have to call an emergency service if there is an accident whereas if the police continue to escort these very big loads they are already there.
I do not believe that anyone would deny that the passage of abnormally large loads has to be done by road. Generally, they cannot be taken by rail because of the size of bridges and so on. I am not in any doubt that this type of movement has to be carried out. However, if it is an important economic matter, the question of payment arises, and I shall return to that in a moment or two after I have commented on the delightful suggestion of the noble Lord, Lord Berkeley, who should know; namely, that, on the whole, railway carriages should travel by rail. I thought that that was a point of such absolute simplicity that it has great virtue. I was reminded of songs about porters and not being able to get to Crewe, which he particularly mentioned. That is still one of the major rail junctions in the whole of England. I am sure that the noble Lord is right on that particular point.
The last point I wish to pick up from previous speakers is the incompetence of local authorities. I do not know whether noble Lords could see my hackles rise at that point. I ask the Minister whether he has any evidence whatsoever that local authorities are not carrying out their responsibilities as regards heavy loads. I am sure that I do not need to remind him that for loads of 38 tonnes and over, transporters have to apply to the local authority. They have to be consulted about the route and they are normally consulted by the police when the load is particularly large and its transportation has to be organised by the police rather than by the local authority. I hope that I am right in thinking that highway authorities are more than competent and do know where their weak and strong bridges are and where there are narrow overhead railway bridges.
Earl Attlee: My Lords, has the noble Baroness ever actually applied to a local authority to move an abnormal load?
Baroness Thomas of Walliswood: My Lords, no, I have not. That is why I asked the noble Earl to respond in that way. I am interested to know what people's experience has been. If there are any statistics on that, I hope that they are in the noble Earl's department because I do not have such statistics at my beck and call.
If, as I understand it, the suggestion has been made that at some future date abnormal loads might be accompanied by non-police personnel, I think that that raises extremely important considerations, some of which were referred to by the noble Lord, Lord Mason. It is a question of whether it is desirable to have such accident-prone operations always accompanied by a police presence. I believe that it is. However, if the police are not conducting such loads along the motorway but are still responsible, as I understand might be the case, for conducting them on non-motorway and
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non-dual carriageway roads, a particular difficulty ensues. There will have to be a changeover of escort, but where will it take place? Will we have to provide a space at the junctions of motorways with non-motorway roads so that those huge loads can stop for half an hour while one escort goes off and the other escort checks on? That does not seem an intelligent way of conducting highways business. After all, this is a highways matter that will impact greatly on congestion.
I understand that the cost of escorting heavy loads is about £7 million per year. However, I must point out that escorted loads are the exception rather than the rule. Like other noble Lords, I have been in contact today with the Freight Transport Association and the Road Haulage Association, both of which are on the record as saying that, if payment has to be made, they would rather pay the police to do the job properly than pay a non-police escort to do the job less effectively. Obviously, they would prefer not to have to pay. We would all prefer not to have to pay for the demands that we make on society, but that is just human nature. Nevertheless, those associations recognise that there is a problem for the police who are overloaded with other duties, and they value the fact that the "flashing blue light", as they put it, exercises a great deal more discipline on the roadway than the flashing orange light. People will stop for the police in a way that they would not stop for others. If a heavy load has to go round a roundabout the wrong way, all the streams of traffic approaching that roundabout have to be stopped while the heavy load is manoeuvred. Like those associations, I do not believe that any group of people, except the police, is competent enough or powerful enough to be able to stop four or five streams of traffic while a heavy load negotiates a roundabout. That is why, if they have to pay, those organisations would rather pay the police to do the job.
Perhaps I may pick up a point that was made by the noble Lord, Lord Lucas. I think that it would he an excellent idea if the police could retain that charge in their own budgets without having an equivalent amount subtracted from their budgets by the Home Office. That brings me to a much wider point. It is perhaps a little unfair to inflict this on the noble Earl because it is not exactly his cup of tea or departmental responsibility. I refer to the fact that all the emergency services, particularly the fire brigade and the police, are now being asked to do things which are outside their compulsory statutory duties or which arc on the borderline of those duties. Although the services can charge for carrying out such duties, the moral context in which they operate says that they cannot make a charge. It is time that we all grew up a little bit and recognised that if someone performs an exceptional service for us, it is reasonable to make a small payment in recompense for that assistance.
Finally, I should like to ask whether this approach to privatising—I do not want to use that word, so perhaps I should say "de-professionalising"—the service—
The Earl of Courtown: My Lords, it is not that.
Baroness Thomas of Walliswood: My Lords, I think that it is. We are talking about removing certain duties

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from the police force. Is that part of a whole process whereby a series of activities will be removed from the purlieu of the police? If so, it is an extremely dangerous process.
7.5 p.m.
Lord Clinton-Davis: My Lords, I thank my noble friend Lord Mason of Barnsley for initiating this important debate. Many interesting points have been made. I differ from the noble Lord, Lord Lucas, when he suggested that motorists are not inconvenienced or delayed because of abnormal loads. That view is not consistent with the experience of many of us.
A number of fascinating points have been raised in the debate. I refer not least to the comment of the noble Lord, Lord Berkeley, who, as the noble Baroness said, asked the interesting question: why should trains go on roads when as a general principle, they should travel on rails? That is a new development and may be another aspect of the privatisation of the railways that we have not encountered previously. Perhaps we shall see more and more trains on the road network of this country. It is an interesting point. I do not think that John Betjeman ever referred to that, although it might have led to some interesting poetry.
My noble friend presented his case with customary skill and raised a number of important issues. He touched on the question of crime. The noble Lord, Lord Lucas, could not have been listening at that point. A related element is the question of accidents, which was raised by the noble Baroness. We are now dealing with an issue which is essentially within the domain of the Home Office rather than the Department of Transport; but since the issue has been raised, we must deal with it. I believe that abnormal loads, particularly the mega-abnormal loads to which I shall refer in a moment, are very vulnerable to crime and accidents. As has been said, we need to have the emergency services available to deal with such matters. The presence of the police can be a deterrent to crime—and that is not unimportant.
I have mentioned "mega-abnormal" loads because it is hopelessly inadequate to talk merely of "abnormal" loads and long vehicles with wide loads. There has been a relatively new development during the past 12 or even six months. A number of mega-abnormal loads have been arriving, and will doubtless continue to arrive, on our road networks. Last November we had the first of 20 massive cargoes of 300-ft. convoys, with two units pulling and one steering from the rear. They used—perhaps I should say "engulfed"—two lanes of motorway and crawled to their destination at 10 miles per hour which went down to three miles per hour when they proceeded uphill. That was only the first of those mega-abnormal loads which travelled from Avonmouth to Didcot carrying parts for a new gas power station. With loads of that size it is self-evident that havoc could ensue if anything went wrong. Consequently to avoid any such chaos, one is heavily dependent on the skill and expertise of the escorting service which, in my submission, should most certainly be the police.
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The cost of policing has also been mentioned. Who is responsible for the cost of policing abnormal loads? There seems to be a sort of voluntary arrangement. Should not there be some national policy, as my noble friend asked, because inconsistency of this kind is profoundly unsatisfactory. What is the cost of policing such loads? I believe that the noble Baroness said £ million, but that is not a satisfactory figure, for the reason I have just given. What is the cost of advertising campaigns warning of such loads? Does not some special recorded telephone service have to be provided in these circumstances which can take 2,000 telephone calls separately? Who pays for all that? What is wrong with transferring the cost to the road haulier?
That suggestion was something that the noble Lord, Lord Lucas, effectively went along with. He said that if there were a method of doing that, it is self evidently right that it should be done. I agree entirely with what was said about costing and hypothecation. It makes eminent sense. After all, it is not totally unusual. Football clubs have to pay for the cost of policing inside the football ground, and rightly so. There are other similar areas. I do not wish to go into them now. So it is not an unprecedented way of dealing with the situation.
I am satisfied that efforts are made to minimise inconvenience, but the questions about future policy raised by my noble friend need answering. A number of comments were made about the Home Office review and the question of deregulation. Clearly the Government seem to be stopping short of outright privatisation so far as concerns police forces; but the handling of abnormal loads seems to be a matter that is ripe for a form of privatisation, according to the Government. For reasons I have already given, I believe that it is wrong. It is not the way to deter crime. It may show that the Government are, after all, on the side of the villains. I thought that was what Mr. Heseltine said in one of his more deranged moments over the weekend, but he was not referring to the Government at the time. He does have deranged moments for those of us who remember his waving of the Mace. It is not altogether consistent with sanity. I seem to have upset the noble Baroness, Lady Trumpington. I am unhappy about that, because I we lcome her back. I like her very much.
The duty to tackle not just accidents and crime but pollution is important. It may well be that these are loads which give rise to pollution. The fact that the police are on the spot is important. The Police Federation is somewhat ambivalent over the matter, but I suspect that it is ambivalent because of the question of cost, with some justification. If we could get rid of that problem, the Government would he off the hook of their obsession with regulation. In fact, they can find a way through the cost difficulties.
Is it right that the Government are talking about escorting drivers within the private sector merely being in possession of full licences for three years? I want to know what criteria will govern the fitness of those whom they might have in mind in terms of recruitment from the private sector. That in my judgment—I have seen it reported in the press—would be hopelessly inadequate. When dealing with abnormal loads and, in particular, mega-abnormal loads, it is surely necessary

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to recruit qualified people who can deal with any emergency. Those matters require training and equipment. I believe that the police, and only the police, are capable of doing that.
Is the Minister aware that, as my noble friend said, in North Wales, hauliers have estimated that it would need three men to take a 12-ft. wide load—a lorry driver, a statutory second man, who would be required on a journey through other police areas, and a private escort—on its journey? Is he aware that it has been submitted that that could add 25 per cent. to delivery costs? Does he agree with that or not? Do the Government appreciate that there are profound concerns about wide loads being carried in areas other than on motorways, as the noble Baroness has just said? That gives rise to deep concerns on the part of people who live in such areas.
Perhaps I may return—I had forgotten this point—to private security firms, which seem to be the candidates for selection by the Government. Private security firms are burgeoning. Apparently about 162,000 people are employed by private security firms. That is roughly the present size of the police force. But there is no statutory mandatory requirement on private security firms to comply with certain criteria as to their fitness. That is vital if one is thinking in terms of recruiting private security firms in this regard. What sort of tests will be applied? Are the Government thinking now of a compulsory register? I believe that to be quintessential if this idea is to be entertained at all.
In relation to this matter, it must be remembered of course that private security firms have only a citizen's right of arrest; that is to say, they can arrest if they can show that an offence has been committed, but they cannot stop and question. That is another corollary of importance in relation to this whole issue.
As I said at the outset, it has been an interesting debate. The noble Earl, Lord Attlee, raised a number of significant points of which I was frankly unaware previously. He did not want a monopoly to be created in terms of the selection of any private force to deal with escort duties. Again, that is a sensible point. He said that the haulier should have an option to call an escort. I do not believe that that is right. I believe that it contradicts the earlier points that he made. He said that it was important to allow the police to be able to stop traffic. They cannot have the right to exercise an option and yet require the police to stop traffic and do the other things about which he was talking.
Earl Attlee: My Lords, I may not have expressed myself very well. I was saying that if a private escort were authorised by the police, then the haulier should have the option of escorting his own load or using a professional escort company.
Lord Clinton-Davis: My Lords, I still think it is contradictory if they have the right to escort their own loads, and they want to call upon the police to carry out certain duties as well. However, that is another matter with which I have no time to deal, although I believe we have plenty of time for the debate.
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Once again, I congratulate my noble friend on initiating the debate. It has been a valuable hour or so. I think that he has derived some entertainment and some useful information from it. I thank him once again.
7.19 p.m.
The Earl of Courtown: My Lords, the nature of our construction and heavy engineering industries means that it is often necessary to move abnormally large loads from one point in the country to another. I thank the noble Lord, Lord Mason, for raising this interesting subject, and I thank all noble Lords for giving me notice of their areas of concern. I listened with interest to all their points which I shall attempt to answer. If I do not, I shall of course deal with them in writing at a later date.
The movement can be to a point in the UK where a facility is under construction such as a new power station, as mentioned by the noble Lord, Lord Clinton-Davis, or moving an assembly or machine to a port for export. It is government policy to limit the use of roads for the movement of abnormal loads where possible. However, the use of alternatives, such as rail or air, is severely limited by the weight and bulk of these loads. There are some inland waterways available. But in general that system is not compatible with loads of these sizes. Where possible, a heavy load will be transported to a port and shipped around the coast to another port in the UK closer to its final destination to reduce road mileage.
The nature and size of abnormal loads are extremely varied and their movements are closely controlled. I should, perhaps, explain how the system works. Regulations require the movement of abnormal loads to be notified to the relevant highway authorities, bridge owners and the police before they can move. They also specify construction standards for the vehicle such as maximum weights, maximum axle weights, braking standards, marker boards and lighting equipment and, reflecting the size of these loads, lower speed limits than those generally applied to goods vehicles.
Most abnormal loads are moved under the provisions of the Motor Vehicles (Authorisation of Special Types) General Order 1979. These regulations permit the movement of loads over 38 tonnes and up to 150 tonnes in weight, 27.4 metres in length or 5 metres in width. Part of the definition of an abnormal load is that the load cannot, without undue expense or risk of damage, be divided into two or more loads for the purpose of carriage on roads. The loads should therefore he of a minimum size and the procedure ensures that the structures on the highway such as bridges and culverts are able to withstand any high axle weights; that there are no physical obstructions in the case of a load of large dimensions; and that the route is feasible with the minimum disruption to other road users.
The noble Earl, Lord Attlee, raised the issue of these regulations being outdated and inconsistent with the requirements for general goods vehicles. The regulations are now 17 years old. In answer to the noble Earl. we are producing draft regulations to consult by the middle of the year. Because the regulations controlling the use

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of ordinary goods vehicles have changed in this period there are a number of anomalies which have to be addressed. For example, as 44 tonne vehicles on 6 axles are now allowed for combined road-rail transport, the necessity to notify abnormal loads which weigh less than that will be considered.
For the largest and heaviest loads—that is, on loads wider than 5 metres, longer than 27.4 metres or heavier than 150 tonnes—written permission is required from the Department of Transport, which will also specify the exact route to be followed.
The necessity for this authorisation can frequently result in discussions between the manufacturer and department to ensure that the move is necessary and the item is reduced in size as much as possible. Hauliers and manufacturers are always encouraged to contact the department as early as possible, even prior to the object being made if possible, to ensure that moving it by road is feasible. Around 10 to 15 per cent. of applications to the department for movements are rejected on the grounds that the load is divisible or because the size of the load and/or the distance of the journey would cause quite unacceptable delays and disruption to other road users.
The noble Lord, Lord Berkeley, raised the issue of railway locomotives travelling on the road. Where these are required to have the Department of Transport's authorisation to move, permission would be given only where the locomotive could not be moved on the rail system; that is, where the destination is not connected to the rail system—such as museums—or it could not be moved on the track for safety reasons.
Locomotives are generally so heavy that they require Department of Transport authorisation. If it is at all possible to move them on the rail network we would not give permission. The trains referred to by the noble Lord, Lord Berkeley, must fall below the 150 tonne limit and are therefore free to be moved as abnormal loads under the special types general order.
The "ownership" and consequently the responsibility for the protection and maintenance of the roads and the structures on them is varied. Bridges, for example, can be the responsibility of the Department of Transport, local authorities, British Rail Property Board, Railtrack or the British Waterways Board. The noble Earl, Lord Attlee, suggested that the current system could be improved by better co-ordination of notifications. It is true that this fragmentation of responsibilities makes it difficult and time consuming for hauliers to check a route. However, while it may seem desirable for a central agency to co-ordinate notifications, given the number of bodies involved it would not be practicable and would almost inevitably result in an increased layer of bureaucracy.
Over the years a number of routes have evolved as being preferred for the heaviest and high loads. The noble Earl, Lord Attlee, suggests that these routes should be given statutory status. However, as the needs of industry are also constantly evolving, there is not a
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strong case legally to protect these routes. In the case of the largest loads, where the Department of Transport is involved in the selection of the route, the department monitors any proposals for changes on roads used on a regular basis and notifies the relevant highway authority of its special usage. The case of high loads is more complex as high loads which are light and not otherwise abnormal are also affected. Many of these roads are actually local authority owned but generally they are receptive to approaches from the haulage industry and the department when told that proposed changes would affect its use as a high load route.
The route is chosen to minimise the disruption to other road users. Inevitably, that means using the widest roads available to allow other traffic to pass. In order to enhance road safety, the police usually escort such loads to warn other road users of their presence and, where necessary, direct traffic to enable the load to pass. The widest roads generally available are the motorways. Thus, invariably these are often used. The timing of the movement is generally in the hands of the police. That is for two reasons. First, they have the operational responsibility for road safety and traffic management and have local knowledge of the times that roads are likely to be at their busiest. Secondly, they will usually choose to provide an escort to ensure safe progress. Thus the timing of the move is subject to police resources being available.
The noble Lord, Lord Mason, in his opening remarks raised the issue of police involvement in escorting the largest loads. The involvement of the police in the movement of these loads is under review. At present some 1½ million movements are notified to the police in the UK each year. Of these, some 10 per cent. would require escorting, the cost of which is generally met from police resources. Current arrangements for escorting can be complex, particularly where a load passes through more than one police area, necessitating a change of escort vehicle. The resultant delays and difficulties for hauliers are both inconvenient and costly.
The noble Baroness, Lady Thomas, the noble Lord, Lord Clinton-Davis, and my noble friend Lord Lucas asked about charging. Section 15 of the Police Act 1964 provides that a chief officer of police may provide at the request of any person special police services at any premises or any locality in the police area for which the force is maintained. That is subject to any payment to the police authority of charges on such scales as may be determined by the authority. What constitutes special police services is a matter for the chief officer concerned and the police authority to determine in any particular case. By definition, however, it is unlikely to include routine services.
In answer to the noble Lord, Lord Clinton-Davis, the costs of advertising and providing a telephone inquiry point for the Avonmouth to Didcot loads were borne by the contractors. Most of the police escort costs were also met by the contractor. Each move was in three parts:

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two runs during the night and one, where a complex manoeuvre over a bridge was involved, took place during the day—
Lord Clinton-Davis: My Lords, why should not the whole cost be borne by the contractor in such circumstances?
The Earl of Courtown: My Lords, the noble Lord will find that I will deal with that question later in my speech. If not I will contact him. In answer to the noble Lord during the past 15 months the Home Office and the Association of Chief Police Officers have worked closely together to develop the idea that suitable trained and qualified personnel could replace the police when escorting some loads on motorways and certain dual carriageways. These roads have been chosen because they provide for the easiest and safest movement of the loads, without such private escorts requiring special powers such as to stop and direct traffic.
As mentioned by my noble friend Lord Lucas, as an experiment an unmarked police vehicle with amber flashing lights—which, in fact, is more visible at a distance than a blue flashing light—was used to escort an abnormal load on a long motorway journey between Rosyth and Hatfield. It was completed successfully in all respects and the journey time was reduced by some five days over a similar load travelling under normal procedures. Therefore, that amount of saving of time must be taken into account when we are looking at the cost of such operations.
I can assure the noble Lord, Lord Mason, that movements on roads which are likely to require control and direction of other traffic will continue to remain with the police. I know that other noble Lords mentioned that fact. Indeed, the noble Baroness, Lady Thomas, talked about situations where roundabouts are involved. We envisage that the police will be involved in all those areas where other movement of traffic Occurs.
The police are keen to realise the manpower savings which private escorting could provide. The problems of manpower resources have prompted non-police escorts on some loads, as mentioned by several speakers. Neither the Home Office nor the Association of Chief Police Officers has been involved in the scheme which is being used by the North Wales Police as an independent force initiative. It is understood to be meeting the purpose for which it was set up and we are monitoring the outcome with interest.
The private escorting of certain abnormal loads would not mean that the escorting function currently carried out by the police would be put out to tender. That would not be practicable. It would rather be a case of private operators acquiring the necessary qualifications in escorting and then making their services available to hauliers. The hauliers themselves could train staff to carry out the function, and the cost of the escorting would be met by the haulage industry. The outline
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proposals envisage no change affecting the overall responsibility of chief officers of police for the safe escorting and management of abnormal load movements. I can also confirm to the noble Lord, Lord Clinton-Davis, that every movement of a load with a private escort would be subject to the agreement of the chief officer of police for the area concerned, having due regard to agreed national criteria. Moreover, in answer to my noble friend Lord Lucas, I can say that any regulations applying national standards for escorting would be likely to be implemented through changes to the Motor Vehicles (Authorisation of Special Types) General Order. As regards my comments concerning a national criteria for private escort duty, I can confirm that that would also include proof of qualifications of the personnel involved. As I mentioned earlier, changes to those regulations would require further public consultation.
In finding ways to minimise the disruption to other road users, the movement of these types of loads at night is being investigated. That possibility was mentioned by the noble Earl, Lord Attlee, and the noble Lord, Lord Mason. The benefit is that there is less traffic on the road to be disrupted; the drawback is that there is the danger of vehicles travelling at faster speeds suddenly coming across a large, slow-moving convoy. The advent of modern lighting on vehicles and roads appears to make the load and escorting vehicles more conspicuous. So it could become beneficial to move at night; indeed, some police forces are already ensuring that movements are carried out at night, although the individual circumstances still have to be taken into account.
The noble Lord, Lord Berkeley, raised the issue of the safety of loads on our roads. Although the frustration of those held up by the movement of abnormal loads is understandable, such movements do not cause additional danger to road users. I agree with the noble Lords, Lord Mason and Lord Berkeley, that the movement of abnormal loads must be carried out with safety as a top priority.
In summary, I hope that it can be seen that the movement of large, indivisible loads on our road system is unavoidable and necessary for the functioning of our domestic industries and to provide for the competitive export of goods from our heavy industries. While it can be appreciated that those movements cause disruption to other road users, the procedures which have to be followed are designed to minimise those effects. However, we acknowledge that road usage has changed over the years and those procedures are under review. Any changes will result in reduced disruption without compromising road safety.
Baroness Trumpington: My Lords, before the House adjourns, I cannot resist saying that I own a silver flask which was given to me by my then government car service driver. It is engraved with the words:
"To my abnormal load".
House adjourned at twenty-five minutes before eight o'clock.