Lords Sitting of 6 March 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 Worcester.
Lord Joicey—Lord Joicey—;Sat first in Parliament after the death of his father.

Prison Service Expenditure Cuts
The Lord Bishop of Worcester The Lord Bishop of Worcester asked Her Majesty's Government:
Whether they are satisfied that the Treasury cuts to the Prison Service announced in January will not affect educational and other services within the prisons.
The Minister of State, Home Office (Baroness Blatch): My Lords, reduction in provision of regime activities, including education, may be made only as a last resort and after savings elsewhere have been sought.
The Lord Bishop of Worcester: My Lords, I thank the Minister for her reply. Will she agree that when cuts are made in the face of a rising prison population, rehabilitative services like education and chaplaincy are always vulnerable? Will she further agree that if prisoners leave without qualifications to help them in the search for a job, they may return to crime and in turn add to the prison population?
Baroness Blatch: My Lords, I absolutely agree with the right reverend Prelate about the importance of both the chaplaincy service and education. For that reason, we believe that those services should be protected, not only because they benefit prisoners on release but also because they are material to good order inside prisons.
Baroness Farrington of Ribbleton: My Lords, is the Minister satisfied with her reply that the reductions would arise only after savings had been sought in other areas? I assume that she refers to the often repeated government assertion that savings on administration can always be made by all public services at all times. Surely the Government have a responsibility to be certain that cuts in the area of services to people in prison should not be made.
Baroness Blatch: My Lords, perhaps I may tell the House about some areas where I believe that efficiencies can be achieved: better shift systems to avoid wasteful deployment of staff—some prisons employ over-qualified staff on routine tasks; better use of part-time and contract staff; reduction of management layers; reduction of headquarters staff; exploring the scope for contracting-out services—for example, works services, ground services and vocational training; the improvement of energy efficiency. Prisons can improve their systems for managing performance. They can take prompter action in dealing with poor performance and
292
unsatisfactory attendance records. They can exercise better control over staff expenses and improve on and have more efficient procurement policies. The list is considerable and none of it affects frontline services in any other way than to improve them.
Lord Boyd-Carpenter: My Lords, can my noble friend tell us the cost to taxpayers of keeping a prisoner for a year?
Baroness Blatch: My Lords, I believe that it is in the region of £25,000. However, I shall ensure that my noble friend receives the information.
The Earl of Longford: My Lords, will the Minister provide justification for the damaging and horrifying cuts at a time when the prison population has reached a record level and when the Government plan to increase it by many thousands? This is at a time when we are told, in the words of a former Conservative Prime Minister, that we—the nation—have never had it so good.
Baroness Blatch: My Lords, first, there is a general policy by the Government that we should make our services as efficient and effective as possible and that we can improve frontline services, while cutting out waste. That is the general policy.
Perhaps I may put into context the present efficiency reductions that are being asked for. In 1979 there was one prison officer for every 3.02 prisoners; today there is one prison officer for every 2.13 prisoners. That is an improvement of 30 per cent. The number of officers in the Prison Service has increased since 1979 by 76.6 per cent., while the prison population has increased by only 26 per cent. In 1979 there were almost 5,000 people sharing three to a cell. There are no prisoners now sharing three to a cell. In 1979 there were 11,700 sharing two to a cell; that has been reduced to 8,000. Spending has almost doubled since 1979, there have been 21 new prisons, 18,500 new places. More purposeful activity is taking place in our prisons than ever before: 300,000 hours of additional purposeful activity have been added since agency status. More prisoners than ever before spend more than 12 hours outside their cell. Those are the improvements effected by this Government since 1979.
Lord Avebury: My Lords, speaking of purposeful activities, will the Minister agree that the Open University offers a particularly valuable opportunity for prisoners to prepare themselves for release? Can she say what number of prisoners were taking Open University courses in 1995–96, and what number will be taking them in 1996–97? Will she also agree that it is to be deplored if prisoners are taken off Open University courses as a disciplinary penalty, without adjudication?
Baroness Blatch: My Lords, I cannot give the specific information for which the noble Lord asks. If I am able to obtain it, I will write to him.
The point made is an interesting one. It may well be that that is a more cost-effective way of providing information in prisons than the very high cost of a

293
teacher being before the prisoners, physically teaching in the prison. There are distance learning programmes and other ways of efficiently delivering education in prison. We want the Prison Service to think much more laterally about how it can provide education for people in prison. It is an important point that the noble Lord makes.
Lord Richard: My Lords, the Minister gave a long list of what the Government had done, and another long list as to where she believes the Government can save money. May I therefore take it from that that there are no proposals to cut educational and other services within the Prison Service?
Baroness Blatch: No, my Lords, I can give no guarantees at all. The noble Lord scoffs, but the Government have effected a great deal of improvement since 1979. The service today is better resourced and prisoners are better cared for than they were in 1979.
How the efficiency savings are found is a management issue. I have made clear, as has Mr. Tilt, the Acting Director-General of Services, that we expect the front-line services to be preserved. We expect priority to be given to stability, good order and security. Only as a very last resort should any of these areas be looked at for savings.
Lord Brain: My Lords, in view of the Minister's remarks about 30 per cent. savings, and other savings, will she be surprised to hear that the chaplain of Channings Wood prison in Devon has recently had a 30 per cent. cut in his budget?
Baroness Blatch: My Lords, I cannot comment on any individual prison. If it is a 30 per cent. cut, there must be some reason why it is disproportionate to cuts in other prisons. The overall cut is nothing like 30 per cent.
Baroness Faithfull: My Lords, is my noble friend the Minister satisfied that it is right that Oxford prison should be closed, in view of the fact that it has splendid educational facilities and the men go out to education? I appreciate that the prison has been leased by the city council to the Prison Service. Nevertheless, does my noble friend agree that it seems the wrong moment to be closing down such a very good prison where the men are so happy?
Noble Lords: Oh!
Baroness Blatch: All terms are relative, my Lords.
There is a very buoyant prison building programme. I do not believe that any prison establishment at this time is closed without very good reason. I will pass on the reasons to my noble friend.
Lord Stoddart of Swindon: My Lords, does the Minister believe that prisons—
Noble Lords: Order!
The Lord Privy Seal (Viscount Cranborne): My Lords, I think I take the sense of the House that with three more Questions to come, time is limited. I wonder whether the noble Lord would allow us to continue.

Community Hygiene Concern: Funding
2.47 p.m.
The Countess of Mar The Countess of Mar asked Her Majesty's Government:
Whether they will reconsider their decision not to increase funding to Community Hygiene Concern for their "bug busting" campaign in schools.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, in January, Community Hygiene Concern approached the Department for Education and Employment for funding. The organisation was asked to refer its request to the Department of Health. It has not yet done so.
The Countess of Mar: My Lords, before asking any supplementary question, may I say how grateful I am that the Department of Health is to produce a leaflet, which I gather the noble Baroness will launch on 22nd April, promoting the "bug busting" campaign.
Does the Minister accept that it is unreasonable to expect this very small charity to provide education to school nurses and medical practitioners for a mere £25,000 a year? Will she look urgently at the question of funding, in view of the fact that many of the chemicals used are now producing resistance in the head lice?
Baroness Cumberlege: My Lords, the noble Countess is right in that we do support this organisation from the Department of Health and have provided £25,000 each year over three years. If it wishes to make an additional request to us, we will consider it. If it has a cashflow problem, as I believe is the case, we would be willing to consider a bridging arrangement.
Lord Hailsham of Saint Marylebone: My Lords, can my noble friend assist me? What is "bug busting", and why does it require a campaign?
Baroness Cumberlege: My Lords, I believe it is commonly known as "nits".
Lord Morris of Castle Morris: My Lords, does the Minister agree that the "bug busting" campaign is a non-pesticidal, non-toxic, effective and cheap answer to what is a widespread and very distressing problem, especially among children? Until yesterday the DoH said that it was the DfE's problem, and then the DfE said that it was the DoH's problem. Is not that a perfect example of departmental nit-picking? Is it impossible for those two huge departments to split the difference and each find £577 a month to continue funding that conspicuously successful initiative, which is only asking for £3,500 a quarter for all the work that it does? Failing that, could one of those departments not accept full responsibility for funding it and admit that "the bug stops here"?
Baroness Cumberlege: My Lords, there has never been any doubt about which department is responsible for the organisation. It was the organisation, which

295
thought that it could get more money from another department, that has caused the confusion. The Department of Health has always been responsible for nits. I have never quite understood why I deserve that.
Lord Glenamara: My Lords, can the noble Baroness tell us what has happened to the small toothcomb, which many of us suffered in our youth? Why not bring it back? There would then be no need for chemicals.
Baroness Cumberlege: My Lords, that is the cheap element in the "bug busting" campaign. The pack produced by that organisation includes a very fine toothcomb. Parents and teachers can use it to eradicate nits.
Baroness Hayman: My Lords, does the Minister agree that there are education implications in not supporting the campaign? Has an estimate been made of the number of school days lost when children are excluded from school because of nits?
Baroness Cumberlege: No, my Lords, I am not aware of the figures for the number of children who do not attend school because of that fact. We believe that parents feel strongly about the problem, as do teachers. That is why we support this organisation and indeed general practitioners and school nurses, who not only use that method but also apply lotions to the children.
The Countess of Mar: My Lords, is it not the case that historically schools have been very much involved in diagnosing and head louse treatments and telling parents what to do when their children are found to have head lice? Does she agree that it is therefore very important that school nurses, teachers and others are properly taught how to use the "bug busting" procedures? It involves using an ordinary shampoo, lots of conditioner and combing out the hair while still very wet. That is repeated for four times in a fortnight, during which period all adult head lice are removed and no eggs are laid. If it is not used properly it will fail.
Baroness Cumberlege: Yes, my Lords.

Legal Aid: Fees Policy
2.52 p.m.
Lord Taverne Lord Taverne asked Her Majesty's Government:
What steps they are taking to encourage a fixed price service from lawyers in legal aid cases.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, there are already standard fee schemes in place for magistrates' court cases and for shorter cases in the Crown Court. During the coming year, I hope to introduce graduated fees for advocates in the Crown Court, which will extend the existing scheme, and standard fees for both advocates and litigators in civil cases. In the longer term, the contracting proposals set
296
out in the Green Paper, Legal Aid—Targeting Need moved, towards securing the provision of legal services at a fixed price.
Lord Taverne: My Lords, I welcome the noble and learned Lord's Answer and urge him to press ahead with the proposals for the franchising firms that offer fixed fees. Does he agree that, since severe constraints on legal aid are a denial of justice and there must inevitably be a compromise to ensure access for as many people as possible, one of the most important aspects of limiting costs may be fixing fees? Can he tell us the reaction of the professionals to his initiatives?
The Lord Chancellor: My Lords, I agree with the general view that has been expressed by the noble Lord that it is wise to do what one can to eliminate the expense per case if one wishes to get as good a distribution as possible of legal aid to those who need it. I believe it would be right for me to say that my moves in those directions have not been warmly and universally welcomed by the legal profession. But the Bar Council particularly has been extremely helpful in preparing the scheme for graduated fees for advocates in the Crown Court. The Law Society also participated in that process and in relation to advocates and litigators in civil cases as well. While matters were difficult for a time, they may well be improving somewhat.

A1 Fayed Brothers: Nationality Decision
2.55 p.m.
Lord Spens Lord Spens asked Her Majesty's Government:
Whether they will reconsider their decision not to grant British nationality to the A1 Fayed brothers.
Baroness Blatch: My Lords, we have no plans to do so.
Lord Spens: My Lords, now that it is no longer a serious offence to mislead, and given that that allegation is at the centre of the refusal of the Home Secretary to grant British nationality to those two gentlemen, does the Minister feel that it is time to put aside past prejudices and revisit this application, bearing in mind the enormous contribution made to the economy of this country and to charities by the A1 Fayed brothers?
Baroness Blatch: My Lords, I must take issue with the implied criticism that my right honourable friend acted improperly. The courts found that he acted lawfully in all aspects of this case.
Lord Bruce of Donington: My Lords, I do not wish in any way to suggest that the Home Secretary has acted at all improperly in this matter. But can the Minister say, in considering the position of Mr. A1 Fayed, whether any evaluation has been placed upon his activities. 11 years ago, when he acted as an intermediary between the Government and the Sultan of Brunei—the Sultan of Brunei decided to support the British pound, which at that time was standing at 99 cents—and whether all that can be taken in the balance? Is she

297
aware that that action avoided having the Government run cap in hand to the International Monetary Fund at that time?
Baroness Blatch: My Lords, it would be improper for me to give reasons as to what was taken into account in this case. Indeed, my right honourable friend has no obligation at all to do so. Charitable works and goods works can be taken into account. All that is contained within Schedule 1 to the 1981 Act; namely, residency requirements, knowledge of the English, Welsh or Scottish Gaelic languages, restriction under immigration laws, intention to make principal home in the United Kingdom and whether or not a person is of good character. But it would be improper for me to go into any further detail.
Lord Wyatt of Weeford: My Lords, is the Minister aware that the Fayed brothers have been described by the DTI as—
Noble Lords: Order, order!
Viscount Cranborne: My Lords, I am sure that none of your Lordships would ever want to see a Speaker introduced into our proceedings. I am in the hands of the House. As we have plenty of time, I wonder whether the House will allow the noble Lord, Lord Wyatt, to speak next and other noble Lords will come in later.
Lord Wyatt of Weeford: My Lords, is the Minister aware that the Fayed brothers have been described by the DTI as having cheated and lied their way into buying Harrods, at which point they also cheated the Sultan of Brunei, although he is not willing to engage in a public controversy about it? Should not those two people be deported as undesirable aliens?
Baroness Blatch: My Lords, I must repeat what I said earlier. It would be improper for me to respond to that kind of comment or question. I think that it would be improper of this House to discuss any individual in that way.
Lord Campbell of Alloway: My Lords, not wishing in any way to follow the line of discussing the merits of this application, does not the grant of British nationality lie within the discretion of the Home Secretary, subject to limited control by the courts under judicial review? If that is so, and leaving aside the merits, can my noble friend say how may the Government reconsider, looking at the Question, a decision that was never made?
Baroness Blatch: My Lords, Section 44(2) of the British Nationality Act 1981 says, among other things, that,
"The Secretary of State…shall not be required to assign any reason for the grant or refusal of any application under this Act the decision on which is at his discretion".
That is the point made by my noble friend. The decision of whether or not to grant an application for a certificate of naturalisation as a British citizen is at the discretion of the Secretary of State. I can also say that Section 44(2) is lifted from Section 26 of the Nationality
298
Act 1948. The Secretary of State was first exempted from having to give reasons for granting or refusing certificates of naturalisation in the Nationality Act 1870. So it is a very long and well-established tradition.
Lord Cledwyn of Penrhos: My Lords, will the noble Baroness note that, if these two brothers come to Wales and open a couple of shops like Harrods, we shall give them the Order of St. David?
Baroness Blatch: My Lords, that is noted.
Lord Avebury: My Lords, if we now believe in open government, is it not time that the provisions which the noble Baroness read out were reviewed? On the one hand, if the reasons why the Secretary of State does not have to explain why he has refused nationality are to do with embarrassment to the applicant if the reasons were revealed, could not the reasons be revealed by agreement with the applicant? If, on the other hand, the Home Secretary declines to give reasons due to the fact that he does not wish to open a front for possible litigation by the aggrieved person, is that not a very bad ground for maintaining secrecy?
Baroness Blatch: My Lords, I have given the history of this piece of legislation. I can say that almost all governments have visited and revisited this aspect of it and have decided that the discretion should be the Home Secretary's and that reasons can be withheld. If the noble Lord believes that the law should be changed, then it would be up to Parliament to consider that. I believe that there are very good reasons why that discretion should be left to the Home Secretary. There are often very good reasons why the reasons are not made public.
The Earl of Lauderdale: My Lords, does my noble friend agree that British nationality is a privilege to be cherished and that it is not something to be obtained either by bullying, blackmail or endeavouring to interfere with British processes?
Baroness Blatch: My Lords, I agree absolutely with my noble friend. The granting of nationality is an extremely serious issue. It is right that it should be considered properly and that there should be an appeal system which allows the decision to be challenged. It has been challenged and my right honourable friend has been found to have acted lawfully in this case.
Lord Dubs: My Lords, accepting that the Home Secretary can use the British Nationality Act as a reason for not explaining why a particular grant of nationality has been refused, what are the reasons for not explaining to the people themselves why they have been denied nationality?
Baroness Blatch: My Lords, there may be many. It may be the way in which the information about them has been sourced; it may be about protecting other people or national security. There may be all kinds of reasons. But the fact that the law, as it has been visited and revisited, has allowed it to be a discretion on the part of the Home Secretary, and as it states quite

299
explicitly in the Act that reasons need not be given, I believe that my right honourable friend has exercised his right under the law.
Lord Richard: My Lords, of course one accepts that the Home Secretary exercised his right under the law. The question is whether or not he will reconsider it and exercise his right under the law again. Is the Minister aware that the refusal of the Government to reconsider this matter is viewed by many people as verging on the spiteful against these two men and that the Government should think hard about it?
Baroness Blatch: My Lords, I profoundly disagree with what the noble Lord has just said. An application was made; it was rejected; it has been challenged, and my right honourable friend has been found to have acted lawfully. We have no plans and indeed no reason to reconsider the matter. It is of course open to the two Mr. A1 Fayeds to reapply. We normally recommend that at least two years should elapse since the last application. If they wish to reapply nothing that has happened hitherto will impede proper consideration of their application.
Lord Monkswell: My Lords, in his first supplementary question, the noble Lord, Lord Spens, said that "misleading" had been legitimised. I can only presume by that that he meant that the rejection last week by a vote in the House of Commons of the Scott report, which found that the Government had misled Parliament, effectively legitimised "misleading"—or, as someone described it, telling porkie pies. Can the Minister say what steps the Government are taking to correct that impression that may have been conveyed to the British people?
Baroness Blatch: My Lords, that was a thorough distortion of what the Scott report said and has absolutely no relevance to this matter. The court has found that my right honourable friend acted lawfully, and that is an end to it.
Lord Peyton of Yeovil: My Lords, does my noble friend agree with me that the explanation of the noble Lord, Lord Monkswell, of what was meant by the noble Lord, Lord Spens, could be quite a time-consuming and perhaps wasteful exercise?
Baroness Blatch: My Lords, I am attracted by the notion put forward by my noble friend. Perhaps I may also say that there was an implicit criticism that my right honourable friend had been dishonourable, and I take issue with that.

Business
3.6 p.m.
Lord Strathclyde: My Lords, after the debate on expenditure in universities and before the debate on developing countries, my noble friend Lord Lucas will, with the leave of the House, repeat in the form of a Statement an answer to a Private Notice Question in another place on the judgment of the European Court of Justice on fishing interests.
300
I should like to say a word about today's debates. In the first debate, other than the mover, Front Bench spokesmen and the Minister replying, speakers will be limited to eight minutes and in the second debate to nine minutes. Perhaps I may also remind your Lordships that when the digital clock shows eight minutes, the full eight minutes have elapsed and the speaker is already trespassing on the time of others.

Business of the House: Debates this Day
Viscount Cranborne: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debate on the Motion in the name of the Lord Annan set down for today shall be limited to three-and-a-half hours and that in the name of the Earl of Sandwich also set down for today to two hours.—(Viscount Cranborne.)
On Question, Motion agreed to.

University Funding
3.7 p.m.
Lord Annan Lord Annan rose to call attention to the cuts in current expenditure and in capital (including equipment) grants which have been imposed upon universities; and to move for Papers.
The noble Lord said: My Lords, I want to begin by congratulating the Secretary of State on being a woman. After a series of males, each one more disastrous than his predecessor, it is a relief to have someone who immediately calls in Sir Ron Dearing to review the funding and operations of universities. For 12 years we have had policy for universities made off the cuff. But now I hope that we have someone who wants to listen to those in higher education and hear how they suggest the formidable problems that face government and themselves might be solved.
Sir Ron Dearing's appointment reminds me of the bad old days in industrial relations when a strike would be called, followed by weeks of fruitless negotiation and millions of pounds lost, and then Mr. Jack Scamp was called in to produce a settlement. I never could see why Mr. Scamp was not called in at the beginning of the dispute. So let us be grateful that Sir Ron, the scamp of the 1990s, has been appointed before the vice-chancellors carried out their threat to impose a £300 tuition fee on all students. Let there be no doubt that it was that threat—which the vice-chancellors no more than the Government wanted to carry out—that brought the department to the negotiating table. The Secretary of State has displayed admirable sensitivity in seeing how serious the situation had got; and it is serious.
There seems to be only one thing in which the Government want to be wholeheartedly European and that is to make our universities resemble those on the Continent. There, for instance in Rome, buildings designed for 10,000 students accommodate today 100,000. There students never meet or discuss their

301
work with their professors. Is that what we want? For years Britain has been admired for the quality of its university higher education. Foreign students are amazed by the personal attention and tuition they got, and still get, from their teachers. I know this from the German students who for the past three years have lodged with us and studied at the LSE and at the University of Essex. Do we want to throw that away?
I have no doubt that in his reply the Minister will say that universities have to learn how to teach larger numbers of students. Student numbers have certainly increased—since 1979 by 45 per cent. In the past six years recurrent funding per student has declined by 28 per cent. and a so-called "small" class now numbers 25 to 30. The old tutorial system is in danger of collapse. Heads of departments, particularly in science, tell their junior staff that, if they devote time to tutorials instead of getting on with their research and adding to the department's publications list, they will not get promoted.
I remember Lord Robbins, back in the 1970s saying that he thought that perhaps staff/student ratios were a bit lavish. He thought that a ratio of 1:15 would be reasonable. It is now 1:20 as an average, excluding medical schools. In practice, that means a ratio of 1:30, or more in popular subjects. In the management-speak in which the present Permanent Secretary at the department is a master, that would be called an enormous increase in "productivity", having regard to the "down-sizing" of staff.
And what has been the reward for academic staff? Since 1979 they have seen their salaries fall far behind those of any other professional group. I am not going to join the Government in bashing school teachers—most of them deserve better than they get. Still their salaries have risen by over 30 per cent. since 1985. Academic staff salaries have risen by 10 per cent. Is that a fair deal? It is simply an indication of how much the Government despise dons. They treat them like petits pions, a low form of life to be sneered at or bullied by the Chancellor of the Exchequer.
On top of that gross unfairness, the Government have added vastly to the paperwork demanded of universities. Indeed, a new monster has appeared, the Higher Education Statistical Agency, which is churning out demands for information never before demanded. Then there is the quality exercise, in which every department receives a visitation every three years and is assessed. The paperwork, the waste of time—time that should be spent on teaching and research—is incalculable.
What about the inspector from a former poly who told a junior lecturer in a prestige London University college that how well she knew her subject was not the concern of the inspector, but she should not stand before her class because it was too "authoritarian".
Skilful heads of department jockey with each other for assembling impressive lists of publications. Anyone who has been a don knows that mere numbers of publications are a delusion. The more entrepreneurial vice-chancellors never miss an opportunity of luring on to their staff by hook, and often by crook, scholars or
302
indeed simply writers whose publication record seems to be impressive. The other day a talented consultant at one medical school perfectly reasonably was offered a post as professor at another medical school, but only on condition that he was in post by 31st March. "Why that date?", asked his present employer. It became clear that had he been in post by 31st March, all his publications for the past five years would have enriched the research record of the hiring university and would have deprived the university in which he had been for the past five years of their credit.
I hope in answering this point the Minister will not talk a lot about "accountability". When was there last a complaint about the quality of university teaching or of the devotion of dons to their pupils in the old universities? I challenge the Minister. There have been complaints, we know, of bad teaching in some primary and secondary schools. But when were there similar complaints of universities? Let us have chapter and verse.
I would not dispute that some departments need visitations. But do the pre-1970s universities require this? Once a university has been audited and found in good shape, can it not be left alone for, say, seven to 10 years? It is not likely to get all that better or all that worse during that time.
What does the Secretary of State expect from Sir Ron Dearing? I hope she will ask him to do what he did when he examined education between 16 and 18. I mean by that to issue a general principles paper by December of this year which can be sent to all interested parties for consultation.
I do not think there is any doubt that Sir Ron will have to propose a different balance in finance between the state, employers and graduates. Every quality newspaper now accepts that students must make a contribution to their own fees. They, or their parents, may not be able to make it at the time when they are undergraduates, but something like a contribution by those who have graduated must come about. I recognise that some will question whether someone such as myself who graduated in 1938 should now be required to pay this tax or whether it should be levied upon those who graduated post-1960. Speaking for myself, I would willingly pay such a tax provided it was hypothecated and guaranteed to be used for higher education and not disappear into the maw of the Treasury. I can imagine that the Treasury will refuse that because it always declines to accept anything which is hypothecated.
Above all, Sir Ron must bring other government departments such as the DTI and the Department of Health into these matters. When universities are cut, the staff of the hospitals of the Secretary of State for Health are affected. Posts have to be frozen and consultants' posts cut. I am told that there are at least 17 cases in which essential work in hospitals will be curtailed because of the present cuts.
There are now 105 universities and it seems to me inevitable that there will have to be two clusters, one of which will be full research and teaching universities and the other teaching universities whose courses are linked to professional institutions, though that would not

303
inhibit a particular department gaining support for research from industry or even indeed from the Higher Education Funding Council.
Government policy is so full of paradoxes. They came into office determined to cut bureaucracy, yet they add layers of bureaucracy in the universities. They create opt-out secondary schools and special technical schools, but they abolished the distinction, without any consultation, between universities and polys—and what is more, threw a considerable sum of money at those new universities as an indication that they were now in the top league.
When Sir Toby Weaver persuaded Mr. Crosland to create the polys, he envisaged them as a cheaper form of higher education because the polys made no pretence at being research institutions. In fact today unit costs at a number of the old polys are higher than those in the old-established universities.
And what has happened to the Department of Education and Science? It is now the Department for Education and Employment. Science has been turned out and made to walk the streets of Whitehall like a whore. At last she has been picked up by the Department of Trade and Industry. It is as if Jane Austen had been told to lodge with Casanova. It is ridiculous because for years scientific research has been angled towards industry. What is needed now is protection for the fundamental research that has to be done if new applied research is to be developed from it.
The problem before us this afternoon is not so much what should Dearing recommend; it is what is to be done between now and 1999, when such recommendations as Sir Ron makes may be implemented, so as to enable universities to weather the storm caused by a cut of 6 per cent. this year, 5 per cent. next year and 5 per cent. the year after that, and a cut of 47 per cent. in the capital and equipment grant. Capital grants are used to buy equipment. It will mean that books cannot be bought for the library or equipment for the extra students in the labs. At Durham the grant is sufficient only to upgrade IT equipment—nothing else.
The Government say, "Go out and find benefactors under the private finance initiative". But you cannot get private finance to fund the repair of fume cupboards which have been condemned by an inspector from the Department of Health. I wonder whether the department realises just how large a contribution the private sector already makes to universities. Consider Sheffield university, a fine old but not unrepresentative civic university. Today 47 per cent. of its income comes from private sources. Per contra some of the newest universities get 94 per cent. of their income from the taxpayer via the HEFC.
When the HEFC sends universities their allocations for next year the wizard Merlin will not be needed to predict what will happen. Vacancies will be frozen. Worse still, more students will drop out. I am sure that the Government will blandly answer all questions in this House by saying to a noble Lord who airs any grievance that he should not address them but the HEFC. In 1994–95, 21,000 students, 20 per cent., left universities without qualifications for academic reasons. That rate of drop-out was unheard of 10 years ago.
Incidentally, perhaps the Minister can tell me why it is that the Scottish and Welsh universities have been cut less than the English universities. Is it hoped that the noble Lord, Lord Cledwyn, will cross the Floor of the House in gratitude?
This afternoon I have spoken out of character. Noble Lords who have heard me speak over the past 30 years know that I always play the part of Bottom:
"I will roar you as gently as any sucking dove; I will roar you as 'twere any nightingale".
Nearly always I have been a blackleg among vice-chancellors because I thought the universities were selfish in the days of their prosperity, did little to help the government reduce their expenditure and were indifferent to the plight and standards in the schools. But today I speak in anger. I beg to move for Papers.
3.22 p.m.
Lord Renfrew of Kaimsthorn: My Lords, as a university teacher may I declare an interest that I hope is more than just pecuniary? Like all of us, I owe a debt to the noble Lord, Lord Annan, for initiating the debate today. University education in this country is now in a state of crisis. This is odd, because there are many positive things that can be said. First, the reputation of our universities stands high. Secondly, the higher education sector has expanded by 100 per cent. since 1979. Thirdly, there have been so-called efficiency gains of some 28 per cent. over the past four or five years. The per capita investment in each student from public funds compares favourably with that of most industrialised nations. There is a reasonably coherent system in place to make available cheap loans to help students pay their maintenance. We know that a thorough review by Sir Ron Dearing's committee is expected by September 1997.
Of course, the crisis arises from the swingeing cuts that have been recently announced. These cuts come after the 28 per cent. so called efficiency gain—that is to say, the reduction in unit funding, over the past four years. On the university and tuition side—recurrent funding—the cuts announced amount to a 4.7 per cent. squeeze in real terms in the coming year, rising to 9.4 per cent. in real terms by 1998–99 in relation to last year's funding. On top of that, capital grants will be down 47 per cent. by 1999. These are savage cuts. Some universities may be bankrupt before Sir Ron Dearing's reforms can take place, which will not be before 1999. One has to add to that the plight of individual students. Here I talk about student maintenance. For example, at current rates, a four-year science student who begins his or her studies this October will have a loan of £7,811 by the year 2000 on graduation, to which one must probably add inflation. If on an average salary, the student will be expected to pay off that loan within five years.
For years the Government have been advised on all sides to have an income-contingent repayment scheme—that is to say, a graduate tax. Neither party has had the guts to grasp the nettle of a new tax. What disturbs me is that the impending crisis, which arises largely from increased student numbers, has been blindingly obvious for at least three years, as noble

305
Lords have been telling my noble friends with remarkable consistency. Where is government policy? In September 1993 when Labour produced, and then suppressed, a shadow Green Paper—for which the shadow Minister in the other place, Mr. Jeff Rooker, was dismissed from his position—my right honourable friend, the then Secretary of State for Education, called a press conference. He dismissed it with ridicule with its talk of a graduate tax and the hint that students might be asked to contribute to tuition costs. When Mr. Patten was succeeded by the current Secretary of State the first thing that my right honourable friend did was to commission a study. A few months ago her Green Paper was said to exist in draft. A year later, where is it? Where is government policy?
I wish that I could say better for the party opposite. The then Leader of the Opposition dismissed Mr. Rooker from his position; but what happened to the policy? Indeed, what is their policy? The noble Lord, Lord Morris of Castle Morris, in the Second Reading debate on the Education (Student Loans) Bill two weeks ago, spent some time discussing the Conservative Political Centre's report entitled The Future of Britain's Universities. I am sure that the CPC was suitably grateful. But where was the exposition of Opposition policy? What is that policy? I hope that in four minutes we shall begin to learn.
In his speech the noble Lord alluded to four clear principles on which the Labour Party was alleged to be working: to encourage access; to protect and enhance quality; not to discriminate among students; and to be fair both to students and the taxpayer. Your Lordships will be surprised that he omitted motherhood and blueberry pie, but was there a glimmer of policy among that welter of platitudes? There was none. Is Labour advocating a graduate tax, as Mr. Rooker was said to have done? Sometimes, it sounds like it. I hope to know in three minutes' time. This country has not been well served by the Opposition in the matter of higher education. They have suffered a collective loss of nerve. In the past couple of years successive Ministers of Education have also failed to grapple with these obvious and emerging funding problems. One may harbour the suspicion that officials in the Department for Education have not been energetic in proposing alternative strategies.
If serious lasting damage is not to be inflicted on our universities and student population, something has to be done now. We can expect more from government and from the opposition than drafts of Green Papers which never see the light of day, and more than a committee of inquiry to report in 18 months' time—however welcome it will then be—and to be implemented we know not when. We hope we shall see swift action.
3.28 p.m.
Lord Morris of Castle Morris: My Lords, Mark Antony in Shakespeare's Julius Caesar looks down at the stab wound in Caesar's corpse made by Brutus's knife and says,
"This was the most unkindest cut of all",
306
so giving grammarians the most famous example of the double superlative adjective to achieve emphasis, and your Lordships' House the most "bestest" description of the Chancellor's bloody butchery of universities in his last Budget. The Chancellor's knife removes £107 million from the capital programme, a cut of 31 per cent. at a stroke. Capital expenditure is not simply expenditure on buildings. This cut will affect the purchase power of libraries, will lengthen the backlog of maintenance of properties, compromise health and safety standards and prevent the purchase of vital equipment.
Take engineering, which is essentially an equipment-based subject. One vice-chancellor recently pointed out that funding of engineering in British universities had unquestionably declined relative to the rest of the world. He said that the replacement rate for engineering equipment—normally about three years—would become seven, eight, nine or ten. Computer equipment becomes redundant 50 per cent. in year one; 25 per cent. in year two; and you can write it off after about four years. But no, not in British universities—not any more.
Let me give your Lordships two examples: first, in Sheffield University, where Professor Ian Cooke's department of obstetrics and gynaecology was planned to move to the Royal Hallamshire Hospital in a big new scheme. That is now in jeopardy, because the university's £2 million share of the project is under threat from this recently announced cut. That department is one of the world leaders in the field of molecular aspects of fertility. Its successes in treating infertility are world famous. It will be a calamity if its development is prevented by being forced to work in huts and hovels, anywhere that the vice chancellor can find it.
Secondly, consider the case of the University of Manchester Institute of Science and Technology. UMIST has nothing but departments, some of them world-renowned, whose major expenditure is on scientific equipment. The same is true of Imperial College in London. Yet UMIST's capital grant is cut from £2.8 million to £1.8 million at a stroke and at short notice. As its vice-chancellor said recently:
"If this capital cut is not reversed in next year's funding round, the Government will be signalling the UK's withdrawal from the international competition in science engineering".
Hard words!
Those two examples can be multiplied by every university in the country, and were there time I would quote the example of the Royal Postgraduate Medical School. But gaily and insouciantly, the Government have suggested to universities that the private finance initiative is the solution to all their problems. The Secretary of State for Wales, writing to the University of Swansea, says so:
"Planned capital expenditure for higher education has been reduced in line with most other public expenditure programmes. The reduction in provision reflects the policy that capital should, wherever possible, be financed through private finance".
He speaks as if there is some queue of beneficent capitalists waiting to shower universities with money, and asking next to no return for considerable risk. There

307
is not, just as there is no queue of banks and building societies eager to finance a student loans service. Surely the student loans Bill before us is now irrevocably doomed when the NatWest has turned down the Government's blandishments?
No, the PFI simply will not solve this problem, and I can tell the Government why. First, universities have to prepare bids, and very significant costs in time and money are required to do so. At all the stages of their preparation, they incur professional charges from accountants, lawyers, architects, engineers, and the like, and all those costs have to be borne by the organisation seeking private finance. I am told that sums of the order of £500,000 can be incurred by universities from public funds without any certainty whatever that the project concerned will go ahead.
Secondly, the PFI is comparatively inefficient. Universities have a long tradition of borrowing from banks to raise funds for capital projects. This can be done quickly because the parties know one another; universities are recognised as good risks, and so they get very competitive rates of interest, often much more favourable than a private developer could obtain. So why bother?
Thirdly, where university buildings are concerned, only things like student residences, sports facilities or catering outlets are even vaguely suitable for PH funding. Those have a separate income stream, and they can be used intensively throughout the year; but even for residential accommodation normal loan finance is usually better value for money than the PFI. But academic buildings like laboratories, on the other hand, generate no separate income stream, and the only return for private sector investment comes from recurrent funding of the universities themselves. So to use the PFI to fund academic building would simply be a drain on recurrent funding, and such a switch would simply reduce the already ludicrously low unit of resource available for teaching. You cannot rob Peter to pay Paul.
The PFI has been powerfully trumpeted by the Government in recent years. They seem to think that it is the solution to problems created by this 47 per cent. cut in university capital budgets in the three years from now until 1998–99. It is not. PFI applies only to a small section of university buildings, and it is next to useless for equipment. I challenge the Minister here today to explain to the House how the private finance initiative could possibly be used to fund the purchase of an anti-proton storage ring. But the utter irrelevance of the PH as a solution to the crisis facing universities in the next five years is proved beyond peradventure by its past record.
The PFI's record in universities is not encouraging. People do not want to take it up. Why should its future be different? The CVCP has given due warning: if this cut is not rapidly reversed, major building programmes will be abandoned; there will be massive reductions in library books, computer and other equipment; there will certainly be staff redundancies; and we may see universities facing unmanageable deficits, closure or merger.
The mindless savagery of this 31 per cent. cut in capital expenditure proves beyond doubt the utter bankruptcy of this Government's policy for higher education. In the words of the poet John Donne:
308
"'tis all in pieces, all coherence gone".
No wonder they have run away and left Sir Ron Dearing to sweep up the bits.
Lord Renfrew of Kaimsthorn: My Lords, before the noble Lord sits down, may I make the point that I spoke only for six minutes out of my eight. May I offer him 30 seconds to say whether Labour has a policy on these matters, as I asked in my speech?
Lord Morris of Castle Morris: My Lords, if I may be granted the leave of the House just a few seconds to answer that question, I refer the noble Lord to what I said in the debate which he quoted, which he will find clear and sufficient to answer his question.
3.37 p.m.
Earl Russell: My Lords, I enjoyed that exchange but I hope that it does not come out of my eight minutes. I should like to thank the noble Lord, Lord Annan, for introducing the debate and for the delightful image of Jane Austen seeking lodgings with Casanova. I enjoyed the exchange between the noble Lords, Lord Renfrew and Lord Morris of Castle Morris. There is more than one party opposite the noble Lord, Lord Renfrew. Our party has already grasped the nettle of an income contingent repayment scheme in our new policy which my noble friend Lord Tope will develop in more detail.
When we introduced that, my right honourable friend Mr. Ashdown said to us as we were considering it, "If you reject this policy, you have three other options: to let quality continue a rapid decline; to put 4 pence on the income tax; or to lie". The first of those is clearly the policy of Her Majesty's Government, and has always been. I wait to know which of those three is the policy of Her Majesty's Opposition.
I must of course declare an interest in this debate, not only as a university teacher but, more specifically, as a teacher at King's College, which has suffered a particularly savage cut in its recurrent grant. We are a college that does individual tutorials, and will continue to do so as long as we can. In the humanities, in the research assessment exercise, we came second after Cambridge. Having assisted in doing the research assessment exercise, I would be reluctant to ask the House to take that information too literally, but that does not happen to a second-rate place.
If this was done deliberately, it is curious. If it is the result of a formula, the House knows what I think about formulae. I am advised that it is going to cause us a lot of problems with teaching rooms. It will impose on us a need, through the closure of some rooms, to teach in smaller rooms, which means either more teaching hours or fewer students. I am also, like the noble Lord, Lord Morris, deeply concerned about books. Without books in my subject one might as well not be there at all.
The House knows my general views on universities and I shall not repeat them at length. However, in addition to my party policy I now find that I must support the proposal of the CVCP for a fee charge on individual students. The House knows what I think of the financial burden on students. The House will believe that I feel like Cromwell dissolving the Rump—that

309
I have sought the Lord day and night that He would rather slay me than put me upon the doing of this work. But we cannot await Dearing. If we do not do it, we might as well close down.
Having spoken so many times on universities I will say something on a subject on which the House has not heard me. It is the private finance initiative; the Deus ex machine which is supposed to fill up all the gaps. The private finance initiative does not seem to have been cast taking into account that most of our capital budget does not go on great glorious new buildings. It is not that kind of period. It goes on repairing the roof, buying computers, mending window frames and so forth. The Welsh and Scottish Offices understand that those items are not suitable for the private finance initiative. I wish that the Department for Education and Employment did the same.
The private finance initiative is essentially a lease-back system. It means that the costs are deferred and, as anyone with a mortgage will know, the ultimate total cost rises. I wish to know whether the Treasury has calculated the long-term cost of the private finance initiative to the state. They think only in five-year terms down there; we up here ought to do a bit better.
The lease-back of small items creates problems. I am reminded of the time when Camden Council, borrowing money from Japanese banks, passed over to them the title to every bath tap in every council house in Camden. I wondered how the Japanese bankers would foreclose if that were necessary.
We face much the same problem. If we have banks and private firms getting titles to defective window frames I do not know what they will do with them. It has been pointed out that repayment can come only out of recurrent grant. Defective window frames do not generate income. It is also crucial to the private finance initiative that ownership of the item in question is passed over. If ownership of a teaching room is passed over to a private body it must become involved in decisions about what is done with the room. What is done with the room will determine the teaching programme of the university in question. We are getting private firms involved in the planning of academic teaching and it really will not work. It is one of a succession of hare-brained schemes which go a long way back.
When Henry IV of France visited King James I, King James held forth on the cost of his court. Henri Quatre assured him that one could feed 300 courtiers for two days on one ostrich egg. In the accounts of the Keeper of St. James's Park a few months later appears the entry: "To Coles, for one month's trial to hatch ostrich eggs; 13s 4d". Those eggs did not hatch and neither will these.
3.44 p.m.
Lord Dainton: My Lords, I must first declare my interests in institutions which are significantly affected by changes in government funding of universities. I have been Chancellor of the University of Sheffield for 17 years. I thank previous speakers for their
310
references to that university, which were so gracious and were so well deserved. I am also president of the Royal Post-graduate Medical School and president of the Arthritis and Rheumatism Council, which is a medical research charity devoting most of its income to encouraging and paying for research within the universities. In common with other medical charities, it is profoundly affected by what happens to the universities.
I too am grateful to the noble Lord, Lord Annan, for initiating the debate, which is very timely. I will not attempt to match his flights of oratory but shall begin by quoting the words of the opening speech of a similar debate in another place. In arguing for the simple and, in my view, entirely just proposition;
"that the obligations imposed upon the universities are matched by the resources made available to them",
the speaker said,
"We are at present witnessing a crisis on the campuses of Britain's universities … the universities are being forced to make major restrictions not only in fringe matters but in some of the essential services that enable universities to do their job properly".—[Official Report, Commons, 13/1/78; col. 2016.]
Then he elaborated on the effects of the cuts in teaching, research, libraries, scientific equipment and other cognate matters which have been amply illustrated today. From my vantage point as chairman of the University Grants Committee, and with my heavy responsibilities, I could only applaud and endorse all that the speaker said, which applies with much greater force today.
Mr. Malcolm Rifkind—for the speaker was none other than today's Foreign Secretary—was completely right. In looking back at my UGC papers, I remembered one year in which the university inflationary cost index, which was nearly larger than the Government's deflator, touched almost 30 per cent. By throwing in all our reserves, switching the capital furniture and equipment grant to meet recurrent costs and by appealing at length, and successfully, for some help to the then Secretary of State, who became the noble Lord, Lord Prentice, we managed to reduce what would have been an entire catastrophe: a cut of almost 30 per cent. to one of just over 11 per cent.
The noble Lords, Lord Annan and Lord Renfrew, told us that the best indicator of the trend in government funding of the universities is the average amount of recurrent annual income per student from government directly and also from fees in respect of British and European Union students. It is called the average unit of resource. My UGC papers showed that in 1972–73 that was £2,762. Using the Government's own annual deflators, which are specifically—and I quote the Government—
"provided for use in constructing comparisons over time on a consistent basis",
I calculate that what that cash bought in 1972–73 would require £19,000 of today's money. What is the position today? The old universities—and I restrict myself to them because they are the only ones for which the data are sufficient over a long period—are not receiving that sum but £6,700 of today's pounds. In other words, the cut over the period has been 65 per cent. which is

311
two-thirds. Often that is referred to as an "efficiency gain". That is a misuse of the English language because it is nothing of the sort.
How did the universities react throughout the prolonged period of repeated cuts in recurrent funding? In my view, they have been exemplary. They loyally accepted the duty of the expansion of higher education which the country needed and for which the Government called. Inevitably, teaching loads increased and staff/student ratios deteriorated dramatically. House of Lords Paper 60, issued on 19th July last year, shows that, despite the great increase in student numbers, the total number of established staff of those universities increased by only 4 per cent. in the 16 years after 1978. More detailed statistics are available for 1984 onwards. If one looks at the age profiles of the staff one will see that they have risen by about 10 years. That indicates little recruitment of younger staff, which is never a good sign in universities where youthful intellectual vigour and imagination is essential if quality is to be maintained.
Finding themselves in that very difficult position, the universities assiduously sought and received funding from sources other than the funding councils, principally research grants and contracts. The noble Lord, Lord Annan, has referred to the performance at Sheffield. I am grateful to be told about things that I did not know in relation to my own university. That extra money was used mainly to support so-called contract researchers, whose numbers trebled from about 7,000 to 22,000 in 16 years. Those people keep research activity alive and help with teaching. They comprise many people of high quality but, as the same House of Lords paper shows, they constitute an underclass of temporary staff and are disadvantaged in all manner of ways relative to established staff of comparable age. Moreover, the women in that category are even more disadvantaged and are a kind of "super underclass". I shall not expand on that because I hope that your Lordships will be able to debate that particular issue after Easter. I merely use that as an illustrative example today.
Your Lordships can see that, faced with those figures, there must be a real crisis, worse than that identified by Mr. Rifkind. But even worse is to come. Government plans call for recurrent funding to be cut further; money for building and equipment to fall by 17 per cent. per annum in the next three years. That will erode further the science base, as has been mentioned, although it is generally acknowledged that the laboratories of universities are no longer "well-found" as they should be, if universities are to maintain the standards in research and teaching which the nation demands.
The Government have stated that non-governmental sources can make good those cuts in government capital funding either by direct arrangements or the private finance initiative. I have inquired of industry what is the position and Dr. Peter Doyle, who runs Zeneca, which is an extremely large and successful high-tech company, has said that it will not support the initiative. I am told also that the Association of Medical Research Charities is resisting paying indirect costs and the research councils, government departments and the European Union have strict financial rules which give them little, if any, manoeuvrability to help in relation to capital funding.
312
I know that all those points have been made to the Department for Education and Employment and many are in the public domain. At last, that department has acknowledged that there is a problem and has responded by setting up a national committee of inquiry. We must all be grateful for that. But the committee will not report until late 1997 and any decisions based on its conclusions will be even later. What is needed is action now to resolve the financial crisis that faces the universities now. All I ask is that today's equivalent of the noble Lord, Lord Prentice, will acknowledge the parlous financial realities and will persuade the Chancellor of the Exchequer to produce that absolutely minuscule sum from the Budget in November which would enable the projected cuts in capital and recurrent funding to be revoked until we can have a proper plan for the universities. I assure your Lordships that I know that I am not alone among those who have experience of university funding in expressing those views.
3.53 p.m.
Lord Beloff: My Lords, some 30 years ago at an international conference in Canada I followed the noble Lord, Lord Dainton, in a discussion about university finance. At that time I said that I thought that a higher education system wholly dependent on the public purse was very vulnerable. The noble Lord, Lord Dainton, was a little more optimistic than I was.
Today we see the consequences which are not of the particular malice, wickedness or incompetence of particular Ministers because the problem that we face is shared by everyone. We face the problem that we have allowed one generous impulse—the expansion of higher education—to override what should always be in the mind of any government putting forward a new policy; namely, how they were to persuade the country to pay for it. It is my view that the problem is not due to a particular government and therefore I do not wish to enter into controversy with the noble Lord, Lord Morris of Castle Morris. It is due to the fact that we have come up against a ceiling in the public apprehension of the proportion of taxpayers' money which should be spent on higher education as it was understood 30 years ago.
Therefore, we face not merely the current crisis—and I shall not elaborate on that because there are people who are closer to the current scene than I am—but the need to rethink from the beginning the whole of our system of higher education. Instead of 105 universities, we must consider groups of universities performing different functions and requiring different levels of finance. No country in the world, not even the United States, has 105 research-led major universities. If we had 10 or 12, we should be doing better than most countries of our size and with our resources.
Universities will be asked to face merely not this current problem, whose seriousness I do not under-estimate, but a total change in the way in which both their own expenditure is financed and, as we have learnt, the way in which students are supported.
It is clear that some contribution in some form from those who benefit from university education should be demanded. Some of us pointed that out in the original

313
debate on student loans some years ago and were ruled out of court by the then government and the then Minister. That is coming back—income contingent refunding.
After all, that is what happens elsewhere where there are major universities. I agree totally with the noble Lord, Lord Annan, that the last thing that we want is to have universities on the Italian, North German or, indeed now, French model, although in the case of the French and in a different way in the case of the Germans, that is made up by research and high-level teaching being concentrated in particular institutions. All that needs to be done. It is a major operation which is bigger because it must be done relatively quickly if the crisis is to be overcome. It is a major operation which can be compared only with the extension of secondary schooling after the war.
For a year the Government have been apparently indulging in consultation. I must say so far as I perceived it, that consultation was not very radical or deep, and clearly the results have not satisfied the Government or they would have published them. Therefore, the matter has now been handed to a new committee. But it is all very well to say, "Let us wait for the committee". What is the committee going to produce? If it produces, as I hope and believe it must, that major transformation of the whole higher education scene—the grouping of universities, the singling out of those led by research and the singling out of those where individual teaching is maintained at a high level—inevitably it will offend and upset a great many people in the higher education system. You cannot have radical change and satisfy everyone.
If that is the case, that committee will need to have the understanding, approval and sympathy of the entire university community. I do not believe that the Government have altogether grasped that point. Sir Ron Dearing is no doubt a valuable and experienced public servant, but he has no experience of higher education at any level. As I have been going round since his appointment was announced consulting people from a variety of universities, I find everywhere a lack of confidence that he can on his own overcome that considerable disadvantage. After all, if a hospital has a patient who has to have a heart bypass, it sends for a surgeon; it does not send for a plumber however good the hospital plumber may be.
This is a serious matter because the fortunes of the committee depend on two things: terms of reference which will allow it to consider from the beginning the kind of higher education system that we should have, the institutions that should compose it, and the finance that should go into it; and how we prevent this appalling falling off in the standards of our student welfare and the serious lessons of the drop-out rate. For that we need at least a Lord Robbins. I do not know—it would be presumptuous of me to know—who is the Lord Robbins of this generation. But he has to be found. Even if Sir Ron Dearing remains as chairman, it could be possible to find members of a committee to consider those issues from the kind of experience with which we have been favoured by noble Lords who have spoken
314
today and those on the list before us. But it will not be easy and it is as well that Her Majesty's Government should realise the difficulty of the task.
4.1 p.m.
Baroness Dean of Thornton-le-Fylde: My Lords, we owe a great debt to the noble Lord, Lord Annan, for putting this Motion before us today. Not only Members of this Chamber but many thousands of people outside are affected by these education cuts. I must confess to a little trepidation in putting my name down on the list of speakers. It looked almost what I might term a closed shop of providers from the higher education field. However, I plucked up my courage—at least until I heard the noble Lord, Lord Beloff, refer to plumbers. Perhaps I am the plumber in this context. I did not go to university. In many respects that gives me all the more determination to ensure that people have the advantage of going to university where their ability allows them to do so.
I have an interest to declare. I am a member of the Council of the Open University. It is from that aspect that I should like to address my brief remarks. In student numbers it is the largest university in the country, with 150,000 students. Many of those are people I met in my former days as a trade union officer. I met them on factory floors and in the office. I met people who never had the opportunity to go to university and to have the higher education provision that many fortunate people now have.
With the development of the Open University there has been development of different course structures. As a consequence, 37 per cent. of all part-time students in the United Kingdom in university education are within the Open University provision.
If the proposed cuts are agreed, it will mean that the Open University will have to reject 5,000 students next year. I gather that that is the equivalent in student population of a medium-sized traditional university in Great Britain. That is frightening. I suggest that it is also a big threat to Britain's competitive position in the future. I make no apologies for introducing in a debate about education our overall well-being as a nation in the industrial and commercial field competing world-wide. The fact of the matter is that many of our people at work today have not been given the education training back-up that they need to enable the country to compete world-wide. That pressure will increase. It will not go away. It will not decrease. Cuts today in education mean a deficit of skills in a decade's time. That is what we need to consider in the debate.
Seventy per cent. of students at the Open University maintain full-time employment while they are on their courses. I regard that as a tremendous achievement, not just for the education sector but for those people as individuals. It is tremendous to see the pride they have for the skills and the education that they receive.
The problem is that the Open University feels a little like the meat in the sandwich, between government policy on the one hand advocating strongly that part-time courses are the way forward, and, on the other, the Higher Education Funding Council cutting back on the funding provided for the Open University.

315
I suggest that it is not the fault of the HEFC. At fault are the overall budget provisions available. If the measures are carried through, at worst it could mean next year a cut-back in funding of £6 million against an increase in expenditure of £1 million.
Those are real concerns. Today's debate is to me a privilege to partake in. It is like sitting in on a master class, a tutorial, not on a one-to-one basis but with this marvellous array of eminent and extremely experienced people from the education field for whom I have the utmost respect. I hope that in the debate we do not forget the many thousands of people out there who depend upon the education system for determining not only the quality of their lives in the future but how they provide for themselves and their families.
I should like to refer to the impact that these cut-backs will have on medical education. It is almost a double jeopardy. I declare a tenuous declaration of interest. I am the deputy chairman of University College Hospital in London. We have strong links with University College London. The partnership that UCL has with the NHS on research and capital expenditure is of major benefit not only in the education field but as regards the health of the nation. The cut-backs will mean some quite profoundly damaging implications, involving something like £3 million.
However, these bodies are told that they will have to raise the money through the public finance initiative. We have had some initial experience of that in the National Health Service. At present the University College Hospital is engaged on a tender process involving PFI for a new hospital. When faced with such cut-backs, where does the Minister expect the universities to obtain the resources involved as regards a business plan with all that a public finance initiative means? It is not an easy thing to do. One cannot do it in-house. One is talking about a major investment resource in that respect alone.
I recently found out about the dual support system relating to research. Noble Lords will understand this issue better than I do. In 1992 there was a change in the way in which that was calculated and assessed for the research council grants. It meant a £3.2 million loss to University College London.
We are faced with serious issues here and now in the education field—whether in the future people will have a good quality of life and be allowed to develop as individuals in the way in which they should be allowed to do. I share the concerns of noble Lords who have spoken. I hope that when the Minister responds he will be able to answer those key issues.
4.10 p.m.
Lord Kirkwood: My Lords, looking at the recent budget on university funding, clearly the most dramatic and potentially damaging items are the cuts in capital spending which have been alluded to. There is a 32 per cent. cut for English universities this year, rising to 47 per cent. in 1998–99, compared with 1995–96. The Scottish and Welsh universities will suffer similar deprivations. The suggestion that this can be made up from the private funding initiative is—as many noble
316
Lords have suggested, and in the opinion of the vice-chancellors themselves—laughable. The noble Lord, Lord Morris of Castle Morris, elaborated on that matter in his speech. Funding by this means is not well tested and it would certainly take a period of time to set up and get running in the universities, and time is in short supply. The consequence of the cuts in capital spending will certainly mean that many building projects will now have to be halted or cancelled.
It should be remembered that apart from buildings the capital budget provides for books and equipment. Without books—even in this age of information technology provided by computers—there is no university as we understand it. Unfortunately, technological progress means that equipment, particularly scientific equipment, rapidly becomes outdated and has to be replaced if universities are to pass on those skills required by society, and if they are to maintain themselves in the forefront of research and not begin to drop behind their competitors.
The commercial partners in PFI can have no interest in providing and investing in hooks and equipment: unlike buildings, they cannot provide extra income. It is ironic that one inevitable consequence of decreasing funding will be the loss of active university teachers. This cannot be compensated for by improved efficiency or productivity through introducing newer teaching technologies such as computer-aided learning because the equipment budget is being cut at the same time. There appears to be no way out of this dilemma except by lowering standards, and possibly the bankruptcy of some institutions of higher education.
However, while the capital spending cuts are most dramatic, there is another less sensational effect of this budget but which has no less serious consequences, and that is the effect on unit costs. In England there will he a decrease in the total funding in cash terms of 2.1 per cent. in 1996–97 over the previous year. As a result of inflation and a small rise of 0.4 per cent. in student numbers, the net effect on funding per student is a drop of just over 5 per cent. over the year. This is predicted to continue on the same scale in the following two years.
It really is almost impossible to describe the effects that this will have on the morale of already overstretched university staff. They are already badly paid in comparison with those in like professional occupations, and they are falling behind in public esteem. They certainly cannot expect any recompense for the additional stresses they will be put under. However, that is not my main concern.
My main concern is with the quality of education that future university students are likely to receive. I know that the noble Lord, Lord Annan, has discussed this particular aspect but I think it needs to be stressed strongly. Degrees at British universities used to be highly valued throughout the world. We used to think that a bachelor's degree from the United Kingdom was superior to an American bachelor's degree from most universities in the States. Sadly, I feel this is no longer the case. We then had graduates of high quality and a low drop-out rate. The higher education system was,

317
in economic terms, highly efficient. This was partly achieved by having dedicated, highly motivated academic staff who had the space, in time, to become excellent scholars and researchers in their own fields. They were often men and women of international reputation, teaching students by way of lectures, tutorials and small group seminars, and they often had close personal contact with their students, providing inspiration for learning and often acting in a pastoral role as well. That was, of course, an expensive, élitist system and was probably only possible with small numbers in the higher education system. So, inevitably, it has had to give way to a system in which there are huge lecture theatre audiences and tutorial groups which are large and impersonal and cannot engender the one-to-one discussion and debate that used to exist. So what we used to think of as education of the individual is fast becoming the force feeding of a passive audience with information to be regurgitated at exam times.
It is clear that there is room for improvement in the methods of passing on knowledge. Traditional lectures in some ways are outdated, except those given by the occasional inspired performers, and not many university lecturers will claim to be that. Pre-recorded lectures by good presenters, such as have been pioneered by the Open University, with professional quality illustrations, animated diagrams, film clips and the rest, which can be run and re-run by students in their own time, have definite advantages for both students and teachers. However, it seems to me that what we cannot do without in a university education worthy of the name is the teacher of small groups of students—the tutorial—who challenges and probes assumptions, and allows the critical approach to knowledge gathering to become a part of the student's intellectual equipment. This is as true for history or literature as it is for science and engineering.
What this cruel Budget will do is to continue the process of underfunding each student's education, which must inevitably lead to further reduction in the staff/student ratio; reduce the quality of our highly valued university education; and result in a great increase in the number of student drop-outs and failures. Can the Government really wish this to be the ultimate consequence of their important and vital experiment in providing more universal higher education? They must back their vision with adequate financial investment of public money; it cannot be done on the cheap.
4.18 p.m.
Lord Walton of Detchant: My Lords, I, too, thank the noble Lord, Lord Annan, for initiating this debate which could not possibly be more timely. At the outset I apologise to him and to the Minister for the fact that I may not be able to stay until the end of the debate because of a pressing early evening engagement. I had set down my name to speak in this debate having been assured it would be likely to last some two-and-a-half hours.
318
The universities of this country have served the country well. They have a high graduation rate still. The honours degree which most of them award is justly regarded highly, nationally and internationally. When I had the privilege two years ago of debating in your Lordships' House the report of your Lordships' Select Committee on Science and Technology of an inquiry which I had chaired on international investment in UK science, it was clear that because of the quality of the science base in the United Kingdom—much of it within our universities—40 per cent. of all American and 42 per cent. of all Japanese overseas investment in science came to the United Kingdom. That science base is now not only under threat: it is in decline.
There has been a universal welcome in the higher education sector for the Dearing review; but, as the noble Lord, Lord Beloff, has said, it is crucial that it looks at a restructuring exercise relating to the higher education structure as a whole, although it is important to realise that one can never tell within such a setting where the new rising star in research is going to appear. For that reason any such restructuring must not be too rigid in grouping universities.
As the noble Lord, Lord Morris of Castle Morris, said, the recent 30 per cent. cut in capital expenditure for the coming year and 47 per cent. over three years has been the unkindest cut of all, and I agree with those who have said that the assumption that this can be replaced by the private finance initiative is totally misplaced, at least in relation to equipment. I have never known any decision which so enraged the vice-chancellors, who now oscillate between anger and despair. Last week's announcement of the Higher Education Funding Council settlement means that many universities now face staff redundancies, deficit and closure or possibly merger. These are not idle threats. They are a genuine statement of the present position.
The salaries of academic staff now begin for a young lecturer with a PhD, as the noble Lord, Lord Annan, said, at £14,137 per annum—almost less than a private soldier would earn—rising after many years of service to £33,898 as a senior lecturer, and a professorial minimum of £32,000, far below comparable professions. Now we see the repeat of the annual charade where the universities will not be able to pay the award of the Doctors' and Dentists' Review Body, normally translated for clinical academic staff, until there has been a decision about the pay of other staff, if any, the department has said, with salary scales at that level. It is intolerable that the academic staff should be so far held back. Thank goodness for the review of clinical academic medicine which used to be undertaken by the Oxford academic, Sir Rex Richards. As I said in last week's debate on the NHS, there are 24 vacant clinical chairs in United Kingdom medical schools, 10 of which have been vacant for lack of suitable applicants for more than a year.
Higher education is costly and I wholly agree that no developed country can afford to pay full maintenance grants and fees. But when will the Government realise that the present loan system, even modified as proposed by the legislation under consideration in your Lordships' House, is pleasing no one? It is crucially important that

319
we should move to repayment through the national insurance or tax systems, beginning when the individual has begun to earn an appropriate sum, and repayment of the sum borrowed like repaying a mortgage, not a lifetime graduate tax. I know that the Minister will yet again, rather wearily no doubt, repeat the comment that has been made on this matter before, that the national insurance and tax systems are not there for debt repayment. Why not, my Lords? This has worked in other countries. Why can we not make it work? How long will the Treasury continue to wag the tail of the governmental dog?
The National Commission on Education, which I had the privilege of chairing, strongly proposed that not only should the maintenance grant be repaid through such a mechanism but also a contribution towards university fees, say, a flat rate of 1,000 per annum. That would be wholly acceptable to the student body. Medical students, who have a five or six-year course like dental students and veterinary students, are suffering particular hardship, working as they do a 48 to 50-week year, with no possibility of earning outside their training. It is therefore very important to recognise how great is their hardship when we have a shortage of doctors. As the NHS debate last week showed, doctors are difficult to recruit in accident and emergency departments and the Government now propose, very reasonably, an increase of 200 medical students per annum. Where are the resources going to come from with these cuts in the universities?
The Committee of Vice-Chancellors and Principals has now listed 17 vital, high priority capital schemes in medical schools, many of them in partnership with the National Health Service, where the university must contribute a capital sum and the National Health Service will contribute another capital sum. All of these, in the light of this savage cut in capital expenditure, are now under threat and I am given to understand that some of these vital schemes may have to be abandoned.
We will welcome the outcome of the Dearing review, but these issues simply cannot wait and I trust that the Government will be persuaded to think again about this capital cut, at least in November's Budget this year, if not before.
4.25 p.m.
The Earl of Limerick: My Lords, on 19th February this House addressed the Second Reading of the student loan Bill. I did not speak but I listened. It was striking how speaker after speaker, having commented on the Bill, often to dismiss it as irrelevant, went on to address the wider issues of funding. It is therefore most timely that the initiative of the noble Lord, Lord Annan, should give us the opportunity to examine these issues in detail today. I have an interest to declare as the chairman of the governing body of a former polytechnic, now one of London's new universities, and also as the current chairman of the Committee of University Chairmen. Chairmen of universities collectively—although they may be less heard in public—feel no less strongly than their vice-chancellor about these issues. I speak with concern and, I have to add, in sorrow. I shall divide my remarks into three parts: what has gone wrong; what is the current effect, and what might be done?
320
What has gone wrong? It is easy to see with hindsight. As numbers have expanded further and faster than was predicted, there has been a failure to adapt a limited elite system to an open access system with a participation rate recently increased three-fold to about 30 per cent. Universities were urged to increase numbers in higher education. They responded with energy and with success but there was no overall plan. There was no preparation for the increased funding which clearly would be needed if those numbers were to be achieved. In effect, those running universities were conned, and I am not suggesting that there was any intent that they should be conned. I am suggesting that this was the effect of the funding regime under which they were achieving this expansion in numbers. After the rapid expansion came a rapid application of the brakes. There was an inability to continue recruiting into courses already started and financed in many cases. There were annual changes in funding methodology which led to additional problems in budgeting, probably most so in the case of those with a high proportion of part-time students.
My Lords, what is the current effect of this? Universities have to be thought of in funding terms as medium-sized businesses, some of them at the small end of large businesses. Typically, 70 per cent. of their total recurrent costs are attributable to staff, both teaching and non-teaching, and the conclusion is obvious. If funding falls in real terms, courses and departments will be cut and are being cut. Choice will be limited. Some of this one accepts as inevitable as competitive forces distinguish successful from less successful courses. However, to cut staff when student numbers are not reducing has the obvious effect: student/staff ratios deteriorate towards the point of frustration for those working in the system trying to deliver an adequate educational experience.
I therefore have to join those who urge that we find the courage to resist the misuse of the word "efficiency". We never quite reach the point where all efficiencies have been achieved. That should not be a claim. However, we are long past the point of diminishing returns. One can perhaps achieve another 10 per cent. efficiency in a particular area, but that leaves one with only 90 per cent. That is a real cut.
I am cautious about joining those who cry wolf about the quality of our system. It does no good to denigrate what is still, in general, an excellent product. It goes without saying that all concerned in the system will do their utmost to maintain that quality of education.
So what do we see in practice? The 40 per cent. cut in real terms in funding over 10 years has resulted in fewer books, and in some cases fewer libraries in which to house them; fewer computers on which people can work; longer queues; and buildings in which we can no longer take pride. Managing that process brings no satisfaction.
I turn now to consider what might be done. The first conclusion is that the present system, and many of its constituent universities, will not stand another dose of start/stop. The least that is needed in the short term is a stable funding regime against which to plan without the

321
threat of further real cuts in the recurrent funding. I associate myself with the remarks made about the shock sustained from the swingeing cuts in the capital funding budget last November.
We need to face facts. Sources of core funding are central government, local government—neither of which is able to come up with any additional money and, indeed, both are consistently cutting budgets—and the student community itself and the families who support it. It is therefore long overdue that there should be a serious and urgent study of a system of graduate recovery. That has worked successfully in other countries and there is no reason to suppose that it should not work successfully here. It has to be a system which is seen as acceptable and fair. I make only one observation in that respect. Current student loans are repayable over four years once the threshold is reached. If a first-time buyer in the housing market can get a 25-year mortgage, why should not education for a lifetime be thought of in the same terms? The second caveat is that the system has to bring additional finance and should not be used merely as a means for further cuts in central government provision for higher education.
My final point concerns Sir Ron Dearing and the task that faces him. Sir Ron may not have a degree but he has earned the respect of the education sector and deserves all the help that he can get in his important and urgent task. I listened with great interest to the speech of my noble friend Lord Beloff. It is easy to follow him intellectually in his argument, but it leaves me with a great anxiety. I do not believe that Dearing should be thought of like Robbins. There is no time for that. That is not to deny the need for such a fundamental root and branch analysis, but Dearing has to concentrate on numbers and finances. We have income from foreign students which is estimated at £700 million a year. That would be at risk quite quickly if it was felt that standards were deteriorating.
There is little point in designing the best possible higher education system for the 21st century if many universities may not be in business to see the millennium.
4.34 p.m.
Lord Sewel: My Lords, I begin by declaring an interest as Vice-Principal of the University of Aberdeen. I join with others in thanking the noble Lord, Lord Annan, for providing the opportunity for this debate. I am also conscious of the number of noble Lords who wish to speak, and as I spoke on the student loans Bill I shall be brief today.
The causes of the present difficulties facing higher education have been very well identified by other noble Lords. In essence, what has been happening over a number of years is that the universities have responded to government policy by increasing student numbers, and they have been rewarded by continuing and increasing reductions in the funding per student. In other words, we have the sheer perversity of policy penalising productivity and of government penalising virtue. That is not a prudent way forward.
322
During the period of rapid expansion the pressure of efficiency savings—or, to be brutally honest, cuts—was partly hidden by universities expanding out of their immediate difficulties through increasing student numbers, although that was often on the particularly disadvantageous terms of so-called fees-only students and was effectively storing up trouble for the near future. So even before this year the system had been squeezed and squeezed again.
There comes a time when the seeking after efficiency gain after efficiency gain becomes the enemy of effectiveness. That is the state that we have reached in higher education. The immediate problem has been made evident by a policy of consolidation of student numbers, therefore cutting off the quick-fix approach of immediate expansion, together with a funding settlement which produces an actual cash reduction in the amount of money available to universities.
My day job is that of what is now known as an academic manager. As I roll forward my own faculty's plans for the next three to five years, I have to tell the Minister that there is already a real crisis in terms of maintaining activity and quality. When plans are rolled forward on the basis of the Government's stated policy the situation deteriorates, and it does so very quickly indeed. That is the fundamental and urgent danger we face today.
The Government have announced the Dearing review. That is both welcome and important. It is perhaps our last best hope, but it is not enough. The danger is that very severe and possibly irreparable damage will be inflicted on the system before Dearing can report and long before Dearing can be implemented.
I urge the Government as strongly as I can to review the course upon which they are presently set, to recognise and repair the damage caused by this year's decisions, and above all to put into the system a period of stability, particularly over the crucial period between now and the report and implementation of Dearing. If that is not done then Dearing will be confronting a system going rapidly into a tailspin. That is the danger.
In Scotland, we have seen the development over recent months of a near disaster in the area of local government finance, producing a last-minute panic reaction from the Secretary of State for Scotland. That disaster was the product of a combination of ignorance and arrogance in the Scottish Office. If the same happens with higher education, the Government cannot plead ignorance.
4.39 p.m.
Lord Porter of Luddenham: My Lords, I do not suppose that there is anyone in your Lordships' House who is not in favour of better educational opportunities for everyone. It probably comes higher in the scale of virtues than motherhood and blueberry pie, to which the noble Lord, Lord Renfrew, referred. Only one argument against it carries any weight and it is the only argument that we have heard: that we cannot afford it. But in making the case, have the Government given proper consideration to the economic benefits of education against the costs of a poorly educated Britain? Among them we may count unemployment, crime and an unskilled workforce.

323
Other big spenders are defence, health and the social services. Of those, only health could be argued to have an economic pay-back that is comparable with that of education. I shall quote an example which is close to my heart and has been eloquently referred to by the noble Baroness, Lady Dean. It is the Open University. Do the Government believe that by allowing a reduction in the number of Open University students of 5,000 this year, they are contributing to the future prosperity of the country?
4.41 p.m.
Baroness Lockwood: My Lords, if there were any doubts in the minds of noble Lords before the debate began, there can be none at all now that our universities are in a deep state of financial crisis. Noble Lord after noble Lord has referred to the latest cuts which came as a result of the 1995 Budget. As the noble Lord, Lord Dainton, indicated, they come on top of a series of cuts since 1981 which have reduced the unit of resource considerably.
Like other noble Lords, I have to declare an interest as Chairman of the University of Bradford and a member of the Committee of University Chairmen, chaired by the noble Earl, Lord Limerick. Bradford University is a medium sized university, but as a result of the 1995 Budget it will be £750,000 worse off in recurrent expenditure. That might not seem a large amount, yet it is equivalent to 30 members of academic staff—and not junior members either. On top of that, there has been a further £750,000 reduction in capital expenditure which means that capital expenditure, this year will have to be concentrated on maintenance work in compliance with health and safety regulations alone. Yet, like other universities, the University of Bradford has been struggling to meet a long list of essential priorities in maintenance and renewal of equipment.
Since 1981 there have been: first, a confusing stop-go policy on recruitment which has made effective planning difficult. Secondly, changes in methods of funding research have added to the bureaucracy and administrative burden of universities. Thirdly, there has been underfunding of the cost of living salary adjustments each year. Fourthly, there have been fundamental changes in student support.
All that has meant that the recurrent funding per student has declined by about 28 per cent. over the past six years; that the research selectivity exercise, now approaching its third round, is increasingly polarising universities in terms of whether or not they conduct research. The noble Lord, Lord Beloff, may be right when he said that not all our universities should be involved in research, but we cannot tolerate the present system which has introduced a disruptive, inefficient and expensive level of competition between universities in search of research stars which leaves nothing to be learnt from the transfers that football clubs carry out. Fortunately, the end of this month will see the end of that scramble because it will no longer be worth while poaching research staff.
It has also meant that academic salaries have lagged far behind other professions, as the noble Lord, Lord Walton, indicated. The dual support of grant and
324
loan plus the withdrawal of benefits has led to an unacceptable level of student poverty which contributes to the higher levels of student withdrawal before courses are completed. I am not saying that we can continue to fund about 30 per cent. to 40 per cent. of the 18 year-olds at university in the way that we funded 12 per cent., regrettable though that decision might be. But we need a much more sensible student loan system than the one we have at the moment or the one that the Government now propose under their new Bill.
Moreover, universities have not been helped by the tight and often contradictory policies and procedures of the Higher Education Funding Council. I again use Bradford as an illustration. Universities are now expected to set a tight student recruitment number. If a university fails to meet that target, it is penalised financially. If it overshoots the target and recruits more students than it said it would, again it is penalised. The University of Bradford will suffer a penalty of about £435,000 this year because it under-recruited by 279 students.
A further example is shown in the table published in The Times Higher Education Supplement of 16th February. It shows a strange diversity in the funding of similar courses which results apparently in Oxford Brookes University receiving £468 per student taught more than the mean. The University of Luton receives £484 less than the mean. Bradford University is funded at £136 less than the mean per full-time student. That has led to a reduction in its funding of £777,000, compared to funding at the mean. On top of that, it would have received additional funding if its part-time students had been funded at the mean. There are many anomalies in the system which contradict the policies which the Government appear to put forward.
Universities have coped with these problems remarkably well, and have attempted to follow government policy while at the same time maintaining standards and thus the high reputation of British universities. However, I am afraid we are now in a situation where that cannot continue. Some very drastic steps will have to be taken to repair matters. Like the CVCP, I suggest that the first significant step should be to remove the 1995 cuts.
4.50 p.m.
Lord Quirk: My Lords, although this debate, which we owe to the noble Lord, Lord Annan, is a welcome opportunity to draw attention to the acute financial distress in our universities, I would like, as a preface to my words, to insist that, for my own part, our educational priorities as a nation must be solidly at the primary level: the first five or six years in the education of our youngest children. This needs to be emphasised not only because this sector has for too long been at the mercy of mediocre ideas and practices but because it is the sector which provides for all our children and not just the agile minority who go on to university. It is the sector, what is more, on which universities themselves crucially depend if the pool from which they recruit their students is to be replete with the wherewithal for a full and challenging basic education.

325
So I for one am very glad that, over the past 10 years, strenuous efforts have been made to transform primary education, with a national curriculum and a system for monitoring and enhancing standards which we can be confident will bear fruit in due course.
Those same 10 years have wrought a transformation in higher education too, at which—in many respects—we can rejoice. We have discarded the increasingly artificial boundary between the polytechnics and universities, producing a single system but one that embraces an attractive and healthy diversity of mission. We have achieved a dramatic increase in the proportion of our youngsters going on to university, putting the UK at the top table internationally in respect of our participation rate. In the early eighties, there were about 1.5 million university graduates in this country; by the end of the present decade, we shall have about 3 million.
But this sea-change, as we have been reminded repeatedly this afternoon, on which all concerned are to be thankfully congratulated, whereby a university education—once the preserve of a lucky few—is now nationally perceived as being within reach of the indefinitely many, is at a cost that has become more frightening with every passing year. As an arts man, I see this cost not least in our libraries. Between 1985 and 1995, the number of students per member of library staff has risen by over 150 per cent., while the number of books per student bought by the libraries has fallen by 30 per cent. More broadly, during the past six years alone, while student numbers have risen by an impressive 45 per cent., the nationally funded unit of resource has fallen by a horrifying 28 per cent., and the HEFCE allocation announced last week for the approximately 80 institutions in their sector of the UK entails a further immediate reduction of several more percentage points.
It is all too likely that the effect will be to destroy the benefits that increased participation in university education should bring, and I deplore (for example) the signs of waste through drop-out—a phenomenon this country hitherto has been proudly able to avoid. And of course it is particularly worrying—as other noble Lords have said—that whatever panacea emerges from the Dearing inquiry, it can only be for a future some years down the road and can bring no comfort to universities wrestling with an incomparably grim present.
Now, I have no doubt that all the universities addressed by the HEFCE are in a similarly tight predicament. But I make no apology for expressing a particularly grave concern for a minority among those 80 institutions—a minority, as the noble Lord, Lord Beloff, has indicated, on which we draw disproportionately heavily for the quality of the research and postgraduate education which has a direct and immediate impact on the intellectual, economic and industrial health of the nation. And since I have a naturally close interest in the colleges of London University, I was shocked, for instance, to find that Imperial College was to have an immediate cash reduction of 3.7 per cent., King's of 3.8 per cent., Queen Mary and Westfield of 4.4 per cent., and the School of Pharmacy of a staggering 4.7 per cent. Even with fairly
326
low inflation, this means actual and immediate cuts of around 8 per cent. or even more. We simply cannot afford thus to snuff out excellence at British institutions of world-class quality. And Imperial College is one that obviously comes into that category.
So let me ask the Minister to give urgent consideration to an expedient which, though bringing little relief, I fear, to the majority of institutions, could do something positive for the leading research institutions—and which need not wait upon the deliberations of Sir Ron Dearing.
In November last year, the Office of Science and Technology received a report by Coopers and Lybrand reviewing the current operation of the dual support system. This report argues convincingly that the present level of support for indirect costs provided by the research councils was—at 40 per cent.—grossly inadequate for the research infrastructure in university departments which each research grant automatically assumes. Rather, says the report, these indirect costs should be funded at a rate well over 50 per cent. and perhaps by as much as 65 per cent. The benefit to the research councils (and to the nation they serve) would lie in higher quality outcomes from better resourced projects, while the benefit to the universities where the research is actually done is likely to be quite extraordinarily significant. Let me illustrate from figures provided by a London college which I have not yet mentioned but with which I have—like the noble Lord, Lord Annan—a particularly close tie: UCL, the biggest of them all.
At University College London—the noble Baroness, Lady Dean, has already alluded to this—it is reckoned that since the changes to the dual support system introduced in 1992, diversion of funds to supplement the indirect costs of research has come to be running at £1.5 million a year. If the Coopers and Lybrand report were accepted and implemented even at a level well below the optimum therein suggested (say at 53 per cent.), the resulting redeployment of funds would be enough to restore UCL's annual loss of £1.5 million—and partially offset the certain annual loss of £4 million (and rising) that that particular college now starkly faces. But UCL is just an example. The changes recommended in the Coopers and Lybrand report would bring comparable benefit to all our top research universities—institutions on which, as we must surely all agree, our future most especially depends. It is in such a spirit of disinterested enthusiasm that I urge this proposal upon the Minister.
5 p.m.
Lord Winston: My Lords, I too express my gratitude to the noble Lord, Lord Annan, for introducing the debate, as, I am sure, will many colleagues throughout the universities of Great Britain. I should declare an interest as a professor working in the Royal Postgraduate Medical School at London University, bridging the gap between medicine and science in a university setting. It is rather difficult to be the fifteenth speaker in a debate of this kind. Nearly all my points have already been made, in many cases much more eloquently than I could make them and by those certainly more eminent than myself. I have some

327
sympathy for the noble Lord, Lord Henley, who must speak at the end of the debate. Perhaps I may come back to that sympathy in a moment.
It might be most appropriate if I speak briefly about medical schools. That is the area of my greatest expertise. It cannot be denied that there is a very serious problem, which typifies much of what is happening in our educational and research base. Salaries have already been mentioned. At London University we effectively face a much bigger cut. Because the basic cuts are involved with the additional funding needed for salary increases, our institutions will be in particular trouble. It is interesting to examine the figures quoted by the noble Lord, Lord Quirk. For the non-medical schools in London, the overall cut is around 2.75 per cent. I calculate that for the medical schools it is something in the order of 4.1 per cent. or 4.2 per cent. That will be much more when account is taken of the salary increases needed. That affects recruitment; it is very important for research; and it is quite critical.
Perhaps I may give noble Lords one example. Our country is proud of the Nobel Prize awarded to Cambridge University—Watson and Crick, who understood the structure of DNA. That is a signal and most important achievement in science. It is now altering our fundamental understanding of human life and medical treatment. When one considers how DNA technology is now being employed, it is clear that there is a very real problem. It is a technology in which we led the world. The universities are currently threatened with cuts which mean that in one place a genetic research centre probably will not be built; in another university a child health department will be cut, which depends absolutely on the molecular genetics; animal house facilities which are currently being built and which are absolutely essential for the study of molecular genetics, because of the need to look at gene action in animals, may be cut; and at another university an immunology department is under serious threat. All over the country, where new molecular genetic set-ups are being undertaken, containment laboratories cannot be built.
In my own institution we need containment for recombinant DNA experiments. Obviously, one cannot afford to allow infected viruses to get out into the population. That means that either the research will not be done at all or that it will be done with some danger to the research workers and the surrounding population.
Yesterday in my clinic I spoke to a medical student who came from the north of England. She is at one of the very good universities in the north and her story is quite typical. I asked her, as a fourth-year medical student, what were her current bank borrowings and what she thought most of her colleagues in a similar situation in the penultimate year of medical school were facing financially. She said that her current bank borrowings were over £6,000 and she expected them to be closer to £10,000. She felt that most people in her university year would borrow £10,000 by the time they qualified.
That may seem like excessive spending. But in that particular university, in order to have their medical education, those young men and, in particular, women
328
need a motor car to travel to quite far-flung areas to obtain clinical experience. So one begins to see that they will have a huge debt at the start of their career. If they are to go into medical science, there is no way that they can repay the debt. As a house surgeon at £15,000 a year and on a fairly reduced salary, it will be a serious burden for them to pay off the debt. We do need to look at that.
Noble Lords are very protected. I was in my operating theatre this morning when one of my colleagues was operating and during an idle moment I looked through Dodd's Parliamentary Companion (I also watched the operation). I took a sample of just under 600 noble Lords. Some 62 per cent. went to a university and 42 per cent. went to Oxford or Cambridge. It is interesting that a very large number of your Lordships went to Trinity College; then came New College, Oxford, and Balliol featured very highly—not Jesus College, Cambridge. My point is that many of us have come from very protected institutions which are relatively wealthy. But the truth is that out there in most red brick universities—the universities should be providing our research base—there is that very serious problem.
Lord Vinson: My Lords, I wonder whether the noble Lord would be gracious enough to give way. I take the point that he makes about the shortage of finance. I have two daughters currently at university. I am convinced that the three-year term for which they are there could be reduced to two years, or the four-year term reduced to three years. That may not be necessarily right for medics. But if the students worked a little harder, a great deal of resource would be released and money saved, which could then be used for the kind of purposes mentioned.
Lord Winston: My Lords, the noble Lord is perfectly entitled to make that point himself during his own time. Perhaps I may briefly continue and make one final comment despite that interruption. I do not see this as a political issue or even an electioneering issue. It is an issue at which we need to work collectively.
The fact of the matter is that we are in a society which now has a very much reduced manufacturing base and that will inevitably continue. The future of Britain must lie in our science and technology. Looking at the Far East, we begin to see the threat that looms up for our children. We must provide that kind of educational base in order to be competitive, to attract people back into this country and to promote our technology.
In conclusion, the Minister has had a very clear message from everybody in this House. No one has disputed the crisis that now faces our universities. I ask the Minister to take back the message and see what can be done by the Government this time.
5.7 p.m.
Lord Armstrong of Ilminster: My Lords, I should declare an interest in the subject of this debate, as

329
Chancellor of the University of Hull. Hull is not a new university but is, relatively speaking, one of the younger universities. It is a sobering thought, I suppose, that I am likely to be the last chancellor of Hull who is older than the university.
Though it was founded on the generosity of locally based industry, personified by Mr. Ferens of Reckitts, it does not have the benefit of private endowments on the scale of some of the older universities. So we are heavily dependent, as are all universities (some even more so than Hull) on the public funding which we receive, through the HEFCE, from the Government, from local education authorities and from research councils.
Our unit of resource—the amount of money paid in respect of each student each year—has been diminishing steadily and sharply for some years now. On the present plans, the reduction will by 1998 have amounted to the best part of 40 per cent. in eight or nine years. Of course, the university has been doing everything that it can to trim costs and improve efficiency. It has cut back desirable expenditure on books and libraries, and on buildings and maintenance, where possible—often short-term expedients with long-term penalties, but they have had to be accepted in order to safeguard core educational objectives and programmes.
We were at one time able to blunt the effect of the reduction on our overall funding by taking on large extra numbers of students with the expansion of higher education. But numbers have in effect been frozen for several years, as the noble Baroness, Lady Lockwood, pointed out, and will continue to be frozen for several years to come. This relief is no longer available to us.
The problems would not be significantly eased by charging students an entry fee. Indeed in our case, and I suspect in the case of many other universities, the consequence of such a fee would be likely to be that fewer students would come forward for admission, because of inability to afford the entry fee. The effect would thus be to deny access to higher education to some students who would otherwise get it and benefit from it. Is that what we want to achieve?
Universities are rightly expected to use their resources prudently and efficiently. But we cannot expect universities to be able to meet rising expectations; to cope with greatly increased numbers of students; to play the sort of role that they ought, and would like, to be able to play in their local communities; to uphold, improve and enlarge the country's research base, and to give a good standard of tuition and pastoral care, on the basis of the present amounts of, and arrangements for, funding.
Reducing the number of students is no answer to the financial problem, even if we were willing to reverse the trend of recent years, since the size of the grant, albeit diminishing, is directly related to student numbers. Our expenditure, as has been pointed out is, above all, on staff, and if we are to achieve spending reductions of the size now being imposed upon us, we can really do so only by reducing the number of staff. Inevitably, the first to go are likely to be younger staff
330
on short-term contracts—just the people on whom the quality of future teaching and research specially depends.
The alternative to that is of course to pay older staff public money to take early retirement. Either way we shall be taking measures to meet short-term financial constraints at the expense of long-term quality and effectiveness. What sort of sense does that make?
Apart from the need at least to maintain the amounts of funding for universities in real terms, and the effects of the cuts which we are discussing, there is the separate issue of the uncertainty created by changes year by year in the amount of funding provided.
I am old enough to remember the time when UGC grants were set not annually, year by year, but quinquennially, for five years at a time. Even the Treasury—that tail which wagged the government dog—in those days understood the need for a measure of stability in university funding. Indeed, I believe that in those days the Treasury, led by Mr. R. A. Butler and at official level led by that great, good and wise man, Sir Edward Bridges, would have regarded annual reviews of university funding levels as an unacceptable erosion of academic freedom.
If that view was held, it has long since gone by the board in Whitehall and in Westminster. But the principle was right. If we are to have universities which fulfil all the purposes to which I have referred, what is needed is a wider understanding of the nature and purposes of higher education, and an altogether more stable system of funding.
So we at Hull, and all noble Lords here this evening, very much welcome the appointment of the educationally ubiquitous Sir Ron Dearing as the chairman of the committee on higher education. It must be about the only part of education which he has not honoured and graced with his attention. Some noble Lords have suggested that he cannot be expected to do the sort of job that the Robbins Committee did a generation ago. I disagree with that and I hope that he and his colleagues will be able to do what Robbins and his committee did a generation ago: assemble and set out the facts, figures and arguments, and so provide the universities and the country with a solidly constructed base from which to proceed for the future. They will need to redefine for our day and age the nature and purposes of higher education, the aims to which universities should be working, and the implications of all that for funding, from private as well as from public sources.
Of course, that will take time. I hope that the Government will make sure that the universities have the resources to enable them to sustain themselves until Dearing's report is available and can be acted on. If we cannot do that, and as a result establish a greater measure of trust between the world of universities and the world of government and politics, we shall be at grave risk of doing serious damage to our system of higher education, from which it will take a generation to recover. We owe our young people a duty to do better than that.
5.15 p.m.
Lord Goold: My Lords, I, too, would like to thank the noble Lord, Lord Annan, for initiating this debate on higher education which comes at a most opportune time. I must also declare an interest as the Chairman of Court of the University of Strathclyde. Like others, I welcome the appointment of the Dearing Committee of Inquiry. I believe that this review is timely because higher education is at a crisis point.
The past 10 years have been a period of great achievement. There has been a massive expansion—over 50 per cent. in student numbers. Research funding has been focused on areas of excellence, and the management and the output of university research have improved considerably. New systems of public accountability have been introduced, and rightly so, with both teaching and research now subject to rigorous peer review—not, I hasten to say, from your Lordships' House.
There is an evident concern on the part of the universities to maximise the beneficial impact which they have on their communities—and it is immense. In Scotland, the tremendous economic impact of the higher education sector has been analysed in the McNicoll Report, published recently by the Committee of Scottish Higher Education Principals. Scottish universities generate some 68,000 jobs, and more than half of these are created in other sectors of the economy through the knock-on effect of the universities' activities. The economic impact of the universities on the Scottish economy is equivalent to some £2.5 billion each year—significant achievements indeed.
Higher education has therefore been a success story for the Government, and the achievements have depended on the commitment and dedication of university staff. So what of the future? I am afraid that the achievements of the past decade are now being threatened by a misguided belief that universities will continue to provide a first-class service with sharply reduced levels of finance. An efficiency gain of some 30 per cent. has already been achieved by the sector in the past five years. There are few, if any, similar gains still to be made.
If, as planned, the Government now cut funding by a further 10 per cent. over the next three years, many of the staff who have contributed to the successes of the past decade will soon be redundant. Staff numbers will be driven sharply down. University estates will deteriorate as institutions try to protect staffing budgets by making savings on maintenance. Some will try to weather the storm by borrowing and will simply mortgage their future. Some may even go out of business. It is essential that the Government should take stock before taking this policy further.
The Dearing committee has been asked to consider the size, structure and funding of the university sector. In doing so, particular note should be taken of the following points. As regards the size of the university sector, the Committee of Vice-Chancellors and Principals has for many years urged further expansion. That is an understandable line for such a body to take,
332
but I am strongly of the view that the maintenance of standards is now a far more important issue than the promotion of expansion. Further growth is not vital: the protection of standards is.
Regarding the structure of higher education, I would like the Dearing committee to address three issues. The first is the question of so-called "research universities". Here I am sorry to take issue with the comments of my noble friend Lord Beloff and agree with the noble Lord, Lord Walton. The Russell Group is a small club of prestigious universities which would like to monopolise funding for research, leaving their fellow institutions with the less glamorous job of teaching. Sir Ron Dearing and his committee should quash those ambitions. The Government's current policy of focusing research funding on areas of excellence is the correct one. There are areas of excellent research in universities the length and breadth of the country which will be starved of vital funds if the ambitions of the Russell Group are realised.
Secondly, Dearing must consider the role of further education. Many of the newer universities would like to expand through merger with further education institutions. That development concerns me. It may undermine the role of the FE sector, reducing the commitment of FE institutions to meet the nation's need for basic skills training. Dearing should support a strong, independent FE sector.
A third issue in relation to structure is Scotland. We hope that Dearing will recognise the distinctive nature of Scottish higher education and the value of a distinct Scottish funding system. Since 1992 when the Scottish Higher Education Funding Council was established, Scottish universities have benefited from close dialogue with their funding body and with Scottish Office Ministers. That close dialogue has had tangible benefits. Scotland has led the way in developing its academic computing infrastructure through the Metropolitan Area Networks. Those networks may now be the key to realising the vision of a University of the Highlands, as set out by my right honourable friend the Secretary of State for Scotland in his recent statement to the Scottish Grand Committee.
The final and perhaps the most significant area of the Dearing committee's work relates to the funding of higher education. In terms of the funding of the universities themselves, if the Government are serious about high academic standards and enhancing the quality of teaching and research, the current policy of progressive funding cuts must be halted. If we will the end, we must also will the means. While the Dearing committee is deliberating, the current level of funding should be maintained.
The funding of students is another vital issue, as many noble Lords have said. Graduates already contribute enormous amounts to the Treasury through income tax. It can be argued quite plausibly that they already pay for their higher education. That being said, with the financial pressures which the Government face, it may be reasonable for student maintenance to be funded in future through loan rather than grant. Alternatively, some form of graduate tax or fee could he the answer. What the Dearing committee can contribute to this issue

333
is clarity. Uncertainty over student funding has now been a cause of distress to students and their parents for several years. We should hope that a committee of inquiry which has cross-party support can come to a clear recommendation which will settle the matter.
In conclusion, therefore, I welcome the establishment of the Dearing committee. The past decade has seen great things achieved in higher education by the Government and by the higher education institutions. Perhaps I may be the first in this debate to congratulate the Government and my noble friend the Minister on those achievements. However, our priority now must be to maintain the fine standards which have been set by our universities.
5.22 p.m.
Lord Ashley of Stoke: My Lords, like other noble Lords I must declare an interest because I am Chancellor of Staffordshire University. I thank the noble Lord, Lord Annan, for initiating the debate and congratulate him on his splendid speech.
We have heard many speeches critical of the Government and underlining the havoc that has been wrought by the many cuts in the higher education budget. However, after that bombardment of criticism from both this House and outside it is amazing that the Government do not seem to comprehend the magnitude of the cuts or their effect on the universities. That is astonishing.
Members of this House, Members of the other place, the Committee of Vice-Chancellors and Principals, university lecturers and students have all complained about the cuts, yet the Secretary of State made a remarkable statement in another place a little while ago. On 19th February, when responding to the legitimate claim that higher education faced a crisis, she said:
"I cannot accept that any sector that receives £7 billion of funding—21 per cent. of the total funding of the education system—is in crisis".—[Official Report, Commons, 19/2/96; col. 24.]
The official declaration of the Secretary of State in another place was "no crisis". However, speaker after speaker today has talked of a crisis. The noble Lord, Lord Annan, was outspoken in his criticisms and he was followed by the noble Lord, Lord Renfrew—unfortunately he is not in his place—who referred time and again to a "crisis". In fact, as noble Lords will remember from our recent debate on student fees, the noble Lord said then that there was a crisis which may lead to a "catastrophe". There should be no doubt in people's minds about the present situation or about the Government's failure to appreciate that the universities are facing a crisis.
Perhaps one of the reasons why the Government do not fully understand the seriousness of the situation is that many universities are afraid of acknowledging that they face a crisis. When Ministers meet members of universities, they may be given a false sense of security and a complacent impression. The universities are understandably reluctant to admit publicly that they are in crisis. They are trying to attract students from both home and abroad and do not want to declare themselves
334
a disaster area. That is understandable, but it may well be misleading. I should like the universities to be able to be more outspoken about the seriousness of their situation. If the Government continue to turn a Nelsonian eye to the crisis in our universities, they are storing up trouble not only for themselves, but also for the universities.
The CVCP has warned time and time again that major building programmes will be abandoned, about massive reductions in library books and computers, and that salary bills may have to be reduced, leading to redundancies and closures. Anyone connected with the universities knows about the larger classes, the queues waiting to use computers and the unfilled academic posts. Despite the Secretary of State's £7 billion, but because of her cuts, our universities are resembling decrepit firms worrying about bankruptcy. There is blight at every level of our university system. There has been negligent corrosion of the system that is designed to develop our seedcorn.
I shall speak only briefly because a number of other noble Lords are waiting to speak, but I must point out that I believe that the Dearing inquiry and the subsequent report will be of great benefit to our universities. I do not agree with the noble Lord, Lord Beloff, who, as always, made a marvellous speech, but who criticised the fact that Sir Ron Dearing is to lead the inquiry. It does not matter that Sir Ron is not as knowledgeable as the noble Lord would like him to be. In fact, I think that that is a positive advantage because Sir Ron will not be full of the prejudices, anxieties and partisan views which can affect so many of those who have been involved in the university debate for so long. I think that that will be a great asset. Sir Ron Dearing is an outstanding individual, whom I have had the great privilege of meeting. He is a marvellous, well-endowed man. Apart from the singular note struck by the noble Lord, Lord Beloff, he is rather like David Attenborough. They are the only two men who are universally loved and admired. Sir Ron Dearing will do a marvellous job, but his report will not come out until after this Government leave office.
I do not wish to make a partisan point, but we must face facts. The Labour Government will have to cope with Sir Ron Dearing's report. In the meantime, this Government will have to cope with the crisis. All of these facts, which are adduced by people who are far more knowledgeable about the universities than I am, add up to a condemnation of the present university system. Students and university staff are suffering, and therefore the nation is suffering. University education is being neglected and is going downhill. I hope that the Minister will be able to respond in the constructive fashion adopted by all speakers who have participated in the debate.
5.31 p.m.
Lord Broadbridge: My Lords, I too am grateful to the noble Lord, Lord Annan, for securing this most timely debate. Like others who have spoken, I am dismayed at the magnitude of the budget cuts announced last week. I think of the well-known literary adage:

335
"Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery".
But that statement treats only of a marginal situation. The prospect that faces some 200 universities and higher education colleges is far from marginal. A steady decline in budget income has prevailed for several years, but now, instead of a breather without budget cuts to allow for rebuilding and consolidation, out of the blue come the most swingeing cuts of all, in both recurrent and capital expenditure.
The implications have been variously stated and referred to by earlier speakers. The one that I should like to stress is that of the Association of University Teachers. Last Thursday that body said that many universities were their town's biggest employers and claimed that the cuts would lead to more than 10,000 job losses. As to this, I think of a university like St. Andrews in Fife, Scotland. It is one of our most ancient. The town is the university and the university the town. I know it well, because my eldest daughter obtained her degree there. The situation is analogous to that of a large firm that is cutting back. There are actual job losses and, in real terms, a decrease in spending power of the directly employed. But there is a halo effect throughout the community which affects the viability of shops and suppliers of services such as restaurants—in fact nearly everybody.
Professor Gareth Roberts, vice-chancellor of Sheffield University (where I have a house) and chairman of the CVCP, warned that some universities could close as a result of the cuts and that four—which he did not name—were already in trouble. The Government appear to rely for mitigation of the effects of their cuts, in my opinion unwisely, on two matters: first, the inquiry into the funding of higher education by Sir Ron Dearing, who is due to report in the summer of next year. The principle of this move is admirable and will, I am sure, be extremely valuable, but the results will come much too late to mitigate the present cuts. Even if he meets his deadline—it is an enormous task—it is hard to see how legislative teeth can be put into his recommendations before 1998 at the earliest, probably 1999.
Secondly, the other tactic upon which the Government seem to rely is the application or the private finance initiative (PFI) to higher education. The CVCP's reaction is that such funding, if appropriate at all, is relevant and can be effective only in a tiny segment of their members' area of capital costs, for example student accommodation and perhaps sports facilities and catering outlets, because these are revenue-bearing, especially with an eye to conference and seminar use during vacations. They argue persuasively that the great bulk of capital expenditure on construction and maintenance of academic buildings, laboratories and computer systems will have no appeal whatsoever to PFI providers. There are also significant costs in putting together a PFI bid. They may be as high as £500,000 without any certainty that the project will go ahead. There are only a few successful PFI projects in the pipeline, and in any case the costs of leasing
336
capital under PFI will have to be taken from the now reduced recurring funding, which is not meant to be used to pay for capital.
The funding per student is in very worrying decline. Having fallen by over 28 per cent. over the past six years, the prospect of a further near 10 per cent. over three years is profoundly alarming. I believe that this point was made forcefully to Mr. Eric Forth, the Minister of State for DFEE, on 11th January. The reduction in funding per student should particularly alarm your Lordships. Supervisors have a corporate responsibility not only for their students' academic progress but their general welfare. For example, if a student repeatedly attends for supervision looking worn out, the supervisor has a responsibility to inquire why and, more time-consumingly, perhaps to do something about it. One university has reported to the CVCP that each member of staff now has to take responsibility for 40 per cent. more students than as recently as 1989.
It is a worrying fact that student stress, drop-out and breakdown are increasing as, more tragically still, is student suicide. The announced student funding cuts are in a literal sense most unhealthy. They are also unhealthy for academic staff. Salaries are often falling in real terms and stress-related illnesses are rising. We face the real prospect of the increasingly sick having responsibility for looking after the increasingly sick. Book purchases per student are falling. Outside, overseas and more highly paid staff cannot equitably be recruited generally and, in particular, to research teams for which Britain is famous. Staff drop-out and chairs cannot be filled. It is a litany certainly not in line with the strategic general and economic aims of this country.
While I am the last to say that a degree is essential to the production of leading men and women—arguably, the greatest Briton of this century, Sir Winston Churchill, hardly shone in his early education—nevertheless significant numbers of graduates tend to enhance the performance of industry, commerce, the professions, the arts and the public and administrative sectors. Although both of my degrees are from Oxford, nevertheless I believe Cambridge to be a wonderful place. I am sad to see that it heads the list of budget cuts at 7 per cent. or £6 million in real terms. That is a sad state of affairs for a country renowned as a centre of innovation, invention and academic excellence. One Cambridge College, Trinity, has produced more Nobel laureates than the whole of France.
I turn to capital grants. I have already mentioned the CVCP's argument that PFI is inappropriate for the bulk of academic buildings and equipment. Whether for arts or sciences, equipment that is required for teaching today, particularly for research, is frequently computer-based and very expensive. With the pace of modern change, it requires constant renewal and maintenance, as do buildings. When in the late 1930s Sir Howard (later Lord) Florey and his team at Oxford developed penicillin and tested it successfully on the first human being, it was done largely on the basis of bucket chemistry. Perhaps it should be described as bucket bacteriology. Buckets come cheap. Not so today's equipment. New universities, without the riches of medieval, post-medieval or Victorian industrial

337
magnates' endowments, are at a particular disadvantage, as are new colleges within older universities. I think of my own college, St. Katharine's, Oxford. It is particularly relevant as the founding master, the noble Lord, Lord Bullock, is a Member of your Lordships' House, as is the present master, the noble Lord, Lord Plant. Some donations have been embarrassingly large, but it is difficult to compete with, say, Henry VIII.
In conclusion, I both deplore and am greatly saddened by what is happening. I very much bear in mind the biblical words that as ye sow, so shall ye reap. I fear that we shall reap the wind if we go on like this.
5.39 p.m.
Lord Tope: My Lords, when the debate started this afternoon I thought that I would be one of the few people with no interest to declare. Earlier, the noble Lord, Lord Renfrew, made an unfavourable comparison with the pay increases of school teachers and university lecturers. I suppose that I should now declare that my wife is a school teacher. I feel a little as the noble Baroness, Lady Dean of Thornton-le-Fylde, did in looking at the list of distinguished speakers. Having heard 19 of them, they have expressed an astonishing degree of unanimity. Comparisons have been made with the debate on the subject of student loans the week before last. I recall that in that debate there was one speaker who supported the Government. Today, we have yet to hear a speaker support the Government, although I suspect that there may be one before the end of the debate.
Speaking as the fifteenth speaker, the noble Lord, Lord Winston, said that many points had already been made. That is even more true speaking as I do as the twentieth speaker, but most of those points bear repetition of course. Much reference has been made to the Dearing review. It was in fact announced on the day that we had the Second Reading debate on the student loans Bill. I gave it then a qualified welcome which I am happy to repeat now. We welcomed it as being at least a recognition by the Government that there is a problem in higher education which needs addressing urgently.
But, as others have said, the Dearing review will not be reporting until the summer of 1997. That is after the general election, and it is hoped that many of its proposals will need some legislative action, certainly if the funding arrangements are to change. We are probably looking at real changes not coming into effect until the end of the century. That assumes that we have a government who are willing to tackle these difficult problems.
The funding crisis is now; it is here; and it needs to be tackled now. We cannot do nothing until the end of the century, merely waiting for a useful report to be made. By then, the damage will have been done. Today people have spoken with real feeling, knowledge and experience of the problems that they know that their universities are experiencing. Reference has been made to the fact that since 1989 student numbers have increased by 45 per cent., yet funding per student has
338
decreased by 28 per cent. Mention is often made of economies of scale. I read that one institution had put starkly to the CVCP its own experience:
"Each member of staff now has to take responsibility for 40 per cent. more students than in 1989 … there are no economies of scale in the need for individual attention to each student's work … their examination papers or their pastoral care".
Reference has also been made to efficiency savings. To someone who is much better versed in the role of an LEA than a university, reference to efficiency savings comes as nothing new. Speakers have pointed out that we are long past being able to make savings on anything like the magnitude expected by the Government through increased efficiency. The sort of things being euphemistically called "efficiency savings" now are real cuts and damaging cuts. That is the case in local government, and I am certain that it is equally the case in the world of our universities.
Capital funding has also been mentioned. Reference has been made to the 30 per cent. reduction in next year's capital budget, and its halving over the next three years to 1999. I was going to talk of the effects of the PFI. It has been well and fully covered in the debate. I shall not allude to it except to repeat what others have said. PFI is in no way an answer to the capital crisis facing our universities. Indeed it can worsen the crisis. Significant costs are usually involved in preparing a scheme for the PFI. Those costs must be borne, and there is no guarantee that the application will be successful.
What will be the effects of the cuts? New and much needed projects will have to be abandoned or, at best, postponed indefinitely. Urgently needed, up-to-date equipment will not be acquired. Our universities will no longer be able to offer modern state-of-the-art facilities. That is bad enough, but I have sufficient confidence in the energy and initiative of our universities to believe that against all the odds they will overcome some of those difficulties. What concerns me even more are the effects on the unglamorous but vitally important area of care and maintenance budgets. As we all know, one can postpone maintenance and care for perhaps a year or two years, but one cannot do it year after year after year without there being some disastrous effects.
I wish to quote from the National Audit Office report entitled The Financial Health of Higher Education Institutions in England. In 1994 it noted that a backlog of maintenance work and work needed to comply with health and safety legislation was putting pressure on the majority of the sector. In its submission to the public expenditure survey the following year, the CVCP estimated:
"a backlog of maintenance work totalling £1,269 billion across the university system, as a result of government underfunding".
Those problems are urgent and they will not go away. We need to find a means of tackling them.
Earlier in the debate, my noble friend Lord Russell trailed my giving some information about my party's proposals in this area. There are few people who are fortunate enough to have my noble friend as a warm-up man, but I shall do my best in the few minutes that remain to me. I need to say for the benefit of my colleagues, if not for the House, that the proposals are

339
to be debated at our spring party conference the weekend after next, and only then will they be party policy.
The proposals recognise that we can no longer expect the taxpayer to bear all the cost. We say that as a party which is committed to increasing taxation if necessary to fund education. We recognise that the cost needs to be shared among the three stakeholders—we claim that we thought of the word first—in education. The first is the Government. We would increase contributions from the Government to tertiary education, although that would not be our top priority. We recognise that employers have a role to play in contributing towards the education of their employees and society generally. We propose a 2 per cent. remissible education and training levy on company payrolls, although we would exempt small firms.
Perhaps most important and relevant to the comments that have been made in the debate, we recognise that individual learners themselves will have to make some contribution. We do not propose a graduate tax. We propose an income contingent repayment scheme. We will establish what we would call a learning bank into which the contributions will be paid, and in which each student can open an individual learning account to receive contributions, if necessary, borrow from it, and to repay in the way I have described.
I cannot do full justice to a 17-page document which is not yet party policy in the few moments left to me. Those are our proposals, and as my noble friend Lord Russell pointed out to the noble Lord, Lord Renfrew, there is more than one opposition party on this side of the House. Those are our proposals. They are up for discussion and consultation. As my noble friend also pointed out, our leader Paddy Ashdown in launching the proposals said that there are only three alternatives to them or something like them: one is to let quality continue its rapid decline; the other is a 4 pence increase in income tax; and the third is to lie. We know which policy the Government have chosen. We wait to hear which policy the Labour Party is going to choose. I look forward to hearing the next speaker outlining that. She has had at least 10 minutes more notice of it than I had earlier.
To conclude, the terms about which we are talking, and the implementation of the Dearing review, which may well bear a startling resemblance to what is in the document, will need to be implemented, but they are not likely to be implemented before the turn of the century. We need an urgent solution to the problem. We need the Government to tackle it. We cannot wait for the Dearing report. We cannot wait for the election of a Liberal Democrat Government, although the two may well be coincidental in timing.
By setting up the Dearing review, the Government have recognised that there is a problem with higher education that needs addressing. The Government must be brave enough to recognise that the funding crisis is here and now. After the debate today they cannot possibly not recognise that. It cannot wait for another two or three years, especially with the cuts proposed for those years. Action is needed now. We should support
340
the CVCP's call for a significant reversal of the proposed funding cuts next year, and especially over the following two years. Preserving the quality of our education for the future is much more important than tax cuts now.
5.50 p.m.
Baroness Farrington of Ribbleton: My Lords, I congratulate the noble Lord, Lord Annan, on initiating what has been for me, as a comparatively new Member of this House, one of the most informative debates that I have attended and in which the unanimity of views has been remarkable. In introducing the debate, he referred to the parameters of the cuts during the past six years, the collapse of the tutorial system and the need for us to recognise that in this and other areas the Government have increased the cost of bureaucracy and paperwork by the policies they have introduced. It is also important to note, as he did, the need to obtain agreement on how higher education is to be funded.
The Government are in danger of pretending that the problems arising from the cuts in revenue and capital spending will go away during the period in which the Dearing Committee is to produce its report. The problems will not go away, as so many speakers have made plain. I echo the words of the noble Lord, Lord Annan, in referring to the danger of students dropping out and the problems which are faced if the cost of student drop-outs begins to come into the equation. Perhaps I may refer to a university lecturer who pointed out that as regards tuition, maintenance and infrastructure costs British university degrees are the cheapest in terms of public funds for completed degrees within the OECD. However, the same lecturer went on to point out that part-time students are so tired that the drop-out rate is increasing. That is a problem not only for the universities but for the country.
The noble Lord, Lord Renfrew, referred to the importance of the cut in capital funding. That point was raised by speaker after speaker in terms of its effect. My noble friend Lord Morris of Castle Morris spoke of the problems of capital funding having to cover libraries, health and safety equipment, maintenance and computer equipment. He gave graphic illustrations using Sheffield and UMIST. He could have cited many universities across the country. What answer will the Minister give in the light of such widespread anxiety?
The issue of PFI capital has run like a recurrent thread through the debate. In introducing PFI as an idea for funding, the Government in the early stages recognised that it must be additional to essential underpinning capital expenditure and not used as a substitution. The much referred to Treasury dog is now turning it into a substitution as an alternative to the full and necessary funding. What is the Minister's answer to the fact that many universities are unable to match the private-sector funding which is essential to their ability to develop PFI initiatives?
The noble Earl, Lord Russell, referred to the problem of most of the capital having to be spent on repairs and maintenance, and not on investment and equipment. The noble Lord, Lord Dainton, referred to the Government's

341
misuse of language in efficiency savings. As a comparatively new Member of this House, but as a much more longstanding member of the local government team, I cannot but echo and strongly underline his point. It is pointless for the Government, in the teeth of the detailed, knowledgeable, carefully researched opinions put forward by the universities, to maintain that efficiency savings during the next three years, and during the wait for Dearing, will solve the problems of the cuts which now face the universities. The noble Lord, Lord Dainton, also referred to the growing concern about contract research and the conditions in which young people work. We are in danger of losing them.
The noble Lord, Lord Beloff, surprised me somewhat, if he will forgive me for saying so. I had not realised that he was so close to being recruited to New Labour. I was delighted by his contribution in which he raised extremely important comparisons with other European Union countries. We hope that that factor will be taken into account by the Dearing committee because of the mobility of students and the need for us to be effective in competition with our European Union partners. As someone whose father was a plumber, I hope that the noble Lord was not suggesting that Sir Ron Dearing is in danger of behaving like a plumber as regards timing, because if so the universities will be in deep trouble.
My noble friend Lady Dean referred to the problems facing the Open University. It would be a tragedy if the cuts were to go ahead. It would be a particular tragedy for the students because of the exciting work that is being developed by the Open University in collaboration with other universities in credit transfer schemes, which may be a solution in particular for mature students. Furthermore, the European Union has recognised the contribution of the Open University to the quality of the different styles of learning developed in the UK.
It is impossible to cover all the points raised by all the speakers. The noble Lord, Lord Walton, referred to the quality of the science base in our universities which attracts inward investment. That point is critically important in terms of the economic viability of the country and the fact that partnership schemes are being put at risk.
The noble Earl, Lord Limerick, and the noble Lord, Lord Beloff, referred to the question of whether there should be concentration. The only point that I would raise in advance of Dearing is the importance of accessibility in as many parts of the country as possible to the full range of course options because of the growing number of non-standard entry students.
My noble friend Lord Sewel was right in saying that the current Government policy penalises and punishes success. It is extremely important to recognise that it would be a tragedy if during the period leading up to the Dearing Report the Government believed that they could rest on what today's debate has demonstrated are some pretty shaky laurels in terms of the position of the universities during the next two or three years.
We cannot say that efficiency savings will protect our universities from cuts. The noble Lord, Lord Broadbridge, referred to the tragedy that would be caused
342
to the local economy were any of our institutions to become bankrupt during that period. I come from a small town whose former polytechnic is now a university and I know the importance of that point. We cannot afford to allow any of our universities to become bankrupt in quality or bankrupt in terms of finance.
It has been a wide-ranging debate. The Government are on the witness stand in terms of what they intend to do. If before it is possible to implement Dearing the Government have money to subsidise a private-sector loan scheme, would it not be better to use that public money to protect the system so far as possible before changes are made with all-party support after Dearing reports?
Lord Renfrew of Kaimsthorn: My Lords, before the noble Baroness sits down, perhaps I may ask whether the only expression of New Labour policy that we are to hear this evening is a glimmer, allegedly from my noble friend Lord Beloff.
5.59 p.m.
The Minister of State, Department for Education and Employment (Lord Henley): My Lords, like my noble friend, I was very interested in that exposition of the higher education policy of the party opposite.
Some time ago the noble Lord, Lord Porter, said that he suspected that in this House most of us are in favour of education, motherhood and apple pie. That made me think of the remarks of W.C. Fields who said that someone who hates children and dogs cannot be all bad. That is not my policy nor is it the view of Her Majesty's Government. We very much value education in the whole and higher education in particular.
I join all noble Lords in congratulating the noble Lord, Lord Annan, on introducing this debate and on attracting such a considerable amount of expertise in the higher education sector to it. It was not until we reached the Front Bench speakers that the lay voice was allowed to be heard. I believe that only one speaker before that did not have a connection with the higher education sector. Therefore, to some extent it has been a one-sided debate but it is none the worse for that. I have certainly taken on board the messages given to me by the noble Lord, Lord Annan, and others on this occasion and by the noble Lord, Lord Annan, when he came to visit the department the other day, and I am sure that he will visit on other occasions.
I heard the comments by the noble Lord, Lord Armstrong, about the old UGC and its relationship with the Treasury. He reminded the House that in the old days grants for the UGC were set by Her Majesty's Treasury. If that were still the case today, I should not be standing at the Dispatch Box because one of my other noble friends would be here representing the Treasury. I understand that in those days it was not a matter for the Department of Education, in whatever guise.
I begin by setting out some of the background. The noble Lord, Lord Ashley, poured scorn on the figures given by my right honourable friend. But I do not apologise for saying that the Government are currently spending over £7 billion of the taxpayers' money on

343
higher education in the United Kingdom. That is a very substantial sum by any standards. I do not believe that it indicates, as the noble Lord, Lord Annan, expressed it, that we despise dons. It may be that that was unworthy of the noble Lord. The allegations of butchery put about by the noble Lord, Lord Morris of Castle Morris, are also unfair. That spending represents over 20 per cent. of the £35 billion total public funding for the education system as a whole. I was extremely grateful to the noble Lord, Lord Quirk, for stressing the importance of other parts of the education system and that extremely difficult choices have to be made in terms of achieving the right priorities. I remind the House that in what turned out to be a very difficult spending round—and I appreciate that it was particularly difficult for the higher education sector—we were able to increase funding for schools by a fairly considerable amount.
I remind the House also that we spend more per higher education student than any other country in Europe and rank among the top five in the world. Obviously, we spend far more on each higher education student than we do on each student at school, whether at primary or secondary level, and we spend far more on each higher education student than we do on each further education student. It must be asked at some point whether that gap should be widened or whether it is about right. I hope that Sir Ron Dearing will address that point among the many other points which need to be addressed by his review.
In the late 1980s and the early 1990s, higher education was one of the fastest growing public spending programmes. In real terms funding from my department for higher education in England rose by over 23 per cent. between 1989–90 and 1994–95. I accept that at the same time we saw an increase of some 57 per cent. in student numbers. But that is something on which the universities should be congratulated and I hope that they will accept those congratulations.
Like every other publicly funded service, higher education is part of the wider economy. The 1995 Budget was designed, as I hope are all Budgets of whichever government, to control public spending in the interests of a healthy economy and a speedy recovery. The Government expect the universities to manage within the public funds that are made available.
I accept that much has been said in recent weeks about the Budget settlement for higher education. The noble Lord, Lord Ashley, made a rather interesting point that many higher education institutions are afraid to make their concerns known to Ministers. That picture of blushing virgins somewhat amazed me. I have not noticed any shyness on the part of any higher education institutions in relation to coming forward and telling Ministers in no uncertain terms exactly what they feel. I should have thought that this evening's debate was a good example of that. I suspect that the noble Lord may wish to retract or withdraw those remarks.
Reports have highlighted reductions of 6 and 7 per cent. in funding compared with 1995–96. When transfers to the Teacher Training Agency are taken into account, the recurrent and capital grant and tuition fees
344
for English institutions will reduce by 2 per cent. in cash terms. That represents a reduction of 5 per cent. after allowing for inflation. Therefore, that is marginally lower than the 6 or 7 per cent. which has been alleged.
Perhaps I may say to the noble Lord, Lord Annan, that that is broadly the same as the position in Scotland. The position in Wales is slightly different, but I assure the noble Lord that there are perfectly valid reasons for the difference in the Welsh figures. They are not based on any attempt to try to lure the noble Lords, Lord Morris of Castle Morris and Lord Cledwyn, over to these Benches. I am sure that our own arguments will do that in due course.
Despite a very tough Budget, our spending plans maintain the recurrent provision announced in 1994. They allow for the participation of young people to be maintained at what I think everyone accepts is the current record level of over 30 per cent. and for increases in the number of part-timers, most of whom are mature students. The total package of student support has been increased in line with inflation.
But our policy is that capital expenditure should wherever possible be financed from private sources. The Budget reduced the universities' capital provision in line with that with most other publicly funded programmes. We believe—and I shall say more about this in due course—that the private finance initiative offers scope for private sector expertise as well as private funds to deliver value for money.
I accept that that reduction in capital provision for 1996–97 is substantial. But it is small in relation to more than £1.6 billion of capita] investment financed by universities in recent years. Universities will receive a single grant and be free to make their own decisions on the balance between capital investment and other priorities.
I turn now to the private finance initiative, about which many anxieties have been expressed. I accept that it will take some time to develop in the higher education sector. But universities and colleges are used to commercial transactions. The private finance initiative offers opportunities for them to achieve better value for money by transferring risks and management of projects to the private sector. There is also scope for funding capital projects through loans or facilities management-type contracts.
A number of firms have approached the private finance panel to discuss potential PFI projects of all sizes. Higher education institutions are taking forward some fairly exciting PFI projects. I could give examples and examples have been given. There is a general acceptance that a number of projects are relatively easy to carry out, particularly in the larger sector; for example, student halls of residence and so on.
But I do not accept the argument put forward by the noble Lord, Lord Morris of Castle Morris, that the PFI cannot be used for smaller-scale projects. There have been successful smaller projects. There have been a number of such projects in the National Health Service where we are talking about sums in the range of £1 million to £2 million. Again, I could give examples but in view of the time, it would be wrong to do so this

345
evening. Experience in the NHS suggests that the key factor behind private sector interests in a project is not its size but its type.
The noble Lord, Lord Morris, asked whether we could fund an anti-proton storage ring by means of the private sector finance initiative. Obviously I cannot say whether one could or could not. I can give an example from my own department of a small project relating to equipment which we managed to fund by PFI and made considerable savings as a result. That was one where the Employment Service turned to the private sector to replace its outdated computerised personnel system. The chosen system will save an estimated £1.2 million over the seven-year life of the contract. Payment is related to the number of live records on the system but ownership of the computer remains with the private sector. I believe that ideas of that kind can be explored further.
I note the concerns that have been expressed by the CVCP and others about the impact of the Budget settlement. I know that there are considerable worries about the effect of continuing productivity improvements on the quality of teaching and learning and on research. I know that there are concerns about the scope for private finance to meet the full range of universities' capital needs.
The noble Lord, Lord Annan, quite rightly asked, as did others, what we should be doing as a result of those pressures between now and what we call post-Dearing. As the noble Lord will be well aware—he came to see us the other day—we have listened to the CVCP and we shall continue to listen to it. We have set up two groups to work with it. The first group will collate evidence about the impact of public funding levels on universities and report to us in the department. The second group will examine the scope for PFI in higher education in achieving value for money and will assess its potential for offsetting the reduction in public funding for buildings and equipment. It will identify apparent obstacles to PFI and the means of overcoming them.
As I said earlier, I pay tribute to the excellent work of the higher education sector in achieving efficiency gains approaching some 30 per cent. since 1989–90. Those who claim that the squeeze has gone too far should note that up to 1993–94 universities and colleges achieved higher efficiency gains than the Government had planned through their own recruitment decisions. Independent assessment reports from the Higher Education Funding Council for England suggest that quality is at least satisfactory and in some places excellent. I believe that it was the noble Lord, Lord Annan, who pressed me to give examples of teaching which was unsatisfactory. I shall not give him such examples; there are no such examples. What the report indicated was that to date some 26 per cent. of courses have been found to be excellent, 73 per cent. satisfactory, and only 1 per cent. was initially judged to be unsatisfactory. All of those courses which have since been re-examined have been found satisfactory; so universities are managing.
Further—it was a point that the noble Lord, Lord Kirkwood, would like us to explore—new technology can open up the possibility of new ways of teaching
346
and learning and delivering higher education in new and exciting ways. Again I refer not only to the speech of the noble Lord, Lord Kirkwood, but also to a very interesting article on this subject in today's Daily Telegraph. I imagine that even the noble Lord, Lord Morris of Castle Morris, can bring himself to read the Daily Telegraph on occasions. We have identified this area in the terms of reference for the Dearing inquiry. I very much hope that that will be pursued.
On research, funding benefited from the fast growth in higher education spending earlier in the decade when it was not subject to the efficiency gains delivered in teaching. In 1996–97 the Higher Education Funding Council for England allocated a total of £638 million for research. We have asked the funding council to have particular regard to equipment needs, especially equipment for research. And with the Office of Science and Technology it has set up a challenge funding initiative to fund research equipment in Technology Foresight priority areas. Subject to matching funds from industry, charities and other users, these and similar schemes run by the other higher education bodies could yield up to an extra £36 million for research equipment.
As regards the specific point put to me by the noble Lord, Lord Quirk, I am grateful to him for drawing my attention to the major contribution which our leading research universities make to our intellectual and economic well-being. I understand his concerns to ensure that they receive appropriate funds for the indirect costs of publicly funded research projects. It is certainly one of the issues which the Government will be taking into account when considering the responses to the review of the operation of the dual support system referred to by the noble Lord.
I turn now to the inquiry itself. Many noble Lords have stressed the importance of a properly funded university sector. That is why we believe that it is necessary now to review the future of higher education over the next century. I can give an assurance that our own internal departmental review looked at the issue and developed its own ideas. However, it recognised that there are extremely complicated and complex issues. That is why on 19th February my right honourable friend announced a national committee of inquiry under the chairmanship of Sir Ron Dearing. I am certainly grateful for the fact that Sir Ron agreed to take this on.
I am grateful for the welcome that many noble Lords have given to the fact that Sir Ron will take on the task. Perhaps I may assure my noble friend Lord Beloff that he is a man of considerable experience in the world of education and in higher education. Like the noble Lord, Lord Ashley, he is a chancellor of a university—in this case Chancellor of the University of Nottingham. Perhaps I may correct my noble friend Lord Limerick. He has a degree from the University of Hull, I understand, but I presume that that was before the noble Lord, Lord Armstrong, was a chancellor of that university. As others with, I believe, greater experience of the educational world will know, he also has considerable experience from his times as chairman of the Council of National Academic Awards, of the Polytechnics and Colleges Funding Council, of the

347
UFC and of the HEFCE. He also has considerable experience throughout the entire education world from his work with SCAA and from the various reviews that he has done. I have considerable faith in Sir Ron. I am pleased to note that so many other noble Lords in this House also have faith in Sir Ron and what he will provide.
His committee and the composition of its size have not been decided. It is a matter for discussion. We welcome views. I think that many noble Lords would have strong views about the size of the Committee. I believe that most would agree that it should not be too large. As regards its composition, as my noble friend Lord Beloff said, it is important that it should have representatives of higher education. We also believe that it should have representatives not only of the providers but also the consumers of higher education. It must also have representatives who deal with the world of research, or from other parts of the country; it is not purely an English review. Getting the composition right, and keeping its size at the right level, will be difficult. But I and the department will be more than happy to consider all recommendations.
Sir Ron Dearing's committee will consider and make recommendations on future funding arrangements. It can only do so once it has considered other fundamental issues first.
As we move into the 21st century, the decisions that we take on the future of our higher education system must enable universities to retain and develop their capacity to innovate. They must foster universities' contribution to the research base which underpins the United Kingdom's ability to harness scientific and technological advances, and they should encourage universities to enhance wealth creation and our quality of life, and help to drive local and regional regeneration through services to employers. That is why we have asked them to make all the recommendations on how the shape, structure and size of the sector should develop to meet the needs of the United Kingdom over the next 20 years. It is only in the context of those fundamental issues that it can then move on to the funding arrangements, many of which have been discussed this evening.
I do not believe that anyone will expect me to comment today on the merits of a graduate tax, a pay-roll tax. That might or might not be the policy of the party opposite. I can see considerable dangers in terms of increasing the non-wage labour costs for large numbers of employers, putting a large number of jobs at risk. I hope that that is an issue which the Liberal Conference—I shall not be attending it over Easter—will manage to address.
Obviously there are other matters which can also be addressed: whether the national insurance system can be used, whether there should be a loan or whether it should be an income contingent scheme. However, I stress that our scheme is partially income contingent; and that should be recognised. I can also assure the noble Lord, Lord Ashley, that I very much look forward to receiving that report, and receiving it when in government.
As I said earlier, I believe that with the £7 billion going to higher education, the universities are generously funded from the public purse. But, as I have made quite
348
clear, I understand the concerns that have been expressed today. As I have said, we have taken note of those concerns and we will continue to take note of those concerns. We have listened to the CVCP, and on occasions when addressing this House I have felt I have been listening to the CVCP. We will continue to listen to the CVCP. As I said, we have set up two joint working groups with it to consider the very points that it has made to us.
Higher education has expanded and it has expanded rapidly, but we now need to plan for the next century. I believe it is Sir Ron, and Sir Ron's framework and his conclusions, which will set the framework. In future young people are going to need the higher levels of skills, understanding and flexibility to enable us to compete in the modern economy.
Lord Morris of Castle Morris: My Lords, before the noble Lord sits down, I have been dying to interrupt him on the question of the private finance initiative, but I did not do so because I think interruptions are a bit of a nuisance, especially in a time-limited debate. But before the noble Lord finishes, I hope he can be helpful to me. I find it difficult to get precise facts and information about how many instances of the private finance initiative there are successfully working within universities. If there is information available within the noble Lord's department, I hope that he will be so kind as to write to me at some future date.
Lord Henley: My Lords, I should like to write to the noble Lord on that issue, but on the wider issue of private finance throughout the whole of government I believe there are lessons which the higher education sector can learn from others. I shall certainly write with greater detail because I think, having already exceeded my 20 minutes, now would not be the time to embark on a new debate.
Lord Annan: My Lords, it only remains for me to rise and thank everyone who has spoken in the debate. It has been a remarkable debate and I thank noble Lords for attending. I hope that I may make one point to the Minister. Despite what he said, I have the feeling that in the past years antagonisms, and rather unhappy ones, have arisen between universities and successive Secretaries of State. Would it be possible for the Secretary of State to meet the vice-chancellors en masse and, having heard what they have to say, the Secretary of State could say, "I have heard your problems; may I tell you some of mine?", because she has problems which concern the funding of schools. If we cannot get school education right, the universities will be turned into remedial teaching institutions for their first-year students. I do not know whether the Secretary of State would be bold enough, or indeed wise, to appeal to a Dunkirk spirit in the universities. However, it looks to me as if that is what she will have to do if no further funding is forthcoming. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Fishing Interests: European Court Judgment
6.22 p.m.
Lord Lucas: My Lords, I understand that this may be a convenient moment to repeat a Statement made in another place by my right honourable friend the Minister of Agriculture, Fisheries and Food. The Statement reads as follows:
"Madam Speaker, it is helpful to have this opportunity to develop further the points that my right honourable friend the Deputy Prime Minister, my honourable friend the Minister of State and I made yesterday in immediate response to the text of the Factortame judgment.
"Let me first deal with the court's judgment. It is a stage, albeit an important one, in the action brought in the UK Divisional Court against Her Majesty's Government for damages in respect of the losses that Spanish and other owners of fishing vessels incurred as a result of their exclusion from the UK register and consequent inability to fish. The Divisional Court sought guidance from the European Court and the latter has now ruled that member states are obliged to make good damage caused to individuals by breaches of Community law attributable to the state where the national legislation was responsible for the breach in question and where the breach is sufficiently serious. Importantly, the court also ruled that it is for the national courts to decide whether such a breach has occurred and what damages are available.
"There has been speculation about the damages that might be payable. It is far too early to comment because it is for those involved—namely, the Factortame applicants—to decide whether to proceed with their action, and if so, to substantiate any claim to the full. The court's judgments in this and the earlier Factortame cases have highlighted the fact that quotas allocated to each member state do not always benefit the fishing communities of that member state. This is because the eligibility for quotas and their administration by member states has to take account of general treaty provisions, for example on the right of establishment and the freedom of movement. This has certainly undermined the benefit which the UK fishing industry has been able to secure from the fishing opportunities available to it under the common fisheries policy.
"It is clear that we should not go on as we are. That is why both the Deputy Prime Minister and I explained to the House yesterday that the Government are looking at all the options. These include pursuing treaty or other changes at the IGC. What we want to do is to achieve measures that enable member states to ensure that fishing opportunities arising from their national quotas provide real benefits to their own fishing communities and not to others".
There endeth the Statement.
6.25 p.m.
Lord Carter: My Lords, I thank the Minister for repeating the Answer that was given in the other place to a Private Notice Question put down by my honourable friend Dr. Gavin Strang. This is a sad day for British fishermen, for the British taxpayer, and, I would add, for those who support, however sceptically, the principles of the European Union. I wish to repeat a remark that I have made before; namely, that the common fisheries policy, as it begins to be worked out, is beginning to make the common agricultural policy look like a beacon of common sense and sweet reason.
We should be quite clear what this means. It means that the Spanish and other fishing vessel owners are to be compensated for loss of trade despite deliberately joining the British register to fish against the British quota and then landing their fish, unchecked, in Spain and elsewhere outside the UK. Will the Minister confirm that 103 fishing vessels with a significant Spanish interest, and 39 boats with a significant Dutch interest, are still on the British register, and they represent some 28 per cent. of the total British fleet, and, as regards some species, over 40 per cent. of the quota?
A Written Answer given in another place yesterday was referred to in today's Statement. In the Written Answer Mr. Hogg stated,
"There is an inconsistency underlying the quota regime of the common fisheries policy in that the quotas allocated to each member state do not always benefit the fishing communities of that member state".—[Official Report, Commons, 5/3/96; col. WA 130.]
That is the understatement of the decade!
The cost of the judgment has been estimated at £30 million. I know that the Minister will say—this was mentioned in the Statement—that he is not able to comment on these estimates. However, I wish to ask him about the costs of the action. The Statement confirms that the quantum of damage is for the British courts to decide. I am not a lawyer but, as I understand it, costs usually follow the compensation. Is it possible that the final figure, including costs, could be well in excess of the various estimates that are being mentioned at the moment for the costs of the compensation for damage?
The Government say—this is a welcome conversion; this has been pressed by the Labour Party for some time—that they now intend to try to use the renegotiation of the treaty at the IGC to reform the common fisheries policy. Will the Minister confirm that any such renegotiation will have to be unanimous, and will therefore be open to veto by any single member state? We know that the Spaniards obviously have a veto. Will the Minister also confirm that whatever happens at the IGC will not affect this judgment? As I understand it, the renegotiation of the treaty cannot be retrospective. Therefore, whatever success the Government achieve at the IGC will not affect the judgment which has just been handed down.
There has also been mention that alongside the renegotiation through the IGC, some use might be made—or attempt to be made—either of the European regulations, or of a protocol to the treaty which would achieve much the same effect. Could the Minister

351
confirm that this is in the Government's mind as an approach and, if so, is it correct that this would be the subject of the qualified majority voting and not of the unanimity which is required for a fundamental reform of the treaty? Is it also a fact that the Factortame case has much wider implications because it enables an individual, including employees, to claim damages against a member state in that state's courts, if damages have been suffered, providing the member state has broken a Community law? As I understand it, that is the nub of the Factortame judgment and it has now been upheld by the European Court. This could have substantial effects outside the fishing industry.
As a final point, much has been made of the effects of the Merchant Shipping Act 1988 and the Merchant Shipping Regulations Act 1993 on this matter. I am not merely seeking here to make a party point. My own party in the other place and here has supported the principles of the Merchant Shipping Act. It is a fact, I believe, that there was legal advice at that time which suggested that the Act as amended by the Government would lead to this outcome. It is a point, I understand, that was raised in Committee in the other place at the time but the Government rejected the argument. It now seems, and this is not hindsight because others were saying it at the time, that the licensing route might have been a much safer way to deal with this matter rather than the course that the Government adopted for the Merchant Shipping Act 1988. May I remind the Minister of what he said when we debated the common fisheries policy on the 14th February, Hansard column 667, when he said,
"On the other hand, Factortame was concerned with provisions in the Merchant Shipping Act 1988, which were designed to achieve much the same end, but in the context of special registration rather than licensing, by requiring that vessels should be mainly British owned and controlled."
I understand that warnings were given at the time that the route the Government were following for special registration had a chance of leading to this outcome, and it seems that those who supported the idea of achieving the effect that the Government wanted through the licensing route in fact were correct. We will certainly support the Government in their efforts to renegotiate the treaty so far as the CFP is concerned, but I have to say that they might find that somewhat easier to do if they did not have the semi-detached attitude to the European Union which is their current stance.
Lord Mackie of Benshie: My Lords, the noble Lord who has just spoken, the noble Lord, Lord Carter, has gone into the whole matter very thoroughly. This is a tremendous smack in the face for the Government. Their method of trying to control what is in fact a cheating device in order to get protection has failed and it looks as though they will have to pay in addition massive compensation.
In the Statement the Minister has just read it says that we must reform the CFP as an urgent matter, but it will take a lot of time. It is, however, absolutely vital. What the noble Lord, Lord Carter, said about the CAP and the CFP was a crack I was going to make and I can only applaud it as perfectly true. The CAP looks like a simple and successful piece of legislation alongside the total
352
failure of the common fisheries policy. I can only reiterate that negotiations should be undertaken urgently; that the Government should bend themselves to it and try to get some sense into it.
In the meantime, I wonder whether the Government could look at our own regulations. At the present time, as I understand it, and the Minister might confirm this, these registered boats have to call four times in six months at a British port but they land their catches wherever they wish, particularly in Spain where the registration and collation of data are very suspect indeed.
What would happen if the Government laid down regulations that, not only had they to call four times a year, but in addition they had to use the other alternative and land at least half their catches at a British port? This at least would give us some idea of the size of the problem and the amount of fish they are catching and would make it, I hope, uneconomic for them to adopt this cheating device.
However, I agree that the main priority is to renegotiate the whole business and then to police it properly. The CFP in theory should work but outside a few countries you cannot trust the figures. Certainly on the high seas there is very little chance of stopping everybody who is breaking the rules. It needs a determined attack and it needs money spent on control before we get a policy which the fishermen themselves will believe in. The Government have a tremendous task in hand and we on these Benches would back any effort to improve it and get some justice into the situation for our own fishermen.
Lord Lucas: My Lords, I am very grateful for the support that we have received today from the noble Lord, Lord Carter, and the noble Lord, Lord Mackie of Benshie, for the action which we are proposing to take. It is a very sad day, not for the common fisheries policy, because it is not the common fisheries policy which is at fault in this instance, but for our understanding of the way the common fisheries policy operates within the Treaty of Rome.
The judgment reached by the European Court is that the Treaty of Rome takes precedence over the provisions of the common fisheries policy, whereas we, and I believe all other member states, have been operating on the basis that the common fisheries policy was a reasonable exception in some ways to the provisions of the treaty. Indeed, that raises major questions as to the future of the common fisheries policy and whether it is operable and acceptable to member states. We believe that those concerns will be widely shared and that the impetus to put the common fisheries policy back where it should be, which is in terms of a national right to an agreed share of the common fish resource, is something which will be pursued at the IGC and will be pursued vigorously by us. We believe that we shall receive a great deal of sympathy from other member states because nobody believed that the way the European Court has interpreted this situation is the way in which the common fisheries policy was envisaged when we all set out together to make it.

353
So far as the statistics are concerned which the noble Lord, Lord Carter, asked for, we estimate that there are about 150 vessels on the UK register which are currently foreign owned or have significant foreign interest in them. Of these, about 100 have a Spanish interest and the remainder mainly have a Dutch interest. In numbers quota hoppers represent some 5 per cent. of the UK's offshore fishing fleet but account for more than 20 per cent. of its tonnage. Indeed, in some species such as plaice they take 44 per cent. of the quota. Overall they take about 10 per cent. of our white fish quota, but there are obviously some species where they are much higher than that. So far as the costs of any judgments which may be given in time by the UK courts against the Government are concerned, we will have to wait and see what they are. We do not know any more about them than we do about the damages.
So far as the question the noble Lord, Lord Carter, asked about the IGC, I reiterate that it is not the reform of the CFP we are looking at: it is the reform of the treaty. That has to be unanimous and any such reform would not affect the judgment in the Factortame case or its consequences. However, we will look at all ways of achieving our end. I do not think we are stuck on any one particular formula. What we are looking to is putting back the relationship between the common fisheries policy and the treaty that we and others always thought was there, and putting back the status of UK fishermen versus UK quotas that we always thought was there and always believe should be there.
So far as the wider implications of Factortame, yes, the noble Lord, Lord Carter, is again right. This is a judgment which may well affect other situations, such as the denial by Spain of rights of transit for ferries from Gibraltar and the rights of British beef exporters when it comes to selling in Germany and other such areas. It is something which seems to us to be in that limited sense a very reasonable judgment and may as a result have a lot of good consequences for intra-community trade.
The noble Lord, Lord Carter, asked about the Merchant Shipping Act 1988 and the legal advice that we received at the time. I do not have that information with me, but I shall write to the noble Lord to cover that point and the question of the licensing route. My understanding is that the licensing route would not work. Indeed, we cannot see anything that will work without an amendment to the treaty or some close equivalent. We have looked at a great many options, and spent a great deal of time with our own and outside legal advisers, and have not come to any conclusion which would suggest to us any other way of dealing with the problem, either now or in the past.
The noble Lord, Lord Mackie, covered many of the same points but suggested that we might change our present regulations so that half the boats' catch should be landed in the UK. That would seem quite a sensible regulation to put in place, but it is not something that we could succeed in doing under current treaty interpretation by the European Court. We are quite clear that we could not. Nor could we impose residence requirements on the people operating the boats, or
354
nationality requirements or any other means by which the boats might be made British. They are all areas we shall be looking at, but as far as we understand, and according to all the advice we have, they would all require treaty amendment.
6.40 p.m.
Lord Campbell of Croy: My Lords, while the European Court's task is simply to interpret laws—and unfortunately the judgment that has just been made has been what I was expecting—does this not make a nonsense of a system of quotas allocated by nationality?
I have raised the subject many times in your Lordships' House, and I spoke when the Merchant Shipping Act passed through this House in 1988, when I supported the revised register requirements included in it. As regards the queries of the noble Lord, Lord Carter, in our debate on 14th February I gave the percentages of quota taken by boats from Spain and Holland, which were as much as 40 per cent. in some cases. Those figures were confirmed by my noble friend Lord Lucas.
The European Union has been trying to pursue two policies at the same time which are totally at variance with each other. One policy attempts to merge nationalities and enable any EU citizen to set up and do business in any member country. The other regulates fisheries by a system of quotas based entirely upon nationality. They are incompatible and conflicting policies.
As it is vital that conservation of fish stocks be achieved, will the Government urgently press for a major change of the present basis of the quota system, namely nationality, or for its replacement?
Lord Lucas: My Lords, I agree completely with what my noble friend said. The judgment throws up a major deficiency in the common fisheries arrangements as they are at the moment and as they relate to the treaty. It is a matter that we must do something about as quickly as we can. However, since it requires treaty amendment, the IGC is the place for that. I do not believe that there is anything that we can do faster, but we shall work very hard when it comes to the IGC.
Lord Stoddart of Swindon: My Lords, to mix my metaphors, it seems that the stinking fish are coming home to roost. Is the Minister aware that there is outrage in the country as a whole, and particularly among the fishing community, at what has happened? The noble Lord was in the other place with me this afternoon. Does he agree that there was all-party condemnation of the situation which has been brought about by the judgment of the European Court of Justice and of the route by which we got there? Unfortunately, the situation goes back a long time. Does the Minister agree that, after the Factortame judgment, not only the Government but this House and another place agreed far too easily to set aside the Merchant Shipping Act 1988, which was designed to protect the livelihood of our fishermen and to conserve our fish? Have the Government not learnt from that that they ought not to do the bidding of the European Court with quite such alacrity and in such a short period of time?

355
What will the Government do if, as is most likely, the other countries of the European Community will not agree to a treaty revision? They will be faced with an almost impossible position, unless they are prepared to re-establish the sovereignty of Parliament over not only fishing but also other rights. If they are faced with the implacable opposition of our competitors in the other member states of the European Union, will they be prepared to come to Parliament and repeal Section 2 of the European Communities Act 1972 in order to give back to Parliament the powers which it so wilfully and foolishly gave up at that time?
Lord Lucas: My Lords, the noble Lord takes a rather bizarre and extreme view of our partners in the European Union. I do not think that it is shared widely in this House, and it is certainly not shared by the Government. We believe that the dismay that we feel at the interpretation of the relationship between the common fisheries policy and the Treaty of Rome is shared, even if the immediate pain is not so heavily shared by other member states. We believe that with our negotiating skill—which I am sure the noble Lord appreciates—and the good will of our partners, which we experience every day in our dealings with the European Union, we will achieve a satisfactory outcome, and we see no need to speculate on improbable, extreme and uncomfortable results.
As regards the 1988 Act, we believe that we took the right action at the time in bringing it forward, as did all sides of the House. We believe that we took the necessary action when the European Court of Justice expressed its opinion. Indeed, given the final resolution of its judgment, that has turned out to be right. We recognise that the Treaty of Rome is quite properly policed by a court to which all national governments should pay respect.
Lord Boyd-Carpenter: My Lords, will my noble friend indicate that the Government's patience with the European Court is beginning to wear out, as this is not the only example of gross interference by the court in matters which should be dealt with in this Parliament? Will they make it clear that unless a quick concession is made over this issue we take very seriously the suggestion made by the noble Lord opposite that we should pull out of the jurisdiction of the European Court?
Lord Lucas: My Lords, I am sorry to say that I do not agree with my noble friend at all. This seems to me entirely a case in which the European Court of Justice is the proper court. It has decided between two aspects of European policy—the Treaty of Rome and the common fisheries policy. It is the right body to do so. We think that it has come to the wrong judgment. We believe that of our own courts from time to time, but nonetheless we give them the respect that is due to them.
Lord Lester of Herne Hill: My Lords, is the Minister aware that there will be strong support on all sides of the House, and beyond this House throughout the country, for the tone in which he has dealt with this difficult problem in his answers? In particular, he has
356
made clear that the people of this country can benefit from this defeat. The important principle established by the European Court that liability to pay compensation for damage suffered as a direct result of a serious breach of Community law is an entitlement of the individual citizen can be used by the people of this country when the public authorities of other states violate the Treaty of Rome against their interests. Is the Minister aware that that important principle is one from which we can benefit greatly, however sad it is in the context of this particular case that we have suffered this defeat, with deplorable effects on our own fishing industry?
Lord Lucas: My Lords, I am surprised and delighted to find myself agreeing with everything the noble Lord has just said.

Development Policy Awareness
6.49 p.m.
The Earl of Sandwich The Earl of Sandwich rose to call attention to the case for greater public awareness of Britain's response to the longer-term needs of developing countries, and to the encouragement of development education in the United Kingdom; and to move for Papers.
The noble Earl said: My Lords, as a nation, we cling to a world role yet we are still shamefully unaware of the extent of world poverty and hunger and under-educated about the long-term needs of the third world. We ought to know better. Like other European powers, we had a habit of occupying large areas of the world and we used to colour them pink on the map. This geography lesson came to an abrupt end in 1962, when I was a student. My generation was the last to be educated during colonial rule and the first to be taught that as a nation we are no better and no worse than anyone else. I am not saying that we are not excellent at some things—and I do not exclude cricket. We have a lot to pass on to other countries and our world influence, although much reduced, is still important. What I am saying is that we have moved on a generation and our children look at the world differently. As parents, we have a responsibility to ensure that they look at it fairly and not from a superior position.
What is development education? It is a form of education internationally recognised by governments. It is education which is honest about the world. In the words of the Irish President, it "challenges our complacency". We still allow ourselves to talk up others' failures abroad. Our political leaders often distract us from domestic difficulties towards some grand solution overseas. We allow pockets of racism and poverty to grow in our midst which engender their own brands of prejudice and distort our world picture. We forget sometimes that immigrants and asylum seekers are also our friends and allies, not foreigners but people like us, representatives and interpreters of the wider world to which we belong.
I will give one small illustration from Scotland. SEAD, Scottish Education and Action for Development, arranged for a visitor from Sri Lanka and another from South Africa to visit local churches, schools, urban

357
estates and crofters in the Highlands. It was an eye-opener for those communities to meet someone from countries with which we have much in common and which combine such a variety of cultural and religious influences. Visits like that are becoming more popular every year. They contrast sharply with the diet of bad news we receive from the developing world.
We first need to define what kind of overseas development we wish to portray. Here I give a personal opinion. Aid for sustainable and appropriate projects has a lot of support in this country. I do not believe our children want to learn any more about the aid we were providing in the 1960s, when millions of pounds were used to prop up political allies and prestige projects all over Africa and Asia. The ODA's latest expenditure review has many splendid statements of intent, but it disguises how much money is still injected into friendly nations through large-scale projects like the Pergau dam, in the name of jobs, trade and diplomacy. I am all for giving British companies opportunities, but they must not be the prime reason for giving aid. Instead, we must concentrate our education on what is good—and there is a lot of good. There is excellent long-term aid through ODA and its many bilateral and multilateral programmes.
How do we carry out development education? In practice it means three main areas of work: education which explains Britain's position in the world and our overseas aid and diplomacy, which one could call public relations; education in the formal sector, in schools and colleges within the national curriculum, but often reinforced by the home environment; and adult education, which includes the campaigning which NGOs now do very effectively.
The first of those areas is our official overseas aid programme. In my view, the public largely glimpse Britain's aid programme through brief news items mainly relating to emergencies and peacekeeping in places like Rwanda and Bosnia. But the ODA is highly regarded among OECD agencies as a development agency and deserves better, more balanced propaganda than it gets. I am sure that the Minister would welcome more coverage of the long-term programmes. It is just that press officers invariably point to the public interest which comes from emergencies.
Environment and sustainable development are right at the front of ODA's new mission statement. They have been united by the Rio conference and regularly appear together in high level studies, such as the one last year debated in this House. It is an area where I believe communicators are making the most headway by asking questions of fundamental importance to the public and to teachers and children. How much damage are we still doing to the third world by dumping our third-hand technology, selling more and more cars, exporting banned substances and propagating old models of development?
People would much rather hear about sustainable development than about what the royal butler saw or endless columns about the Scott Report. In contrast with the destructive impact of the state which our aid has often helped to create, our aid programmes could be
358
made more visible in putting the case for a sustainable global environment. Surely we would be able to expand our own aid programme if we explained to the public more precisely what it is.
Another popular subject is conservation and tourism. Should we still be gawping at so-called primitive societies or helping them to recover from the damage we have done to them? I can think of many good examples from CARE and the World Wide Fund for Nature of genuine partnership with local people in forestry, tourism and wildlife management. I know that ODA is involved in many of those schemes.
Occasionally ODA projects are mentioned in a science programme or a feature article and perhaps more inventive programming could be encouraged, using celebrities or an association with an NGO or a UN agency to attract a wider audience. Occasionally a skilled development journalist or film maker writes a good piece in the Financial Times about draught oxen or makes a gripping film about locust control. But it is hard for those rare gems of development education to find a mass audience.
In mainstream education there has been some good collaboration between government bodies, the NGOs and the formal sector. Schools broadcasting and children's television have done a lot. There has been an improvement in the quality of written educational materials.
But new resources are becoming scarce, and teachers, especially in maintained schools, increasingly have to raise their own funds. Schools would rather eat into their resources and training budgets than lose members of staff. Teachers rely heavily on the voluntary agencies to supply materials which draw on overseas project experience and are adapted to the national curriculum. The problem is that the curriculum, while a good discipline in itself, restricts the subject matter now allowed in school timetables. It limits the scope which more creative teachers have had in teaching world development and environment studies.
It was partly with that in mind that the development agencies in 1993 set up the Development Education Association, which now represents over 250 members and is also supported by ODA. The DEA's national curriculum monitoring project has guided policymakers and helped teachers at various key stages to steer a difficult path through the present curriculum. But the aid agencies themselves are being squeezed, with some funds going back from development education to mainstream overseas aid projects. The Department for Education and Employment has almost withdrawn from development education, though it supports the worthwhile work of the central bureau within the British Council.
ODA has a useful but limited programme which is now outdistanced by the European Union. This year, the EU has already provided £1.7 million for projects in Britain, which is three times the ODA's budget. That means that regional development education centres trying to help teachers in Somerset or Tower Hamlets are turning to Brussels to make up for the shortfall. The EU itself cannot meet all the demands made on it or

359
monitor all the projects. There are over 40 development education centres in the UK and they provide an invaluable support to teachers and community groups in promoting development issues.
Turning to youth and adult education, I believe that the NGOs, working closely with the media, have made huge strides in influencing public awareness. Whether it is Greenpeace or Amnesty, Oxfam or Christian Aid, we can all think of issues, from whales to the World Bank, which would never have come forward but for their persistence. Youth training has been a growing area of education, and the Development Education Association, with ODA backing, has produced an excellent report for youth groups which will lead to a training programme involving organisations such as the Scouts and Guides alongside local authorities.
Then there are the agencies involved in educational exchanges, which report a growing interest in exchanges and placements that provide young people with overseas experience. VSO now caters for a wider age group, but it received over 80,000 letters last year, mainly from unsatisfied young people. Save the Children receives 700 to 800 letters a month seeking work abroad. Unfortunately, funding and recruitment have rarely caught up with the demand. But, on the plus side, companies are doing more. In the recent British Council debate we heard of the importance of educational exchanges and training to overseas trade. And yet we will see yet another really drastic reduction of the council's staff this summer unless something is done very soon.
The influence which all these exchanges have on our perception of other cultures through the colleagues, families and friends of those involved is incalculable. It is an invisible diplomacy which touches the whole of society. I accept that there are negative influences too. But the overwhelming number of young people who go to developing countries return with a positive impression of the people and a much greater understanding of their problems.
Adult education by NGOs now includes techniques such as single-issue campaigning, lobbying in international assemblies, networking with overseas partners, racism awareness and political education, which have increasingly and successfully enriched our society and linked it—through themes such as drug trafficking, child prostitution and arms dealing—to others in the developing world.
Anyone who attended the South African elections or the Beijing Conference will know how many international NGOs now have a sophisticated relationship with the media and are not just looking for short-term publicity advantages. In fact some development projects involve considerable personal risks to journalists, as I have seen for myself in Natal. I would like in particular to congratulate BBC TV's development correspondents, George Alagiah and his successor Emily Buchanan, for achieving quite difficult features in Africa, Asia and Latin America, thanks in part to the help of the NGOs.
Two other important organisations are active in this field: the International Broadcasting Trust, which commissions its own excellent television films, and the
360
World Development Movement, which has had a considerable impact on public awareness of our aid programme Both have had the steady support of the main aid NGOs. Such campaigning may appear to be by definition anti-government, and hardly deserving of public money. But this is only a surface impression. In practice there is now a forest of contacts between government departments and campaigners, and government actually gains a lot from its association with NGOs, not only in public relations but in knowledge and contacts. Simultaneously the agencies that do engage with government and legislators learn, in most cases, how far they can push the boat out before they lose credibility with experts and their own supporters.
In conclusion, I must emphasise that I am not just pleading for more government understanding and funding. The Minister herself has been down the Damascus road to development education and I know she is committed to doing more. She will, I am sure, say something positive about her future intentions. But it is also up to journalists, Members of Parliament and the agencies to put a stronger case to the public; and I know they plan to do so. A national debate is needed to see what future framework would be most appropriate for development education and would involve both government and the agencies together in planning the way forward. There is a possible model in environmental education. Perhaps the ODA could embark on a join programme with the DFEE such as has already been achieved by it with the Department of the Environment.
Before anyone cries, "Where is the money coming from?" I must put the Government's programme in context. The larger NGOs—known as the British Overseas Aid Group—are setting aside about £3.6 million for schools and adult education in the current year. That includes external funding and the cost of their own education departments—not information. It is equivalent to 3 per cent. of their total unearmarked funds—in the case of the Church agencies it is more like 6 per cent. It compares with the Government's £644,000, announced on 21st February, for 1994–95, which is only about 0.01 per cent. of government expenditure per head. Welcome as that is, it simply does not compare with the development education programmes of other OECD countries.
I mentioned that industry is becoming interested in development education, and I know the Government are in favour of that. I believe the DTI, with ODA encouragement, could do more to bring developing countries into focus, as they have recently with their India material. Companies seeking new markets are more than willing to have an educational profile, especially those that have overseas aid connections. If all these sectors can make more effort, I believe government will see a way to increasing its fairly modest commitment. I beg to move for Papers.
6.55 p.m.
The Lord Bishop of Worcester: My Lords, I apologise for entering the debate so soon, but I realise the hour is late and we shall all want to be going home.

361
Nevertheless, this is a very important subject and it ought not to be rushed. I thank the noble Earl, Lord Sandwich, for initiating this debate.
I am glad to say that when I sought help from various bodies such as the Church Missionary Society, the United Society for Propagation of the Gospel, Christian Aid and CAFOD, I was given a whole sackful of brochures on development education, which I was unable to bring with me. There are games for children on the same principle as Monopoly, which help them understand the way in which the world is an interlocking network of economies and cultures which can learn from each other. This was greatly encouraging.
At Selly Oak, in Birmingham, there is a development education centre that is celebrating its 21st anniversary this year. It has a special movement called Teachers in Development Education (TIDE) and its own magazine, filled with informative articles which will enable teachers in schools to get across to the citizens of tomorrow an understanding of the whole global family. The only hope is that national curriculum pressure will not squeeze that sort of thing out.
Furthermore, development education is good value for money. In 1995, the One World Week organisation managed to mount 500 stimulating events in towns and villages on a budget of only £80,000. It is a contribution to world citizenship and understanding of our neighbours, an understanding of the way in which the world ticks. It is foolish indeed for us to allow a generation to grow up which does not know why refugee camps are formed; does not know why there is an immigration problem in many of the countries in the northern hemisphere; does not realise that, when poorer countries are under such a heavy debt burden, they have to over-graze and over-farm their land, thereby causing people to roam the face of the earth seeking new pasture, new land, a place in which to live and work and have their simple economy.
These things are going to happen in the 21st century. We need to have people who understand that—not just children, but women's groups, employment groups, people who are decision-makers and who influence our life. It is no good putting all our young people through management courses. Whenever I take a confirmation at a public school, about 95 per cent. of the children tell me that they are going to do management studies at university. What is the point of managing if we do not have a vision of the world in which we live, an overall vision which will enable us to see why it is worth managing anything? So I greatly appreciate a debate on this vitally important subject.
We have so much to learn from each other. Last Saturday I heard a splendidly informed presentation on the economy of Peru, a country with which my diocese of Worcester has a link. Four years ago I went to Peru and found there a very poor, feeble economy and terrible terrorism from the Shining Path. During the succeeding four years President Fujimori has done great things. He has brought up the economy and silenced the Shining Path. So what is lacking in Peru? Lacking is
362
a good interface between government and people. The economy is better and terrorism has been silenced, but there is no coherence in the community.
It seems to me that we in the northern hemisphere—not just in the United Kingdom—need to understand that. In all sophisticated countries there is a danger that we live beyond our means. Thereby we leave behind communities who themselves have no stake in the country and no participation in its life. In the end, they will be more expensive as a result of being an underclass. There are ways in which we can understand each other. The wisdom is not always on one side. We have either a common future in the world or no future at all.
As I said, it is essential that we, as citizens, should understand the implications of global interdependence. Perhaps I may return to that point. It has become very clear that we are living beyond our means globally. It is a very difficult situation for politicians to handle. No politician will go to the electorate with a programme which suggests that we must live on less. But the more we stoke up the economy, especially the economies of the sophisticated countries, the more we shall exhaust the globe and leave to our grandchildren an exhausted husk.
The great hope is that there may be some core funding from the Government. I understand that development agencies, such as Christian Aid, spend 10 per cent. of their income on development education. They cannot spend more because the money has been given to go to the poorest and they must see that that is done. I hope that we shall have some reassurance from the Minister that there will be some core funding. It does not have to be total funding, but it must be enough to enable the non-governmental organisations to continue with their work. I hope that people will see that development education is essential to our one world.
About five years ago, I was in Parliament Square for a great demonstration on the needs of what we then called third world countries. At the same time there was a march for jobs taking place in the north of England. We need to bring together such marches. We shall regret it, if we do not enable countries in the rest of the world to become our trading partners. When I was in Ashford, Kent, men of 40 or 45 who were skilled engineers were being laid off. At the same time, the rolling stock in, for example, Tanzania, was so old and decrepit that it was lucky if it reached the end of the journey. We need the markets of other countries if we are to develop our own economy. We live in an interlocking network of economies.
I end by uttering words that I have used before in this House: self-interest so often dictates that which justice demands.
7.15 p.m.
Lord Eames: My Lords, I too welcome the debate and thank the noble Earl for his introduction. Like the debate earlier this afternoon on the university situation, this debate raises issues which transcend party political interest and are for the very definite good of the nation.

363
The term "development education" is not necessarily on everyone's lips. Despite the explanation given by the noble Earl, there is a need to recognise that in the younger generation today there has been a vast change in outlook and there is a sense of responsibility which puts to shame my generation and many in this House when we think of our own lack of responsibility as young people. The substance of that particular attitude consists in such terms as the environment, world issues, justice and need.
But education in that sense is surely much broader than school programmes. Perhaps I may share with the House a definition which, in my experience of working in Northern Ireland, seems to me to illustrate the real substance of development education so far as this debate is concerned: to bring and apply moral responsibility of knowing and caring about the needs of the world to the agenda of everyday life in this nation.
What does that involve? I believe that there are three key issues. From the example set by the noble Baroness the Minister in her work on our behalf, I know that she needs no reminding of them. They are knowledge, support and attitudes. There is more to the world in world development than simply crisis management and the reaction to natural disasters across the world. There is more to world development than assuming that we know better than anyone else how to address human need. It is not always true, I am afraid, in the political sense, but the honest acknowledgement has to be made that certain needs across the world are caused by local mismanagement and local failure and that all the outside aid in the world will not necessarily change that situation. Lastly, there must be recognition of the excellent work being done by the ODA and the prime importance today of links between the ODA and the NGOs.
In 1979 the Government discontinued the development fund. In that instant the challenge was thrown down to the voluntary sector, including the Churches and voluntary organisations. I am glad to say that the challenge was accepted. An average of £4 million per annum has been generated from those sources. Without apology, I for one pay tribute this evening to the work of agencies such as Christian Aid and Save The Children Fund. They are but two of a magnitude of similar agencies.
In all honesty, however, I must also say that the Government have not done enough to promote the importance of global perspectives in education. While the ODA gives support to a number of NGOs involved in development education, that level of support, to our shame, is small compared with the majority of donor aid countries. That surely should be of particular concern for the Department for Education and Employment.
I presume to remind the House of the Minister's words, which she used in 1993. She said:
"Part of our jobs must be to communicate the reality of what happens in other countries around the world in the developing world. And that is where development education comes in".
It is in that context, in the moments that are left to me, that I want to concentrate on one aspect of development education; namely, communication. I refer in particular
364
to the role of the BBC World Service. One hundred and forty million regular listeners tune in to the BBC World Service. Since 1990 that audience has increased by 13 million. It has become the most trusted source of news and information among the international broadcasting networks. Like others in this House, I can relate occasions in developing countries at times of tension and war, which I have myself experienced, when it was a lifeline to those of us who felt cut off from our home country. I think only of the events in which I was involved some years ago in the hostage crisis in the Middle East, when it was not only a lifeline to those of us who tried to help; it was a lifeline to the hostages themselves.
Yet the cuts in 1996–97 amount to some £5.4 million. The cuts in 1997–98 are much more serious. The FCO had already planned a cut of £2 million in operating costs for 1997–98; it has now added a further £2.5 million cut to that, plus£9.5 million to the capital budget. Taking into account inflation and operating consequentials of PFI (Private Finance Initiative) that adds up to nearly £20 million.
I am particularly concerned to learn that there has been an extremely sharp decline in documentary TV programmes on international topics and, more particularly, on developing countries in recent years. I for one find that fact most alarming because surely television is the primary source of information on world affairs for more than 70 per cent. of the British people. Documentaries often add depth and background context to news coverage of international stories.
I may be a voice in the wilderness, but I make the plea that even now these cuts be re-examined, for I believe that in the spirit of the debate which the noble Earl has so ably introduced, such things as the BBC overseas service is a practical way of acknowledging the role of our nation in what I earlier described as bringing the moral responsibility of knowing and caring about the needs of the world to the agenda of everyday life.
In his introduction the noble Earl suggested that we need a national debate. We have heard calls like that before in this House and in another place. But I seriously suggest to the House this evening that this is a debate which will not go away and, as the right reverend Prelate who spoke before me reminded us, touches and concerns not only individual lives, but the whole image of our nation in a one-nation world. I beg to support the words of the noble Earl in his introduction.
7.23 p.m.
Lord Northbourne: My Lords, I would also like to thank very much the noble Earl, Lord Sandwich, for bringing this subject to our attention this evening. It is perhaps sad that not more of the places in this House are occupied.
I do not share the noble Earl's sense of guilt about the work of our colonial services. I am just old enough to have seen the work of the colonial civil servants in Malawi. It was something of which I was extremely proud. In the few minutes available to me I wish to show the link between development education and sustainable

365
development, because I believe that this link is very important in underlining the importance of development education.
Some years ago I was chairman of an organisation for sending volunteers overseas. They were young people leaving university and they were sent under the British volunteer programme. I attended a number of the briefing and debriefing sessions. I was deeply moved by the humility which the experience induced in those young people. The year or two years they spent in a developing country taught them how much they had to learn about life as well as how much they had to give.
In the past the philosophy of aid was to export high-tech western solutions wholesale. There was an arrogant assumption that our own technology must be applicable and relevant across the world—no less arrogant perhaps than the assumption that Westminster democracy is capable of being transplanted without adaption. It was Fritz Schumacher, the author of Small is Beautiful, who first popularised the idea that the third world may need radically different solutions because the problems are different. That led to the concept of appropriate technology, which was developed by what was then known as the Intermediate Technology Development Group, which I believe now calls itself Intermediate Technology.
The mindset of appropriate technology, as many of your Lordships will know, is this. High-tech solutions are not always the best. High capital, low labour solutions are not always the best. We must look at the facts of the case in each case. Appropriate technology is about solving problems in ways which are appropriate to the availability and skills of people, to the availability of capital, to the sustainable supply of raw materials and energy and to the ability to absorb pollution or waste. It is that sustainable element which links the concept of appropriate technology with that of sustainable development.
What is interesting is that these same principles are equally applicable in the developed world as they are in the under developed world. They are equally applicable in the rich world and the poor world. As regards Africa, I was recently given an example of how the traditional skills of the potter and the local supplies of mud clay are being used to make clay pipes which are then used for land drainage. The technology of pipe-making and of land drainage are high-tech inputs, but they are making use of local skills and materials. In the same way local potters' skills and local clay are used for developing cooking stoves, which are so important in many countries where the supply of firewood, the only available fuel, is rapidly running out. A proper wood stove can reduce the consumption of firewood by about 70 per cent.
In England one gets a similar use of ingenuity and technology in a very simple way which has always struck me as very impressive; namely, in the development of the baby pushchair with eight wheels. If one has a pushchair with four wheels it cannot be collapsed. If one has a pushchair with eight
366
wheels—and wheels are very cheap and easy to produce nowadays—one can collapse it into something like an umbrella when it is not being used.
There is one other example. The Intermediate Technology Development Group is working in Nepal to produce small hydro-electric generating plants which can give electricity supplies for lighting at night and work machinery during the daytime. It is interesting that a friend of mine is using precisely the same technology in northern Europe and Canada to take advantage of millponds which were used for sawmilling and other purposes, and feeding the electricity that they generate back into the grid. Exactly the same technology is being used in both worlds.
Because appropriate development is a concept which is universally applicable to the solution of design problems, it is an important—nay, an essential—ingredient in the proper teaching of design and technology in schools. There is a way in which development education can be integrated into the curriculum without necessarily having a special curriculum slot. It can become a cross-curricular theme and will then be seen as even more relevant than if it were isolated into one period of the week on, say, a Friday evening. I hope that the Government will encourage the schools to link third-world development issues with an understanding of appropriate development as a concept equally applicable in the North and the South, in rich and poor countries alike. Of course, the needs, resources and ecological problems will be different in every case.
If we are to be effective in the future in supporting the developing world, that means also the developing marketplace, as the right reverend Prelate pointed out, and it is essential that our children learn to think in terms of appropriate solutions and to avoid extravagant and unsustainable use of resources and unacceptable pollution both in the developing countries and at home.
7.31 p.m.
Lord McNair: My Lords, I thank the noble Earl, Lord Sandwich, for tabling this Motion for debate, and I support everything that he said about the need to give a higher priority and more money to development education.
When I did geography in the fifties we learned about Heidi who lived on a little farm in the Swiss Alps and helped her parents to milk the cows and herd the animals. We also learned about Mohinder who lived in a little village in India. Now Heidi and Mohinder are quite likely to live either side of Janet and John. How much the world has changed—in some places and in some respects too much for comfort, while in others not enough.
We need to make sense of that process of change. We need to achieve what I believe to be the right approach, one that leads to a sense of unity in diversity with awareness and understanding. For that to become a reality, development education has to be a priority and must be strongly linked to issues such as the environment, decision-making, science and citizenship.

367
Development is complex and few professionals even appreciate its complexity because of the traditionally narrow focus of expertise. Economists need to be trained to understand more science and technology. Policy-makers need to have a better understanding of geography and the environment. Ecologists need a better understanding of mathematical and economic models. A broadly based development education is just as necessary for professionals as for children of all ages.
I am indebted to Jonathan Briggs, the IT adviser—"IT" here stands for "information technology", not "intermediate technology"—of the World Wide Fund for Nature's UK Education Department, for drawing my attention to their Aswan High Dam CD-ROM project. That is a teaching resource for development strategy. While compiling the package, he and colleagues spoke to many experts in, for example, policy, water management, agriculture and economics, of whom few had a broad picture of how their area of expertise impacted on other sectors and professional areas.
The project was based on work with the International Multimedia Consortium for Environment and Development. One key tool in enabling professionals in different areas to talk the same language is modelling. It can be a mathematical model, but it can also be something much simpler, which I shall describe later. Information technology offers both professionals and students the opportunity to look at issues in the round and see how different viewpoints interact.
However, we should not think only of what could become an ivory tower approach to development education. The very simplest ideas can have powerful and far-reaching benefits, and take root and develop their own momentum. As the noble Lord, Lord Northbourne, said, an enormous amount has been done over more than a quarter of a century by the Intermediate Technology Development Group at Rugby. Intermediate Technology has delegated the creation of practical solutions using appropriate technology to many everyday problems of living in poorer countries to offices in other parts of the world and now concentrates on advocacy of development projects which dovetail into the existing level of technology in the area under discussion.
The noble Lord, Lord Northbourne, touched on an example of that, and I should like to add to what he said. I refer to the Arun Dam project in Nepal where the World Bank is thinking again about the wisdom of a large-scale project that bypasses local technology—indeed, bypasses local people because it would be uneconomic to supply communities in the vicinity of the dam. Such issues need to be made real to professionals and schoolchildren in the developed world so that decisions are made by taking all aspects of the situation into account. Today's schoolchildren are tomorrow's decision-makers. The Intermediate Technology Development Group also has an extensive and effective track record in development education but, as other noble Lords have said, it is hampered by a lack of funds. With a little more money, it could do a lot more work.
I shall now take on the role of development educator myself and give the House an overview of a contribution to world development that should be far better known
368
than it is at present, one that is having a hugely beneficial effect in many parts of the world. It also has lessons for us that apply to the whole of education, including development education. The point has been made that development is not just about the nuts and bolts of technology; far more fundamentally, it is about unleashing the potential of individuals. It was individuals who created our industrialisation in Britain and it is individuals who are going to make the difference in the third world.
There are two initiatives from Africa among many educational projects using this study method which deserve particular mention in this respect as they give individuals the educational tools that they need to be able to study, understand and apply any subject. I mentioned modelling earlier, and I should like to describe one aspect of this approach to education where modelling plays an important role.
The key datum is that when a person has a full, conceptual understanding of something, they are able to portray it in some form, whether by using odds and ends to represent the component parts of the idea or sketching it or using modelling clay to represent it. If a person is unable to do that, there is some aspect of it that they do not fully understand and a re-study of all or part of it is indicated. That completely eliminates vacuous learning by rote. The first, second and third worlds all need people who can apply what they have learned.
There are other components of this methodology, such as knowing the purpose of studying a particular subject or topic, and the identification and elimination of the three barriers to study, but time does not permit me a more detailed discussion of them.
Modelling is also important to enable people to share their world view with others, whether it is done on a sophisticated piece of software or whether, as in the case of the schoolchildren of Zimbabwe, it is done using locally available clay that is cheap and plentiful.
The entire teacher-training programme of Zimbabwe is undergoing a fundamental re-orientation. Having successfully achieved their goal of education in quantity by creating schools in the remotest part of the country, the Government there have turned their attention to improving quality, using the methodology that I have been describing. To that end, they have embarked on an ambitious, five-year programme to retrain all their existing teachers and to train all the new teachers in the new methods. In case some noble Lords are worried that "new methods" might mean the discredited disaster that began in the 1960s in the developed world, I should emphasise that the educational process that I am describing is precisely the best way to ensure that the basics, and more complex studies, are fully absorbed and available for use as I described earlier.
I am running out of time, so I can give only one example. I am privileged, as a Scientologist, to be kept informed of those and other achievements of my fellow Scientologists who now number some 8 million worldwide. The educational method which I have just mentioned is the Hubbard Study Technology, which is based on research by the author and humanitarian, L. Ron Hubbard, who also founded my religion. In fact,

369
as well as being a prolific author, his gift to world development encompasses education, training in business and administrative skills, and moral education. The uptake of those courses is running at a rate of expansion of about 40 per cent. per annum—and for one reason only: people find them to be effective and useful. Large-scale projects implementing the educational programme are also under way in Colombia and China, and there are many smaller projects in many other countries. It is also used for inner-city projects in the United Kingdom.
I said at the beginning of my remarks that I saw the purpose of development education as being to achieve a sense of unity in diversity with awareness and understanding. One aspect that occurs to me is that intercultural education among the different cultures living together in the United Kingdom has a part to play in the process because development does not take place in a cultural vacuum. It is greatly affected by, and in turn affects, the culture in which it takes place. To understand that culture will make it easier to comprehend what is happening in the poorer countries of the world.
7.40 p.m.
Lord St. John of Bletso: My Lords, I am grateful to my noble friend Lord Sandwich for introducing today's debate. As noble Lords will be aware, my noble friend speaks from an enormous amount of experience and expertise on this subject. My only regret is that as a Cross-Bench debate there are not more contributions from the other Benches to this extremely important matter.
The debate appears to address two distinct issues: development communication and development education. Both are vital to Britain's standing in the world or, more accurately, understanding at home and abroad of sustainable development in developing countries. What is it, why does it seem to be so elusive and what is Britain doing on its own, and collectively through the European Union and multilateral institutions, to promote it? In considering development communication, I welcome the policy of the ODA to "laser beam" on the poorest countries and the most vulnerable people in those countries (to use President Clinton's parlance). I also welcome the ODA's commitment to sustainable development and the emphasis in its bilateral and multilateral activities to support human rights, democracy and good governance.
There appears to be a clear shift away from a belief that a few hundred Potemkin projects dotted around the developing world will do much to stimulate long-term development. With this new emphasis, my call today is for more effective support and funding for communication. This call was eloquently elaborated upon by my noble friend Lord Eames. Communication is the warp and weft of sustainable development. How can greater awareness of problems and solutions be created without information? How can projects be replicated and effectively disseminated without reliable information, everything from villager talking to villager to satellite television broadcasts?
370
I declare an interest as president of Friends of Television Trust of the Environment, a charity established in Britain 10 years ago, which is committed to the production and distribution of films on all aspects of global sustainable development. One of the objectives of Her Majesty's Government, ably steered by the noble Baroness, Lady Chalker, is to help promote democracy in developing countries. But what is the hallmark of any democratic society? Surely, it is the free flow of information. A survey conducted in 1993 by Inter Press news service in Rome found that less than 0.1 per cent. of development assistance went to this most vital of all sectors. The nub of the problem is that there are no readymade indicators or handy graphs to chart the increase in, say, rice production or housing units. Project appraisals require measurable results. Unfortunately, awareness building and public education can rarely deliver results in such concrete terms; yet, as noble Lords are aware, it is public opinion that leads. For example, would we have a protocol to ban CFCs if it were not for the international fuss that followed the British discovery of the hole in the ozone layer?
When it comes to modern communications, Britain is an acknowledged leader. We hear so much of the information revolution and the 300 or so satellites in geo-stationary orbit that have broken governments' stranglehold on information around the world. They beam down pictures to 1 billion or more television sets, or nearly one for every five people on the planet. But what do viewers get from this orbital tower of Babel? They get pop stars, soap operas and quiz shows. I shudder to think of the impact that this output has on developing countries where the single biggest consumer item is the colour television set.
TVE has met almost 35,000 orders for programmes on environmental and developmental issues in developing countries. Next month is the start of the world's first weekly news feed on sustainable development via BBC World with Sir David Attenborough. First and foremost, its mission is to help programme makers from developing nations express their views on development. I am happy to note that that activity has been generously supported by the ODA. But for every 10 orders that it receives, the trust can respond to only one. This unique service exists only through the support of ODA's counterparts in Holland, Denmark and Sweden.
It is vital that the public in Britain should be made more aware of what Her Majesty's Government, and especially the ODA, are doing to address the needs of developing countries. For example, I am sure that few members of the British public are aware of the recent agreement signed by the Minister and the Mpumalanga Premier in South Africa for Britain to spend R14 million over the next three years in retraining 1,600 primary school teachers in that province in mathematics, English, science and technology, ably assisted by British educational specialists.
Unfortunately, time precludes me from saying much about the second issue raised in this debate: development education in our country. The subject has been comprehensively and ably covered by other noble Lords who have spoken, in particular my noble friend

371
Lord Sandwich. Like other noble Lords, I commend the work of the Development Education Association in promoting the efforts of all those organisations engaged in bringing about better public understanding in the United Kingdom of global and development issues. Compared with many other countries in Europe, such as Austria, Belgium, Denmark and the Netherlands, sadly the British Government give minimal support to development education. A recent survey sponsored by the International Broadcast Trust revealed that United Kingdom television showed less and less about the world inhabited by three-quarters of humanity.
Crisis and disaster are the staple output of news broadcasts. With rare and honourable exceptions, such as Channel 4's Africa Express, the view one gets is of continents riven by corruption, natural disaster and political instability. The other more positive picture of a developing world that returns its investments, continents that need modest investments to unleash enterprise and more people better fed than at any time in history, rarely comes through on our television screens. Many NGOs in this country do sterling work to educate the public through formal and non-formal channels. There are only two minority television channels that are prepared to give serious coverage of the third world, and yet we know that 80 per cent. of the public in this country cite television as their first source of information. One of the tasks of Friends of Television Trust of the Environment is to develop a thematic development education video library for the United Kingdom. The trust has access to hundreds of films that have never been broadcast in this country which can be a major resource for the multipliers.
In conclusion, I ask the Minister whether she can give any indication about further investment and encouragement by Her Majesty's Government in the work of the NGOs and agencies that are committed to promoting development education in the United Kingdom—an investment to ensure that our citizens know what their role is in the global village, so long predicted and now a reality.
7.50 p.m.
Viscount Craigavon: My Lords, I congratulate my noble friend Lord Sandwich on choosing this subject for debate today and on giving us notice yesterday in a little meeting we had in another part of the building that he would pursue it. I am not an expert on the subject, but I agree with him that there should be a national debate on it. It will be difficult to put it into motion, and the type of national debate may turn out to be more political than we sitting here might think.
In his excellent speech, the right reverend Prelate the Bishop of Worcester asked a number of questions. They were political. They were about debt and levels of consumption. He said that we were living beyond our means. He said that was a difficult question for politicians to deal with. The national debate may be more political than we might think.
372
Those of us who have been in the House long enough may remember the late Lord Hatch of Lusby. This was one of his subjects. He had a particular agenda. He did not seem to engage the sympathy of the House on the subject, but I believe that the climate has changed.
I shall focus on the educational and advocacy work of the charity Population Concern, and the importance of putting what, in shorthand, I shall call "population" as an essential part of development education. Before I do so I should like to mention two other matters which have already been partly touched upon.
First, my noble friend Lord Sandwich asked an oral Question on this subject last week. I intended to ask the Minister an innocent question about the effectiveness of one of her department's main publications entitled British Overseas Development. I was interested to know the audience at which it is targeted. The subtitle of that fairly glossy publication, which usually has a schools section, is, "How British aid works in partnership with developing countries".
I now understand that the future direction of that magazine might be under review as part of a larger reassessment of communications. Nevertheless, I should be grateful if the Minister would give us her thoughts as to how her department might be intending to communicate cost-effectively to a wider public the non-emergency achievements of the ODA.
Secondly, perhaps I may mention an aspect of the work of the International Broadcasting Trust which is supported by the major and some smaller UK development charities. It provides a continuing base and organisation for high quality television programmes about development, environmental and human rights issues.
The vital role of television broadcasting has already been mentioned, in particular by the noble Lords, Lord Eames and Lord St. John. According to the ITC, more than 70 per cent. of the British public—I believe Lord St. John said 80 per cent.—cites television as its main source of information on international issues.
This country has a reputation for excellent standards of documentaries, but in recent years there has been a marked decline in international coverage, especially of developing countries. According to research by the Third World and Environment Broadcasting Project, which is related and connected to the IBT, on the BBC, that decline in the five years to 1994 has been of the order of 30 or 40 per cent. (according to whether peak time broadcasts alone are measured).
Similar declines in coverage have taken place on ITV and, although not so sharply, on Channel 4. The IBT and documentary makers have obviously to be responsive to the needs and pressures that changing circumstances present. What is of concern is that a publicly accessible record of the extent of such programming, and its decline is not available from the broadcasters. That the BBC, or the BBC governors, for example, should be so aware, was advocated by the noble Lords, Lord Dubs and Lord Elis-Thomas, in the debate on the BBC Charter in this House on 9th January. I echo the importance of that request.

373
Geography has been mentioned during the debate. According to the BBC education department, 87 per cent. of all secondary school geography departments use mainstream TV programmes as teaching aids in the classroom.
I come now to my main subject—what I called earlier "population", by which I mean the wider concerns of population and reproductive health, in the implied context of sustainability. As the House may know, the Minister in particular and her department have a very good record in this area, but I believe that she would agree with me that it is especially important in this sphere to have the informed support of the public. That is so not just in the providing of funds but to raise the standard of the debates and arguments that break out periodically on this issue.
It is part of the remit of the charity Population Concern, which was originally part of the FPA but became independent in 1991, to provide information and education in the UK on this subject. Because of the longer term effects and results of what is done in this field, it sometimes seems a difficult issue to advocate; but it is increasingly and more widely seen as an essential part of the more fashionable sustainability at which we are all meant to be aiming.
In the UK, Population Concern has limited resources to provide some specialised educational material to schools. In addition, it holds successful schools conferences—usually twice a year—for large numbers of students in a particular town or city. With a dramatic speaker such as its president, Dr. David Bellamy, the hope is to put population growth into the wider green context of sustainability, including mention of the levels of consumption in this country.
I describe that partly to show on what a relatively small scale such educational endeavours take place. Similarly, on wider public awareness, again resources are understandably limited, and, as in other examples we have heard today, a greater reliance has to be placed upon the good sense of the media.
A limited amount of direct advertising is possible for an organisation such as Population Concern, and it so happens that this week it has the back page of The House magazine. That is appropriate this week as it is flash-banded "International women's week" which some of us learnt about for the first time last night in "Today in Parliament".
This debate is not the place to advocate the merits of reproductive health, but I hope that the Minister and her department will continue to encourage the education and advocacy roles of Population Concern. They are essential to a full understanding of the wider concept of global sustainability to which we are all committed in the long term.
Finally, as I have a minute, I hope the House will allow me to take the opportunity to congratulate the Minister on the particular and rare honour that she has been given in this field in being asked to deliver the Rafael Salas Memorial Lecture at the UNFPA, I believe at the end of the month. Mr. Salas was a former director of the UNFPA. This is an annual lecture which is given
374
at the UN in New York. She will be following in the illustrious footsteps of people such as Mrs. Brundtland, Robert McNamara and Prince Philip. It is a well-deserved honour for the work she has done in this field, and we wish her well.
8 p.m.
Baroness Willoughby de Eresby: My Lords, in a country which not so long ago was a trading empire, the British Government spend surprisingly little on development education. When I left school I felt that I was a citizen of the world. I felt special ties and responsibilities to countries of the Commonwealth. We shared the experience of the war. Those who are now completing their education do not have the same sense of shared experience. The links of goodwill and friendship which we still have around the world will weaken unless young people when leaving school have a global awareness of interdependence and a sense of responsibility as world citizens. I therefore welcome the initiative of my noble friend Lord Sandwich in bringing forward this debate on development education. I hope that tonight is the beginning of a debate which will long continue.
For more than a quarter of a century I have worked on and off for overseas development projects at community level, mainly with the Save the Children Fund. At this late hour I wish to make only two points. There is a huge amount of material within the NGOs' work overseas waiting to be put in a format that can be used. It was very frustrating for those who worked full-time (unlike myself), who gave their lives to working in development overseas and who had the information and were asked for it by the universities in the countries in which they worked and by international agencies; but it was not within our remit to spend funds on developing academic material.
The material exists and is waiting to be used. Relatively small amounts of funding would release the knowledge that has been accumulated by the NGOs from their overseas work into the national curriculum and environmental education. Within secondary education there are cross-curricular themes on economic understanding. The domestic context in which that is taught could easily be expanded into a global one. Recently the Department for Education and Employment co-operated with the Department for the Environment to fund cross-curricular environmental studies. The pattern exists and the Department for Education and Employment could explore, in co-operation with the ODA, the possibility of putting a small amount of funding towards that.
One of the main trends in the work of the NGOs overseas with their partner countries has been the increasing emphasis on in-service training. That ranges from kindergarten teachers with a few years of primary education behind them, to health workers with even less, through middle management and technicians, to the specialists courses developed within the universities. In-service specialist training is perhaps the most cost-effective form of development aid which can be given. However, the initial trainers need to be trained within this country.

375
There is a wide role for co-operation and co-operative funding between the Department for Education and Employment and the ODA to look at this subject through courses run within institutions of higher and further education. I hope that the debate that has begun will reach towards that. It is an area to which in the future we may see more aid being channelled. The importance of in-service training overseas and training in the countries within which we work cannot be too greatly emphasised.
In supporting the Motion of my noble friend Lord Sandwich in calling for Papers on the role of the Government in development education in the United Kingdom, I wish to say how much the World Service means to countries overseas. As we live in a country in which we sometimes feel the press is almost too free and untrammelled, it is sometimes difficult to realise what it is like to live in a country in which the only way of knowing what is happening there is to tune in to the World Service Overseas.
8.7 p.m.
Lord Redesdale: My Lords, I too thank the noble Earl, Lord Sandwich, for initiating the debate. During the time that he has been a Member of your Lordships' House he has shown that he has a great deal of optimism as regards development, which is most refreshing to see. However, he showed optimism about the ability of the English cricket team in the World Cup which I am afraid I do not share.
The world is becoming a much smaller place and I find it amazing that one can travel to any country in Africa in less than 12 hours. Considering that the world is such a small place, it is also interesting to discover that there is little real knowledge about the situation on the ground in many countries in Africa. I must admit that in my own schooling I had no education in development—at least none that I remember—and many people can say that they had a lack of teaching. My knowledge about development comes from living, working and travelling in Africa for two years. When I was there in 1991 I worked out that moving between Nairobi and South Africa were about 40 travellers from many different countries. There were so few that one could almost count them. It was ridiculous. The problem is that among the general public few people have knowledge about what is going on in those countries. Of course, I do not include those working for the various organisations. I do not include the noble Lord, Lord St John of Bletso, because he always brings to our debates a wide knowledge of Africa.
One of the problems about there being so few people who know about the area is that often many of the solutions to situations in Africa do not meet the needs. The noble Lord, Lord Northbourne, raised that issue. Although the situation is changing, I remember talking to subsistence farmers who had been advised to use fertiliser which they could neither obtain nor afford because it was beyond their means.
We must look at local solutions. Recently I heard a piece of good news about a clockwork radio which has been developed in Africa. It was pioneered in this
376
country. I know that it sounds absolutely ridiculous but batteries are almost impossible to obtain in many parts of Africa and are extremely expensive. Therefore, a clockwork radio which can be produced in developing countries is an amazingly useful device. I am not sure whether it can pick up the World Service. The Minister seems to believe that it can. Therefore, I hope that no cuts will be made to the World Service which may reduce the ability of people to listen to it, as I believe the World Service is an extremely useful tool for the dissemination of information about Britain.
The point of the debate is to look at the way in which people in this country gain information about the developing world. I should point out that I was surprised to discover that every child now has to learn about development from primary level to the age of 14. We welcome that. It is a significant step forward. Development education is now a compulsory part of the national curriculum.
Perhaps I may raise a few suggestions to improve that form of education, which I ask the Minister to think about. I believe that more should be done in the area of teacher training so that teachers are given more information and do more groundwork on which to base their education. Funding needs to be earmarked by the DFEE to support teacher training in the specific area of development education. That is particularly so in the case of primary school teachers who are not specialists in that field and in many cases often have no real knowledge of development issues.
I realise that some NGOs have organised excellent in-service training programmes. At this point, I must declare an interest as I am vice-chairman of World Aware. But NGOs have very limited resources and if the schemes are not run by the DFEE, NGOs themselves will have only a limited impact. Therefore, I ask the Minister what steps are being taken within the department to ensure the provision of relevant teaching material and, indeed, what funding has been provided to produce that.
I was surprised to find also that development education is not referred to specifically in the national curriculum. It is not mentioned within the youth work core curriculum. It is unfortunate that it does not have the same status and recognition as environmental education. That situation would be quite difficult to remedy, since development education is buried within one area and one concept; namely, geography. Will the Minister give an indication as to how development could be developed further into a subject on its own?
Noble Lords have mentioned the role of the media is disseminating information. We do not have a very responsible media. Very few good stories are publicised and one rarely sees the name of the ODA other than in connection with disaster relief. There are many areas in which the good news about development could be spread. That is happening slowly. Much of the work being done at present in South Africa is being aired on the television and is being brought forward. However, we should ensure that information is given to children so that they have

377
positive images of the area. If that is not done, they will be left with the image of a third world which is suffering desperately.
8.15 p.m.
Lord Rea: My Lords, the noble Earl, Lord Sandwich, has presented the case for development education gently but thoroughly and persuasively. Something that has come out of the speech made by the noble Earl, and four other speakers, including the right reverend Prelate and the noble Lord, Lord Eames, is that despite our long historical connection with the world beyond Europe, the Government are far from generous in their support for development education, particularly compared with a number of other countries some of which have never had a colonial past.
The noble Baroness would perhaps be in a stronger position in the annual spending round if the nationwide constituency for development assistance was larger and better informed. But people and particularly children are now more globally aware than they used to be because of travel and also because of the more international population that we have in our midst.
As the majority of noble Lords have pointed out, images on television whet the appetite to know more about other places and cultures. But too often the fairly rare programmes which there are on overseas issues are centred more on environmental concerns where people are the enemy or on programmes on animal or plant life rather than human life. I do not run down the incredibly skilled programmes that are made about wildlife in all countries of the world. Indeed, I am addicted to them. But where people feature, they are often the victims of conflict or disaster, natural or man-made. There are not enough success stories or programmes which show how good development can prevent or mitigate future disasters.
On previous occasions the noble Baroness has remarked on how 80 per cent. or more of media coverage concentrates on the 20 per cent. or less of the ODA's work which is concerned with emergency relief. A few years ago, in answer to a Harris poll, 82 per cent. of adults said that they should know what is happening in developing countries but only 45 per cent. of them felt that their knowledge was adequate.
Editors and programme directors seem to think that development is not newsworthy, despite the existence of many gifted journalists who sometimes manage to squeeze first-class news items past editors. That is sometimes only as feature articles and occasionally as real news. We could do very much better in that area. If the Government were more pro-active towards development education, editors and directors of programmes would respond. That is certainly an area which Labour will explore in due course. If properly handled, it should not require very much extra government money.
In the field of television, an exception is the Open University, which has set a very fine example through courses here and outreach to other countries; for example, South Africa, Zimbabwe, eastern Europe and
378
the former Soviet Union. Government assistance for development education is not generous. I believe that I have done my sums slightly differently from the noble Earl. I find that Government spending represents £640,000, which is just over 1.1p per head of the population. A number of other countries do far better. Sweden, which is top of the list, spends £1.22 per head of its population. The Netherlands, Austria, Belgium, Denmark and Ireland all do well with more than 40 pence per head.
The noble Earl quoted the President of Ireland, Mary Robinson, saying,
"Development education challenges complacency".
In the same speech she continued:
"a tolerant and emphatic Ireland demands such a challenge for its vibrant and dynamic realisation".
However, development education in the UK depends, as we have heard, on NGOs which contribute more than £5 million. That is eight times as much as the Government, though some of the money that the NGOs receive comes from the ODA, and the Open University receives a government grant. However, the future of the Open University's funding is now in doubt; and many NGOs are worried about whether their funding will be sustained.
As other noble Lords have said, development education should start, as it often starts, in schools, where lifelong attitudes can be formed. But that is not the end of the matter. There are hundreds of examples of good practice through local development education centres and local authorities up and down the country. Most of those are funded locally or with NGO assistance. Their programmes have been imaginative: building links with overseas communities, staging cultural events, and exchange programmes. The local initiatives which they have shown deserve greater central support, if not in cash terms, at least with more central government blessing and encouragement.
Perhaps I may say a few words about schools. Global perspectives in education can be slotted into almost every subject within today's national curriculum. The curriculum leaves much to the ingenuity and inventiveness of individual schools and teachers. The Development Education Association's book of guidelines gives suggestions for teachers on how almost every subject can be given a global aspect. It may be easy to understand how geography, history or science can have a development aspect, but even mathematics can be taught with a global view. It suggests using as a database Go bananas, a book published by Oxfam which traces the journey of a banana from the Caribbean to the UK, with photographs and a map. It suggests other cross-curricular applications and activities.
Teachers have to be convinced of the need to teach from the global point of view. Development education needs to be part of teacher training, as the noble Lord, Lord Redesdale, said. While there are some good pioneering programmes, especially at Goldsmiths College, progress is still patchy. It would be interesting to know what the Department for Education and Employment is doing about that, if anything.

379
Much teaching about development issues in schools has until now been provided for or contributed to by NGOs, especially Oxfam, Christian Aid and the Council for Education in World Citizenship, to name a few. It would be interesting to know—if the figure can be separated—how much the Department for Education spends on development education. Can the noble Baroness give us any figures on that?
I was sad to hear that the government funding for the Council for Education in World Citizenship is being phased out. Is that really true? The organisation has been around for as long as I can remember, doing very good work in increasing international understanding.
This has been a useful debate of which we on these Benches will take note. We shall study the many well informed and careful speeches. I have not been able to acknowledge everyone who has spoken. However, if and when there is a change of government, we hope to restore development education to its rightful place and set up a development education council to co-ordinate national policy, which will co-operate with the Development Education Association. I see that my 10 minutes are up. I have more to say, but I shall leave the matter there.
8.25 p.m.
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, it has been an interesting debate. I am pleased that there is such a strong interest both in our development assistance programme and in its communication to our people at home and overseas.
Just as important, there are many noble Lords who are anxious that aid and development issues are understood much more widely than at present. I believe that the right reverend Prelate the Bishop of Worcester said that we need a clearer vision of the world. That is one thing that certainly I or my colleagues in the department are seeking to give: a clearer, realistic vision of the world. That is why I have always participated in the One World Week and the excellent organisation that that gives us.
First, I congratulate the noble Earl, Lord Sandwich, upon his work on development education and upon securing this debate. As colleagues will realise, it follows very closely on his oral Question last week and indeed a Question for Written Answer the week before that. The noble Earl is quickly building a reputation as a development education expert in this House.
I hope that we shall all mark and inwardly digest the words of the noble Earl, Lord Sandwich, in his excellent maiden speech last November. They really were most apposite. He said:
"Development education is not secondary to our support for other countries; it is a part of it".—[Official Report, 16/11/95; col. 39.]
"One hundred per cent. right", is the only comment that I can make on that. We are living in an increasingly interdependent world. It is important that people are aware of major economic and social issues affecting developing countries. These issues are much too often ignored by the British media but they affect us all. Instability and poverty in any country undermine peace and prosperity in many others in both the North and the
380
South. The environment, whether it he air, water, forestry, is shared. No country is immune from the effects of environmental degradation. Perhaps we have learnt a good deal since the hole in the ozone layer was found. Indeed, I believe that we have worked well since Rio in seeking to bring developing countries to an understanding of what can be done to help the environment in the future. Certainly, ODA is working very actively in that field.
I believe that it was the noble Baroness, Lady Willoughby de Eresby, who commented upon the lack of the right publicity, as did a number of noble Lords, including the noble Lord, Lord Rea. It is true that I attain around 90 per cent. of publicity for 12 per cent. of my budget; and that I really regret. However, ODA has been making a special effort, and we shall increase that still further, to make sure that the good news development stories—of which there are so many across the world—are put in a way which may persuade editors and those who decide the final version of newspapers and programmes to include the good news for a change, because there is a great deal of positive action going on.
We have an information programme, to which I attach great importance. I wish briefly to outline the information strategy. It is in two parts: activities which publicise the work of ODA and British development overseas; and activities which raise public awareness of opportunities for aid and development generally. Inevitably the two overlap. One cannot publicise our development work overseas without raising in the UK awareness of life in those developing countries. Our development education programmes also help to make people aware of why an organisation like the ODA must exist.
I shall deal with ODA's publicity first. This is achieved in a number of ways: liaising with the press; issuing publications such as our annual review; producing a bi-monthly newspaper, British Overseas Development—I shall return to that in just a moment—attending exhibitions, including our roadshow bus that tours the country; having our own pages on the Internet, and also through my speeches and television and radio interviews. We have tried to get as much coverage as we can reasonably achieve for the developments that we are so busy working upon. The noble Earl, Lord Sandwich, was absolutely right to say that we must have more coverage of long-term development.
A number of the operations which we carry out are really development education. The school section of the British Overseas Development newspaper consists largely of stories and features that cover development issues in ways that appeal to schoolchildren. However, we are looking at a revamp of British Overseas Development to make it even more useful, and not only to the youngest children. Our roadshow bus has a number of general exhibits on it to attract children and to excite their imagination. There are the weevils munching their way through a jar of maize to illustrate the damage that pests cause to crops. The bus also has a fuel efficient stove and a solar powered water pump to show there are other ways of generating power which

381
do not involve cutting down trees. What we are seeking to do with these exhibits is to put over in a simple way important points which will be remembered.
Our development education budget of almost £650,000 is not as large as I would like, but it is valuably spent on grants to NGOs with sound projects which promote factual information about development. Principally we provide the core grant to Worldaware—the noble Earl, Lord Sandwich, has worked with that organisation in the past, and the noble Lord, Lord Redesdale, is a vice chairman of it. I hope they know of its excellent contribution in this field although I think, from what the noble Lord, Lord Redesdale, said tonight, he obviously has not learnt everything that Worldaware has put out.
We also support the Development Education Association, which was set up in 1993 to co-ordinate the work of all those involved in development education. We are currently helping to fund four projects which give a good snapshot of the work of that association: linking young people and global youth work; promoting awareness of development education in further education; building up greater access to information and resources; and working with ethnic minority groups in the United Kingdom. We are also supporting Education Partners Overseas, which has built up many links between schools in this country and the developing world. I met Tanzanian schoolchildren here in your Lordships' House just last year to help these links have a reality for those Tanzanians who came here. We were all sad to hear of the death last month of the first director of Education Partners Overseas, but we hope that many others will continue to work in Jean Burroughs' memory.
One of our newest ventures is the support for OneWorld Online. This is an organisation which puts development material on the Internet. It has just been voted Internet's site of the year by the Earth Times. It is now getting more than three-quarters of a million "hits" a month. For those who are interested in the subject and have access to computers, it is obviously a valuable way of putting out information. There are also two other new projects with great possibilities. The first is a proposal by the One World Broadcasting Group and the International Broadcasting Trust for a major magazine series on the developing world to be shown on Channel 4. A number of your Lordships have spoken of that. The other project just agreed is an initial grant—as the noble Lord, Lord St. John of Bletso, mentioned—to the Television Trust for the Environment. This is for research into a major project to commemorate the millennium with a television series on the developing world. We look forward to co-operating fully on that.
This is but a snapshot of our work on development education and awareness. I wish to comment on some of the remarks made in the debate. The noble Lord, Lord Eames, spoke of knowing and caring about the needs of the world. I fully agree with him. One of the things we should remember, and I hope tap into, is the actual strengths that exist in the developing countries themselves, because their experience teaches us and teaches the volunteer, and, I hope, may in turn better
382
inform the British public. The noble Lord is right to say that there are situations where one needs to help correct local mismanagement and prevent future failures. But if we work in partnership—as the ODA always tries to do—in these countries, we receive just as much back as we give in our teaching. I was grateful to the noble Lord for his recognition of how the ODA works.
I wish to say a few words about our links with the NGOs. The noble Lord, Lord Rea, was worried about whether their money will be sustained in the future. Every year since I have been in the department—all seven years—the grants to the NGOs from the ODA have increased. That will happen yet again for the financial year 1996–97. I have already informed the NGOs of that. Our ODA policy is to fund national organisations which have good projects, and in this particular case those who specialise in development education. There are a number of them: Worldaware, the Development Education Association, and Education Partners Overseas I have mentioned. We do not fund directly the development education work of the traditional NGOs but that is only because we do not wish to duplicate the work that the NGOs are doing, and many of them produce material of their own which is quite excellent. There is no reason for us to copy it. However, much of the work we do concerns development education. Although there are some first-class leaders in the field of development education among NGOs, we are looking to see what more we may do.
There have been a number of comments about the national curriculum during the debate tonight. I wish to make it quite clear that the study of developing countries is an integral part of the national curriculum. I do not go along with what the noble Lord, Lord Redesdale, said, because schools have asked that we should have a moratorium on changes in the national curriculum at the present time, and that will be the case. It is a mandatory part of the syllabus of every child up to the age of 14 to be required to compare countries at different stages of development; in other words, one developed and one developing country. There is a similar theme for those taking geography at GCSE level. Junior schoolchildren study a locality, usually a small village or town in a developing country. Worldaware has provided course material for some of those studies.
There are links between Ofsted and Worldaware to consider the ways in which development education is taught in schools. An Ofsted member has a place on the Worldaware council. The recent Ofsted study noted that none of its inspectors' reports found any difficulties as regards teaching about development. That indeed is good news, but let us have more of that sort of good news. I might say to the noble Lord, Lord Rea, that I seem to remember as a youngster learning a great deal about hydraulics and metal stress through examples from the developing world. That was many, many years ago.
Noble Lords: Not that long ago!
Baroness Chalker of Wallasey: My Lords, oh yes, it was a long while ago.

383
I was asked about teacher training and development education by the right reverend Prelate the Bishop of Worcester and by the noble Earl, Lord Sandwich. The DFEE is supporting teacher training in development education. It makes a grant—that has amounted to over £90 million since 1989<—to support school effectiveness under the national curriculum. It is up to the schools to decide whether they want to take that for teacher training, for books, equipment or management. I am sure that the noble Baroness, Lady Willoughby de Ereshy, will be glad to hear that. There are courses in the UK for in-service teachers and my noble friend Lord Henley, who is listening to this debate, will seek to give further information by letter on anything that I cannot cover tonight. However, there is a great deal of information available and I can inform the noble Earl, Lord Sandwich, that we are working with the DFEE to consider what more we can do with it to provide more opportunities in this field.
There is nothing wrong with the European Union spending on development education. We should never forget that the United Kingdom contributes over 16 per cent. of the European Union budget, and this is a very good example of multilateral and bilateral spending complementing one another. There is also a good deal of work going on in the Open University and the Open University's work in development education has been particularly good in the use of four textbooks they have prepared on development and the new edition of the development atlas. There is a great deal more information about that available which I can let your Lordships have if you would wish.
We have talked this evening about the ODA's communications philosophy. We have recently carried out a communications survey. This has come up with a number of recommendations. We have already established a high level strategy group which will guide the Department on communications and therefore we will have, we hope, more of the good news which we collect all around the world getting out to those who need to be informed. We are already getting our staff to give us more information in the Information Department about what we are doing. We are formulating a more effective publication strategy because this is something with which I have not been totally satisfied.
I mentioned that British Overseas Development is being revamped. It has been a success and I am glad to say that the circulation has risen by over 60 per cent. in the last year. Of course BOD has been circulated free and goes to schools, businesses, engineers, journalists, many members of your Lordships' House and another place, and many interested members of the public, but we want to make sure that it is absolutely right for the future.
One of the things the noble Lord, Lord St John of Bletso, talked about was an improvement in communications, and that improvement has to be not only in this country but worldwide. That is why it was ODA who invested in the development of the free play wind-up radio, and I believe that that was £200,000 extremely well spent. The radio is being produced in a factory in Cape Town, mainly by disabled people, and it is beginning already to have the most remarkable
384
effect. We have bought the first 3,000 wind-up radios and are distributing them through NGOs and to others who can make good use of them. We hope that this will be a proper commercial project, because it deserves to be and it can be.
There were many other comments. The noble Lord, Lord Eames, spoke about the BBC World Service. I am second to nobody in my admiration for the World Service. It is a great national asset and the most successful international broadcasting service of any country. I wish that the BBC at home took more of the programmes that are actually produced by the World Service because they are of such high quality. However, we have to balance resources for the World Service with many others, including the Development Programme and the British Council. Each has a major role to play and we shall continue to ensure that they can make their unique contributions as effectively as possible.
There were a number of comments about large projects at the beginning of the debate tonight. May I say that, whereas there used to be large development projects, a great deal has changed and I can assure the noble Earl, Lord Sandwich, and the noble Lord, Lord Northbourne, that we have much more simple technology which we use in many of our projects. If there were time I would describe the micro-hydro of Nepal to which the noble Lord, Lord Northbourne, was referring, but of course we support the Intermediate Technology Development Group and have done for many years. It is that sort of development technology which can work so well. In this case a little money does go a long way.
The noble Viscount, Lord Craigavon, spoke about the need for a national debate, not a party political one. I agree with him very much in this, and one of the welcome things is that the climate of opinion about development education has changed since the late Lord Hatch of Lusby first started his campaigning. It is a much more positive and much more co-operative campaigning that is going on. What is most important is that we should ensure that we pick up all those instances where something is said about development, examine them, and put them right. It therefore often falls to me to try to correct some of the myths that arise and I have to say that there are an increasing number of people on the ground in Africa who really do know what is going on and I do not think we should be misled by what the noble Lord, Lord Redesdale, said. When he rereads his speech he will see what I mean.
May I say of the noble Viscount, Lord Craigavon, that I was grateful to him for his comments on ODA's good record and also for his underlining of the need for informed support. I well remember a school conference run by Population Concern in Harrogate way back in 1990. I hope they will go on doing their very valuable education work about family planning and sustainable development. Such work is absolutely vital. I thank the noble Viscount for his kind words about the Rafael Salas Memorial Lecture. I shall of course be talking partly about the whole question of development.
We are changing for the better; we are learning from the past and we are involving business in backing the development education that we are doing. We spend

385
over £2.2 billion of the public's money. We believe the public have a right to know how we spend it. That is why we are increasing our information effort and I am greatly encouraged by the interest taken in today's debate. I can assure your Lordships that we will continue to work to raise people's awareness of the reality of life in developing countries and will use every possible means at our disposal to do so.
8.46 p.m.
The Earl of Sandwich: My Lords, it has been a great pleasure to introduce this debate and to hear so many supportive statements from noble Lords and finally by the Minister herself for a subject which I know she has well under control. I was very moved particularly by Lady Willoughby de Eresby's reference to the loss of contact around the world; and to the noble Lord, Lord Northbourne, I have nothing disparaging to say about colonial administrators, but I wish they had known about the appropriate technology in those days as well. I also wish there were more colonial administrators in this debate because the line of Benches before me is full of people who have extraordinary experience of development education. My Lords, where are they? I am sad that there is so little understanding of the nature of this debate on the Conservative Benches, and I hope that will be part of the Minister's development education campaign, perhaps through Central Office.
I am delighted to see the noble Lord, Lord Henley, in his place. Having watched him facing a phalanx of university chancellors and professors single handed on the Benches opposite I have nothing but admiration for him and I wish he were able to answer this debate because I know it particularly concerns him and it has not been quite fair that the task has fallen between two Ministers. However, I have seen the Ministers having conversations and I am ever hopeful that we shall see a joint approach with DFEE and ODA together. I am not certain that I have had enough encouragement from the Minister in the direction of the curriculum. It is true to say that teachers do not want to be interfered with and the curriculum has been established for a number of years, but we are now having to think forward about how we shall approach the curriculum in, let us say, three years. It may be less. Who knows what is going to happen next year after the general election? There may be a shake-up and we now need to think what is the joint approach that could be made. I urge the Minister to join with voluntary organisations.
I welcome the noble Lord, Lord Eames, for giving us a reminder of the moral responsibility and I know that he, perhaps alone in this debate, has experience of bringing people together in the most remarkable way. This is a talent which he has established and which I hope we shall follow in thinking about the value of other cultures together and their influence.
I am grateful to the noble Lord, Lord St. John, and the noble Viscount, Lord Craigavon, for raising important questions, and to the right reverend Prelate for reminding us of the Church's involvement in his diocese.
386
I thank all those who have joined in the debate, and I am most grateful for the Minister's positive response. I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

Sexual Orientation Discrimination Bill [H.L.]
8.49 p.m.
Baroness Turner of Camden: My Lords, I beg to move that the Bill be now read a second time.
This is the second attempt that I have made to introduce a Bill designed to outlaw discrimination in employment on grounds of sexual orientation. The last time was on 14th July last year (reported at col. 2004 of Hansard), but it was too late in the parliamentary Session for it to make much progress beyond Second Reading. Unfortunately, for personal reasons, I was unable then to introduce the Bill earlier. However, that Second Reading debate was useful in giving me some idea of what the response was likely to be. Indeed, as a result, Stonewall, the organisation which has briefed me (and I am a member of the Stonewall parliamentary group), has made certain alterations to the text which I hope will make it more acceptable. I shall deal with those a little later.
The intention of the Bill is to make it illegal to discriminate in employment against a person because he or she is homosexual or bisexual. The United Kingdom does not have legislation in place at present designed specifically to tackle discrimination against lesbians and gay men. Under existing employment legislation there is nothing illegal about rejecting a job applicant on grounds of his or her sexuality. That has serious implications for lesbians and gay men since it clearly gives some employers the freedom to exercise prejudice. Unfair treatment, once in employment, is not itself illegal. If he or she reveals, or someone else reveals, that employee as lesbian or gay, the employer can treat them unfairly, for example by refusing promotion. Again, there is no redress.
Harassment can and does occur at work. In the case of racial or sexual harassment the employer may be held vicariously liable for the actions of the staff who do the harassing. No such duty exists in regard to harassment of a gay man or lesbian.
Lesbians and gay men dismissed because of their sexual orientation have no redress unless they have been with the employer continuously for two years. Only then can they claim for unfair dismissal. Even then there is no guarantee of succeeding, because it has been held by the Employment Arbitration Tribunal that employers may dismiss homosexual people on the grounds of potential client prejudice, even where that prejudice has not been proven to exist.
Is such discrimination so widespread that it justifies introducing legislation to deal with it? Are we making too much fuss about something which is really quite negligible? I do not believe so. Stonewall has published a report based on a survey of 2,000 homosexuals entitled Less Equal than Others. Forty-eight per cent. had

387
suffered harassment at work, 16 per cent. claimed to have been discriminated against at work because of their sexuality, and another 21 per cent. suspected that they had been discriminated against on similar grounds. A study by Social Community Planning Research indicated a similar pattern of discrimination.
When I referred to such surveys in my speech in July last year, the noble Baroness, Lady Miller, who replied for the Government, indicated that the sample upon which the research was based was too small to give a clear indication of the need for legislation, although she acknowledged (at col. 2019 of Hansard):
"that there are some cases where the treatment received by some individuals left much to be desired in terms of good personnel practice".
However, there is a great deal of evidence available apart from that by Stonewall (which might perhaps be felt to be unduly partisan) and that of SCPR. The National Association of Citizens' Advice Bureaux (NACAB) has produced a report indicating that discrimination is in fact quite widespread. CAB clients who are homosexual often experience difficulty in getting employment. Once in employment harassment and various forms of discrimination are common experiences. One aspect of that harassment is that it often takes the form of threats of disclosure about their sexuality. The Equal Opportunities Commission also reports that it has had a number of inquiries about alleged discrimination on grounds of sexual orientation. A number of the cases reported by NACAB refer to individuals dismissed when the employer finds out that they are homosexual. As that normally happens within two years of the employment commencing there is no redress whatsoever.
NACAB makes the point that under existing legislation the options for lesbians and gay men are very limited. It is quite true that if the employee has been working for the employer for more than two years he or she can claim dismissal under the Employment Protection (Consolidation) Act. It may also be possible to argue that some forms of discriminatory treatment, such as persistent harassment, constitute constructive dismissal. But that, of course, involves the employee losing the job. Even so, there are difficulties, as I have indicated, in the way of proving unfair dismissal in the light of some EAT decisions. There is also the further disincentive that exists for lesbians and gay men when it comes to taking legal action, namely the fear of publicity, which with the present prurient interest of the press in all things sexual, could have a devastating effect on the individual taking a case. That is because of the general cultural climate within which we all live and which is often responsible for the harassment suffered by quite innocent and vulnerable people.
The NACAB report quotes an instance of a client who experienced continued and systematic abuse and other harassment from colleagues because he was gay. He was subjected to extreme verbal abuse and several instances of intimidation which threatened his personal safety. He was so intimidated that he felt he could not discuss his situation with his supervisor in case that simply made the situation worse.
388
There are many other cases to which reference is made in the reports I have mentioned. I do not think that it can be denied that discrimination does take place, that there is no protection against it, and that vulnerable people are being made unhappy because of it and denied rights which are available to other minorities.
As I indicated when I opened the debate, I have attempted to take note of some of the objections made to the Bill presented to your Lordships in July of last year. We were grateful for the indications of support received at that time from all sides of the House. In particular, I recall the speech made by the right reverend Prelate the Bishop of Southwark, whom I am sorry not to see in his place this evening. He said at col. 2007 that the Board for Social Responsibility of the General Synod of the Church of England had said clearly that homophobia was a pervasive evil in society. The speech he made then was, in general, sympathetic to what I was trying to achieve in the Bill.
However, the right reverend Prelate was concerned about the definition of sexual orientation in that Bill, which did not attempt to define what was meant by it. He expressed concern that it might also apply to those whose orientation led them to seek and engage in sexual activity with children. I said then that it was certainly not our intention to give encouragement to paedophilia. It will therefore be seen that in this draft of the Bill we have sought to deal with that by defining in the Bill itself what is meant by "sexual orientation". I am told that that works quite well in similar legislation in New Zealand, and clearly it does not include paedophilia which, of course, we all deplore.
It may well be argued, as the Government have, that although discrimination against homosexuals—gay men and lesbians—in employment is to be deplored, legislation is not the way to tackle it. It is, the argument goes, a matter of persuasion, of changing the culture, so that gradually people find such discriminatory behaviour unacceptable. I wish that that were so. Unfortunately, it is not. Experience indicates that legislation is required as part of the drive against unacceptable discrimination of all kinds. Hence we have had legislation on gender discrimination—the Equal Pay Act. How often we were told before 1975 that legislation was not necessary, but what a difference it has made to the position of women in society. The same applies to discrimination on grounds of race or disability.
In each case the existence of legislation has not only changed patterns in the working environment, it has enormously helped to change public perceptions as well. It helps to bring about a change in the cultural climate so that attitudes which 30 or 40 years ago would have been quite commonplace are now regarded by almost everyone as unacceptable. The law can affect behaviour. I hope that legislation along the lines of my Bill will have the same effect in regard to those currently experiencing pain and trauma as a result of discrimination because they are gay men or lesbians.
This is a simple Bill. It is a moderate Bill. Stonewall Parliamentary Group, which campaigns for non-discrimination against homosexuals, gay men and lesbians—I use those terms because they are widely

389
understood and they are used to define themselves—contains members of all parties, but it is very much a mainstream organisation. I do not support compulsory "outing" of the kind that usually attracts press comment. I think that is a matter for individual choice. But if people want to live open rather than secretive lives, it should be possible for them to do so without fear of dismissal from their jobs or harassment at work.
Last year I drew attention to the fact that I was introducing the Bill just over 100 years after Oscar Wilde's conviction in 1885. An article by the noble Lord, Lord Alexander of Weedon, QC, appearing in The Times at that time, commented that the mob who taunted Wilde when he stood in handcuffs and in prison uniform on Clapham Station—including those who spat on him—had long since been forgotten, but Wilde continued to adorn the London stage and rests in Poets' Corner.
Unfortunately, the prejudice and ignorance which crushed one of our finest writers still exists. Because it does, legislation is needed and I ask for support for my Bill. Last time I introduced the Bill, the Government's spokesperson in the shape of the noble Baroness, Lady Miller, made the following comment:
"The Government's position is clear. We oppose unjustified discrimination against any person on grounds of their sex, race, colour, ethnic origin or for any other reason, irrespective of where that discrimination occurs … Everyone is entitled to equal treatment and, at work, to be assessed on merit against objective criteria, not on the basis of prejudice and stereotyping …unjustified discrimination is morally unacceptable and economically inefficient".—[Official Report, 14/7/95; col. 2017.]
I could not have put it any more clearly than that. It is the basis for my Bill and I urge that it be supported. I beg to move.
Moved, That the Bill be now read a second time.—(Baroness Turner of Camden.)
9.2 p.m.
Earl Russell: My Lords, I wish the Bill a fair wind. The noble Baroness, Lady Turner of Camden, has made the basic case so well and clearly that I need not repeat it. She has reminded us that anti-discrimination legislation has a long history. It would be unwise to begin a history of anti-discrimination legislation any later than Catholic emancipation in 1829. That is a good example of how much good such legislation can do.
In the course of that time the arguments have tended to become quite familiar. They divide into the generic and the specific. Tonight I take one of each. The generic I take from the argument used on Catholic emancipation. It comes from Viscount Palmerston, later to be perhaps the most politically incorrect Prime Minister we have ever had. He said that he supported the measure on the ground that it was not expedient to exclude so many able persons from the public service. That is a strong argument because it is so simple. There is certainly no lack of need for talent in all fields of our national life. The example of Oscar Wilde serves to remind us that it is true that among people known to have been homosexual there is a large concentration of people of considerable talent. To exclude them from the
390
public service or to allow them to be excluded from industry, commerce or any other field where an intolerant employer might try to do so is a loss to the whole country as well as to them.
However, that argument applies not only to people of distinction. I, too, have read the NACAB report to which the noble Baroness referred, and a very powerful report it is. Over and over again people who were pushed out of jobs because of their sexual orientation end up on benefit. I am aware—perhaps more than the Minister realises—of the need to keep the benefit bill under control. We have much better things on which to spend social security money than subsidising people who ought never to have been forced out of good jobs in the first place. So the saving of public money is one of the grounds on which I support the Bill. Incidentally, I know that the noble Baroness, Lady Turner, strongly agrees with this: we must again sometime have a good look at the laws on unfair dismissal.
The other point I wish to take up and on which the noble Baroness touched is the changing of public attitudes. The argument about whether the law can change public attitudes is endless. We all want to see a reduction in the disfiguring homophobia of which some examples have recently been quoted in the press from the Ministry of Defence survey. When I say "disfiguring", I speak literally. I have one friend who was walking innocently about the street in the evening when he was set upon by a large number of men whom he had never met before. When he recovered consciousness he had a fractured cheek bone. So when I say "disfiguring", I mean exactly that.
When we discuss how far we can change attitudes, we need to consider quite how ingrained those attitudes are. Naturally, as a historian, I look to see how much I find those attitudes in other periods. In the 17th century, regrettably, I find as much hostility between men and women as in any other century. But when I look for signs of homophobia I find remarkably little of it. In the reign of King James I one would have expected, with a homosexual on the throne and a coterie of fellow homosexuals around him, that one would find a good deal of it. One finds some resentment of homosexuals promoted at court, but it seems to me to be more a sense of unfair competition than anything else. It is the kind of feeling that a young woman rapidly promoted in the City might expect to encounter. It does not seem to me to be anything more intense than that.
I do not find any homosexual assaults. There is nothing like that in assize records. One does not find charges of homosexuality in seditious works cases. One does not get it coming into depositions about tavern brawls. If I look for cases of homosexual blackmail in the 17th century, I do not believe I can find any. The only one I am in doubt about is one where the other partner in the homosexual union was the King, where clearly confidentiality is unusually important.
I think I am entitled to say that that suggests that homophobia in the 17th century was a great deal less deep-seated than it is now. Lucius Falkland—I do not allude to the present Viscount, but to his ancestor, the second Viscount, of the same name—used to write to

391
his friend, Edward Hyde, and regularly began his letters, "Sweetheart". I am not sure what construction to put on that word by itself. It may well be that the obvious construction is not the correct one. What I am certain of is that in a homophobic world two ambitious young men trying to make their way in the world would not have begun their letters to each other with that word.
That suggests that homophobia is not entirely a deep, instinctive prejudice, that a very large part of it is culturally determined and that it flourishes in a climate of official encouragement or semi-official encouragement. That is why I have more faith than I might otherwise have had that official discouragement of the sort this Bill would offer might do a great deal to diminish it. I am happy to support the Bill.
9.9 p.m.
Lord Monkswell: My Lords, at this late hour the House will no doubt be pleased to know that I shall be brief. I thank the noble Baroness, Lady Turner of Camden. I am sure that the whole House will be grateful to her for again bringing this measure before us, and at a point in the parliamentary year where we can hope to see some progress made on it.
British industry and commerce operate in a very competitive world environment. To succeed in that competitive environment needs the best people for the job. Our employers need to employ the right people. We have quite rightly recognised in previous legislation that discrimination against people because of their sex or race is counter-productive. It reduces the productiveness of the individuals involved and also the productiveness of those companies that practise it. It is only right that we should also legislate to prevent discrimination on the grounds of sexual orientation.
I hope the Government will lend their support, or at least allow the Bill a fair wind. To prevent employers penalising themselves and our national effort in this competitive world is surely something that should be dear to the Government's heart.
9.11 p.m.
Lord Monson: My Lords, before I come to the Bill, I must say that I was taken aback by the fact that the noble Earl, Lord Russell, with his classical education, used the word "homophobia" not once but several times. I am sure that upon reflection he will concede that the word "homophobia"—if it means anything at all, which is doubtful—can only mean "an aversion to one's own kind"; and I do not think that is what he had in mind.
I recognise that the noble Baroness, Lady Turner of Camden, is motivated by the most benevolent sentiments in introducing this Bill—which is why I am all the more sorry that I have to knock a few holes in it. To avoid misunderstanding, I had better set out my own philosophy, so to speak, on the matter.
Long before it became fashionable—indeed, when it was distinctly unfashionable and considered positively shocking—I opposed the continued criminalisation of private behaviour between consenting adults, and spoke and voted accordingly. More than that, I consider that the existing criminal law is still too illiberal in some
392
respects. For example, it was quite wrong to send consenting males to prison for hammering nails into one another, utterly nauseating in a literal sense though the thought of that is; or, for example, to impose a sentence of life imprisonment for bestiality. Moreover, I believe that the legal treatment of people in this country who have had successful sex change operations is still unnecessarily harsh. Why should they not be able to alter their records? However, that said, I believe it is quite wrong to go to the other extreme and force people by law to welcome with open arms behaviour that they find repugnant.
Partial support for this widely held point of view comes from a surprising quarter. Three or four years ago, a very well known and respected political commentator, a witty and intelligent man, a former Conservative MP who, since retiring from Parliament, has made no secret of his homosexuality, told me and the small group of people I was with that, whereas he had previously been wholly libertarian on sexual matters, as one might expect, he had latterly swung round to believing that quite a few forms of sexual behaviour were so repugnant to the man and woman in the street that they should not be condoned, let alone encouraged, even—and this is rather a surprising point—if they were carried out in private. He went on to quote John Donne about no man being an island entire of himself, and so forth.
Surely, so much depends on whether this Bill covers only involuntary characteristics—notably in this case homosexual orientation—thereby putting it on a par with sex, race, national origin and so on; or whether it extends to cover voluntary behaviour—namely, homosexual activity—thereby putting it on a par with religion, political belief, philosophy, hairstyle, dress, lifestyle generally, and so on. Discrimination against none of that is illegal on the UK mainland at present.
If the Bill is confined to the former—that is to say, the homosexual orientation—I suppose that it is relatively harmless, although one cannot help wondering why the Labour Party evidently thinks that discrimination against homosexuals is more heinous than discrimination against people over the age of 50 or even 40, which is a much more widespread problem; or indeed discrimination on the grounds of physical appearance. It has been established in survey after survey that goodlooking women and to a less extent goodlooking men have a much greater chance of obtaining employment and being promoted once they have obtained employment than their plainer brethren. Yet such discrimination remains legal unless the person it affects happens to belong to a minority ethnic group.
If, on the other hand, the Bill extends to homosexual behaviour, as to some extent it must do because there are bound to be grey areas, why is only that form of voluntary behaviour to be protected by law, unlike, for instance, the practice of religion or political opinion, and so forth? After all, the Church of England—I regret that no right reverend Prelate is in the Chamber to give an opinion on this matter—makes a clear distinction between homosexual orientation and what I believe it calls homosexual genital behaviour. The first is deemed to be acceptable, which is understandable; the second is

393
not acceptable. Indeed, it is considered to be a sin. Other Christian Churches as well as Judaism and Islam take much the same line, at least officially.
Probably most people nowadays are largely agnostic—one has to be realistic about the matter—and do not consider it a sin. Nevertheless, they find it distasteful when it is flaunted in front of their noses, whether it be at first hand or even second hand. If people with unusual sexual tastes behave in a low key, discreet manner—as they used to do 20 or 25 years ago—there should be no problem. But if people boast of their orgies in San Francisco-style bathhouses or possibly are convicted for indecent behaviour in public lavatories, they should not be surprised if other people prefer not to employ them or to work alongside them. If those other people do not mind, all well and good; but if they do mind, and I suspect that most people do, their freedom of choice and non-association should not be overridden.
Apart from the question of whether the word "orientation" includes behaviour, some of the drafting is rather curious. I suggest, first, that the word "lesbian" is a tautology; "homosexual" embraces lesbian. The fact that the general public may be etymologically confused is no excuse for Parliament to follow suit. Secondly, can there really be such a thing as "bisexual orientation"? Surely, the whole point about bisexuals, whether they be the cynical sensualists depicted in Simon Raven's novels or people in prison or stationed on some remote outpost, is that on the whole they prefer one sex, but if that sex is not available, they will happily have sexual relations with the other, faute de mieux; in other words, there is no hard and fast orientation.
Clause 6 refers to equal pay. I suppose there is no great harm in that but I wonder whether there has ever been a recorded instance of a homosexual receiving less pay than a heterosexual for doing precisely the same job. It is not a terribly important point but it would be interesting to know.
In view of Section 38 of the 1975 Sex Discrimination Act, are advertisements included? Will it be a criminal offence to imply in an advertisement that one would prefer on the whole the heterosexual applicant? It seems probable under the Bill as it stands.
We all know about the outrageous case in the north of England which involved somebody being awarded !29,000 for being called by his workmates an "Irish pratt" on a couple of occasions. Will someone, for example, called a "lesbian pratt" be eligible for similar, preposterously high damages?
Does the Bill extend to those working in private households—for example, au pair girls or housekeepers, and indeed gardeners and chauffeurs living in cottages in the grounds, if there are children of the household about? I suggest that there would be enormous resistance to this Bill if that were proved to be the case.
Finally, would it be the Labour Party's intention when it comes to power to build upon and extend this Bill so that it applied, for example, to private lettings, as I believe the sex discrimination Bill as a whole does? In other words, will people posted for a year or two to
394
Nigeria, the Gulf or New York be forced against their will to let their houses to homosexual couples, trios or quartets? Once again, I suggest that if that were so it would meet with enormous resistance. But that is not on the cards tonight.
To sum up, very few people nowadays, thankfully, want to go back to the bad old days when adults could be fined or imprisoned because of sexual activity carried on in private and with their consent. I also believe—and in this I join with noble Lords who have already spoken—that anyone, whatever their sexual proclivity, who behaves with discretion and dignity ought not to be penalised when seeking employment. I suggest that probably they are not very often penalised. The ones who do find themselves at a disadvantage are those who flaunt their orientation openly. It is wrong to put in the dock employers or partners in professional firms who want to exercise their choice either against people who behave in what they consider to be an outrageous fashion or in favour, for example, of a married man or woman.
Perhaps I may point out that unless the words "sexual orientation" are to be interpreted very narrowly in this Bill in order to exclude sexual behaviour, it will be inconsistent with all the previous anti-discrimination legislation to date in that for the first time it will embrace optional behaviour as well as non-optional physical realities.
9.21 p.m.
Lord Rea: My Lords, I am rather tempted to follow the noble Lord, Lord Monson, through the rather murky areas which he has been treading, but I believe that would be wrong because most of his remarks were not directed actually to this Bill which deals with employment.
I intend only to detain your Lordships for a very few minutes. In fact, I have very little to add to the remarks that I made in the debate on 14th July last on Second Reading of my noble friend's first version of this Bill. The crux of the problem to my mind is whether legislation is necessary or whether the protection offered by the present legislation is sufficient.
I believe that the Stonewall survey and other evidence which has been cited by my noble friend—for example, from the National Association of Citizens Advice Bureaux—suggests that current legislation is not sufficient. There is a need to move further forward in the continuing campaign to make life tolerable for those who have the misfortune to have a different sexual orientation from the majority. I am talking of probably about 5 to 10 per cent. of the population of this country.
I am perfectly aware that there are many other countries where the position of gay and lesbian people is far worse than it is in the United Kingdom. Homosexual acts between men are deemed illegal, whether in private or in public, in at least 19 countries. In Iran the penal code allows for prison sentences, whipping, the chopping off of hands and feet, stoning and the sentence of death. We have come a long way from there.

395
Chris Smith MP, in a leaflet promoting the campaign called "War on Prejudice", which has been set up to help end the situation in the countries that I have described, says,
"I believe we are winning the battle for lesbian and gay human rights in the West. It has been a long and difficult struggle and we still have a long way to go, but we have made fundamental advances".
I repeat, that we still have a long way to go. My noble friend outlined the reasons why we still have a long way to go, as did the noble Earl, Lord Russell.
Other countries have passed similar legislation to the Bill now before us and for the same reasons. Those countries include New Zealand, Denmark, Finland, France, Ireland and the Netherlands. Why should not Britain follow those eminently civilised countries and enact this extremely simple and fair piece of legislation? I support the Bill and hope that the House will give it a Second Reading.
9.25 p.m.
Lord Henderson of Brompton: My Lords, I apologise for my unscripted and brief intervention. I intervene because the last time the noble Baroness introduced a Bill on this, I noticed on reading the debate that no mention had been made of the services. I have a relevant little tale to tell. Fifty-two years ago—that is quite a long time ago, but not back in the 17th century, I advise the noble Earl—I had the honour to command a platoon on active service. Two men in my platoon were obviously in love. I was, I suppose, the last person to notice, but it was drawn to my attention and I took no action—partly, be it noted, because everyone in my platoon was quite happy about the relationship, but also because we were just about to go into action. Both of those men behaved in a conspicuously brave manner in a particularly nasty night attack. But early in the morning when we were all cleaning our weapons, two other soldiers, whom I particularly trusted, committed self-inflicted wounds, one in the foot and the other in the trigger finger.
Perhaps I may ask the admirals, generals and air marshals which two of those four men presented a graver risk to good order and discipline. I am sure that the top brass would agree with me that the two who committed self-inflicted wounds were the ones who presented the gravest risk to good order and discipline. I am sure that the top brass would agree with my action of bundling them back to base as soon as possible before the infection could spread and there was a bad loss of morale. I am sure that the top brass must agree with me on that, and I wonder whether this little tale could be drawn to the attention of the top brass by the noble Lord who is to reply to the debate. I should be extremely grateful if he would do so.
9.28 p.m.
Lord Lester of Herne Hill: My Lords, I congratulate the noble Baroness, Lady Turner of Camden, on her initiative in introducing this Bill, which is well designed to combat an ancient and outmoded form of unfair discrimination against employees and potential employees because they are gay or lesbian in their
396
sexual orientation. I pay tribute to the moderate and effective way in which the noble Baroness presented the powerful case for the Bill.
The Bill does not seek to encourage any form of sexual activity or sexual preference whether for the same sex or the other sex; nor does the Bill concern sexual conduct as distinct from sexual orientation. The aim of the Bill, like the aims of the Sexual Discrimination, Race Relations, and Fair Employment Acts, is to achieve justice for a significant number of men and women who suffer hardship and detriment by being treated unfairly in their access to employment benefits. It seeks to use the civil law, so far as practicable, to ensure that an individual is treated on the basis of personal merit and is not subjected to adverse discriminatory treatment unfairly in relation to employment, except where a particular sexual orientation is a genuine occupational qualification for the job.
Contrary to what has been suggested, and I believe misunderstood, by the noble Lord, Lord Monson, the Bill does not forbid treating someone adversely because of his or her sexual conduct rather than because of sexual orientation, whether real or supposed. Nor does the Bill make unlawful many issues of sexuality or sexual freedom which do not involve discrimination on the ground of sexual orientation.
The basic principle on which the Bill is based is well recognised: an individual is entitled to the equal protection of the law and to be treated on the basis of his or her individual merit without unfair discrimination. That fundamental principle is universally recognised in international human rights law by which this country is bound. It is also part of the great heritage of our common law. We have enshrined that fundamental principle of equality in the statute book in relation to gender discrimination, race discrimination and, in fair employment legislation in Northern Ireland, religious and political discrimination. That is a form of what the noble Lord, Lord Monson, has described as optional behaviour, since one can choose one's religious belief or one's political opinion, but in Northern Ireland to treat someone worse as a result is unlawful.
I agree entirely with the noble Baroness, Lady Turner, and other noble Lords that we should do the same for unfair and invidious sexual orientation discrimination. The only possible legal protection under existing British law is the remedy for unfair dismissal under the employment protection legislation. But the prospects of success under this law are very poor. As the noble Baroness has indicated, most industrial tribunals, led by the Employment Appeal Tribunal, have readily upheld the fairness of dismissal of gay or lesbian employees as having been for a "substantial reason". In the absence of statutory protection, a gay or lesbian applicant or employee has, either furtively or deceptively, to conceal his or her sexual orientation, and to live in fear that it will be revealed, or rely upon a voluntary equal opportunities policy. I am happy to say that that policy is in force in many local authorities, trade unions and the Bar Council, but not with many other public sector and private employers.

397
Your Lordships will know that many employers and employees have traditionally been hostile, sometimes very hostile, to gay and lesbian employees. I am sorry to say that one of the worst is the employer referred to by the noble Lord, Lord Henderson of Brompton, who gave a moving and instructive anecdote from his experience. I refer to the Armed Forces, whose policy until 1992 prohibited their recruitment and required that at least they should be administratively discharged, if not court-martialled, imprisoned and dismissed with disgrace.
In July 1991 the Prime Minister announced that neither homosexual orientation nor private homosexual activity should any longer preclude appointment even to sensitive posts in the home civil service and diplomatic service. The noble and learned Lord the Lord Chancellor has made similar announcements in relation to judicial office. These are very welcome reforms. But the Government have emphasised that homosexual activity remains incompatible with military service and that those who engage in it must expect to be discharged. To the Government's credit, the automatic ban in the senior civil service has been lifted, but unfortunately the automatic and complete ban in the Armed Forces has been steadfastly maintained.
The Master of the Rolls, Sir Thomas Bingham, pointed out in recent judicial review proceedings that under the Ministry of Defence's ban,
"proof of homosexual activity is not needed.
A reliable admission of homosexual orientation is enough. Where homosexual orientation or activity is clear, the service authorities give themselves no choice but to discharge the member involved without regard to the member's service record or character or the consequences of discharge to the member personally".
No matter that the lives and livelihoods of the victims of a rigid and unjust policy are grossly disrupted; nor that they are loyal and efficient, with exemplary service records; nor that they have committed no homosexual acts and made no homosexual advances on the mess deck or in the barrack room. Once their sexual orientation is avowed or established, they must be banned.
I am firmly opposed to using legislation to enforce private morality, but discrimination against gay people is not just a matter of private morality. It is divisive and unfair in a manner which quite transcends personal tastes and prejudices. Sexual orientation discrimination opens covert gay and lesbian employees to blackmail, wastes the talents of very able men and women and creates much unnecessary distress. So far as concerns the Armed Forces, that case will surely go the European Court of Human Rights.
I agree with the advice apparently given to the Government by their legal advisers that the European Court will probably rule against that discriminatory policy, once more coming to the rescue of what are or should be British constitutional rights, by finding that the present policy is in breach of the fundamental right to respect for personal privacy without discrimination. The ministry will then have to abandon its present policy to comply with the European rule of law. I find
398
it regrettable that the ministry will not make any change without being commanded to do so by the European Court.
I shall not take up the time of the House by referring to the bleak and dispiriting assessment published this week by the ministry. It describes a situation in the Armed Forces which is dispiriting for anyone who seeks to combat prejudice. The publicity surrounding the publication of a squalid report, and the statements made in support of it, contain no regret at the prevalence of such hostile attitudes. They suggest no positive measures to combat those prejudices in the Armed Forces. That is a regrettable feature, because surely this is an area in which firm and courageous leadership is called for.
Employment in the Armed Forces is not covered by the Bill as it stands, which deals with ordinary employment. The unjust situation in the Armed Forces and the Government's apparent approval of that unjust situation or of the ban are a vivid example of the need for effective measures to combat this form of discrimination.
What can legislation hope to accomplish in dealing with such a complex social problem, whether in ordinary employment or elsewhere? The answer was well expressed by the late Lord Bonham-Carter, my noble and much missed friend, writing a generation ago in the first report of the Race Relations Board. He said:
"A law is an unequivocal declaration of public policy. A law gives support to those who do not wish to discriminate, but who feel compelled to do so by social pressure. A law gives protection and redress to minority groups. A law thus provides for the peaceful and orderly adjustment of grievances and the relief of tensions".
And, finally:
"A law reduces prejudice by discouraging the behaviour in which prejudice finds expression".
The way in which a society treats unpopular minorities is a litmus test of the extent of its civilisation. Of course the law can affect behaviour. The time is surely over-ripe to legislate, using the civil law to combat unfair sexual orientation discrimination, as Parliament has done already in relation to discrimination on grounds of sex, marriage, race, religious belief or political opinion.
The unelected Upper House, your Lordships' House, has, I believe, a fine record as a watchdog, promoting cultural liberty and protecting minorities against the tyranny of prejudiced and ill-informed majorities. It was this House which a quarter of a century ago gave a spur to the campaign for the legislation against sex discrimination. I very much hope that the House will give this Bill a Second Reading tonight as a further step in the long march towards genuine equality of treatment and respect for private life.
9.40 p.m.
Lord McCarthy: My Lords, we on this side of the House thank the noble Baroness for introducing the Bill for a second time and we hope that it will make better progress. We do not say that the Bill is incapable of improvement by amendment. If that is the Government's view let them say so. My view is that in an ideal world

399
the subject of the Bill would be part of a general review of key standards at work. They range wide across what should be the individual rights of workers against employers.
Perhaps I may say in answer to the noble Lord, Lord Monson, that the central issue behind such a review would be to try to create a situation in which people are employed, promoted, deployed and possibly dismissed on grounds which are related to their individual conduct and capacity in the job and not to a whole range of irrelevant considerations such as sex, race or sexual orientation.
Lord Monson: My Lords, does the noble Lord agree that that ought to apply to age too? Why has not the Labour Party given age discrimination greater priority?
Lord McCarthy: My Lords, it may well be that it will. I am putting forward my position and in a sense it is also that of the party. I believe that at this stage we require a review of our discrimination laws. What we want to see, and what is reasonable to insist upon, is that the appointment, promotion progression and dismissal of people is related to the things they do, the way in which they perform and whether there is work for them to do. It should not depend on a whole range of totally irrelevant considerations, of which this is one.
That may not be the way in which the matter is dealt with. It may be that the Government will accept this Bill. Perhaps they will not accept the Bill. But as was said by the noble Lord, Lord Lester, cases in the pipeline may go before the European Court of Justice because the Government will not first give up. They will then find that everything is against European laws and regulations and the Government will have to accept the Bill in any event. They will have to accept the provisions not just within the compass of this Bill but also in the case of the armed services.
I wish to go through what I take to be the objections to the Bill as it is drafted. During the Second Reading of the previous Bill, those objections were put forward by the noble Baroness, Lady Miller of Hendon. She appeared to have five arguments and I hope that we shall not hear those arguments from the Minister tonight. I hope that he has some new ones.
The noble Baroness, Lady Turner, cited the quotations from the Second Reading debate. The first argument was that although the Government are against discrimination on grounds of sexual orientation, they do not believe in legislation. They do not believe in legislation because they feel that there are insufficient cases or that there is an insufficient incidence of this problem. I should have thought that my noble friend Lady Turner has dealt with that in the examples she has given.
It is remarkable that the evidence shows that people do not agree with the Government that there is a kind of dichotomy between trying to deal with sexual orientation by education and setting an example and doing it by law. People would like the matter dealt with in both ways. As was the case in relation to sex and race discrimination—and we hope in relation to disability discrimination—they believe that the existence of a law,
400
as has been suggested by the noble Lord, Lord Lester of Herne Hill, actually makes people more likely to accept encouragement and leadership because the law is saying what society believes to be right.
Therefore, it is not a question, as was suggested by the noble Baroness, Lady Miller, that you either have education and promotion by example or you have law, and if you have law, you move against encouragement and setting an example. On the contrary, the law assists in that regard. That is what we say and we want to know what the Government say.
Secondly—and this has been dealt with in the debate but I should like to say a few words about it—the noble Baroness, Lady Miller, seemed to say that not only do we not need law and that it is inappropriate to have law but we have law already; that we have, for example, the Employment Protection (Consolidation) Act which deals with the problem. This debate has shown that it does not deal with the problem: first, because of the two-year rule; and secondly, because there have been many cases where tribunals have not accepted sexual orientation as a ground for unfair dismissal. Secondly the noble Baroness said that we have sex discrimination legislation because we have the Sex Discrimination Act which does not ban homosexuals as a group from coming before the tribunals. Of course it does not but it does not, give them protection. Therefore, that is not an argument.
Thirdly, the most bizarre argument was put forward which I hope we shall not hear this evening. The noble Baroness said:
"Perhaps it would also be helpful to draw your Lordships' attention to the recently enacted Section 154 of the Criminal Justice and Public Order Act 1994, which makes it a criminal offence to cause intentional harassment. That was specifically introduced to penalise those who cause others alarm or distress through using threatening, abusive or insulting words, behaviour or displays, in particular when the behaviour is persistent in nature. We see no reason in principle why anyone who suffers intentional harassment in any of those ways cannot bring themselves within the protection of Section 154".—[Official Report, 14/7/95; col. 2017.]
The Government know very well that that is a criminal Act and that prosecutions must be brought by the police. That Act is all about public order and is nothing to do with the kind of harassment which happens inside dwellings.
Section 154 does not apply to behaviour in dwellings. Section 154(2) of the Act states:
"An offence under this section may be committed in a public or a private place, except that no offence is committed where the words or behaviour are used… or other visible representation is displayed, by a person inside a dwelling and the person who is harassed, alarmed or distressed is also inside that or another dwelling".
It is an outdoor, criminal Act which has nothing whatever to do with harassment at work for sexual orientation. I hope that we shall not hear that argument from the Minister this evening.
Previously, the Government said that what we are suggesting would be a bridge too far; that it would be a form of coercion in society; and that that protection of a particular lifestyle would lead to many other lifestyles bringing their own position forward and asking for legislation. It was said:

401
"The noble Baroness also invites the House to accept the proposition that specific legislation is necessary to protect the interests of this group who follow a particular sexual orientation and lifestyle. Were one to accept this principle, then one sends a signal to every group, however small and however narrow or partisan their cause, that they, too, could become candidates for specific legal protection".—[Official Report, 14/7/95; col. 2019.]
I repeat:
"every group, however small and however narrow or partisan their cause".
That presumably is what the Government actually believe sexual orientation is all about: that they are the protestations of a small, narrow or partisan group. That is nonsense. It is a perfectly natural feeling, a natural reaction held by millions of our citizens. The Government do not tell us what these small, partisan and narrow groups are. If they were small, narrow and partisan, I do not see why they should be dismissed for that.
We are saying that people should be promoted, dismissed and appointed on grounds of their personal capacity even if they are small, narrow or partisan.
We do not believe that any of those arguments stand. I come, therefore, to the argument of the Government: the final (what I call) the little England objection. The noble Baroness, Lady Miller, said, referring to my noble friend Lady Turner:
"The noble Baroness's contention is that the UK is out of step with standards applied elsewhere".—[Official Report, 14/7/95; col. 2017.]
We say that,
"As a result the United Kingdom is less civilised in its approach than our EU partners and the approach advocated by the European Commission".
We do not quite say that,
"If I understand correctly, the argument is that standardisation of treatment between countries of different social backgrounds and traditions is a sensible policy objective".
Of course, we do not say that. What we say is that there are a number of countries—they were mentioned by the noble Lord, Lord Rea, in his speech—where such a policy seems to work reasonably enough. The Government do not tell us that in those countries it does not work or it has counter-productive effects. Perhaps the Government should look at those countries and see whether they can learn from them. The noble Baroness said:
"The Government do not find that argument convincing. Just because people drive on the right on the Continent does not mean that United Kingdom drivers should do so".—[Official Report; 14/7/95; col. 2020.]
No one suggests that the issue has anything to do with that.
We say that this is a reasonable proposal that the Government may have to come to sooner or later—and if it is later it will cost much more than if it is sooner. The central principle behind this is that the engagement, promotion and dismissal of people should be related to their capacity, conduct and availability of work. That is why we support the Second Reading of the Bill.
9.52 p.m.
Lord Henley: My Lords, I was fascinated, as always, by what my noble kinsman Lord Russell said about what happened in the 17th century and habits then. We could no doubt talk about the 16th, 15th or 14th centuries, or for that matter any other century that we wish to. However, for once in this House we are talking about the 20th century and, I suspect, the 21st century. I do not intend to follow my noble kinsman on this occasion. Nor—I do not suppose that it will surprise the noble Lord, Lord McCarthy—do I intend to follow his opening remarks into a general debate on employment law. He tells us that Labour will address these matters in due course. Labour will address ageism. No doubt it will address sizeism. No doubt it will address beardism to protect his noble friend Lord Monkswell. I do not believe that that is the right way forward.
Last year my noble friend Lady Miller responded on behalf of the Government to points put forward by the noble Baroness, Lady Turner, in her original Bill. Perhaps we might call it Mark I. We are covering more or less the same ground today, although I appreciate that the Bill is marginally different and there have been a number of drafting changes to it. Nevertheless, we have gone over the same ground.
What I say to the noble Baroness, Lady Turner, and to the noble Lord, Lord McCarthy, despite having heard his wonderful oratory, is that our position has not changed in the eight months since then. We oppose unjustified discrimination against any person on grounds of their sex, sexual orientation, race, colour, ethnic origin or for that matter beards or any other reason, irrespective of where that discrimination occurs, be it at work or elsewhere. It is offensive to decent people everywhere and it is to be condemned. The Government's objective is to promote a fair and safe working environment by making it clear that unjustified discrimination is morally unacceptable and economically inefficient. We shall continue to urge employers to adopt employment practices which treat everyone equally by assessing people on merit against objective criteria and not on the basis of prejudice or stereotyping.
It is commonly assumed that homosexuals do not have any employment rights. I have to say that this is simply not the case. It may be helpful to repeat the words of my noble friend Lady Miller when she responded to the debate last year. She said that the Employment Protection (Consolidation) Act 1978 offers a comprehensive set of individual employment rights, regardless of sexual orientation"—despite what the noble Lord, Lord Lester of Herne Hill, had to say—including the right not to be unfairly dismissed and the right to a redundancy payment. Any employee who feels that their rights under this Act have been infringed can, subject to the two-year qualifying period—which the noble Lord, Lord McCarthy, mentioned as applying to all others—take their case to an industrial tribunal. Compensation up to the usual maximum of £11,000 is

403
available for those unfairly dismissed. That, I believe, is substantial protection. In addition, I would make the point—
Lord Lester of Herne Hill: My Lords, I am grateful to the Minister. I wonder whether he would agree, however, that what I said is correct; namely, that industrial tribunals habitually find that dismissal on grounds of sexual orientation constitutes a substantial reason for rendering the dismissal not unfair and therefore, although he is right in saying that there are theoretical rights available for gay and lesbian employees, those rights in practice are illusory.
Lord Henley: My Lords, I would put it to the noble Lord that he is a much more eminent lawyer than myself. He will understand that it is open to an industrial tribunal in the appropriate circumstances to say whether or not such and such a dismissal is fair. If, for example, an employee had been at a workplace for two years and the employer said, "I am sacking you because I know what your sexual proclivities are—out you go", I think in those circumstances (obviously the noble Lord and I cannot speculate on what the tribunal might decide) it would be open to that tribunal to say that that was unfair because it would be so obviously unreasonable. I do not know of any individual cases, but I think the noble Lord would find that would be the case. I give way to the noble Lord, Lord McCarthy.
Lord McCarthy: My Lords, can the Minister cite one single case where a tribunal has decided that way?
Lord Henley: My Lords, I would obviously be able to address that question if the noble Lord could find a case where such a blatant piece of discrimination had happened, and where the individual employee had had the protection of two years' employment and so on. Obviously in that case that would be a matter I would be prepared to look at. I was explaining what I thought was a point of law. I think it is something that a tribunal could address under the existing legislation as I understand it.
I hope I may go on. In addition, as I was about to say, I would make the point that it is often forgotten that the Sex Discrimination Act does not single out homosexuals as a group who are prohibited from bringing complaints. Complaints of sex discrimination can be made by any individual. The noble Baroness, in promoting this Bill, obviously maintains that legislation is the best way forward, in particular by extending the scope of the Sex Discrimination Act. To reinforce this she relies, as did the noble Lord, Lord Rea, on the evidence of Stonewall, the Less Equal than Others paper, and the Social and Community Planning Research which, if one believes it, suggests that discrimination against homosexuals is endemic. We question whether that is a reliable conclusion. One could just as easily conclude that the findings highlight the diversity of opinion about homosexuals and homosexuality.
Despite what has been said to me about NACAB—I think my noble kinsman will know what I think about some of the evidence put forward of an anecdotal nature
404
from NACAB in the past—no new evidence has been presented to support the contention of the noble Baroness that discrimination on grounds of sexual orientation is so widespread as to justify major primary legislation.
We then move on to the points raised by the noble Lords, Lord Rea and Lord McCarthy. They pointed to the experience of other countries where homosexuals have protection against discrimination on grounds of sexual orientation. They argued that the United Kingdom is out of step with standards applied elsewhere and that as a result we are less civilised in our approach than, for example, our EU partners and New Zealand, which the noble Lord, Lord Rea, mentioned. To use the very words used by my noble friend Lady Miller last year, I understand that the argument is that standardisation of treatment between countries of different social backgrounds and traditions is a sensible policy objective. I have to say to the noble Lord that I think that is absolute nonsense. Obviously we should respect one another's traditions.
Earl Russell: My Lords, I should be most grateful if the Minister could indicate one place where any of us indicated that standardisation per se was an objective.
Lord Henley: My Lords, I do not think that my noble kinsman listened to me. I referred to what my noble friend Lady Miller said last year. That was quoted to me by the noble Lord, Lord McCarthy. I do not agree with the argument that was put forward last year. I do not believe that standardisation is a necessary policy to pursue.
We believe that we should respect one another's traditions, but we do not believe that there is any necessity slavishly to follow what other countries do. If they wish to give homosexuals protection against employment discrimination that is a matter for them. Her Majesty's Government believe that, subject only to our various international obligations, the United Kingdom should decide for itself whether to legislate in this area. In this area there is no obligation under EC law. Even when M. Jacques Delors was President of the Commission he said that the Community have no powers to intervene in respect of possible discrimination against sexual minorities.
Lord Lester of Herne Hill: My Lords, I am grateful to the Minister for giving way. I agree that he is quite correct in saying that there is no European Community obligation in this area. That is because sex discrimination does not cover sexual orientation discrimination. However, does the Minister agree that the International Covenant on Civil and Political Rights, by which we are bound, contains in Article 2 and Article 26 a clear and unequivocal obligation upon the United Kingdom to introduce the necessary measures to ensure equality and equal protection before the law without any form of discrimination, and that there is a strong argument that we are in breach of that obligation, quite apart from the European human rights convention?
Lord Henley: My Lords, the first point I should like to pick up is that I was addressing the question of

405
whether the EC and the European Court of Justice had any position. I said the European Court of Justice, if the noble Lord, Lord McCarthy, would listen to me, which I do not think he is capable of doing. The noble Lord, Lord Lester, accepts that I am right on that point. The European Court of Justice would not have a place here.
As to the noble Lord's other point, it is arguable what would be the outcome if the matter went to the European Court of Human Rights. Certainly, Her Majesty's Government believe that our case is a sound one, and it is one that we would be prepared to defend robustly in such a court should the matter go so far.
I shall not take any other interventions. I shall move on to the question raised by the noble Lord, Lord Henderson, about homosexuality in the Armed Forces. That is a point that was raised by other noble Lords. I have the greatest respect for the noble Lord, Lord Henderson. He and I are fellow Cumbrians. I first arrived in this House when the noble Lord was Clerk of the Parliaments. I also respect his knowledge of these matters from his wartime experience. I speak as one who had the honour to serve in the Ministry of Defence and has the greatest respect for those who serve in the Armed Forces, the Chiefs of Staff and all in the Ministry who advised us as Ministers. However, the position in relation to the Armed Forces is very different from that in the Civil Service, the diplomatic corps or, dare I say it, anywhere else. It remains our view that homosexuality is incompatible with the special conditions of service life. The conditions of military life, both on operations and in the service environment, are quite different from those in civilian life. To meet the demands of military operations service personnel must work together as a close-knit and effective team. They may be required to live in close physical proximity, often in single sex shared accommodation where personal privacy is extremely limited and to work under conditions of considerable stress. I believe that the need, therefore, for absolute trust and confidence between all ranks is essential.
The policy which was questioned in the courts only last year has been found lawful by both the High Court and the Court of Appeal. It is not the result of a moral judgment but rather of a practical assessment of the effect of homosexuality on military life. I have to say that we will continue robustly to defend that policy.
The Government seriously question whether legislation as suggested by the noble Baroness is always the most effective way to overcome entrenched prejudice. Again I have no qualms about quoting what my noble friend Lady Miller said last year. Protecting the interests of one particular group through legislation would lead,
"every group, however small, and however narrow or partisan their cause [to conclude] that they, too [were entitled to] specific legal protection".—[Official Report, 147/95; col. 2019.]
I do not believe that that is practical or sensible. Legislation amounts to a form of coercion to conform. It would add yet another Act to an already over-regulated society. I also believe that it would not be publicly acceptable, given the strong emotions that homosexuality can generate. Strong and compelling
406
evidence from those making the case is necessary to demonstrate that a substantial problem exists. We believe that that evidence is lacking. The Government prefer instead to overcome prejudice by persuasion, by explaining that all of us have a duty and a responsibility to examine our consciences and to ensure that in our everyday dealings with one another we act fairly and put aside the race, sex, disability or sexual orientation of our fellow citizens. All of us individually share a responsibility to treat others as we would wish to be treated and to speak out against discrimination, wherever and whenever it appears.
I believe that this evening we have done justice to the debate on discrimination on grounds of sexual orientation. It has been interesting and informative. Not unexpectedly, the views expressed are much in line with those expressed in what noble Lords had to say last July. However, again I have to say that our position is quite clear. We deplore unjustified discrimination. We will continue to send out the message that it is morally unacceptable, uneconomic and inefficient. Homosexuals will be treated differently only when each individual overcomes his or her prejudice and treats others with due respect. Specific legislation to outlaw such discrimination is not the best way to make a change, nor, given prevailing public opinion, would it command the degree of public support necessary to be acceptable.
I will not, in the usual manner, oppose the Second Reading of the Bill, but Her Majesty's Government cannot give their support to it.
Lord Henderson of Brompton: My Lords, before the noble Lord sits down, I asked him specifically whether he would kindly refer my anecdote to the top brass in Whitehall.
Lord Henley: My Lords, I apologise. Obviously I shall pass it on to my colleagues in the Ministry of Defence and they will ensure that it is passed on to the appropriate authorities there. I give my noble friend (if I may call him so) my assurance of that.
10.9 p.m.
Baroness Turner of Camden: My Lords, I thank noble Lords who have contributed to the interesting debate this evening. I am glad to say that in the main the speeches made in the debate have mostly been supportive of the Bill. I am grateful to noble Lords who contributed their considerable expertise to the debate. Not unsurprisingly, I suppose, my views remain as they were when I first introduced the Bill this evening. I am grateful to the Minister for once again reiterating the Government's view that they are against discrimination and they believe that it should be opposed by all people of goodwill. Apparently they believe, as they did last time round, that persuasion is enough to accomplish what we all want.
I do not believe that. As I said earlier when I introduced the Bill, it is my belief that the law can change behaviour. We have had to have legislation in the past to do away with discrimination on other grounds: of disability, gender and race. There is no reason why we should not add another piece of

407
legislation to that which we have already, designed to prevent discrimination against vulnerable people. And of course we are talking about people who are extremely vulnerable.
As to the remarks of the noble Lord, Lord Monson, I agree with my noble friend Lord Rea that most of what he said did not really affect this Bill. It is essentially an employment Bill. It is about discrimination in employment against people because of sexual orientation. We have made that absolutely clear. All those who spoke in support of the Bill acknowledged that.
And that is the situation in regard to the Armed Forces. My own position on the Armed Forces is quite clear: I am opposed to discrimination and I am opposed to the Government's recent pronouncements in that regard. But that matter is being dealt with through the European Court of Human Rights. There is every possibility, or so I am informed, that the issue may be raised in the other place as a result of an amendment to the Armed Forces Bill. So there will no doubt be an opportunity to discuss it.
I share the views expressed by the noble Lord, Lord Henderson, in regard to the Armed Forces. During the war, quite obviously there must have been people of homosexual orientation in the services, as a result of
408
conscription. Quite clearly there were homosexuals who were extremely brave. Certainly I remember my late husband, who was himself a war hero, telling me that one of the pilots in his squadron had been homosexual—an extraordinarily brave man, who was shot down and killed. My husband had every respect for him and for the fact that though he was homosexual and different from the others, nevertheless everybody worked together because they were conscious of the common danger. I really do find the Government's attitude in these matters quite unacceptable.
However, as I said earlier, this is an employment Bill. It is concerned with public and private employment. The issue of the Armed Forces will no doubt be with us again, either as a result of moves being made in another place or as a result of a reference to the European Court of Human Rights.
I have very little further to say, except that I wish to pursue this Bill. Again I thank those who participated in this interesting and extremely supportive debate. I simply ask the House to give my Bill a Second Reading. I commend it to the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.
House adjourned at thirteen minutes past ten o'clock.