Lords Sitting of 13 March 1996

Preamble
The House met at half-past two of the clock: The CHAIRMAN OF COMMITIEES on the Woolsack.
Prayers—Read by the Lord Bishop of Ripon.

Overseas Aid
Lord Rea Lord Rea asked Her Majesty's Government:
How much of their overseas aid budget is currently spent on debt reduction.
Lord Chesham: My Lords, in the financial year 1994–95 £3.1 million of the aid programme was spent on the cancellation of aid debt. Exceptionally, in 1994–95, £25 million of British programme aid to Zambia was earmarked to help Zambia service its multilateral debt.
Lord Rea: My Lords, I thank the noble Lord for that Answer and acknowledge that only a small part of our bilateral aid programme is directly spent to service or repay debt. Is he aware that a large part of development assistance is used to buttress and restore the economies of the recipient nations so that they are in a position to service their debt, for instance, to the World Bank or the International Monetary Fund who require their credits to be serviced before offering further assistance? Does the Minister realise that, according to a recent study, over half of bilateral aid now to sub-Saharan Africa goes indirectly in that way back into the hands of creditors rather than being used for genuine development and poverty reduction?
Lord Chesham: My Lords, indeed a considerable amount of money goes in that way. The reason is that these countries need to be able to service their debt if they are to continue borrowing from these institutions. If donors had not provided the money, for example, to Zambia, budgetary constraints would probably have meant that government funding for the social sectors would have had to be cut back.
Lord Redesdale: My Lords, can the noble Lord give an indication as to why there are no set figures agreed between the Government and the NGOs over the level of the budget of the Overseas Development Administration which is spent on debt relief?
Lord Chesham: My Lords, debt relief is not generally part of the budget of the ODA but something which comes from other areas. Therefore debt relief and the NGOs have no relation to the ODA budget.
Lord Moyne: My Lords, can the Minister say whether it is the case that the real value of third world debt automatically reduces in line with world inflation?
Lord Chesham: My Lords, yes, of course it does. But it can happen that their inflation rates are considerably higher than the currencies in which the debts have to be serviced.
Lord Judd: My Lords, does the noble Lord agree that this is really a very grave matter and that globally
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as much as £3 billion a year may be diverted from bilateral aid programmes intended for development to pay off debt to multilateral institutions like the World Bank and the IMF? Can he assure the House that at the World Bank—IMF meetings in April Britain will give a lead in mobilising new and additional funds from multilateral sources such as World Bank resources themselves, the IMF gold stocks, or a new issue of special drawing rights, so that the multilateral institutions begin to play their part in the crucial fight against the burden of debt?
Lord Chesham: My Lords, yes. The British Government have consistently pressed for action on multilateral debt. At last year's annual meetings of the IMF and the World Bank, my right honourable friend the Chancellor called on all the international financial institutions to examine further measures to deal with the problems of multilateral debt for the poorest and most indebted countries. That work is currently under way. We expect firm proposals at the spring 1996 meetings of the World Bank and the IMF in April.
Lord Rea: My Lords, is it true that the Chancellor of the Exchequer, Mr. Kenneth Clarke, actually advocated at a meeting with the International Monetary Fund that it should use some of its gold reserves to help towards reducing the outstanding debt, particularly of the most indebted countries?
Lord Chesham: My Lords, that is one suggestion that has been made. As I said, the work on this matter is currently under way. We expect firm proposals in April of this year.

Sheep Dips: 1952 Scab Eradication Programme
2.42 p.m.
The Countess of Mar The Countess of Mar asked Her Majesty's Government:
What were the active ingredients in the sheep dips used at the time sheep scab was eradicated in 1952.
Lord Lucas: My Lords, the annual report of the Animal Health Services in Great Britain shows that at the end of 1952, 216 dips were approved by the Ministry for use when sheep were required to be dipped to treat sheep scab. Of these, 95 were of the tar acid class, 54 arsenical, one lime and sulphur, one soda sulphide and 65 benzene-hexachloride.
The Countess of Mar: My Lords, I thank the noble Lord for that Answer. Is it not an indication that sheep scab can be controlled with the very much more potent chemicals that we have now? Was not a major factor in the control of sheep scab in the 1950s the policing of the dipping to make sure that every single sheep was dipped, and we then got rid of scab? Is it not the case now that the incidence of scab is increasing rapidly? Have the Government costed the effectiveness of having

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a supervised double dip, with every sheep being brought in from the hills, and of humanely shooting any sheep that cannot be brought in for some reason or another?
Lord Lucas: My Lords, one of the difficulties that we face is that the dipping compounds that we now use are not so effective as those that we had in the 1950s. Benzene-hexachloride, otherwise known as Lindane, its active constituent, was extremely effective, extremely long-lasting and generally nasty to people and the environment. Although organophosphorus compounds are good, they are not so effective and are much more liable to lead to problems such as becoming too dilute in the dip and, as a result, mites escape. That resulted in a long campaign of compulsory dipping which failed to eliminate sheep scab or to get us to the same position as we had achieved 20 or 30 years earlier. At the end of that, we concluded that there was no point in continuing compulsory dipping because it was not achieving the objective that it had set out to achieve. If we were to attempt to embark on the sort of campaign which the noble Countess suggests, of having every sheep in the country dipped on one single day, our back-of-the-envelope calculations suggest that that would cost about £15 million. On the other hand, it would take only one farmer somewhere to misbehave and the whole exercise would not have been worth while.
Lord Carter: My Lords, is the Minister aware that, according to the very latest information, 11,464 shepherds and flockmasters have certificates of competence in sheep dipping although there are some 56,000 shepherds and flockmasters in the United Kingdom? What are the Government doing about the 45,000 who are presumably using these dangerous chemicals without the proper protection?
Lord Lucas: My Lords, I sincerely hope that they are not using those chemicals without the proper protection. There has been a great deal of publicity about the protection that should be used—not least because of the efforts of the noble Countess and her colleagues. The noble Lord is right about the number of certificates in issue. He always knows things ahead of me—
Baroness Hollis of Heigham: True!
Lord Lucas: My Lords, the Veterinary Products Committee is reviewing the effectiveness of the scheme and while it is doing so I do not want to comment one way or the other as to how satisfied we might be with it.
Lord Carter: My Lords, I have to come clean. I received that figure from the Minister about five minutes ago.
Viscount Mersey: My Lords, is it not now possible to develop a type of sheep which is entirely resistant to scab, by cloning?
Lord Lucas: My Lords, we would have to call it a "New Labour" sheep.
The Countess of Mar: My Lords, may I ask the noble Lord to ask the Government to reconsider my
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proposition? I was not asking for all sheep to be dipped on one day because the products that are available at the moment—incidentally, some take the form of injections—are effective for at least a fortnight. The dipping could be spread over that period and could be carried out area by area, with the sheep being confined to those areas concerned for the period during which the dipping is carried out. This is a serious matter—I am concerned about sheep welfare as well as human welfare—and many sheep are suffering because of the increase in sheep scab and the failure of some farmers to dip. Only some farmers do not dip properly. It is certainly not true of them all.
Lord Lucas: My Lords, if there emerged in the community of sheep farmers a wish for that to be done and a determination to eliminate sheep scab, which we do not see or sense at the moment, we would take seriously the suggestion of the noble Countess. We feel that at the moment any such programme would be more than likely to fail and would turn out to have been a waste of effort and resources.
Lord Mackie of Benshie: My Lords, is it not the case that there are no longer country policemen in the parishes to supervise any such programme?
Lord Lucas: My Lords, I am sure that we could find people to supervise the programme if we set out to do that. At the moment, country policemen have better things to do.

Cuba: US Embargo
2.48 p.m.
Viscount Montgomery of Alamein Viscount Montgomery of Alamein asked Her Majesty's Government:
Whether they support the trade restrictions against Cuba announced by the United States following the recent incident in the Gulf of Florida.
Baroness Miller of Hendon: My Lord, the US embargo on Cuba is a bilateral matter between the states involved. We are, however, deeply concerned about the latest US legislation, which contains extra-territorial powers which seek to impose US law on UK companies. We shall be examining the legislation carefully to determine the appropriate response.
Viscount Montgomery of Alamein: My Lords, I accept that the decision is entirely bilateral. However, is my noble friend aware that the implementation of the Helms-Burton Act would be extremely damaging not only to British Companies, but to many other international companies, at a time when trade and investment opportunities in Cuba look extremely encouraging? Furthermore, is my noble friend aware that the extra-territorial provisions in that Act are such that they must be entirely contrary to the spirit, if not the letter, of GATT which is at present being implemented by the World Trade Organisation? If so, are we making appropriate representations?
Baroness Miller of Hendon: My Lords, we agree with my noble friend that this is a serious matter and may very well be contrary to the principles of free trade. We are studying the legislation carefully with our European partners to determine its compatibility with the United States' international obligations under GATT and other international agreements.
Lord Merlyn-Rees: My Lords, will the Government arrange to discuss this matter also with our fellow Commonwealth member, Canada, and not just with the European countries? Canada has a different view on this matter and has expressed it. It might be a good idea to have a word with Canada.
Baroness Miller of Hendon: My Lords, we have already been in touch with Canada.
Lord Ezra: My Lords, although this action was bilateral, as the noble Baroness explained, it has wider implications, which she also explained. In view of that, did the US Government have contact with other countries such as our own before they took this action?
Baroness Miller of Hendon: My Lords, I am afraid that I have no information as to whether the United States was in contact with us before it took the action that it did. We have certainly been in contact with it since, as have many of our other partners.
Baroness Young: My Lords, while I welcome my noble friend's response to the Question, can she say anything about what would be the reaction of Her Majesty's Government if UK companies were taken to court by the Cuban Americans in the next few days? I ask in my capacity as chairman of the Cuba Initiative which seeks to promote trade between Britain and Cuba.
Baroness Miller of Hendon: My Lords, parts of the US legislation dealing with trafficking in expropriated property do not come into force until 1st August. No action can therefore be taken in the US courts until that date. If the Cuban Americans wish to challenge the constitutionality of that delay, that is a matter for the US courts only.
Lord Kennet: My Lords, perhaps I may take the noble Baroness further into this matter. Since clearly the legislation signed by the President the other day is against international law, and in particular against the provisions generally administered by the WTO at the moment—incidentally, I cannot make out why the noble Baroness calls the legislation bilateral; there was never anything more unilateral in the world—is it necessary to wait until a British company is taken to court next time it sets foot on US soil? In view of the obvious, I am almost inclined to say, delinquency of the legislation, is it not possible to go to the WTO before that happens?
Baroness Miller of Hendon: My Lords, as I think I said, we have already made a series of these bilateral démarches and we have joined in European ones. As regards what we can do in the future, and what the noble Lord asked me, of course the Government will be
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making further diplomatic representations on the matter. But it is important that the full text of the legislation is examined carefully both here and in co-operation with our European partners in order to formulate the appropriate response. That takes some time and has to be done with care.
Baroness Hooper: My Lords, given that Canada and Mexico—I appreciate that reference to Canada has already been made—as members of the NAFTA, have signalled their intention to bring legal action against the US under the NAFTA, can my noble friend reassure us that the British Government will do all that is possible to support Canada and Mexico in those actions?
Baroness Miller of Hendon: My Lords, we are not a party to the NAFTA, but, as I said, we are equally concerned about the legislation. We have already been in touch about the matter with the Canadians and the Mexicans.
Lord Haskel: My Lords, does the noble Baroness agree that our trade relations with Cuba are now a matter for the EU? The EU has, quite rightly, strongly condemned this act. What advice are the Government giving UK companies currently trading with Cuba, many of which are likely unknowingly to fall foul of the Bill? In doing so they may risk their trade with the USA which is probably far more important than their trade with Cuba.
Baroness Miller of Hendon: My Lords, Her Majesty's Government are looking carefully at the Helms-Burton legislation to decide what they can and what they cannot do. We shall be advising companies which already trade there because, as noble Lords know, Her Majesty's Government encourage trade with Cuba. We hope that all these matters will be dealt with satisfactorily.
Lord Wright of Richmond: My Lords, in making representations to the US on the question of Cuba, will the Government also take into account other extra-territorial legislation sitting before the two Houses of Congress; for instance, that put forward by Senator D'Amato?
Baroness Miller of Hendon: My Lords, it would be inappropriate for me to answer something about which I am afraid I do not know. I should certainly not like to have some kind of international incident because this Whip got up and said something incorrect.
Baroness Rawlings: My Lords, what is Britain's position on trade relations with Cuba?
Baroness Miller of Hendon: My Lords, government policy on trade with Cuba has not changed. The UK enjoys normal trade relations with Cuba. In 1995 the value of UK exports to Cuba was £19.16 million, and we had a trade surplus of £11 million. The Government's policy is to support the efforts of

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UK firms to exploit the growing civil market opportunities which will arise as Cuba progresses with reform of its economy along market-oriented lines.
Lord Stoddart of Swindon: My Lords, is the noble Baroness aware that I and many other people will be encouraged by what she said about our trade with Cuba? Is she aware that there is already a growing shortage of good Havana cigar leaf? I would hate to think that anything the American Government or our Government did would result in a further shortage of that fine leaf which makes such wonderful cigars.
Baroness Miller of Hendon: My Lords, that is a splendid question. The only thing I can say is that I do not use them myself.
Viscount Montgomery of Alamein: My Lords, in the light of the unanimity of the remarks made this afternoon from all quarters of the House, will my noble friend ensure that the UK makes the strongest possible representations on this subject in Washington?
Baroness Miller of Hendon: My Lords, I am certain that the Government will be making all the diplomatic representations they can.
Lord Campbell of Alloway: My Lords, in relation to the question just asked, is my noble friend aware that the US claims extra-territorial jurisdiction beyond that claimed by any other state in the world?
Baroness Miller of Hendon: My Lords, yes, I heard what my noble friend said.
Lord Cledwyn of Penrhos: My Lords, will the noble Baroness give an assurance that the fact that we trade with Cuba does not mean that we admire her government?
Baroness Miller of Hendon: My Lords, I am terribly sorry but I did not hear the question.
Lord Cledwyn of Penrhos: My Lords, will the noble Baroness give an assurance that the fact that Her Majesty's Government support trade with Cuba does not necessarily mean that we support its government?
Baroness Miller of Hendon: My Lords, yes, indeed, I can give that assurance.

Bank of England Meetings: Minutes
2.58 p.m.
Lord Bruce of Donington Lord Bruce of Donington asked Her Majesty's Government:
Further to their answer of 22nd February 1996 (HL Deb., WA 84), how the earlier publication of the minutes of the monthly meetings between the Governor of the Bank of England and the Chancellor of the Exchequer would "complicate the short-term conduct of policy".
The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, earlier publication of the minutes of the monthly meetings could have an unsettling effect on financial markets. Publication of press notices, the Bank's quarterly inflation Report and the minutes of the monthly meetings makes the UK's monetary framework one of the most open in the world. Indeed no other major country publishes monetary minutes earlier than we do.
Lord Bruce of Donington: My Lords, I am grateful to the Minister for that reply. He will recall that my original Question referred to a delay of six weeks between the holding of the meeting between the Governor and the Chancellor of the Exchequer. That means that in the case of the meeting held on 13th December last, the minutes were not published until 31st January. However, in the meantime a further meeting between the Governor and the Chancellor had taken place, notably on 17th January. That meant that when the Governor met the Chancellor on 17th January they did not have in front of them the minutes of the previous meeting. I do not want to seem to be unreasonable on this, but, if the minutes in fact represent an accurate account of what happened, there is no reason why they should not be published within, say, a fortnight of the meeting itself rather than be held over for six weeks until someone, somewhere has made some unspecified corrections which result in the minutes not being minutes at all but doctored minutes.
Lord Mackay of Ardbrecknish: My Lords, I believe that the noble Lord's last remark was uncalled for and I do not believe that he has evidence to sustain it. The position that my right honourable friend the Chancellor took in 1994 was that in the interests of transparency and better economic management the minutes of the meeting between himself and the Governor should be published after the subsequent meeting.
I commend to the noble Lord the minutes of the meeting held on 17th January. The conclusion was:
"Summing up, the Chancellor said that the main issue was whether to move this month or wait until February".
Without boring your Lordships, perhaps I may say that the minutes contain a lot of discussion about what to do. As it turned out, they decided to move in January but if they had decided to move in February they would have been unable to do so if the minutes of the meeting had been published before the February meeting. We are carrying out a sensible economic policy and we shall continue with it.
Lord Renton: My Lords, although the Government are to be congratulated on extending open government in many ways, does my noble friend agree that there are various occasions, in particular with regard to matters of finance when confidentiality is essential?
Lord Mackay of Ardbrecknish: My Lords, of course I agree with my noble friend that one must be careful in making discussions public in case the very basis on which they are held will influence the markets. It is exactly because of that that we publish the minutes

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after the succeeding meeting with a delay of six weeks, as the noble Lord, Lord Bruce of Donington, said. As anyone who reads the minutes will see, the Governor and the Chancellor have a full and frank discussion about all aspects of economic policy.
Lord Barnett: My Lords, is the Minister aware that I agree with the first half of his Written Answer of 22nd February? I should be obliged if he would pass to the Chancellor my congratulations on his willingness to override the Governor of the Bank of England when appropriate as regards interest rates. I hope that he can be persuaded to override other decisions in government, in Cabinet in particular.
As regards the second part of the Answer, I agree with my noble friend that the explanation is strange. Is the Answer his or the Chancellor's? If it is his, will he reconsider it? If it is the Chancellor's, will he ask him to reconsider it?
Lord Mackay of Ardbrecknish: My Lords, I shall pass on the noble Lord's first comment to my right honourable friend the Chancellor. I am sure that coming from that quarter he will be suitably pleased to receive such a plaudit. As regards the more general part of the noble Lord's question, the point about the minutes of 17th January, to which reference has been made, and the discussions about lowering the interest rates by 0.25 per cent. then or in a month's time illustrates that, if they had decided that a month's time was better, and if the minutes had been published, say, a fortnight after the meeting on 17th January, the world would have known then that the Governor and the Chancellor intended to lower interest rates in the middle of February.
Viscount Chandos: My Lords, does the Minister agree that confidentiality may be one thing but confidence, both domestically and internationally, is a vital ingredient in successful monetary policy? Does he further agree that rumours and speculation about disunity between the Chancellor and the Governor are a patent way of reducing confidence?
Lord Mackay of Ardbrecknish: My Lords, I am not entirely sure where that question gets us. I am not sure whether it suggests that no minutes should he published of discussions between the Governor and the Chancellor or that they should have discussions only when they are firmly agreed about what they are to discuss and about the outcome.
I would have thought that the suggestion that the Governor and the Chancellor meet and discuss openly the problems that they have with economic policy and how they believe economic and monetary policy should be managed and publish the minutes of their meeting six weeks later would enhance confidence both at home and around the world.
Lord Cockfield: My Lords, can my noble friend the Minister cast some light on an interesting paradox arising out of these monthly meetings? Why is it that every time they agree to reduce the rate of interest, the rate of interest on the Government's own borrowings
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goes up? Why was it when on the last occasion the rate of interest was reduced to 6 per cent. the yield on the Government's last issue of gilts promptly went up to about 8.3 per cent.?
Lord Mackay of Ardbrecknish: My Lords, as I am not present at the meetings between the Governor and the Chancellor, unfortunately, I cannot give my noble friend an insight as to other matters that are discussed and not recorded in the minutes. If my noble friend tables that question I shall be happy to answer him.
Lord Peston: My Lords, may I help the Minister by telling him the answer? I assume that the noble Lord, Lord Cockfield, knows it too. It is that the yield on long-term gilts reflects the expected short rate of interest, and essentially what the market is saying, as was apparent yesterday, is that it expects the Chancellor as soon as possible to reverse those cuts. Is that not what the evidence shows?
Lord Mackay of Ardbrecknish: My Lords, I am always slightly suspicious when a professor of economics comes to my aid. Perhaps I should say that of course the noble Lord is right. However, as professors of economics seldom agree with each other I cannot concur with him. All I know is that at present we are seeing our economy in a most encouraging position. Inflation is low and all the predictions are that it will remain low. Growth is good and the general position for the economy is markedly better than that of many of our friends in the European Union, for example.
Lord Bruce of Donington: My Lords, is the Minister aware that I went carefully through all the minutes and discovered that there is nothing remotely confidential about them? All the data that they contain are readily available in the Government's press handouts in relation to inflation, unemployment and prices. They are only assembled in the minutes and there is nothing remotely confidential about them. The Government want to make sure that what was heard of the conversation between the Governor and the Chancellor reflects as nearly as possible their views on the subject.
Lord Mackay of Ardbrecknish: My Lords, there is a great deal more in the minutes than merely factual information. One can read of the Governor's views about the interpretation that should be put on the factual information and, equally, the views of the Chancellor and the way in which they see the economy moving in the future. However, if the noble Lord is saying that the minutes should not be published, he has every right to that opinion. I believe that my right honourable friend the Chancellor has taken a positive step and that most people interested in these aspects of policy welcomed the decision that he took in 1994.

Tributes to the late Lady Faithfull
3.9 p.m.
Lord Richard: My Lords, it is not usual in this House for there to be tributes to Members who have been Back-Benchers. I am told that tributes are reserved

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for more nominally exulted beings. However, for every rule there is an exception. Therefore, I hope that the House will allow me to say one or two words upon the death of Lady Faithfull.
We were all deeply saddened at the news of her sudden death. She was a colleague and, across the party divide, a friend. As I sat on this Bench this afternoon, my noble friend Lady Hollis said how strange it was to look across the Chamber and to see the noble Lord, Lord Peyton, but not to see Lady Faithfull sitting next to him in the green suit that she so often wore. It is particularly sad because yesterday she was actively playing her part in the House.
In many ways Lady Faithfull was a Back-Bencher par excellence of this House. She pursued her causes with vigour, determination and a very considerable degree of single-minded independence. Her background in social work made her particularly effective in those areas of Parliament's work. She carved for herself a very special and unique role, which is why I venture to say a few words today.
We shall all remember her for her independence, persistence, sense of humour, compassion and, most of all, her kindness. She will be very sadly missed in this House and on behalf of my party I express my deep sympathy to her family.
The Lord Privy Seal (Viscount Cranborne): My Lords, with the leave of the House, I pay tribute to the noble Lord, Lord Richard, for an act of, I think, the very greatest generosity of spirit in drawing your Lordships' attention officially to the death of my noble friend. His action is in the very best traditions of your Lordships' House. I agree with the noble Lord. Rules, particularly in this House, are there to be broken, if the House allows. I can think of no better occasion than this to do so.
I know that all of your Lordships will have been very shocked and saddened by the news that my noble friend was taken ill yesterday and died this morning. As the noble Lord, Lord Richard, said, her presence in this House and her valued contributions to our proceedings will be greatly missed. I remember in particular my noble friend's look of deepest distress when she used to come to see me to explain that on one particular issue on which she was an acknowledged expert, once again she could not support the Government. But her distress in no way deflected her from her absolute determination to pursue what she thought was right. Her independence was a quality which above all distinguishes Members of your Lordships' House. However awkward that may be for the Government from time to time, we must always value it and I trust that it will always be an integral part of your Lordships' nature.
Above all, apart from my noble friend's independence and deep knowledge of the matters in which she took an interest, she radiated a quality of kindness which is extraordinarily rare in humankind. I know that my noble friend had great faith. That faith was reflected in her name. I particularly mourn her because she never ceased to point out that one of her 19th century relations was the rector of my home town in Hertfordshire and that
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I should follow more often his example and my noble friend's example rather than the dictates of my party. The whole House will miss her and we should be grateful to the noble Lord, Lord Richard, for what he said.
While I am on my feet, perhaps your Lordships will allow me to mention one other matter. The shock which ran through the country at the unprecedented news from Dunblane this morning was palpable. With your Lordships' permission, I shall convey to the town of Dunblane, which I happen to be fortunate enough to know fairly well, to the families of the victims, and to the people of Scotland, the absolute horror of this House at what has occurred and our deepest sympathy for the families.
The Secretary of State for Scotland and the shadow Scottish Secretary left this morning Ito travel together to Dunblane. They will return tomorrow and a Statement will be made in another place. In the normal way, at that time an opportunity will be given to your Lordships to have the Statement repeated. I hope we shall then be in a position to answer in full and factually any questions which your Lordships may have.
Lord Jenkins of Hillhead: My Lords, I associate myself and my noble friends with the exceptional tribute which the noble Lord, Lord Richard, paid to Lady Faithfull. She was an exceptional servant of this House and of the public good. Her death has a particular poignancy for me, as I am sure it does in differing ways for many Members of your Lordships' House, because as I was coming into the House yesterday afternoon I saw her in a chair in the yard being moved into an ambulance. I shall never forget the smile of patient serenity on her face. That was perhaps an appropriate last memory of her. We associate ourselves very strongly with the remarks of the noble Lord, Lord Richard, as we do with the remarks made by the noble Viscount the Leader of the House about the terrible incident in Scotland.
Baroness Hylton-Foster: My Lords, on behalf of the Convener, who I believe does not know that this sad event has occurred, and the Cross Bench Peers, I join with all that has been said about Lady Faithfull. I know that she will be particularly missed by those who served on the all-party children committee where she did such wonderful work. She is one of those rare people whom everybody loved and nobody knew how to disagree with because she was generally always right. On behalf of the Cross-Bench Peers, we send our condolences to her family.
Lord Elton: My Lords, as a Back-Bencher who for some years was a Minister dealing with matters in which Lady Faithfull took a close interest I noted that she sat immediately behind the Dispatch Box. Therefore, one could not ever see the effect of what one said but one got the result in a way which made me say to her in the Lobby on one occasion that my back was full of her darts. She said that she never threw darts at me. It is true that all she was doing was protecting the interests of children with courage, fortitude and no regard to any other loyalty. That enormously enhanced the reputation of this House and the quality—I have the humility to say—of some of the legislation I helped to put through it.

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There is a sad irony about the fact that children were the victims of the atrocity to which my noble friend the Leader of the House referred. It makes it all the more fitting that the heartfelt sympathy of your Lordships should be sent to the families of the victims.
Lord Brougham and Vaux: My Lords, I spoke to Lady Faithfull yesterday morning at 11.30 on a matter of common interest, namely, my group on youth clubs. We were to meet this afternoon because she said there were three defects in my proposal. I shall now never know what they are, and I shall sadly miss her.
Lord Hughes: My Lords, living as I do less than 20 miles from Dunblane, when I heard the news on the radio at 11 o'clock this morning I was terribly shocked. As the Leader of the House said, Dunblane is a beautiful place. If there is any place on earth where one would not expect an atrocity of this kind, it is Dunblane. All the people there will take this terrible tragedy as a personal loss.

Consolidated Fund (No. 2) Bill
3.17 p.m.
Brought from the Commons endorsed with the certificate of the Speaker that the Bill is a money Bill, and read a first time.

Business of the House: Debates this Day
Lord Strathclyde: My Lords, I should like to say a few words about today's debates standing in the names of the noble Lord, Lord Wallace of Saltaire, and my noble friend Lord Campbell of Croy. In the first debate, other than the mover, Front Bench spokesmen and the Minister replying, speakers will be limited to nine minutes and, in the second debate, 14 minutes. I might also remind your Lordships that, when the digital clock shows nine minutes, the full nine minutes have elapsed and the speaker is already trespassing on the time of others.

European Union Enlargement Proposals
3.19 p.m.
Lord Wallace of Saltaire Lord Wallace of Saltaire rose to call attention to the implications of the European Union's commitment to open negotiations with 12 potential member states within six months of the conclusion of the forthcoming Intergovernmental Conference; and to move for Papers.
The noble Lord said: My Lords, in introducing this debate—and I am very glad to be able to do so—I wish to draw your Lordships' attention to the fact that it is very much a "call attention" debate rather than one which is intended to come to any conclusion. What I hope to suggest is that it is time that the European Communities Committee of this House should again look at the broad question of enlargement, some four years after it last did so.
When that committee last considered the matter it said at paragraph 144 of its 1992 report that enlargement potentially,
"confronts the Community and its Member States with an historic opportunity and a challenge: their response will go far to determine the shape of European politics into the next century. The States which have emerged from decades of Soviet military domination and communist oppression are looking to the Community as an anchor for their fragile democracy, security and independence and as a source of strength for their … economies".
In the White Paper published yesterday, the Government reinforced that view and said on page 3 that,
"the European Union is the basis upon which we must consolidate democracy and prosperity across the whole of Europe, healing the historic divisions which scarred our continent through the Cold War, and cementing peace. Enlargement poses formidable challenges not only for the applicants, who must be ready and able to take on the obligations of membership, but for the existing European Union which must adapt its structures and its policies, including the Common Agriculture Policy and Structural Funds, to ensure that enlargement is successful and affordable".
We have, then, a major task—not simply a matter of minor adjustments—and an historic responsibility; perhaps the greatest responsibility facing the European Union in the next 10 to 20 years and thus also, I would argue, the greatest priority for British foreign policy. We are, as both of those quotations suggested, talking about the transformation of the European order over the next five to 15 years.
Of course, the transition is under way. It is some six years since the Berlin Wall came down. Those countries which have applied are already into their second or third governments. Happily, some of them have already got through the worst of the transition and their economies are now growing again at 3 per cent. to 5 per cent. a year. But I suggest that we need to look ahead and to ask ourselves in this debate what sort of European order we wish to achieve in five, 10 or 15 years' time, and how we need to adapt the European Union to cope with that challenge.
I suggest that there are four major tasks for the European Union in the next 10 years. I suggest that strongly because so many people seem to think that there are only two—namely, monetary union and a bit of institutional tinkering. Apart from monetary union, enlargement is the overwhelming priority for the European Union to manage. Enlargement carries with it major implications for foreign and security policy to cope with enlargement, and to cope with the fact that the European Union will have a boundary on the Black Sea and a long land border with Russia and the Ukraine. Institutional reforms should be discussed in terms of what we need to cope with that, rather than in abstract in themselves and with regard to some of the odder doctrines of the British unwritten constitution.
As noble Lords will know, 12 states have now been accepted as applicants for entry: the four Visegrad states of Poland, the Czech Republic, Slovakia and Hungary; the three Baltic states of Latvia, Lithuania and Estonia; two Balkan states; Slovenia (not yet quite a Europe agreement state because of an outstanding disagreement with Italy); and two Mediterranean islands, Cyprus and Malta. Behind them, of course, is the shadow of further applicants: Albania, Macedonia and, in time, Croatia and the remains of the former Yugoslavia; and, perhaps,

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when they have changed their minds—if they do so again—the remaining EFTAN countries, Norway, Switzerland and Iceland.
We are talking about a very major transformation. The 10 Europe agreement states and Cyprus and Malta account for some 107 million people. That adds one-third to the European Union's population and adds a further one-third to the European Union's land area. Therefore, it also adds substantially to the extended security commitment which implicitly comes with Community enlargement.
The speed with which the whole process is moving is quite remarkable. I have to say that I was rather surprised to see in the 1996 report on the IGC of your Lordships' Select Committee on the European Communities a statement in paragraph 233 which reads:
"A Union of 27 Member States, including a number of small Member States, is an eventual possibility".
I wish to put forward the argument to your Lordships that that is not only an eventual possibility but that, indeed, it is quite likely to happen bit by bit in the foreseeable future. We have met the pressure from those post-Socialist states with an initial reluctance which has given way, European Council by European Council, to an acceptance that they can move fairly rapidly towards membership.
In the Essen European Council on December 1994 we agreed to what was called a "pre-accession strategy" whereby those states would be encouraged to adapt to Community legislation and practices before we open negotiations for membership. We also agreed to what was called in Community jargon a "structured relationship" with the applicant states whereby officials and Ministers sit in on a number of Community meetings each year.
At the Cannes European Council last June it was agreed, in order to get the association agreement with Turkey off the ground, that Malta and Cyprus would be allowed to open their negotiations within six months of the end of the coming intergovernmental conference. At the Madrid European Council last December, after a good deal of pushing and shoving, it was agreed that other applicant countries would open their negotiations within the same time-scale as for Cyprus and Malta.
I suggest to your Lordships that that means that it is possible to see a movement in which the IGC ends in the summer of 1997 with all of the applicant countries meeting the European Union in January 1998 for what I gather in Brussels is called the foto en famille, when they all group together and are photographed as potential, full-scale European Union members. But, having already worked through quite a lot of the dossier on the pre-accession negotiations, I foresee after that two years of entry negotiations which conclude at the end of 1999, together with a further year of ratification. We could then see the first new entrants coming in in less than five years' time in January 2001. We can perhaps allow a little more slippage than that and say January 2002, but that is still not too far distant.
Of course, not all of the applicants will come in at the same time. I believe that we will most likely see some three to seven members in the first group—Poland
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being the most important with, perhaps, the Czech Republic and Hungary coming necessarily with Poland, Slovenia, Estonia and one or more of the two Mediterranean states, with the others following some five years later. There would also be a long period of transition after membership.
Some of your Lordships may wish to ask whether it is important for us to accept all of those applicants. Could we not perhaps just have one or two and leave the others outside for the foreseeable future? It is not inevitable that all will succeed in their negotiations. The formal procedures mean that the Commission will be asked to give an opinion after the IGC on how far the applicant states have fulfilled the conditions of membership in terms of aligning their laws, their taxation systems, their competition policies and the capacities of their administrations, as well as meeting the criteria set out in the Copenhagen European Council for political acceptability—namely, democratic conditions for membership.
Poland is evidently the key. Germany has to insist that Poland comes into the European Union as soon as possible. The Czech Republic and Hungary come along with that in economic and political terms. Slovenia, by far the most prosperous of those states at present, has the strongest economic case for membership. The Nordic states will wish to insist that at least one of the Baltic states is in the first group of membership. I gather that that was part of the argument in Madrid. Therefore it is likely that Estonia will be one of those that comes in within five or six years. Romania and Bulgaria are likely to take a longer period, and perhaps they may not succeed, but the French and the Greeks will necessarily have something to say about stabilising the Balkans. Some of your Lordships will believe that Malta and Cyprus are in many ways British responsibilities and that we ought to have a particular care that those countries carry through their applications to successful membership.
There are some major and complex issues at stake. I do not intend to rehearse them in detail now; I wish only to underline that they need to be examined and understood together, not torn apart one by one. If we are moving towards a Community of some 25 to 30 nations within the next 10 years or so, then the foreign and defence policy responsibilities which that brings to the European Union will be considerable. As many of your Lordships know, there is a parallel argument under way about the enlargement of NATO and about the implications for the Western European Union.
The European Union itself carries implicit responsibilities for ensuring the security of its members. These states wish to join the European Union partly in order to strengthen their political and military security, so the whole dossier on European defence co-operation is one which will have to be looked at in the context of a much wider European order. There are, of course, major financial implications of increased membership of the Community, which will probably result in a larger Community budget. It is indeed on the Community's agenda to reconsider its financial framework before 1999. There will be a major shift in the balance of the European economy as these countries prosper as their

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economies grow, which necessarily again will make Germany even more the centre of the European economy, and therefore even more the central power of our new European order.
There are, of course, major agricultural implications of this increased membership. The amount of arable land in the European Union will increase by one third, and the number of people working on the land in the European Union will double. There are also major institutional implications—which I gather other speakers may wish to address—as regards the future of the Commission and the European Parliament, majority voting, and the problem of making sure the Community rules are implemented throughout the European Union. There is also the important question of how far in such a wide European order we can maintain the structure of the European Union which we have so far established; whether or not there are core policies which must be implemented throughout the Union, and whether or not the levels of diversity which these new countries will bring into the Union must allow for a greater degree of flexibility of the sort suggested by the Government in the White Paper published yesterday.
The debate has not yet been fully joined on which core policies we need to maintain and which policies are less important that we might allow to be opted in and out of as the Community expands. The passage of time over the next 10 years will resolve some of these problems. The agricultural markets are already shifting. The transition under way is already solving some of the legal and political problems. The faster the economies of these countries grow, the less the cost to us in financial transfer terms when they join. But there is also a need for an active approach on behalf of the European Union as a whole and, I suggest, on behalf of our Government. The British Government are doing well with the know-how fund, but I doubt whether we are yet doing enough to encourage their governments to play an active role in bilateral as well as multilateral relations, and I suggest that we might perhaps give some of these countries a greater level of ministerial attention.
I hope I have said enough in opening this debate to suggest that there is a huge number of questions here which we have not yet entirely understood. We are, after all, talking not just about a transformed European Union but about a transformed Europe and about the objective of establishing a stable European order after the Cold War which can give our children the peace and prosperity which our grandparents failed to establish after the end of World War One. That is a major objective. I hope that our government—and whichever governments we may have over the next 10 years—will contribute actively and positively to that objective. I beg to move for Papers.
3.35 p.m.
Lord Kingsland: My Lords, I am greatly flattered and somewhat bewildered to find myself speaking second in this debate. I can only attribute it to the frequent confusion between the names Kingsland and Kingsdown. I wish to touch on just two matters. The first is security; the second is the rule of law.
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Our country assumed in the 1930s that security developments in central and eastern Europe did not matter to us. That was a near fatal mistake. The central issue therefore raised by the membership of the emerging democracies of central and eastern Europe is one of security. It is absolutely crucial that they are bound in to the western security system. Here, I believe the fundamental relationship is not a European relationship but a trans-Atlantic relationship. The commitment of the United States to the security of the Continent of Europe is absolutely crucial to our security and Europe's security. It was, I suppose—second to the character of the German leader in the 1930s—the failure of the Senate to ratify the League of Nations treaty in 1920 and the removal of the United States from the balance of power system of Europe for 20 years that was so fatal in Europe's failed attempts at creating peace after the First World War.
I believe we would also be under an illusion were we to think that institutions will solve security problems. They will not. Institutions do not solve security problems unless the political will is behind them to make security stick. We have the tragic example of Yugoslavia over the past five years to demonstrate that—I hope, to your Lordships, obvious—truth. I am afraid that the western democracies' approach to Yugoslavia has been abject. I might almost say that the word "appeasement" has sadly reappeared in our political calendar; not because the institutions failed us but because we lacked the political will to confront an aggressor far less formidable than the aggressor we faced in the 1930s. We have to make sure that the commitment of the United States, and the political determination of the western democracies to resist aggression, are two fundamental preconditions to any successful security system we might negotiate with our partners in Europe over the next decade.
The second point I wish to make is about the rule of law. In a Community of six nations it is possible to have institutions which can develop a common political will. It will be exceedingly difficult to do that in a Community of 27 nations. No national electorate will have anything like a majority of Commissioners or a majority of Members in the European Parliament, let alone a majority in the Council of Ministers where they will have just one representative among 27. The crucial element in binding the Community together—a Community of perhaps as many as 27—will be the rule of law. Without the rule of law the whole idea of the European Community will crumble. It ought not to be a difficult notion for us in the United Kingdom to understand in the sense that we invented it.
However, the rule of law means respect for the decisions of courts. You cannot have a market system which is continent-wide without a single source of interpretation of the rules. That can only be the European Court of Justice. Therefore, far from weakening the European Court of Justice, as some have suggested in the recent great debate in our nation about Europe, I believe that we ought to be strengthening it. It has to be strong enough to withstand not a Community of 15 but a Community of 27 nations.

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At present some countries virtually ignore the rule of Community law and do enormous damage to our business interests in the process. Therefore, we have to make sure not only that we have a strong Court but that in each member state of the Community there are judicial remedies available to individual citizens which are effective. Sometimes we may not like what the Court says. Mostly, in this country, what it says is music to our ears. Often, when what it says is not music to our ears that is not the fault of the Court but the fault of the legislation that it has to interpret.
Let us be under no illusions. We cannot have a Community without a strong Court. We cannot have a rule of law in the Community without independent judges. That is the great challenge in integrating central and eastern Europe. Fundamental to a market system operated by a rule of law is a law of contract and a respect for the rule of law. Neither of those exists as yet in any of the new democracies. These are economies which have been run by fiat from central government. Volumes of production, prices and the incidence of profit and loss are entirely arbitrary. They have nothing to do with individual initiative. The idea that you make a bargain and stand by it whether it is a good or bad bargain is totally alien to the culture of those countries. How can you have a market economy without a law of contract? We have a very long way to go before the notion of the single market can have any reality in those areas.
For those who have lived in a country like Poland, Hungary or Czechoslovakia for the past 40 or 50 years the rule of law does not equal the friend of the citizen. It equals the instrument of the foreign oppressor. So there again is a terrific cultural challenge which we must face.
I believe that we should concentrate on the crucial issues of security and the rule of law. After all, everything in our own political life in this country is a pygmy compared to those two factors. It is the same for the European Community. If we concentrate on those fundamental issues I am sure that the detail will fall into place.
3.42 p.m.
Baroness Blackstone: My Lords, this is a most timely debate. Europe is the subject of considerable interest and topicality this week with the publication of the IGC White Paper. I only wish, however, that the White Paper and yesterday's Statement had been characterised by a little more vision and a little less carping. At least they endorsed enlargement and the institutional changes designed to facilitate enlargement. However, in their insistence on the retention of unanimity in many areas, as well as supporting enlargement, I am not sure that the Government were being entirely consistent. However, the IGC is not the subject of today's debate, and I hope there will be other opportunities to debate it more fully.
The Labour Party is strongly in favour of further enlargement of the European Union for those countries willing and able to join. In particular, we believe that
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we have a duty to help the countries of central and eastern Europe, countries which since the collapse of the Soviet Union have worked hard to reform their political systems and develop their economies. We endorse the view of their governments that both democracy and a successful market economy are best supported inside the European Union rather than outside it. However, we recognise that before that can happen significant change is needed, both in the countries concerned and, as the noble Lord, Lord Wallace of Saltaire, has already said, in the European Union itself.
We welcome the agreements that have already been made with some of those countries as a preliminary to European Union membership, and hope that it will be possible to extend them to others. 'We also believe that we have the obligation to support all those countries in making the necessary changes for full membership at a later date. That means finding new forms of co-operation. It also means avoiding policies which make economic and political progress among the applicants for membership more difficult.
I want to say something about those agreements, but before doing so I want to make one general point. We are considering 12 different countries in a two-and-a-half hour debate with 14 speakers. In the short time available it is not possible to consider each country individually, though I recognise that each is unique and generalisation has its risks. I know that the extent and scale of their economic problems vary enormously. Nevertheless, generalise I shall and must. Moreover, as I shall argue later, there is a strong case for treating the countries of Central and Eastern Europe as a group. With all respect to Cyprus and Malta, it is on the Visegrad countries, Bulgaria, Romania, the three Baltic states and Slovenia, that this debate should be mainly focused.
Returning to the European agreements, perhaps I may begin by asking the Minister what is the latest position with respect to Slovenia. For how much longer does he think that implementation will be held up by the dispute with Italy?
Central to all the agreements is the principle of asymmetry. What is entailed here is the acceptance that the European Union should make greater trade concessions to those countries while they are in transition than are received in return. In other words, it needs to be recognised that their economies could not cope with a complete liberalisation of trade immediately. That is reflected in a phasing in of free trade in industrial goods. That is fine. However, the agreements also lower trade barriers in agriculture. It is rather unfortunate that they do so in a far more restricted way.
So on the one hand we are telling these countries that they must move as fast as possible towards a market economy, but at the same time we are imposing substantial restrictions on the entry of their goods, and in particular their agricultural goods, into European Union markets. Nor is there any clear end date to the restrictions on the free flow of agricultural goods.
No one doubts the importance of agriculture in the domestic economies of many of these countries, although the extent to which that is true varies. It is

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much less true of the Czech Republic than it is of Romania, for example. But what is worrying is that as a result of the way in which the agreements have been drawn up distortions are now occurring in which agriculture, which vitally needs reform and modernisation, is being neglected while greater focus is placed on goods whose exports are less restricted. The Minister may well tell us that the European Union is offering extensive assistance programmes for agriculture. That is true, but it is a pity that that does not seem to be properly reflected in the agreements.
The other problem with the agreements is that they are all on a bilateral basis between the European Union and individual states. That has led to differential preferences being offered to individual countries and, in turn, to their competing with each other to meet the conditions of membership. Moreover, the agreements have done little to encourage trade among the countries of central and eastern Europe, nor, in particular, helped the recovery of the central European market in agricultural goods.
I should very much welcome a view from the Minister on all this. Can he indicate whether the Government agree that what is now needed is a new approach aimed at creating common economic arrangements which encourage those applying for membership to forge closer relationships with each other in the transition period?
Without some change in direction the chances of successful enlargement in the near future seem rather remote. While quite unequivocal about the desirability of enlargement, as I hope I made clear, we must also be realistic about the likely timescale over which it will happen. To be frank, the wording of the Motion in the name of the noble Lord, Lord Wallace, takes us a little beyond the point that we have actually reached, as he made clear in his speech. The only absolute commitment to negotiations six months after the IGC has been concluded is with Cyprus and Malta. What the Madrid Council did was to express the hope that initial negotiations could begin with some of the other applicants.
If we are honest with ourselves and with them, we have to ask how meaningful such discussions would be without further changes to the CAP and the structural fund. I know that the Government are in agreement with us on the urgent need for its reform, but I am afraid that they have utterly failed to bring about required further changes. I suspect that this is partly because they do not carry the weight they should in Europe because of their negative attitudes towards the European project which were made manifest yet again in yesterday's White Paper.
It is painfully obvious that no positive step can be taken forward on any European matter now without a row in the Conservative Party. Last week we saw a row between the Foreign Secretary and Mr. Redwood about the appointment of an official to co-ordinate a common foreign and security policy. This week we are seeing a split emerging between the Prime Minister and the Chancellor on whether we should have a referendum on a single currency.
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If the Government are as serious about enlargement as they claim, they should be at the centre of the debate persuading Chancellor Kohl to agree to a radical reform of the CAP. This might allow some of the proceeds of the resulting savings to be used in a special structural fund for those countries which have applied for membership, helping them to prepare for it. Again, perhaps the Minister will comment on this proposal.
Having concentrated on economic issues I should like to conclude by suggesting that much more thought needs to be given to the promotion of a European political area which would allow prospective members the opportunity to participate in the political deliberations of the European Union.
The wish for membership is based on a desire for political stability and security as well as economic prosperity. It is in all our interests that stability in the eastern part of the European continent should be sustained. There is some danger that insufficient tangible progress will be made towards enlargement because of the difficult economic conditions that have to be met. Nor can we ignore those economic hurdles. Precipitate economic integration will only damage the long haul towards economic transformation on which all those countries are embarking with such bravery and commitment.
3.53 p.m.
Lord Tordoff: My Lords, when I first heard that my noble friend Lord Wallace of Saltaire would be joining your Lordships' House I knew that we could look forward to some interesting contributions, in particular on the subject of Europe. His luck in the ballot gives him an opportunity today to demonstrate to your Lordships his breadth of knowledge on the subject, and we are grateful to him.
It was Professor Helen Wallace, as she then was, now Lady Wallace of Saltaire, who, appearing before your Lordships' Select Committee last year, said that enlargement,
"is probably the most important challenge for the I.G.C. but also the hardest to address".
I thought that I might take the opportunity of reminding your Lordships of one or two matters which have been dealt with by your Lordships' Select Committee and sub-committees over the past two years. The noble Lord, Lord Wallace, mentioned the first report of the sub-committee in 1992–93, chaired by the noble Lord, Lord Aldington, which looked at enlargement as a subject, and the 21st report last year produced by the IGC ad hoc sub-committee which I had the good fortune and privilege to chair.
The report of the committee chaired by the noble Lord, Lord Aldington, stated in its conclusions:
"The advantages to the Community and to Europe as a whole of enlargement are undeniable and this enlargement must not and need not threaten the effectiveness of the Community. Enlargement has been the destiny of the Community … Enlargement will be in the United Kingdom's interests."

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Having talked about EFTA countries which were not at that stage in the Community, the report added:
"A broader Community stretching eastwards as well as northwards will better face the challenges of the third millennium from the world beyond Europe. The problem is not whether there should be enlargement, but how and how quickly, and what adjustments should be made in the Community's institutions and procedures".
It continued:
"There will be strains, but they will be procedural rather than institutional…arrangements have to be tailored for the circumstances and needs of each European State".
That was a point made by the noble Baroness, Lady Blackstone, when she referred to the states all being quite different and to arrangements starting with the trade and co-operation agreements. I endorse the report's statement:
"No country should be encouraged to believe that Community membership is possible before it is able to play a full part in the Community's economic and political structure. Otherwise it could subject itself as well as the Community to unacceptable burdens".
The report added:
"Every Community institution will be affected by such numbers, and considerable political issues will be raised. Such decisions cannot wisely be rushed".
It is not for me to become involved in the debate which is developing this afternoon on how far and how quickly we should go. That is a matter best left to the proponents on the various Front Benches. I can only offer a few ideas from your Lordships' Select Committee.
The ad hoc committee which I had the privilege of chairing states at paragraph 230:
"The enlargement of the Union since 1991 and the prospect of further enlargement throw into relief a number of purely institutional aspects which require attention at this I.G.C.".
As my noble friend Lord Wallace of Saltaire stated, yesterday's White Paper underlines the same point in its introductory paragraph 3. He quoted a large portion. However, the paragraph concludes:
"Enlargement is at once an historic responsibility for Europe and a long-term British interest".
Indeed, the Corfu conclusions themselves instruct the IGC to facilitate the work of the institutions and guarantee their effective operation in the perspective of enlargement. Perhaps we may spend a few minutes reminding ourselves of the consequences that your Select Committee saw as a result of enlargement.
It is clear that failure to address institutional questions will delay accession negotiations and send "profoundly negative signals" to the associated states. On the other hand, I wonder whether we are not already sending signals which are perhaps too optimistic in regard to time. We occasionally meet people from central and eastern European countries passing through. I must say that their expectations often seem somewhat ahead of the game.
However there is much to do if we are to put the existing Communities' house in order. I do not intend to deal here with the CAP although we urged in our report that Her Majesty's Government should make it a political condition that the IGC should not close without some agreement being reached on its reform. I know
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that the noble Lord, Lord Middleton, intends to say a few words on that issue from the perspective of Sub-Committee D.
Perhaps I may take one or two instances. As regards the size of the Commission, at present there are not enough portfolios to go round. As long ago as 1990 the Select Committee of your Lordships' House expressed the view that this matter must be addressed. But with the prospect, however distant, of a Union of 27 members the Commission would become utterly unwieldy. The White Paper seems to agree. At paragraph 32 it states:
"The Government understands the importance which Member States attach to having their own Commissioner. With further enlargements, however, it may not be appropriate to retain the present system. The IGC will consider how to achieve an acceptable balance".
The White Paper discusses a two-tier Commission. We felt that that was dangerous. It may well be that a team of commissioners should to be put together. But we ducked the question of what it should be called. We state in our report that,
"the delicate question of title, rank and status within the teams would be a matter for further consideration in the Commission itself".
Similarly, the presidency is thrown open to question. Both in our report and in the White Paper there is the question of what is to be done when countries the size of Latvia or Malta take on the presidency. Again, team presidencies were suggested. But there were cautionary voices. On the whole the committee came down in favour of team presidencies, but the voice of the noble Lord, Lord Hunt of Tanworth, was loud in our considerations and was heard in the House when we debated the report. He felt that there were grave administrative difficulties in team presidencies. It is also difficult to believe that we can live with a situation where the presidency comes round only every 12 or 13 years.
Qualified majority voting is another item which must be addressed. I mention not the scope but the arrangements. The possibility of some form of weighting to take account of population is obviously high on the agenda. We recommended a dual key approach with Council votes weighted by population size as the most likely way round the problem.
The size of the Parliament must be addressed again if there are 27 or 30 member states. However, it seems that the European Parliament itself has recognised the problem and is now considering limiting itself to 700 members. I was interested to hear the noble Lord, Lord Kingsland, talk about the European Court of Justice in a memorable contribution in which he discussed the rule of law. But even there the question of how many judges can be produced from how many major and minor states is a problem we must tackle.
Noble Lords will see from those few remarks that the Wallace family is right to draw our attention to the whole matter of enlargement. In the long run we must solve the conflicting pressures of the benefits of the political stability which will come from expansion of the Community towards the east and the countervailing difficulties in modifying a Community which was designed for fewer than a dozen so that in future it can

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suit a Community approaching 30 members. Time is not on our side. I only hope that we have not already given too many hostages to fortune.
4.2 p.m.
Lord Mackie of Benshie: My Lords, I too wish to congratulate my noble friend Lord Wallace of Saltaire on introducing the subject. We knew that he would and it is right and proper that he should do so. I also wish to congratulate the noble Lord, Lord Kingsland, on a speech which shook me to the core. I did not know that that kind of vision still existed in the Conservative Party. I am glad that it does.
The noble Lord, Lord Kingsland, raised the point of education and the transformation of thinking of those nations to the east which had been under communist domination. I have been a member of the Parliamentary Assembly of the Council of Europe for 10 years and that organisation has played, and can play, a great part in preparing the nations which have been under communist domination for proper membership of a democratic community. The Council of Europe has taken distinct risks. I know that my noble friend Lord Lester disagrees with me. We have been criticised, but, when it came to the point, the decision on the admission of Russia to the Council of Europe—which had already been delayed once—was correct. They are a proud people (witness the success of Zhirinovsky) and rejection would have been a terrific blow to their pride. That admission of Russia, with all its imperfections on human rights, was enormously helpful to democrats inside Russia who are striving to help to build a proper democracy. The Council of Europe has been valuable in that way.
It may not surprise noble Lords that I shall talk about agriculture. I am also a member of the Agricultural and Rural Development Committee in the Council of Europe. I have been shocked and dismayed at the way we have proceeded agriculturally in regard to eastern countries. We talked a lot of rubbish about how quickly the free market would transform the situation. We were right—it was transformed. It ruined many people, caused immense misery and lowered production by 30 per cent. to 40 per cent. in some countries. For example, in 1993, for the first time in its history, Poland had to import food. That was exacerbated, no doubt, by the drought, but the main reason was the enormous fall in efficiency of production; not efficiency in terms of labour. I went through the great plain of Hungary in the early communist days. There were good crops and the cows gave a lot of milk. Admittedly, there was one cowman to every cow, but the people lived reasonably happily, although poorly, in their communities. Now we see them deeply regretting that the system has departed as there are now rural communities without work.
Poland is the most interesting country. Without doubt, the whole nation was held together by the fact that 80 per cent. of the land was held in small units. At the moment, those small units contribute greatly to stability, but gradually and even quite fast, they will be amalgamated. Young people on the small farms will not
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put up with the standard of living they have there, in exactly the same way as young people will not put up with the standard of living in crofts in the Highlands. They want work.
We have a big task, not only in agriculture but in rural development. We must help to set up small, medium and large industries in the countryside so that there will be work for the people who live there and they will not proceed to the towns, adding to the amount of crime. If they can live in the country and their own homes there is a good chance of genuine progress. That depends largely on our being able to have a common agricultural policy which we can share. I am talking mainly about the first four: Poland, Hungary, and the Czech and Slovak Republics. At present they receive a good deal less for their produce. On top of that, we have generously opened our borders for their production and poured our subsidised production into their countries, to the great detriment of the farmers who get poorer prices.
We have much to sort out before we can start bringing the whole body into a common agricultural policy for the enlarged Community. All main parties are agreed, and I am sure we are right, that we must work towards world prices through which we can protect the agricultural community by an outside tariff, which is allowed up to a point under GATT, and with direct decoupled payments to farmers and areas which are in need. That must go a good deal further, because there is little doubt that production in those countries will recover quite fast. For example, I know a couple of young Scots who are farming good land in Poland. Their neighbours are catching on fast to their practices and production is already rising. When it reaches its former level of communist times, we may well be in a situation where our surpluses and the intervention stocks will rise to an unacceptable height. So before then we must move towards world prices.
I know that the Minister for Agriculture, and the Government believe that to be necessary, but I have listened to agriculture Ministers in Germany and France who do not agree. They say firmly that they will continue to support the CAP in its so-called reformed state and that for electoral reasons they will not shift from that point of view. We have to offer a reasonable scheme. I ask the Government to look at a number of excellent schemes to produce bonds that were before us some time ago in Sub-committee D. The idea was very simple. For 10 years, or five years, a payment is made to farmers to compensate them for the fall in prices and keep up their income. The bond can be marketed. The scheme lets you off the hook eventually because it does not commit you for ever more to supporting those farmers who are incompetent.
This process will be helped greatly by the fact that the Chinese are multiplying by leaps and bounds. All over the Far East prosperity is growing and those countries can buy the food that they need. If, for example, China were to consume the same amount of cereals as we consume in the European Union it would need 500 million tonnes of cereals, of which nearly 200 million tonnes might have to be imported. That will keep up cereal prices in the world. It is certainly doing so already. It is not all the result of a drought here and

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there. I believe, as do many good judges, that it results from the fact that we are progressing towards a rise in cereal prices that will get us off the hook.
The goal is worthwhile. Agriculture plays a big part in it. This country can take a lead if it shows that it is sincere and people in Europe believe that we really do want to be at the heart of Europe, instead of taking our present attitude.
4.12 p.m.
Lord Middleton: My Lords, we should be grateful to the noble Lord, Lord Wallace, for reminding us that a successful integration of the CEE and other countries into the European Union will go a long way to ensuring the peace and stability of the European continent in the future. The noble Lord also referred to agriculture, as did the noble Lord, Lord Mackie, with most of whose remarks, as usual, I agree. I also agreed with the noble Baroness, Lady Blackstone, when she referred to the nature of the trade agreements on which my committee reported and to which it will refer again.
It is worth quoting an introductory paragraph to a paper written for a conference on enlargement in Brussels three weeks ago:
"Agriculture will be the main stumbling block in talks about expanding the European Union to include the Central and Eastern European countries (CEECs). This we already know for sure. In fact, it is the only real certainty in this massive bargaining process, for which neither the exact date nor the form of the changes that it will take are yet known".
This was endorsed by the Select Committee of the noble Lord, Lord Tordoff, in its report on the IGC and again by many speakers in the subsequent debate last December.
The matter was taken on board just over a year ago by the Essen European Council which told the Commission to get on and produce a paper with alternative strategies for CAP reform with a view to future accession by the CEE countries. The resulting paper, under the signature of the agricultural Commissioner, Mr. Fischler, was published just before Christmas. This is not the occasion to debate that strategy document. The noble Lord, Lord Wallace, suggested that the Select Committee on the European Communities should address the subject of enlargement. Sub-committee D is at this time conducting an inquiry into the question of enlargement and CAP reform based on the Fischler paper and we hope to report to the House in the early summer.
Whatever the merits, or otherwise, of the Commission proposals, the important thing is that there is movement within the EU towards CAP reform and the ultimate removal of the great obstacle in the way of enlargement.
At this stage of our inquiry I think I can say that what worries my committee is that the proposed CAP reforms do not go far enough and may not proceed fast enough. On the one hand there are a number of separate pressures for reform. First, the CAP itself, despite the 1992 reforms, remains expensive and inefficient. Secondly, it barely complies with the obligations imposed by the recent GATT round and it will surely be challenged again when the new WTO negotiations
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start in 1999. Thirdly, as the noble Lord, Lord Mackie, mentioned, there are those who see great opportunities in an increasing world demand for food coupled with an increasing ability to pay for it on the part of the developing countries, not least, as the noble Lord reminded us, China. A CAP which continues to restrict output will hardly be an ideal instrument for enabling European farmers to capture these expanding markets in competition with the United States.
Lastly, there is the accession pressure to which I referred. No one who has visited, as I have, some of the CEE countries or who heard, as my committee did last week, the representatives of the Parliament of the Czech Republic can be unaware of the strength of their drive towards accession. But how can they reorganise their agriculture if they do not know what form the CAP will take? As one of the Czech MPs said to us last week: "It is very difficult to aim at a moving target". Those countries are justified in saying that if you are about to join a club you do need first to know the rules.
As a result of all these pressures, there is great urgency to get CAP reform moving. On the other hand, there are political difficulties. The noble Lord, Lord Mackie, referred to these. Within the EU there is reluctance to change the system. There is preference in some member states for inertia and the status quo. I was reminded of that when I attended a conference in Brussels on enlargement earlier this month. That is all the more reason for making an early start, after the IGC, in working out a CAP reform plan that can he adopted by the EU following a period for debate. But that period for debate must not be allowed to drag on. If the EU fails to press forward with CAP reform, then the movement towards a settled, safe, stable and integrated Europe will be put in danger.
4.19 p.m.
Lord Desai: My Lords, I am grateful to my noble colleague, Lord Wallace of Saltaire, for introducing the Motion this afternoon. I am very sceptical as to the desirability of enlargement and its benefits. While everybody has accepted that enlargement will take place—like my noble friend Lady Blackstone I speak merely of the Visegrad countries—even at the slow pace it is proceeding it is perhaps premature. The single market is not yet fully absorbed by the existing members. We notice across the European Union a number of practices which are gross distortions and violations of the single market. Nevertheless we are already embarked on a single currency which is proving a considerable problem. I believe the single currency to be a premature project launched by President Delors for a political purpose. The political purpose was to bind Germany firmly with France into the Union. What he thought Germany would do if it was not so bound I fail to see. However, such are the pressures of the history of 50 years ago that we still panic about imaginary dangers.
As the noble Lord, Lord Kingsland, said, perhaps the only argument for enlargement that one can make is based on the argument that we have to avoid the 1930s somehow happening again. For those political and defence reasons perhaps we ought to have enlargement into eastern Europe. We need not enlarge the Union for

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that. The enlargement of NATO may be sufficient. I do not really see the argument for enlargement. I strongly believe that it is not in the interests of the Visegrad countries, keen though they are to join the European Union. As my noble friend Lady Blackstone emphasised, they are being subjected to very severe conditions which the European Union members are not willing to obey in their own backyard. A considerably greater liberal economic policy than is being followed within the European Union is being imposed upon them as a condition of entry. Indeed, it is very similar to the conditions that in NAFTA Mexico had to satisfy vis-a-vis Canada and the United States. It is always the weak who suffer these conditions and the strong get away with it.
As a number of noble Lords have pointed out, given the structure of the CAP as it is today (it has taken the European Union several years before even starting to tinker with it) it is clear that reform will take much longer than was originally thought. With the Visegrad countries in an unreformed CAP, again as noble Lords have emphasised, the costs are going to be enormous and the whole system could not stand the strain. I think enlargement of the Union was first proposed in the hope, at least of the British Government, that it would dilute the federalist programme. The one hope one had in a sense was that enlargement was an expansion of the single market programme rather than of a federal programme.
My expectation is that if we are going to have 20, 25, 27 countries in the Union, qualified majority voting will have to play a much bigger role. As the noble Lord, Lord Tordoff, pointed out, the arrangements which were set up for the six or the 12, or even the 15, that is, the Commissioners, the Council, the presidency, will not be feasible for the 27. When you get to the 27 you have to think really seriously in terms of a federation. There is no other way to run a union of 27 countries. You will have much more harmonising, much more uniformity, much more fiscal federalism for the sheer reason that there will be 15 poor countries out of 27 compared to four or five right now.
A very serious examination of the subject has to be made now, given the difficulties the European Union is having already surrounding the IGC. Even to maintain the 15 in a proper union which has any depth is proving difficult. My fear is that we are embarking on an enlargement programme without sufficient thought as to what sort of Europe at the end is actually envisaged. There have always been two very different sorts of ideals clashing within the European Union. One is the ideal of a single market area which arose from the customs union of Belgium, the Netherlands and Luxembourg. It is all part of the German idea where you have free trade within a large area, free movement of practice and goods, but tariffs against foreigners. That single market idea could be extended. However, another idea, which grew out of the Coal and Steel Community, is a Europe of harmonisation, a Europe of cartelisation, a dirigiste Europe.
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On the Continent people are perfectly happy with these two conflicting Europes. Indeed, some of the reservations that Britain has had about the European Union arise from the fact that the Government like the single-market Europe but are not quite happy with the other Europe. I do believe that the tension will continue, exacerbated by the entry of another 12 countries which are economically uneven relative to the existing members.
All the institutions of the Union—the Parliament, the Commission, the presidency and the Council—will not stand the strain of enlargement. Unless radical thought is given to that question, we are embarking on a foolish adventure. My fear is that, given the way we make decisions in Europe, we do not have the machinery for any radical overhaul, especially on the common agricultural policy. I do not see how French politics could stand a radical overhaul of the common agricultural policy, given all the other difficulties France has. I do not want to labour the point but I want to add a sceptical note to the desirability of what is proposed. I believe that the Visegrad countries would do better to adopt a much more liberal regime in their own hack yard rather than get into a protective European Union.
4.28 p.m.
Lord Weidenfeld: My Lords, I should like to deal with the four Visegrad states: Poland, Hungary, the Czech Republic and Slovakia, and—unbundling her from the wider list—the Republic of Slovenia. I should also like to focus on the first of the three main criteria, that which encompasses the stability of institutions, democracy, the rule of law, human rights and the protection of minorities.
Before appraising the current state of affairs in those countries we owe ourselves a reminder of our debt that has to be settled—a moral and historical debt. Czechoslovakia was the first victim of undisputed Hitlerite aggression, abandoned to Germany and later allowed to be repressed by the Soviet Union. Poland was an ally that afterwards also fell prey to the same power. Hungary, although ensnared into the Axis camp by geography and lingering resentments stemming from the Paris peace treaties after the First World War, redeemed herself by the heroic revolution in 1956. Indeed the Hungarian Government's lifting of the frontier barriers with Austria, enabling East German refugees to flee to the West, started the stampede which culminated in the crumbling of the Berlin Wall.
The Czech Republic has gone a long way towards building a civil society. Far-reaching privatisation and deregulation have boosted the Czech economy to the point where it can confidently look to meeting all criteria. A humanist President, a fiercely free-marketeering Prime Minister and an independent press have shown how this great people, with its thousand year-old history, punctuated and accented by not one but three golden ages, can shape its destiny if given a measure of freedom. There is no serious minority problem in the Czech Republic except a current chill between Prague and Bonn regarding the delicate question of compensations and moral reparations centring on the former Sudetenland.

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While nobody denies the grave injustice done to the Czechs during the war, it must also be recognised that the expulsion of Sudeten Germans after the war was accompanied by violations of human rights. The Czechs are wary about mounting claims for restitution. But it is a psychological more than a material problem. The surviving Sudeten Germans, the descendants of the Sudeten Germans, do not have restitution claims in terms of wanting to have back their land. More than anything else, they want the moral recognition that they also have suffered injustice.
We know that there have been very decent, Christian Conservatives, Liberals and Socialists who were among the expellees. Manfully, President Havel tendered a public apology, which, as it turned out, was ahead of the mood of public opinion. The German Government are now well aware of that impasse, but there is an iron determination in Bonn to reach a compromise ahead of formal negotiations.
In contrast, relations between Germany and Poland, involving the status of nearly 1 million Germans in Poland, are very healthy and most satisfactory. It is one of Chancellor Kohl's achievements to have made that relationship a pivotal part of German foreign policy. The German political class, media and think tanks are now musing about the "Republic of Berlin" which will replace the era of Bonn. What will be its future meaning, its ethos and its philosophical leitmotif? Bonn is on the Rhine and anchored in the West; Berlin is a 50-minute taxi ride away from the Polish frontier. Should the capital of Europe's largest state become the eastern bordertown of western Europe? The 39 million Poles, who are western in outlook, Catholic and European to the last degree, must not be allowed to remain isolated. Polish democracy is robust, litigious and rough but functioning.
When people talk of a communist revival in Poland and other lands between the Baltic and the Black Sea, they are only partly right. In the fluid East European scene today, there is much terminological confusion. Labels do not necessarily mean what they say. All those countries, having chosen the path of "velvet revolution"—that is to say, having eschewed bloodshed and massive top-to-bottom bureaucratic change—have retained many apparatchiks who know how to manipulate power. Some, in fact, are indispensable and difficult to replace; they know where the problems lie. But, at the same time, we must be quite confident. New leaderships are emerging. Some purists may be less than satisfied with the pace of reform, but the process of transition is inevitably marred by compromise and abuse. Yet somehow the system functions.
I was very pleased to hear from the noble Lord, Lord Kingsland, about the primacy of the rule of law. In those countries we must achieve a threshold of human rights observance and a modicum of civil society rather than the minutiae of institutional change or parliamentary government which would clone the parliaments of Britain and France.
Hungary seemed destined to be the front runner in the transition to democracy, having benefited from the mildest form of communist dictatorship in the 1980s. But
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after the initial upswing, both democratic politics and economics seemed to stagnate and some of the demons of chauvinism have resurfaced. Many Hungarians gaze anxiously at the still far from happy fate of the Hungarian minorities in Romania and Slovakia.
It is just that spectre of ethnic feuds and disgruntled minorities which makes the inclusion of the central European states into Europe so vitally urgent and important. Only through the European Union can those demons be exorcised. Exclusion from Europe would exacerbate conflicts, which could reach a scale approximating what we have seen in former Yugoslavia. Such tensions could explode into war. That, indeed, was the deeper meaning in Helmut Kohl's remarks in his recent speech at Louvain, which, incidentally, has been misinterpreted and quoted out of context by some of our tabloids and broadsheets and turned into a kind of apocalyptic and menacing prophecy of doom.
If Poland, Hungary and the Czech Republic deserve our unambiguous support, Slovakia's political scene must give us pause to reflect. The Slovaks' decision to separate from the Czechs has brought them face to face with massive economic problems and thrown into relief the issue of the Hungarian minority. An authoritarian party is in government. It rides roughshod over human rights and the freedom of press and television. There is a courageous democratic opposition which needs our support. The strategic importance of Slovakia, which borders on the former Soviet Union and is liable to KGB penetration, must be of concern. However, I believe that the Slovaks' firm desire for integration into Europe will mitigate the current political danger, but not without a very firm line from the European Union, including Her Majesty's Government.
There remains Slovenia. I am very glad that the noble Baroness, Lady Blackstone, singled out Slovenia. It is that part of former Yugoslavia which is ethnically homogeneous—an educated, civilised people decidedly prepared to meet the European criteria in the near future. Whereas there are still disputes with Austria, which has a tiny Slovene minority, there is a lingering and serious feud with Italy—shades of Marshal Tito's territorial expansion in and around the Adriatic littoral.
On the one hand, we must remember Slovenia's suffering in the last war; but, on the other hand, we must not dismiss Italian claims as flamboyant reassertions of Gabriele d' Annunzio's posturing claims on the eve of the fascist march on Rome. A compromise is necessary and we should help to broker it. There are grounds for optimism. There is much commonality of interest and shared culture between Slovenes, Austrians and Italians. Some time at the height of the cold war I had occasion to attend several meetings of writers, teachers and young politicians in a forum called Alpe-Adria, where Austrians, Slovenes and Italians shared constructively hopes for a peaceful trilateral future.
President Havel once said:
"There can be no real peace in Europe if there is turmoil and turbulence in any one of its parts".
Those five countries are not in a far corner of the continent. Their problems have a way of besetting us on our very doorstep and far-sighted governments must

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purposefully enlighten and carry public opinion, however sluggish, with them. That is the real test of leadership. That is the greater part of a European vision.
4.36 p.m.
Lord Lester of Herne Hill: My Lords, I congratulate my noble friend Lord Wallace of Saltaire on having chosen a topical and crucially important subject for debate. For reasons just expressed by the noble Lord, Lord Weidenfeld, it would be churlish for anyone to speak in opposition to greater enlargement, especially enlargement which involves the Czech Republic, Hungary and any country which can satisfy the crucial criteria referred to. But in my remarks, without in any way withdrawing what I have just said, I shall emphasise some of the dangers. In a sense, everything that I am about to say builds on the remarkably effective speech made by the noble Lord, Lord Kingsland, with whom I entirely agree, and his emphasis on the importance of the European rule of law and the need for effective European judicial remedies.
The White Paper published yesterday rightly states:
"Enlargement poses formidable challenges not only for the applicants, who must be ready and able to take on the obligations of membership, but for the existing European Union which must adapt its structures and its policies".
That is a masterly example of English understatement, even by White Paper standards.
But the White Paper wholly fails to tell us exactly what changes in the Union's structures and policies are necessary if further extensive enlargement is not to result in a serious undermining of the Union and its institutions and the rule of law. The White Paper avoids facing the fundamental questions affecting the very future of the Union. I have read the document twice and can find no enlightenment on those questions.
I do not find encouraging the reference in paragraph 8 of the White Paper to what are called "a degree of flexibility" and "variable geometry", if that means that enlargement involves a variable geometry in the practice of parliamentary principles or in the demonstration of respect for human rights among the applicant states. I mention those because they are the key criteria to which the Select Committee on the European Communities attached great importance in its impressive report in 1992 on the enlargement of the Community. I hope that the Minister in his reply will make clear that that Delphic remark in the White Paper is not meant to signal some retreat from those parliamentary principles or that demonstration of respect for human rights in the applicant states as conditions required for membership of the Union. I do not believe that that represents the kind of excessive respect for purity—or purism—about which the noble Lord, Lord Weidenfeld, spoke.
A key indicator of the demonstration of this respect for human rights is the capacity and readiness of the applicant states to secure the effective implementation in their national systems of the duties imposed on the states by membership of the European Convention on Human Rights. Indeed, as the White Paper says, the European Union is now bound to respect the European Convention on Human Rights.
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I wholly agree with the noble Lord, Lord Kingsland, regarding the fundamental importance of the European rule of law. It is a measure of the remarkable success of the jewel in the crown of the Council of Europe—the European human rights convention system—that 31 member states are now bound by that convention. They accepted the right of everyone in their countries to go to the European Commission and Court of Human Rights. But rapid enlargement of the Council of Europe and the convention system is now threatening the viability of that system in a dramatic and grim way. I am sorry if I sound like Cassandra; I hope that, unlike Cassandra, I shall be proved wrong.
The first step for a member state of the European Union is to become a member of the Council of Europe. It is therefore instructive to see what is happening within the Council of Europe. The European Commission and Court of Human Rights are now choking on a completely hopeless backlog and caseload, working in two languages but in truth with 18 different languages with complaints that will be coming from already 31 states to what is already 31 European judges from very different backgrounds. It already takes six years for the European Court to cope with the backlog; many cases will have taken six years even to reach the court in the first place from the national system. That makes 12 years altogether. That is a denial of justice in itself, without any further enlargement.
The convention was conceived when there were only 10 member states, just as the European Community was conceived when there were only six. A conservative forecast, based on present experience, suggests that the number of cases coming before the European Court of Human Rights will soon double. We will have a full-time, permanent Court of Human Rights with 35 to 40 judges sitting full-time in five chambers of seven judges apiece. Imagine that; imagine the kind of overload and stress that that will place on the system.
Enlargement within the Council of Europe will be quite terrible when the Russian Federation is admitted to the system. It will be the last straw that will break the camel's back. I disagree with my noble friend Lord Mackie of Benshie regarding the consequences of the decision that was taken by the parliamentary assembly to recommend admission. Frankly, I am not at all encouraged by the answers given by the Government to questions I raised about the consequences of that rapid enlargement. Essentially, to sum up the position, I was told that the Government do not accept the view of the parliamentary assembly that objective criteria are to be maintained and enforced. There are to be no new resources for the consequences of accepting Russia's admission to the federation. I do not believe that Russia now respects the rule of law, or is likely to in the foreseeable future, in a way which makes it probable that it will comply with the convention.
I mention that example because, although Herr Kohl may believe—I think he does—that it was sensible to let Russia in under President Yeltsin's ultimatum (for that is what it was), I do not believe that we in this country should be pleased about it. In short, enlargement and further enlargement are a noble aspiration. But it threatens the European Union in its

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present form and, as we said in the report of the IGC sub-committee of my noble friend Lord Tordoff, to which I was privileged to belong:
"A major objective of the IGC must be to make such changes as are necessary to allow the Union to function more effectively and efficiently. This will be even more important in the perspective of an enlargement, which is now the driving force in the European Union's forward planning".
Without those changes—and they are profound—I fear that the European institutions, including the two European Courts, will become Towers of Babel, in danger of collapsing under the weight of top-heavy, uncoordinated judicial and administrative bureaucracies. I believe that the European institution as a whole, without the necessary reforms, will be paralysed by outmoded, rigid and inefficient procedures designed for a much smaller and more cohesive European Community. I do not believe that the Government have yet responded to the challenge of those problems. It is better that they do so now, rather than when it is too late—after we get closer to real greater enlargement.
4.45 p.m.
Lord Grenfell: My Lords, I am grateful to the noble Lord, Lord Wallace of Saltaire, for giving us the opportunity to air some views on this important subject. I look forward to the eventual accession of Cyprus and Malta to the European Union and declare my absolute conviction that the eventual incorporation of the 10 countries of east and central Europe is a geopolitical imperative. I should like to talk about the applications of those countries.
I take as my starting point an interesting first leader in The Times of Monday, 11th March, which commented on the remarkable speech made by the noble Baroness, Lady Thatcher, in Fulton, Missouri. I have not seen the verbatim text, and I must rely on The Times to reflect accurately the thrust of the noble Baroness's remarks. One passage which very much caught my eye stated:
"She is right to turn on the European Union for neglecting 'an almost explicit duty laid down by history': the speedy incorporation of the new democracies of Central Europe. She asks why, instead, 'every obstacle' has been put in their way and absurd quotas imposed against their exports. She is right to point to the resulting political costs in these fragile democracies as post-Communists profit from the perceived rebuff by Western Europe".
It is extremely important that we try to understand why our future European partners, as I hope they will be, in the European Community in east and central Europe are turning to the successor parties to the old communist parties. With respect to the noble Baroness, Lady Thatcher, in my view it has precious little to do with any perceived rebuffs by any European Union members. If we misunderstand or ignore what is really happening in that region, we will be ill placed to help them prepare for entry into the European Union.
I want first to try to dispose of the myth about the European Union driving east and central European countries back into the arms of the old communists under new names; that from Riga to Sofia the clocks are being turned back to the bad old days. We must not
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confuse what is happening in some parts of the former Soviet Union successor states with what is happening in east and central Europe and the Baltic States.
Only two weeks ago the Economist based an article on the "New Democracies Barometer No. IV"—an opinion poll carried out by the much respected Paul Lazarsfeld Society of Vienna. That poll showed that in six former Warsaw Pact countries plus Slovenia, only 16 per cent. of the population are nostalgic for the old days. In Poland, which has just elected an ex-communist president, only 8 per cent. of the population want to return to the communist economic and political system. Five years ago only one-third of East and Central Europeans were positive about the transition. Today nearly two-thirds are happy with the progress already made and do not want to turn back. In the Czech Republic and Poland the numbers holding positive views have shot up in five years from a quarter to over three-quarters of the population. And what bodes particularly well for the future is that, right across the region, it is the under-30s who are the most positive of all.
How then do we explain the fact that in recent times Bulgaria, Estonia, Hungary, Poland, Slovakia and Slovenia have all elected the descendants of the old communist parties? It certainly has nothing to do with perceived rebuffs by the European Union. The most common conclusion jumped to by outside observers is that the reforms were just too painful and that people therefore wanted to take refuge in the old certainties—jobs for life, universal pensions, generous disability systems, guaranteed healthcare, vacations, housing and in fact all the lavish entitlements that eventually bankrupted the communist system.
There has to be some other reason why the old Left is being voted back despite the fact that people do not want a return to totalitarian rule. For a start, the people obviously do not believe that the post-communist Left want to turn the clock back and reverse the drive to a market economy. I am sure that the noble Lord, Lord Weidenfeld, will agree with that.
Everyone knows that the reforms have been extraordinarily painful. Post-communist governments were sailing in wholly uncharted waters. Hundreds of books had been written about how to turn a capitalist society into a totalitarian society and a centrally planned economy, but there had been no books written about how to do it the other way around. I remember a Polish politician telling me that the process was rather like trying to turn a bouillabaisse back into an aquarium. The initial shock was tremendous.
In December 1989, Warsaw's main unemployment office handed out benefits to just five people. A year later I million Poles were unemployed and three years later 3 million Poles were unemployed. Across the region everyone was discovering the cost of transition paid in more poverty, higher child mortality and crime rates and precipitous declines in output. But they went ahead. Now, across the region, as some noble Lords have already pointed out, positive rates of growth are being achieved, and the process is being helped by the end of recession in the industrialised countries and

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the subsequent recovery of western European import demand. And that, taken together with the implementation of the Association Agreements, is adding 8 to 10 per cent. to eastern and central Europe's export growth. A look at household consumption patterns shows that living standards for the majority have not dropped, and consumer durables not available under the old regimes are now being snapped up.
Most significantly of all, social spending has not only remained an unusually high proportion of GDP, it has actually been rising. Social spending budgets are somewhere between 15 and 30 per cent. of GDP. In East Asia, countries at similar income levels average between 5 and 10 per cent.
Herein lies a key part of the answer to the question: why are the ex-communists coming back? Well, they have learnt something important about democracy: that if you promise enough you improve your chances of getting elected—something that they did not have to worry about before. And these ex-communist parties are seen as the parties most likely to retain or increase social welfare entitlements while at the same time embracing the market economy.
The lesson of this is clear. Many of these countries are building up dangerous deficits and will have to halt the growing fiscal crisis in its tracks by reducing the volume of social spending to a more realistic share of GDP. Because of low population growth rates, the region's population is relatively old, which means high state pension costs. Moreover, older workers are having more trouble adjusting to transition, so early retirement is now widespread. With such a large proportion of the adult population on pensions, the cost has to be met out of a huge payroll tax, among the highest in the world, which is hardly helpful to the development of the market economy.
Countries in permanent fiscal crises of this magnitude would be hard put to make themselves ready very quickly for entry into the European Union. Social welfare reform is essential, just as it is essential in many countries that are already members of the Union. It is not easy and, as Jeffrey Sachs of Harvard has said and warned,
"almost no country in the world has been able to roll back long-established entitlements".
But it has to be done. Only six weeks ago, Hungary lost its brilliant young Finance Minister, Lajos Bokros, who resigned because he was fed up with the bickering over his planned welfare overhaul.
European Union members have an interest and a duty to help these countries prepare for eventual membership, as my noble friend Lady Blackstone has said. They are not, and will not be, starved of advice. There are limits to their capacity to absorb large capital transfers. But what they do need is even better access to EU markets than they have at present. I cannot quarrel with the argument in the Fulton speech of the noble Baroness, Lady Thatcher, on that one.
The problems that have to be solved are not insuperable, and we can help to resolve them. But at the same time there must be moves towards some further liberalisation by the European Union in trade and export sectors vital to the interests of these countries.
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I conclude with a plea for particular understanding and patience on all sides in this enlargement argument. The Union must first get its own house in order, and quickly. Applicant countries have little to gain from joining a watered down Community that is little more than a free trade area, vital though trade in them is. The enlargement must proceed, but at a pace that permits time to create the best possible conditions both in the European Union and in the applicant countries. The ultimate goal is set. Its achievement must not be jeopardised by unreasonably rushing the process and its worth must not be devalued by a failure to reform the Union itself in anticipation of enlargement. On that, time is not on our side.
4.55 p.m.
Baroness Rawlings: My Lords, I, too, would like to thank the noble Lord, Lord Wallace of Saltaire, for initiating this debate, especially prior to the one that we shall no doubt be having on the White Paper.
A few years before the Berlin Wall came down in 1989, before eastern and central Europe had refound its freedom and democracy, that part of Europe was often referred to as the "forgotten Europe". Happily, in the light of those events, that has been swiftly remedied.
Now we are in a fragile period when these fledgling democracies have passed through the first excitement of freedom. The dream has come true, as have also the hard facts of reality, as we have heard so well described by the noble Lord, Lord Grenfell. We have witnessed the difficulties and strains on the FDR with the unification of Germany and the immense burden of costs and social strains on the government and the people.
Enlargement of the European Union, as we have heard, is not only eastwards but also southwards, including the Mediterranean applicants. This will involve much larger and even more complex problems.
Article 237 of the Treaty of Rome and Article 0 of the Maastricht Treaty states:
"any European State may apply to become a member".
The term "European" has not been officially defined. It combines geographical, historical and cultural elements which all contribute to the European identity. The shared experience of proximity, ideas, values and historical interaction cannot be condensed into a simple formula and is subject to review by each succeeding generation.
Other essential characteristics of the Union, referred to in Article F of the Maastricht Treaty, are the principles of democracy and the respect of fundamental human rights. A state which applies for membership must therefore satisfy the three basic conditions of European identity, democratic status and respect of human rights. That is only the start.
At this late stage in the debate I would like to touch on just two points. Enlargement of the European Union is vitally important if the Union is to continue to act as a force for peace and prosperity in Europe and the world. Enlarging the European Union to the east will enhance the security and prosperity of all the peoples of Europe.

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It will help to bring about the changes that we have witnessed in the past five years and will bring benefits to Europe as a whole and to Britain in particular.
I turn now to security. The European Union will not be secure if there is uncertainty beyond its borders in central and eastern Europe. Stability in central Europe is necessary if there is to be stability in the whole continent. The prosperity of the applicant countries will not only benefit them but the whole of the European Union. As regards our shared values, the central and eastern European nations and the Mediterranean ones that have applied are not just our geographic and economic neighbours; they also share thousands of years of history and culture. The European Union cannot ignore this common cultural heritage.
The timescale for enlargement of the European Union, which is the essence of this debate, cannot be glossed over just for romantic reasons. We might like to double the single market tomorrow, but it would be totally useless if it did not work—hence the two important points made so eloquently by my noble friend Lord Kingsland about security and the rule of law.
Since the Maastricht Summit of 11th December 1991, it has been clear that the European Community is going to be enlarged. The Heads of State have taken that decision of general principle. There are three open questions to be answered. First, which European countries is the Community willing to accept and when should future enlargements take place? Secondly, what are the adequate terms and conditions for future enlargements for both the Community and for possible new member states? Thirdly, and more specifically, what are the necessary institutional reforms? We have heard some suggestions from the noble Lord, Lord Tordoff. All three questions are interlinked with each other. Obviously, the more countries the European Union is willing to accept and the shorter the time for preparation, the more urgent is the need for reform.
When I was in the European Parliament, I took the Europe Agreements with Bulgaria through the Parliament. The Europe Agreements are important stepping stones, but they are not totally satisfactory, as we heard from the noble Lord, Lord Mackie of Benshie. For most of the countries that suffered all those years under the communist yoke and a command economy, the European Union, despite all its problems and faults, is a light at the end of the tunnel.
I hope that over the next few years the governments of the European Union countries will come to positive decisions to assist what now, thank goodness, is no longer the "forgotten Europe".
5.1 p.m.
Lord Kennet: My Lords, we are having a very good debate and, like other noble Lords, I should like to start by thanking the noble Lord, Lord Wallace of Saltaire, for introducing it so admirably. We heard an outstanding speech from the noble Lord, Lord Kingsland, with whom I differ on only one point in his splendid exegesis of security and the rule of law. I remind him that the aggression of Hitler was against sovereign states, his
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neighbours, whereas the aggression in Bosnia has been of the nature of a civil war within one country, which perhaps we should never have created or rather permitted Germany to create. That speech was followed by a most judicious round-up of considerations by my noble friend Lady Blackstone.
Alongside the widening of the European Union, which we are debating, we have to remember two other aspects. I refer to its deepening, and to relationships with surrounding organisations. Europe is now planted thick with organisations. Deepening was the subject of yesterday's interesting White Paper, and is not a matter for today. So much has been said about widening that there is very little more to say.
The widening of the European Union must be considered alongside the widening, if any, of other organisations such as the Council of Europe, NATO, the Western European Union and the OSCE. When considering the position of Russia in all this, it is obvious that the one thing that must not be done is to widen NATO up to its borders against its will. That would simply be flying in the face of history, and of all chances of peace and harmony in Europe for as far as the eye can see. The existence of Russia provides a natural frontier to the east for the European Community. Russia would not fit into the European Community, not because it is very large and was until recently communist, but because of its continuing nature as an empire. Its wars—its imperial wars; its internal wars—would become European Union wars if Russia were within the Union. I do not think that the European Union is equipped to have any opinion, let alone to take any action, on such a phenomenon in the future, as we have seen in Chechnya. It is true that Britain and France are still empires—that is, we still have overseas possessions, but they are so tiny that the parallel is not of any interest.
How far could the expansion of the European Union go? In the long run, supposing we agree that to the east it should not go as far as to include Russia, there are plenty of countries to the south—I refer to Tunisia, Algeria and Morocco—in which, although I do not say that they are thinking about it, people's voices are raised to say that the only way out of their present difficulties is a kind of Gleichshaltung with Christian Europe, but that is difficult to imagine. Indeed, I imagine that most European countries would instinctively reject that—at any rate, for the moment. So, there is a reasonably, historically, ethnically and even religiously defined frontier all around the Europe that we plan to build in the European Union.
What about future relations between the European Union and the Western European Union? At the moment when we are deepening the European Union and intensifying its functions, and when we are enlarging it, can we sensibly go forward without taking a rather more reasoned and formal decision on the general security functions of the European Union and the military security functions of the Western European Union? I believe that that requires more thought. I do not know the answer, but at present there is a general tendency to say, "They are quite different, aren't they? Never must the military touch the civilian fabric of the European Union, and never

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must the unifying function of the European Union touch the Western European Union". I doubt whether that distinction can be maintained for ever.
I should like to say a final word about the other enlargement—that is, the enlargement of NATO. I had the pleasure about a year ago of meeting the Member of Parliament for Kaliningrad in Russia. Kaliningrad is completely separate from the main body of Russia. That democratically elected parliamentarian had to cross Polish territory each Monday to get back to Moscow to do his work in the Parliament. His views on the possibility of having to cross the territory of an historically hostile military alliance, if we were to include Poland in NATO, naturally enough scarcely bear repetition. We should make a firm resolution that NATO stops short of Poland, and that Poland and the other countries that we are talking about come into the European Union as quickly as possible. "Get 'em in and sort it out afterwards", is the reasonable position.
5.8 p.m.
Lord Taverne: My Lords, one of the pleasures in being a Member of this institution is to discover the expertise and breadth of knowledge that are brought to bear in your Lordships' debates. That has struck me particularly during this debate. We are all grateful to the noble Lord, Lord Wallace of Saltaire, for raising the subject. He pointed out the historic importance of the step of enlargement and what fundamental and profound changes it will have to bring about in the European Union itself.
Several noble Lords have said that enlargement is inevitable. I am not sure that I necessarily share that view or that I feel that enlargement is inevitable within a reasonable timescale because of the fundamental changes that will be required. It is clear that some states are not yet necessarily prepared to face up to those changes.
As was pointed out by several speakers, notably the noble Lords, Lord Middleton and Lord Mackie of Benshie, there have to be profound changes in the common agricultural policy; otherwise enlargement will not be feasible. Yet Germany and France have not yet faced up to that.
There will have to be a move towards making the Union's institutions more and not less effective. In his speech, to which I listened with particular respect, the noble Lord, Lord Kingsland, pointed out that the ECJ would desperately need strengthening. My noble friend Lord Lester also pointed out that as enlarged, the EU must be founded on the rule of law. There are other institutions which need to be strengthened, not weakened. My noble friend Lord Tordoff referred to the need to look again at the whole composition and functioning of the Commission. The Commission's role will become more, not less, important in an enlarged Community. It needs to be strengthened, not weakened.
One of my regrets about the Government's White Paper is that, far from recognising the need to strengthen the Union's institutions if they are to achieve their aim of enlargement, they take a rather opposite view. The point I wish to stress especially is
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the role of qualified majority voting. The Government must realise that they cannot have enlargement without some extension of QMV.
First, the Union cannot function efficiently if it is to be a union of 27 states and every state has a veto. Malta is one of the states which may soon become a member of the Union. Malta, with its population of 400,000, will have 0.1 per cent. of the population of the Union. It is neither efficient nor democratic for Malta to have a veto on so many of the issues where the veto still applies. The Union will be unable to function if every state has a veto. That is a fact that must be recognised. It is not necessarily likely that each country will exercise its veto, but we cannot rule out that vetoes will be exercised capriciously by some states. We have seen that in the past when Greece, for reasons of Balkan politics, vetoed a complaint to the Soviet Union over the shooting down of the Korean airliner. Greece prevented a more constructive relationship being developed with the former Yugoslavian state of Macedonia, again by the use of its veto.
Secondly, not only will it not work, it must be recognised that we will not have enlargement if there is not some extension of QMV, because our partners will not persist in pushing for enlargement if it would mean the seizing up of the machinery of the Union.
A third aspect which is disturbing about the Government's total opposition, as it seems from the White Paper, to any extension of QMV is that it is, in fact, a self-inflicted injury, because we have benefited greatly from QMV. Enormous progress has been made in the near realisation of the single market, and that has been possible only because of QMV. The reason why Europe is such a magnet to the states which wish to become members of the EU is the success of the single market programme.
Without QMV we would not have had the abolition of exchange controls and the extension of free trade in the Uruguay Round. We have benefited in all sorts of ways from the extension of the single market to various financial services such as life insurance. That would not have happened without QMV. As has been stressed by a number of noble Lords, for enlargement it is essential for there to be a major reform of the CAP. That cannot happen without QMV.
I should like to say some words in praise of the noble Baroness, Lady Thatcher. By signing the Single European Act, her government enabled the largest extension of QMV to take place in the Union's history. Before the Single European Act took effect many of the provisions of the Treaty of Rome were frustrated. At one stage the noble Baroness was the leader of a government who enabled QMV to be greatly extended. It is true that she later modified her views somewhat, but then one must allow people to change their views and one must understand that the lady was prepared to go in for some turning.
Unfortunately that turning was to a stance which was contrary to British interests. If the total opposition to QMV is persisted in, enlargement will not take place. If we are to achieve what we wish to achieve—if many of the points made during the debate are to be taken into

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account—the Government's attitude must be flexible and pragmatic. They must recognise that the enlargement, which is desirable for the reasons so many noble Lords have advanced, will not be possible if the machinery and institutions of the EU are not made more rather than less efficient. It is wholly inconsistent to support enlargement but not to support the fundamental changes in the Community which can be achieved only by an extension of QMV.
5.16 p.m.
The Parliamentary Under-Secretary of State, Department of National Heritage (Lord Inglewood): My Lords, we have had a useful debate. The whole House owes a debt of gratitude and thanks to the noble Lord, Lord Wallace of Saltaire, for giving us the opportunity to debate this subject. Of course we have had differences of view, but I am heartened that the majority of your Lordships agrees with the Government on the importance of enlarging the EU and recognises that it is the essential element running through the forthcoming IGC debate.
Enlargement of the EU is an opportunity to heal the wounds of a continent artificially severed for far too long. It will extend to our eastern European neighbours the lasting peace and prosperity which we in western Europe have enjoyed to our collective benefit for 50 years. It therefore follows that the construction of a wider EU, encompassing the whole of Europe, is more than a mere technical enlargement of a unique political organisation. It is a development full of historic resonance. It is a step, not just in the interests of our neighbours but in the interests of the existing EU, the interests of Britain, and, we believe, in the interests of the wider world.
Enlargement will bring a range of benefits, some obvious, some less so. It has increased trade with and investment in the countries of central and eastern Europe and will do more. We are already seeing the results of that. British exports to the Visegrad Four countries trebled between 1989 and 1994. Enlargement will increase the weight of the EU's political voice in the world, and add to it the special insights of countries formerly within the command economy system and the Warsaw Pact. It will help achieve better co-operation in the fight against the growing menace of drugs and international crime. It will bring higher environmental standards in the countries of central and eastern Europe, helping to combat trans-border and global pollution. It will make nationalist wars as unthinkable in eastern Europe as they are in the West. As the noble Lord, Lord Weidenfeld, put it, we must exorcise those demons. My noble friend Lord Kingsland made, as a number of noble Lords have pointed out, a memorable speech. To those of us who were fortunate enough to serve in the European Parliament it will have come as no surprise. He was right to focus on the importance of a common foreign and security policy in that area.
As has already been mentioned, the White Paper on the IGC will be debated by your Lordships on another occasion. I hope that I may be forgiven for quoting the final paragraph of Annex D to that White Paper, which
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is the memorandum on the UK Government's approach to the treatment of European defence issues at the 1996 IGC. Paragraph 34 of the summary reads:
"The United Kingdom's objective will be to promote the concept of an outward looking Europe, able to promote stability within Europe and wider afield, and shouldering its fair share of the burden with the United States and others for promoting the conditions of international peace and stability within which European nations can best pursue their interests and well-being. That burden should also be shared equitably amongst European Member States. This Memorandum has set out our proposals for the adoption of a task-based approach to the development of a European defence policy to achieve that objective, and the implications for institutional structures and the development of the WEU's capabilities. We shall now take these proposals forward with our partners".
On this occasion, I hope that I am permitted to leave that part of our debate at that point.
We have already moved down the road towards a continent at one with itself. In response to the questions asked by the noble Lord, Lord Lester, about the reference to flexibility in paragraph 8 of the White Paper, I emphasise that the use of the word "flexibility" does not refer to what I might describe as the Copenhagen or Madrid criteria. I hope that that is absolutely clear.
As has been mentioned, nine countries have Europe Agreements, designed to lead towards European Union membership. The noble Baroness, Lady Blackstone, and others, referred specifically to Slovenia. We hope that Slovenia will soon be able to resolve its bilateral property dispute with Italy and sign its association agreement, which has already been initialled. We are encouraging both sides to resolve their differences and as strong supporters of enlargement we do not want to see Slovenia fall behind when the Commission begins serious work on its opinions of the central European applicants.
Those countries which have Europe Agreements find that almost all their exports to the Union enter duty free. The last restrictions on their textile exports will be removed next year. We are heading towards full cumulation of rules of origin across the Continent which will reduce the constraints on goods being processed in more than one country, encouraging regional co-operation and helping the central European countries to export more to our markets.
Of course, there is much more to do, as was said by a number of noble Lords not least my noble friend Lord Middleton and the noble Lord, Lord Mackie of Benshie. Agricultural trade remains an outstanding problem. All but Hungary have a food trade deficit with the European Union. Even in the case of Hungary, the balance of trade has shifted significantly in the Union's favour. Yet these countries have a comparative advantage in agriculture. That situation is impossible to justify either to consumers here or to producers in central Europe. We will continue strongly to support moves to improve market access for agricultural goods from central Europe. That is the way to help the applicant countries to restructure and rebuild their economies. Not only is that a problem but, as was pointed out by the noble Lord, Lord Grenfell, social welfare reform must be tackled head-on. Protectionism is not the answer. History shows us that all too clearly.

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The central European countries are working hard to prepare for membership. They are adapting their laws or adopting new ones, in particular for joining the single market. They have a shared goal of long-term economic and monetary stability. They are continuing along the democratic path. We do not under-estimate the task of consolidating lasting change. Reform will not proceed at the same pace in every one of the applicant countries and some countries are likely to be ready before others. That is natural and we must take account of it as negotiations begin.
In this context, it is important to be clear that the European Union has been taking steps to assist those potential member countries with their economic development. The Essen European Council of December 1994 adopted a strategy to prepare associates for membership. The Commission's White Paper on integrating the central European countries into the internal market is a vital part of that strategy. It supports their practical preparations for membership by helping them to align national law to European Union law and to create the conditions for the internal market to function properly after enlargement.
It is a comprehensive and detailed presentation of the internal market, identifying key measures for the freedom of movement of goods, services, capital and people. It suggests a sequence for implementing them and describes the structures necessary to enforce legislation. It does not suggest priorities—that is for each associate to decide—nor does it form part of accession negotiations or anticipate any transitional arrangements.
Most of the central European countries now have plans for approximating their internal market laws to those of the European Union. They are establishing national co-ordinating machinery and planning how to use assistance from the Commission and member states to make their legislation work effectively. It will be a complex task for the associates and requires considerable technical assistance. We shall pay attention to progress with the implementation and enforcement of single-market rules.
As your Lordships know, we are assisting both as a member of the European Union through the PHARE programme, and also bilaterally through the know-how fund, to assist these countries in implementing these very necessary steps. As yet, the Union has not taken a decision on which central European countries will negotiate for accession and when exactly that might be. That decision will depend crucially on the readiness of the candidates for membership. It would create real difficulties both for the candidates and the countries in the European Union if they entered the Union before they had developed the full range of effective institutions essential to economic life in the European Union. That reflects the thinking of the Copenhagen and Madrid criteria.
The decision to begin negotiations will also depend on the opinions which the Commission is set to deliver as soon as possible after the IGC. It would be wrong to prejudge that decision, especially now as the candidates' preparations are in full flow. But at Madrid the
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European Union leaders expressed their hope that the initial phase for the first negotiations should begin alongside the opening of negotiations with Cyprus and Malta, to which reference has been made in the debate. We expect that at least some central European countries will be ready to negotiate then. We are keen that they should do so and very much look forward to it.
I have mentioned the need for thorough preparation. One of our tasks is to help the central European countries with that process and to do so as speedily as we can. We will continue to support their progress through the European Union's PHARE programme and through our own bilateral know-how fund.
The other vital task is one for the European Union itself; to put in place institutions and policies fit for an enlarged European Union. That point was made by the noble Lords, Lord Wallace and Lord Tordoff, in respect of the House of Lords IGC ad hoc committee. It was also touched on by a number of other noble Lords. We must have proper institutions and policies which will be right for the Union in the 21st century. The European Union's institutions will come under the spotlight in the IGC. Our position on the IGC and the issues which touch on enlargement have been spelt out in some detail in the White Paper. I do not wish to go over that ground but we believe that issues which need addressing for enlargement include the weighting of votes in Council, the level of blocking minority, the number of commissioners, the presidency system and the size of the European Parliament. We will certainly consider constructive proposals from others as regards those areas.
There is also the question of unanimity, which was touched upon by the noble Lords, Lord Taverne and Lord Desai. Unanimity in areas where it still applies has not prevented effective decision-making in the European Union so far, even on highly contentious issues such as the Maastricht Treaty and the 1992 financing package. Unanimity ensures that decisions on the most sensitive issues take proper account of vital national interests and will continue to do so after enlargement. New members hoping to join the European Union emerged only recently from membership of organisations which denied them an effective say. They will certainly not want to give up their recently won right to safeguard important interests.
The noble Lord, Lord Kingsland, quite properly emphasised the importance of the rule of law in the proper development of the European Union. That point was echoed by the noble Lord, Lord Lester. It is important to be clear that the proposals in the Government's White Paper which relate to the European Court of Justice do not imply any kind of erosion of the principle of the rule of law. Rather, the Government are looking at the consequences of the court's decisions and the manner in which the court operates.
The noble Lord, Lord Lester, referred to the European Commission on Human Rights and the European Court of Human Rights. Protocol 11 of the European Convention on Human Rights is designed explicitly to allow us to cope with the pressures of enlargement. It provides a way to streamline the procedures involved;

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for example, by replacing the part-time commission and court with a single full-time court. In addition, we are discussing with other member states and the Strasbourg institutions what other new arrangements might help.
Lord Lester of Herne Hill: My Lords, is it not the case, however, that the major contributors to the budget—that is, the United Kingdom, Germany, France and Italy—which together contribute the majority of the budget, have deemed that there should be zero growth in terms of the resources to be spent on the European Court of Human Rights and the Commission even within the context of enlargement? Will that not raise profound problems as the burdens increase?
Lord Inglewood: My Lords, I do not know the answer to the question posed by the noble Lord, Lord Lester. Therefore, with your Lordships' leave, I shall write to him.
I should like to mention also the vital issue of the reform of the common agricultural policy and the structural and cohesion funds. Without reform, extending those policies to central European countries would be prohibitively expensive and, in the case of the common agricultural policy, failure to do so, as was pointed out by the noble Lord, Lord Mackie of Benshie, and my noble friend Lord Middleton, would cause the European Union to breach its commitments under GATT, even without enlargement. Those policies must be reformed sooner rather than later, not least so that the central European countries will know the shape of policies which will be in place when they join. As has been mentioned in the debate this afternoon, we have long advocated reform. We shall continue to press for that to be addressed seriously, and soon, so that the policies become more inherently sensible and so that we can ensure that enlargement is successful and sustainable.
Our commitment to reform does not reflect a lessened commitment to enlargement. Far from it. Those issues are complementary and not antagonistic. We wish to tackle the problems now so that they will not later become obstacles to enlargement; and to make sure that we avoid hasty, last-minute decisions which would almost certainly be botched and hence damaging. That is the only way forward. Real progress means actual progress which will be achieved only by practical measures and not windy rhetoric. We are determined to achieve enlargement; to create a Union encompassing all of Europe; to create a Union which is successful, open, outward looking, flexible, democratic and governed by the rule of law.
5.33 p.m.
Lord Wallace of Saltaire: My Lords, I thank the Minister for that extremely helpful reply. I do not intend to detain the House for more than a few moments. This is a subject to which we shall return time and time again in different forms over the next five years. I am sure that it is a subject in which we shall be fully engaged very soon.
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I was a little distressed by how few Members of the House appear to attach as much importance to the membership of Cyprus and Malta as they do to central and eastern European countries. I hope that the Minister will agree with me that thee commitment to negotiate with Cyprus and Malta is stronger than it is with the other applicant countries.
The noble Lord, Lord Kennet, drew the attention of the House to the linkage between NATO enlargement, the future of the WEU, and the European Union itself. That is another extremely important question which British political debate needs to take on board rather more strongly.
I was not entirely happy with a suggestion made by the noble Baroness, Lady Blackstone, that we could perhaps have a European Union political area as an interim measure before enlargement. My strong conviction, having spent some time studying the matter, is that early political enlargement is needed and that the European political area proposals have been floated as a means of putting off the economic costs of enlargement. Again, that is a question to which we shall return.
The Minister referred to the Government's commitment to institutional reform. We need to try to keep up, as far as we can, with suggestions being floated in other countries. The other day I was rather shaken to read a speech by the French Foreign Minister in which he suggested that countries including France could give up the right to nominate their own commissioner in favour of having a smaller and more effective Commission. Some of the debates in other countries are running ahead of our own debates and we need to take on board such questions.
I leave your Lordships with the thought of how the European Council of 30 heads of state of government would start its opening tour de table if each head of government limited himself to 10 minutes. It would be five hours before they were able to stop for lunch. Clearly a larger community will have to change quite radically its methods of working. My Lords, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Intelligence and Security Services
5.36 p.m.
Lord Campbell of Croyrose to call attention to the change in status of the intelligence and security services, to the nature of the functions now appropriate for them and to the need for public acceptance of their roles in the 1990s; and to move for Papers.
The noble Lord said: My Lords, I should make clear the intended scope of the debate. By the "intelligence and security services", I mean the three organisations which have, in the past six years, all been placed on a statutory basis; namely, MI5, MI6 and GCHQ.
I take them in turn. First, MI5, known as the Security Service, has worked mainly on counter-espionage, mostly within the United Kingdom. MI6 is the Secret Intelligence Service—SIS—which British governments

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did not even acknowledge as existing until a few years ago. The Act which placed it on a statutory basis was passed in 1994. GCHQ, which was made statutory in the same Act, also has the task of obtaining intelligence, the letters standing for Government Communications Headquarters.
It may be asked what were the origins of the designations, MI5 and MI6. In their infancy, before or during World War One, the two organisations were allotted spare numbers of military intelligence sections in what was then the War Office. Military intelligence sections 1 to 4 already existed, the numbers denoting different areas of the world. It was a simple and convenient way of providing identifiable labels. Those labels served conveniently for many years.
I am extremely glad that the speakers in this debate know a great deal about the subject. I look forward to hearing their views on situations in the world today. My noble and learned friend Lord Howe of Aberavon, besides having been a distinguished Foreign Secretary, is the Member of the House of Lords on the new Parliamentary Intelligence and Security Committee which has been in existence for only a few months.
I have never been a member of any of the three organisations. However, I worked closely with them for a period when my job in the Foreign Office consisted of continuous liaison with them. I was authorised to mention that publicly two years ago at the time of the Second Reading of the Bill which became the 1994 Act. That experience of mine was a very long time ago. It took place well before I retired from the Diplomatic Service and entered Parliament in the other place 37 years ago.
The changes in status of the three organisations have been taking place at the same time as the ending of the Cold War and the disintegration of the former Soviet Union. The timing has been helpful but dangerous situations remain in the world. I shall expand on that shortly.
In the legislation passed since 1989, the Government and Parliament have felt able to move to a remarkable degree of openness while remaining confident that secrecy can be preserved where it is essential for work and operations. The United Kingdom now has a regime covering all three organisations. It includes special commissioners, a parliamentary supervisory committee, which I mentioned, reporting to the Prime Minister, and complaints procedures. In supporting those innovations, I have always stressed the imperative requirement to protect the sources of intelligence, and especially the agents who often operate in dangerous places. A balance has to be struck and I hope that we have achieved it safely.
As regards openness in Parliament, everything recorded in Hansard is available to every hostile or terrorist regime in the world. I remember at least one incident, a great many years ago, when a Minister gave a reply in Parliament off the cuff, forgetting that the information had come from a secret source. Within a matter of days the source closed down. That is a powerful reason for the special parliamentary committee, established by the 1994 Act, to deal with matters connected with the secret services.
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The end of the Cold War was a blessing for mankind. The world is no longer menaced by a division between two hostile armouries owned by the most powerful nations. Having myself, first in diplomacy and then in Parliament, worked in a small way to that ending—and now having seen it happen, although much more quickly than expected in the later stages—I give thanks for it as I am sure do other noble Lords. Nonetheless, great dangers remain and also great nuisances.
The dangers include the possible possession by intemperate and irresponsible rulers of even small countries of weapons of mass destruction; for example, biological and chemical weapons. I have pointed to that particular danger on two or three occasions in this House within recent months and given the examples of Idi Amin and Saddam Hussein. The dangers also include the fanaticism, sometimes religious, which resorts to terrorism. Only recently we have unfortunately seen renewed outbreaks in the Middle East and even here in the United Kingdom. Good intelligence can help to identify individuals, ringleaders, and also, very importantly, sources of funds.
As for international nuisances, there is drug trafficking, serious organised crime, which can wreck many lives, and money laundering, which is an integral part of the concealment of the illicit gains from such criminality. The intelligence and security agencies are needed to provide the earliest warning, together with continuing information, and to detect the manufacture and transport of materials for bombs or other lethal weapons intended for terrorism or aggressive warfare.
The world remains dangerous also because of the outbreak of small wars and the tense situations which can lead to outbreaks. Some are civil wars which are difficult for the United Nations or other countries to settle or reduce. The United Nations Charter in Article 2, paragraph 7, specifically prohibits intervention in the domestic affairs of a state. So peacekeeping was subsequently adopted as a new concept with procedures which were not in the Charter. Peacekeeping operations have been launched in various parts of the world with mixed receptions and, usually, unpredicted results. Here again, early intelligence reports can be of great value in anticipating troubles.
Parts of Europe and Asia are still unstable as a result of the Soviet Union dividing up into republics and the internal conflicts in the former Yugoslavia. The shock waves have left disputes, and nationalist movements disposed to use violence. We must be ready, too, for ethnic and religious disturbances elsewhere which could lead to serious armed conflicts.
The intelligence services now have a wider role, if they are to monitor events in various parts of the world and give warnings, than their previous main task of scanning the Soviet empire so far as that was possible. Another role of our intelligence agencies which has been extended is confidential collaboration with other countries. In order to defeat international terrorism and organised international crime, especially the traffic in drugs and bombs, we should now be able to co-operate with those countries which a few years ago were hostile, potential enemies. I have the new Russia in mind. Our

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system should now be refined in a way that enables us to exchange certain information with the Russians without prejudicing delicate sources. In a debate a few years ago on the subject, at the time when Mr. Gorbachev was presiding over major changes in the Soviet Union, I expressed the hope that we would in due course reach that degree of co-operation to the detriment and downfall of international criminals.
Russia has its internal problems and admits to the development of a Russian mafia with tentacles spread as far as the United States. The West should be able to help and co-operate in detecting and forestalling illegal, stealthy transactions which bring misery to many thousands of people. Our intelligence agencies have long co-operated with those of our chief allies. The efficiency of their secrecy and security is essential. They must also have confidence in ours—an important consideration when the extent of openness is being decided.
It is providential that my luck in the ballot produced this debate today. As I understand it, in a few weeks' time, after Easter, the House will have the Second Reading of the Security Service Bill which has now arrived from the other place. We shall have time in that debate and during the later stages of the Bill to consider in some detail the Government's proposals that the Security Service should contribute its expertise to helping the law enforcement agencies, in particular the police, to counter organised crime in this country. That will be an additional function of the Security Service. Much will depend in practice on relations and co-ordination with the police who have the task of collecting evidence to warrant prosecution leading to conviction. That is not a function of the Security Service.
Most of the work of MI6 has to remain concealed for obvious reasons. The British public have been presented with a highly entertaining version in the fictional adventures and antics of James Bond. In his case, he is both a secret service officer and an agent which makes it more exciting. In real life the British member of the secret service does a duller, meticulous job which, nonetheless, needs flair and initiative. He or she is in touch with systems or agents who often depend crucially upon that officer's judgment and wisdom.
My assessment of the three services when I worked with them a long time ago, and later when I benefited from the products of their labours and enterprise, was that their members worked diligently and successfully out of the public eye and with their achievements unknown and unrecognised. It is a form of dedication to the service of our country deserving the highest commendation.
Before I leave the subject of MI6 and 007, I should mention one factor common to Fleming's fiction and real life. During the period when I was working with MI6 I could not fail to notice, as a footnote, that the young women working there were strikingly beautiful, as in the films. I should add that the "Moneypenny" of that time—older, of course, and more senior—was just as charming as the fictitious one, with a lively sense of humour. The new Official Secrets Act allows me to
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divulge that superficial information. I am not sure what the position would have been under the old Official Secrets Act. No one was sure about anything under the all-embracing section in that Act. That was the main reason for replacing it, which the Government sensibly did a few years ago—to the Government's credit—as another extension of openness.
The three organisations are now in the public eye and the reasons for their existence have been openly stated. Their purposes and general roles should be made clear in a way that can easily be appreciated by members of the public. If trouble is not taken to do this, commentators in the media must be expected to be critical, and the public could become suspicious, for example, of apparently unproductive expenditure which in the past was invisible within a secret vote. There could also be complaints about alleged intrusions by the Security Service into the daily lives of citizens.
I look forward to the speech of my noble friend Lord Chesham from the Government Front Bench. Because discretion is needed in addressing these subjects, I have not put any particular questions to him. I hope he will simply comment on progress in the areas I have mentioned, choosing what he feels free to discuss. This is because it is so important to protect sources of intelligence, some of which have taken many years to establish. I beg to move for Papers.
5.52 p.m.
Lord Kennet: My Lords, the noble Lord has surely earned the gratitude of the House for this timely debate before we discuss the Security Service Bill, to which he referred. He mentioned the pleasure he gained from the James Bond stories. That reminded me of the book about the British Secret Service which I most enjoyed reading. It was an Italian book. The frontispiece carried the caption,
"The headquarters of the British Secret Service",
and comprised a picture of No. 10 Downing Street, seen through the Foreign Office arch. The text opened with a description of the training of British secret agents: it was apparently confined to learning how to use invisible inks and how to jump off battlements at a castle in Devonshire, near London. The pleasant absurdity of that was possible because of the extreme secrecy of the Secret Service in those days. That is something which we have long since forfeited.
Because of the intense and multiple collaboration of our services since 1943 with the American services, I wish to draw attention to what is going on now in Washington. A great deal is going on, partly as a result of the Ames scandal. The CIA traitor Ames and his associates managed over the years to foist greatly exaggerated figures for Soviet military capabilities on a succession of Presidents, and thus on American allies too, including us. The National Reconnaissance Office, which is part of the huge panoply of American quasi-secret organisations, recently built itself a mammoth office block, which it should not have done, and which no one noticed. In addition it managed to hide 2 billion dollars of federal funds in a bank account

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of its own. President Clinton has now taken back 800 million dollars of that, and will use it for the Bosnia operation. I do not know what will happen to the rest.
As a result of those and other irregularities, there has been a great wave of inquiry and self-examination in Washington, as one may well imagine. There are at least four exercises going on which are designed to reform and regroup the entire scene. The extent to which each of these exercises is aware of the work of the others, or is collaborating with them, is quite unclear from outside, but that is nothing new on the Washington scene. Given the historically close links which we have with these services in Washington, this present mood there must affect us and our people quite intimately.
First, there is the Perry-Deutch arrangement, whereby a new National Mapping and Imaging Agency would take over everything. The Pentagon and the Director of the CIA—that is, Messrs. Perry and Deutch respectively—would run it. This is supposed to be up and running in October. Secondly, there is the President's own study—of organisation, we take it—done by a commission chaired by a former Defense Secretary, Mr. Harold Brown. That has already reported. Thirdly, there is another report which has been carried out by the House Intelligence Committee Chairman, Mr. Larry Combest. Fourthly, there is the study being done for Senator Arlen Specter, Chairman of the Senate Intelligence Committee, which is due to come out in April.
Both the second and third items in that list propose that the United States should co-develop "less critical" satellites with the United Kingdom, France and Germany. That means that we would be expected to co-fund. That expectation, in American eyes, is well justified because we obviously cannot build anything like Battlestar Galactica ourselves. Nevertheless we are assumed to want the fruits of Battlestar Galactica when they come about. Battlestar Galactica is the latest catch-name for the panoply of sensors and weapons controllers which the Americans are likely to put into space. Besides our own, and French and German, collaboration with that, Israeli collaboration is already far advanced.
Now, from last July, the CIA has been under presidential orders to conduct economic espionage on America's trade rivals as a top priority. I am not sure how well appreciated this fact is yet in Britain; it is certainly well appreciated in France and Japan, where they have had fairly scandalous experience of it. So it is a complicated scene. On the one hand we have to try to continue our collaboration with a ceaselessly shifting, amalgamating and repartitioning organisation there, but on the other hand we have to live with the fact that part of it is under orders to spy on us.
I imagine that all departments of state are thinking carefully about that latter fact—they should be—as, no doubt, are all British political parties. One thing is certain, and that is that the old British contribution to the Washington intelligence scene—which was to act as arbiters in disputes on interpretation between the competing American bodies—is over. How far all this is from the old simplicities when a secret service was
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really secret, and was indeed so secret that it was legitimate to doubt its very existence! Into this fog of manoeuvre, duplication and confusion our own services will have to fit as best they can, without ever compromising their still undoubtedly superior secrecy. We should all wish them good fortune in the job.
5.59 p.m.
Lord Chalfont: My Lords, I should dike to follow the noble Lord, Lord Kennet, in expressing my gratitude to the noble Lord, Lord Campbell of Croy, for giving us the opportunity for a brief debate on this wide and important subject. I shall not follow the noble Lord, Lord Kennet, any further down the road of the American intelligence services, although the subject would make an interesting debate on its own. I should like to concentrate instead on one aspect of the Motion in the name of the noble Lord, Lord Campbell—namely, on the intelligence services.
First, I want to offer a thought on the aspect of the Motion relating to the nature of the functions now appropriate for the intelligence services. My initial premise is that there is not much change in the nature of the functions which are appropriate for our intelligence services, except that perhaps they now have a much heavier responsibility even than they had in the depths of the Cold War.
In military intelligence there is an axiom that the fewer troops one has on one's own side the more powerful must be one's system of intelligence. That has a much wider application. It has an application to our national security. As we have in this country, as a result of the apparent end of the Cold War, proceeded to diminish the strength of our Armed Forces and their equipment, we need to have even more effective and powerful intelligence services than we had when we had larger Armed Forces.
In the trade of intelligence there are two words which often govern the way a service operates. Those two words are "capabilities" and "intentions". We need to know what a potential enemy is capable of doing. In other words, we need to know about his armed forces, his military infrastructure and his entire economic resource capable of conducting and supporting a military operation: namely, his capabilities for conducting military operations. We also need to know an enemy's intentions. We need to know how he plans to use those capabilities.
Therefore, first, we need accurate information about the capabilities of a potential enemy. We need to know as precisely as possible what he has at his disposal. Sometimes, if we have thoughtful and imaginative intelligence systems, we can judge from the capabilities what the intentions might be. One can often tell from how a country deploys or equips its armed forces how it intends to use them.
That is not enough. We also need to know more about the intentions of an enemy. One cannot find that out through the use of satellites and modern technology, however sophisticated it may be. One needs always to have what is known in the jargon as Humint (human intelligence)—the spies and agents of the world of 007,

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who are sometimes nowadays regarded with a certain amount of irony but who are still extremely important elements in a nation's intelligence capability.
It would be fair to ask—and people will ask—whose capabilities and intentions we are talking about. We hear people say that the enemy has gone. The Soviet Union and the communist threat have gone, and with them the threat of surprise attack by Red hordes pouring down to the Channel ports. Therefore, what do we need to know, and about whom do we need to know it? Whose capabilities and intentions do we need to find out about?
A number of examples have already been given by the noble Lord, Lord Campbell of Croy. He spoke of international terrorist organisations. Unless we know a great deal about them, their personalities, their movements and their methods of operation we shall come nowhere near to defending ourselves against that threat to our security. Regional conflicts arise constantly. They have arisen most recently in the former Yugoslavia. Unless we know what capabilities and intentions there are in the region we and our partners will find it much more difficult to conduct even peace-keeping operations. People seem sometimes conveniently to forget that even peace-keeping operations need effective intelligence to be successful.
One aspect that the noble Lord, Lord Campbell of Croy, did not mention, except in another context, is Russia. I have no doubt that the noble Baroness, Lady Park of Monmouth, will have something to say on that subject, and I have no intention of pre-empting her. I say only that it would be extremely unwise of us to suppose that the situation in Russia will remain as it is today, still less that it will become any more stable, pacific or friendly. There is an equal possibility that it will revert, and we may he faced with a hostile Russia. We may even be faced with something like a hostile Soviet Union if the reintegration of the Commonwealth of Independent States should move forward with any degree of scale or speed. Let us not forget that, even though a great deal has happened to the Soviet armed forces and to the Soviet nuclear capacity, the Soviet Union's immensely powerful military capabilities still have a residual force in Russia and in some of the countries of the Commonwealth of Independent States.
Leaving aside all of those matters, an issue which is still of grave concern to us, and which presents a clear need for a powerful intelligence capability, is the proliferation of weapons of mass destruction and the ballistic missiles which can be used to deliver them. Like the noble Lord, Lord Campbell of Croy, I have mentioned the subject several times in your Lordships' House, including in the debate on the Address last year. The theme is now being taken up by politicians even more influential and distinguished than we are.
It is now clear to many people that the greatest threat to stability and security now lies in the spread of nuclear, biological and chemical weapons and the means of delivering them, especially through the use of ballistic missiles. It is generally known now, and certainly widely commented upon, that there are at least a dozen and possibly more countries, some of them third world countries, referred to by some as
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rogue states, which have or will have by the end of the century chemical, biological or nuclear weapons—and in some cases, possibly all three—and the ballistic missiles capable of delivering them over distances of 3,000 kilometres to 6,000 kilometres. I need not dwell too long on the military implications of that fact. I say merely that, if we do not use effective intelligence systems to find out what is happening in those countries, then we shall be laying ourselves open to a threat alongside which the threat of communist aggression may begin to look very mild indeed.
It is worth mentioning that, as some noble Lords will be aware, there is within NATO a senior defence group called DGP which is concerned with proliferation. In December of last year it presented a report on the implications of the proliferation of weapons of mass destruction and the means of delivering them. It brought forward a number of ideas as to the important capabilities that NATO should have in order to meet such a threat. It mentioned, for example, the possibility of some development, some modification, of strategic defence. But at the top of a list of about 14 required capabilities, the one thing that was needed was intelligence. I believe that that has become virtually self-evident.
There is certainly no diminution in the need for our intelligence services; I trust that no one would suggest that. In my view there is not much change in their function. They need to find out what potential enemies of whatever kind are capable of, what their intentions are, and what measures we should take to meet those threats.
I refer to a second aspect of the Motion on the Order Paper: the need for public acceptance of the intelligence and security services' roles in the 1990s. Perhaps I may diverge a little from the view of the noble Lord, Lord Campbell, on that, as also from that of the noble Lord, Lord Kennet. I asked myself whether in the case of our intelligence services, our secret services, we have not already carried open government a little too far. I have never been entirely happy about the constitutional changes which were visited upon our intelligence and security services.
Perhaps I may mention one other little rubric from the world of intelligence. I refer to the need-to-know principle, in which it is clearly laid out that nobody knows anything unless he needs to know it. I believe that that has a wider application too. It is a principle which applies to some aspects of government activity. In this world of transparency and openness, I believe that there are certain government activities which still are, and should be, secret. There are some aspects of government activity, especially in the international field, which the public have no need to know; and certainly not, as some of the popular press would have it, a right to know. I know that that may be a somewhat controversial view to take. However, the mirror image, or the other side of the coin—whichever way one wishes to put it—of open government is that effective Government must not be hampered and damaged by spreading around too much information which people do not need to know.

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I conclude by saying that the one important factor about secret services is that they should be secret—an axiom which is not too widely accepted. I hope profoundly that there will be no greater public attention drawn to our secret services than there needs to be, and certainly not as much as there has been in the recent past.
Lord Kennet: My Lords, perhaps I may ask the noble Lord to note this. He prefaced his last observation about the need for secrecy by saying that he departed from my opinion, among those of others, on this matter. I should like to state that I agree with what he says about the need for secrecy.
Lord Chalfont: My Lords, with the leave of the House, I should like to apologise to the noble Lord if I misunderstood him. I thought that he was taking a more liberal view of the matter than I do. If I was wrong, I apologise.
6.15 p.m.
Lord Cuckney: My Lords, I begin by thanking my noble friend Lord Campbell of Croy for introducing this debate on an important subject. Secondly, I declare an interest as a former member of the Security Service.
As I am sure noble Lords recognise, the intelligence services, as has already been pointed out, operate in areas and with techniques which inevitably, by their very nature, do not readily lend themselves to public debate. As a result, they are often subjected to ill-informed criticism, cannot defend themselves, and cannot explain publicly various actions. Their successes are often successes only because they are not disclosed.
There is one particular aspect of my noble friend's Motion on which I wish to lay some emphasis. It is the need for public acceptance, particularly of the Security Service.
While considerable progress has been made, especially since 1989, in developing a greater degree of openness, and—the point has already been well made—we now have the intelligence services established on a statutory basis with oversight arrangements in place, I do not believe that the strength of those arrangements is widely enough understood and appreciated. It is upon those arrangements that I should like to concentrate.
As background, perhaps I may explain that before 1989, when the Security Service Act was passed, the Interception of Communications Act 1985 had established a tribunal to deal with complaints. The tribunal consisted of five senior members of the legal profession, plus the interception commissioner, a senior judge who, as well as assisting the tribunal, reviews the issue by the Secretary of State of warrants under the Act. The interception commissioner reports annually to the Prime Minister and his report is also laid before Parliament.
The Security Service Act 1989 established the service on a statutory footing with a legal status and replaced a directive which had been the basis for its operations for 37 years when originally issued by the then Home Secretary, Sir David Maxwell Fyfe.
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With case law under the European Convention on Human Rights—I have in mind in particular the Leander judgment of March 1987—there is clear recognition of the need for a security service to provide covert response to covertly organised threats. There is also a requirement for a security service to be put on a clear legal basis with the need to ensure that there are adequate and effective guarantees in place against abuse. These requirements. I believe, are fully met by the 1989 Act. I should, perhaps, add that the Security Service is also subject to the provisions of both the Interception of Communications Act and the Intelligence Services Act. It is bound under those provisions as regards the issue of warrants. Finally, it is also subject to the Intelligence and Security Committee which reports to the Prime Minister and on which my noble and learned friend Lord Howe of Aberavon sits. I doubt whether there are any additional measures which would increase the accountability of the service while maintaining its effectiveness.
I believe that a service these days facing principally the threats of terrorism, espionage and the vitally important issue of the proliferation of weapons of mass destruction, and whose role is essentially to collect intelligence but which has no executive powers, is rightly subject to a high degree of judicial oversight by two separate commissioners and two tribunals as set out in the relevant Acts. I believe that those arrangements should be more widely accepted and understood.
No doubt the Intelligence and Security Committee has been considering the reaction of the intelligence services to the ending of the Cold War and how they have adapted to changed and, in some respects, more difficult circumstances. I hope that my noble and learned friend Lord Howe of Aberavon might be able to say something later on this subject.
I trust that in any review due recognition has been given to the essentially long-term nature of the operations and techniques used by the intelligence services and the fact that their resources cannot be turned on and off like a tap. Some of those points can be explored more fully when the Security Service Bill comes to the House for its Second Reading. It will provide an opportunity, I hope, to consider fully the proposals to introduce legislation to enable the Security Service to assist law enforcement agencies in their work against serious crime.
I have read with considerable interest the Official Report of the Second Reading debate in another place and of the two meetings of the Standing Committee. I was pleased to see that it has emerged that the primacy of responsibility for countering crime rightly lies, and should remain with, the law enforcement agencies. The Security Service will be tasked, in effect, through the national criminal intelligence service. In other words, the Security Service will act in support of chief officers of police, regional crime squads and Her Majesty's Customs and Excise.
It is, I understand, the intention that the Security Service's contribution will be co-ordinated by the national criminal intelligence service and existing law enforcement agency structures. It will not act

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independently. I believe that it makes good and effective use of highly specialist resources in the fight against organised crime.
6.21 p.m.
Baroness Park of Monmouth: My Lords, I too am grateful to my noble friend Lord Campbell of Croy for initiating this debate on a subject which must be of such concern to us all. It is now well over two years since in this House we had the Second Reading of the Intelligence Services Bill. I said then that this was still an unstable and dangerous world. Nothing has changed, except perhaps to reinforce that judgment. I also said that we needed to know the secret intentions of potentially unfriendly countries. For that, as my noble friend Lord Chalfont said, the country needs human sources. Those take time to be developed and cannot be turned on and off. That too cannot be emphasised enough in a period when cuts, cuts and cuts are the order of the day. I emphasise two points made clear by Percy Cradock, the then chairman of the JIC, the body which tasks the Secret Intelligence Service. The SIS—the service for which I can speak to some extent as a former member—does not create its own agenda. I emphasise that especialy in the light of what the noble Lord, Lord Kennet, said in his interesting speech.
The SIS is tasked by the Government and the JIC. Despite being undeclared until the time of the Bill of which I spoke the SIS was and always has been fully accountable to Parliament through the Secretary of State for Foreign Affairs, to whom it answers, as well as to the Prime Minister, in the same way as the Security Service worked to the Home Secretary. I am spelling that out again because I was disturbed in the debate in this House on the Scott Report by the words of a distinguished and much respected former Home Secretary:
"Procedures must be introduced whereby information that MI6 is used to keeping to itself—for very good reasons—is readily available, though it need not be circulated around the department. That certainly would not happen in the Home Office".—[Official Report, 26/2/96; col. 1275.]
He went on to say, correctly, that MI5,
"knows that there is a place called Parliament. Members of the department read the newspapers daily".
He added:
"That may not be true of MI6, cached up in Aden or the Yemen, whose members may not be used to parliamentary accountability".
He went on to say that when he read the Scott Report and tried to read between the lines:
"I sensed that intelligence officers did not realise the importance of reporting to Parliament in some way".
I find it astonishing that a Minister of the Crown, a senior Minister and one who clearly understood and valued the work of the Security Service, should not have been aware that MI6 (SIS) is and always has been fully accountable and responsible. I am still more surprised that he should have drawn such conclusions from the Scott Report. It is, of course, an immensely detailed mass of paper in which a perpetual seesaw of assessment—on the one hand, on the other hand—makes it possible to justify several contradictory
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conclusions. But there are some statements which are quite unequivocal. One such occurs in Volume III of the report (paragraphs G18.39) which, discussing public interest immunity certificates and what the report calls the Government's grudging attitude to disclosure, says:
"The strictures expressed … do not, however, apply to the SIS or the Security Service. Each of these agencies was willing that, subject to redactions to conceal sensitive contents, its documents should be disclosed to the defence. The PII class claims made … in respect of the agencies' documents were not instigated by the agencies".
I could go on to refer to the major report on Operation Babylon (the supergun) which emanated from SIS but which, as its author testified, generated,
"far less interest than might have been expected—rather like throwing a brick into a puddle of treacle—a loud plop, and nobody took any interest".
Very early in the report we learn that SIS was only tasked to put Iraq at the top of its priorities in 1988 (paragraph D5.25 in Volume II). In paragraph D5.1 we read of the volume of intelligence reports which resulted. The report acknowledges that the overall picture of events, now so well known, derived from that considerable volume of intelligence reporting.
However, as anyone knows who has worked in Whitehall, whether in a customer department, reading the intelligence or in the services producing it, the great problem is the vast quantities of paper which must be read, evaluated and acted on each day. The desk officer who is the specialist in the customer department has to decide what to send further up. Eventually, in the case of really vital intelligence which is of immediate and relevant interest, he might send it right up to the Minister, either in the form of a JIC summary or as an individual report.
Lord Justice Scott is constantly surprised at what Ministers did not see which, with hindsight, could, he thinks, have influenced their decisions. But there is only so much paper officials can expect the Minister to take home in the red box and read. My noble and learned friend pointed that out in our debate on the Scott Report. I say that because there has never been a problem of the services withholding intelligence. They are asked to produce it according to a constantly revised agenda set by the JIC. I may say that our budgets were carefully scrutinised at all times to ensure that we were giving value for money. If it is indeed secret intelligence that adds to the knowledge already available overtly and through embassy channels, the officers circulate it to customers. That is their job. All they protect, and rightly, is the identity of the source, although, like every other department, SIS—despite opening its files to inquiry—still found papers later which should have been seen. However, that was the experience of all the ministries. For example, in the MoD there were 11 fat files on only one aspect of the matters being inquired into. As the Permanent Under-Secretary in the Foreign Office explained:
"the nature of the Prosecution cuts across many areas of our work and it would have been very difficult, without checking every paper on every file, to be certain that nothing was being overlooked".
That comes from paragraph G9.10 of Volume III.
We now have a new system of oversight operating and we have the great good fortune to have in my noble and learned friend Lord Howe someone who can speak

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to us with first-hand knowledge. I look forward greatly to hearing what he has to say. I have addressed the issue of whether SIS is a responsible, accountable organisation only because of the unfortunate misconception which, in the context of the Scott Report, seems still to exist. I can only say that SIS, like all the departments involved, was not perfect, but the Scott Report seems to judge that it is a highly professional body which operates with integrity and that it at no point withheld intelligence. What needs looking at, as the report concludes, is what happens to the intelligence and how it is circulated and used.
However, my chief concern is the vital importance of ensuring that we continue to maintain these highly professional services in an operational state. It is very dangerous indeed to lower our guard in terms of intelligence capacity at this moment. I agree very much with what my noble friend Lord Chalfont had to say.
Consider the situation in Russia and Russia's relations with Europe, the CIS, the Middle East and China. I imagine no one would argue that we can afford not to know about nuclear proliferation and biological and chemical warfare. Russia's security council met in February this year to work out a new strategy in "technological security". It was proposed that the state should focus on the manufacture of high technology arms, such as strategic nuclear weapons, and to that end concentrate production on a group of the best performing enterprises in the defence industry. Russia is building a new generation of nuclear submarines to replace obsolete vessels. It launched the first last year. It is building new strategic missiles and new fighter aircraft. Last June, Grachev saw the prototype, at the Zhukovsky complex, of what he called "the new multi-purpose fighter of the 21st century". Russia has repeatedly lied in the past few years about her continuing research into biological warfare, and she has still not disposed of her 40,000 tonnes of chemical weapons. Meanwhile, in January this year, she announced that her arms sales grew by 60 per cent. in 1995. She now enjoys 13.6 per cent. of the world arms market, with China and India her biggest buyers. My noble friends will remember that it was to India that the cryogenic rocket motors were sold which India needed to complete her nuclear capacity.
The defence budget this year is over 80,000 billion roubles, roughly 17.5 billion US dollars. It has moved steadily upwards for the past four years from a mere 900 billion roubles in 1992. We need surely to know what is happening, not only in Russia but in the client states, which include Libya and Iraq—both favourite hunting grounds for Mr. Primakov, the new Foreign Secretary and former head of the modern KGB, and a very different character from Mr. Kozyrev. Iran's foreign minister, Mr. Velayati, visited Moscow this month. Primakov was "most impressed by the position of my Iranian colleague, who considers the fight against terrorism could be stepped up". That is an interesting view from the Iranians. In him Primakov found an opponent of the eastward expansion of NATO "no less convinced than I am. Following the collapse of the
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Warsaw Treaty the NATO bloc only disrupts the balance of power in the world. Its expansion will only create tension in the international situation".
Primakov's aims, which reflect Russian thinking, included in his last job as head of the foreign intelligence service being, as he said, "extremely interested in the centrifugal tendencies developing on the territory of the former USSR". He said: "Our intelligence department is not only in favour of this, but is also working in that direction"—in other words, he was reactivating the extensive network of former KGB officers who now rule in several central Asian republics, and, incidentally, in Azerbaijan, and reconstituting a meaner, leaner Soviet Union, an objective that has long been plain.
The other main plank of Russian foreign policy is to neutralise NATO. Vitali Churkin is already inside NATO's councils, and General Grachev's view of the 16++1 formula in NATO was clearly expressed in the context of his attendance at the NATO Defence Ministers' meeting in November 1995. He said that NATO "would be transformed not by broadening its zones of responsibility", presumably code for enlargement, but by "transforming it into an instrument of pan-European collective security". The consultative mechanism set up in Bosnia would be the prototype for future relations. Russia was gradually, he said, being introduced into NATO's political kitchen. Of importance, he said, was Russia's presence in NATO's top political body as this would strengthen Russia's capacity to influence political decisions. So much for the infiltration method.
General Grachev, in another mode in Belgrade in February this year, was threatening that if NATO expanded eastward, "even if one single state were to be admitted into the alliance", Russia would seek new allies in the east, build up its military power and reconsider disarmament agreements, including CFE, START I and START II. Primakov, this month in Slovakia, while saying that Russia would not bang the table or order anyone not to join NATO, observed: "Slovakia has a negative trade balance with Russia. Do not get too involved with NATO. NATO comes and goes. Nations remain." And he made equally menacing noises to Norway on enlargement.
Does all this sound like a stable, safe world where we can afford not to have strong and effective intelligence services, if only, through early warning of the undisclosed intentions of our enemies, to buy us time to reconstitute our defences should that prove necessary? Do we not need to know whether China is banging drums or really getting ready for something more serious? I remind the House also that the IRA has always had an international dimension (Semtex from Czechoslovakia, arms from Libya, and, curiously enough, arms from Estonia) and the IRA is still with us. The maverick states that aspire to be nuclear powers and meanwhile are quite happy to manufacture biological and chemical weapons are still with us. They have not gone away.
I conclude with Mr. Primakov's own words last December. "Some external forces wish Russia's disintegration. We need to know their intentions.

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We must try and neutralise their intentions". That goes for us, too. And I do urge that the classic targets of the intelligence services should not be crowded out by drug trafficking, international crime and all those worthy, safe subjects.
6.35 p.m.
Lord Knights: My Lords, I, too, thank the noble Lord, Lord Campbell of Croy, for giving us the opportunity to discuss this very important topic. I feel I should first say, however, that it was not without some hesitation—and indeed some measure of trepidation—that I added my name to the list of speakers for this debate. My misgivings arose not only from my recognition of the considerable qualifications of the noble Baroness and other noble Lords whose names were already there, but also from the fact that, while I have had some experience of the Security Service, MI5, I have had no personal contact with the sister intelligence services, SIS and GCHQ. I therefore seek your Lordships' indulgence should my comments be thought to be somewhat more narrow than they might perhaps otherwise have been.
I am also very conscious, as was mentioned, that a Bill to widen the responsibilities of the Security Service has already been introduced into this House and there will be another, perhaps more appropriate, opportunity to debate in detail the important issues that arise from that.
When preparing my remarks I took the opportunity to re-read some of the debates that took place in this House prior to the enactment of the Security Service Act 1989 and the Intelligence Services Act 1994. They brought home very forcefully the changes that have taken place in the status of the intelligence and security services in the past seven or eight years.
Who would have imagined, for example, that by 1993 MI5 would not only take the secrecy wraps off the director-general's identity and the address of her headquarters, but would also publish details of the management and organisation of the service and the methods used by its officers to obtain and gather intelligence? In a few short years, the image of the service has moved from one which, in the words of Mr. Peter Wright in his book, Spycatcher,
"bugged and burgled its way across London",
to one which is clearly now well controlled, accountable in a way it never was before and with clear statutory authority to justify its activities.
Despite those somewhat remarkable developments, it would appear from exchanges in the other place when Members considered the current Security Service Bill that not everybody is yet convinced that the changes have removed entirely the scope for suspicion as to the service's activities. Some, at least, of the old rumours and allegations still persist, although much less vociferously and on a much reduced scale. Be that as it may, noble Lords may agree that, overall, there is much less suspicion generally about the security and intelligence services, which must have an effect on the morale of those who carry out this often dangerous work.
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Whether these new attitudes have in any way made that work more difficult, as some thought might be the case, I am of course not able to say. But it would be interesting to know whether they have in any way compromised or complicated the service's relationships with its opposite numbers in other countries, a matter already touched on by the noble Lord, Lord Campbell of Croy.
It is not only the image and status of the Security Service which have changed. Its functions also have had to adjust to the changed situation in Russia and Eastern Europe generally which has already been referred to. The threat from subversion has clearly diminished, but at the same time the threat of violence arising from terrorism has clearly increased. In this field of course in 1992 the service took over from the Metropolitan Police the responsibility for countering IRA terrorism on the British mainland, and events of the last week or so have indicated quite clearly that there is still considerable work to be done in that field.
As your Lordships will be well aware, the principal statutory responsibility laid on the service is to identify, investigate and counter threats to national security as well as threats to the economic well-being of the United Kingdom which arise from overseas. Specific reference is made to threats from espionage, terrorism and sabotage. In order to achieve this its officers gather, assess and develop intelligence to the point where direct action to counter the threat needs to he taken, a point which again was made by the noble Baroness, Lady Park of Monmouth.
Clearly in doing this there comes a point where serious crime, be it the disclosure of secrets, firearm and explosive offences or the like, raises its head. It is at that point, where arrest and prosecution have to be contemplated, that the police and the Crown Prosecution Service become involved.
There is nothing new in this. Indeed, the Act of 1989 specifically authorised the service to pass on, for the purpose of preventing or detecting serious crime any information which it obtains in the proper discharge of its functions. It is now being suggested that it should also be a statutory function of the service to act in support of the activities of police forces and other law enforcement agencies in the prevention and detection of crime. In that context the word "serious" is always brought in. Clearly this must presuppose that the service will be able actively to seek intelligence about serious crime, whether it is a natural extension of its normal functions or not.
This clearly raises some important issues, particularly who is to have supremacy in any investigation which does not spring from the discharge of the service's traditional functions. It also raises the possibility of the police actively seeking the assistance of the service by way of its specialist skills of investigation, collation, assessment, disruption and prevention when inquiring into criminal matters which are the normal purview of the police. The noble Lord, Lord Cuckney, has already discussed this particular problem, and I agree with all he had to say about it. But there are a number of problems which are thrown up by this new arrangement,

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particularly in connection with the handling of informants, disclosure of information in criminal investigations, the effects of the Police and Criminal Evidence Act on the activities of Security Service officers and the arrangements for their accountability, all of which will no doubt be addressed in your Lordships' further consideration of the new Bill.
There may well be problems here in comparing their position with that of the police officers with whom they are working. Members of the special branches of police forces have for a number of years of course been doing very similar work in connection with terrorism in particular and subversion, and they have none of the additional powers which the Acts have given to the Security Service, for example, to obtain warrants to enter premises. In the future when police and security officers are working together it will be essential, it seems to me, that they should act under the same identical powers. Currently that is not the case, and that matter too will have to be given consideration later on.
There is the question too of whether the functions will extend further; indeed, whether they should. For example, when we are dealing with terrorism we normally think of bombs and explosives being the way in which the wishes of the terrorists are sought to be effected. But it may not necessarily be explosives and firearms. Pressure can also be put on people to do things they would not otherwise wish to do which could well also come under the heading of terrorism. If that be the case, it will probably be the police who will be investigating rather than the Security Service. Here again, when one is dealing with, for example, the Animal Liberation Front, the term terrorism can undoubtedly be applied to various activities, and the rules which are being sought now and the activities which are being arranged now for collaboration with the Security Service in this field must also be considered in relation to these new matters, it would appear to me.
There is much to be discussed. There are many important matters which are going to come up and it will not just he a matter of saying that the Security Service must and will assist the police in criminal matters. It is a much wider argument which we shall have to address and I look forward to taking some part in it. As I said at the beginning, I have concentrated very much on one service alone. I trust that what I have had to say will at least be helpful when we come to discuss matters further on the Second Reading of the Bill.
6.47 p.m.
Lord Howe of Aberavon: My Lords, it is for me a privilege to be able to follow the noble Lord, Lord Knights, and to say to him, although it need not he said, that he had no need whatever to display such diffidence in addressing this topic because his experience in this field has lent authority to his remarks, particularly on the Bill which we shall be discussing later.
I hope your Lordships will forgive me if I do not now turn to those topics but turn instead to thank my noble friend Lord Campbell of Croy for having introduced this subject; to apologise for my absence from the early part of this debate because I was concluding a discourse in
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another place; and to say that I am present not least because my noble friend very properly reminded me, given my position as the only representative of your Lordships on the Intelligence and Security Committee (at least during the first 15 months of its existence), that the House might expect to hear a word from me.
I am indeed glad of the opportunity that that offers, but I must at the same time respect the need to balance that commitment to this House with a corresponding duty of confidentiality to my colleagues on the committee. In particular, I have an obligation not to pre-empt the publication of the committee's first annual report which was submitted as required by the end of last year. We have discussed it with my right honourable friend the Prime Minister and it is due for publication before too long.
The fascinating thing to me, and it has been noticed by many other speakers, is the huge openness of the process on which one is there engaged, which underlines the scale of the sea-change which has taken place even in the 13 years since I first had the privilege of having direct ministerial responsibility for two of the services.
I listened with great interest to the speech by my noble friend Lady Park when she diverted for a moment or two to offer some strictures on the noble Lord, Lord Jenkins of Hillhead, and despite his absence—
Baroness Park of Monmouth: My Lords, I am so sorry. It could well have been the noble Lord, Lord Jenkins, and he has said much worse things, but in fact it was the noble Lord, Lord Merlyn-Rees.
Lord Howe of Aberavon: I accept the correction with alacrity. I am sorry to have uncloaked a secret which perhaps we did not need to know the answer to. At all events I endorse my noble friend's strictures and also her tributes to the service of which she was such a distinguished member. She identified very well the difficulty of operating what I described as a high speed, multi-directional, leakproof sieve, which is what is involved in getting intelligence to the right place.
My noble friend was right also to remind us that, although the world is much more open now in many ways, it is not significantly less frightening. It is a world in which people—at least people in democracies—have come to expect much more candour from those who govern and take at its face value Balfour's proposition that,
"democracy is government by explanation".
My noble friend Lord Campbell said that we must take trouble to justify the role of the intelligence services. But, as he and the noble Lora, Lord Chalfont, pointed out, there is still another side to that equation. In the real, operational world of intelligence and security, the need-to-know test remains of crucial importance. Achieving that balance is difficult, particularly when we are going through a process of moving from darkness into light.
I have a vivid recollection of just how badly we handled the matter—I have mentioned this in the House before—when we first began disclosing the reality of GCHQ to an astonished world. At 11 a.m. on the

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morning that I was to announce changes in the House at 3.30 p.m. in the afternoon, I summoned to my office the noble Lords, Lord Healey and Lord Murray of Epping Forest, to let them into the great secrets which were about to burst upon the world only a few hours later. Within days, of course, GCHQ had achieved world-wide notoriety as one of the best known and most controversial four-letter words in the language. It was a very mishandled exercise.
Since then there has been a near torrent of change. My noble friend Lord Cuckney rightly pointed out the many protections which statutes of the past 10 years have introduced for the citizen. In that context, the Intelligence and Security Committee, as the House will recognise, has potentially a most important and useful role to play in helping to establish a bridge of mutual confidence between the services and the public whom they seek to serve. It is right that that should be done by the means of reports direct to my right honourable friend the Prime Minister, who is uniquely responsible for co-ordination of the services and it is right that the committee should be representative of both Houses of Parliament.
In the process of securing its own legitimacy, the committee realises that it must have in mind two distinct objectives. It needs to establish its independence—that it is not in any sense in the pocket of the services and that it has not been the victim of what I believe is known as "agency capture". That is necessary not just for its general credibility but, more particularly, in case the need arises, as it might, for urgent investigation at speed of some matter of critical importance which could happen at any time. If the committee is to be seen as qualified to undertake that task, it needs to convince people of its independence in that way.
On the other hand, the committee needs to convince the agencies—those who work in them as well as those who command them—that the committee and its members can safely be regarded, so far as is proper and necessary, as totally reliable partners within the ring of secrecy. Candour between the services and the committee, which is essential, can be achieved only if each side can be totally confident of the other's commitment to security. So far as my word counts for anything, I can assure the House that my colleagues on the committee are equally conscious of the importance of both sides of that critical equation.
In fact, for a number of reasons it is a propitious time for the committee to start work. The first reason is that the tasking of the agencies is undergoing great changes both ways on an unprecedented scale. One need only look across at what one used to call the Iron Curtain or across the Irish Sea to understand that. I emphasise that it is both ways because my noble friends Lord Cuckney and Lady Park emphasised the long-term nature of the threats that we face and the need to recognise that the tasks have to be adjusted with care.
The second reason for care is that the services, as several speakers pointed out, have been called to take on new tasks, for example, in the field of serious organised crime. Incidentally, we recognise there the
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role of the Home Affairs Committee in the other place and the limitations of the Intelligence and Security Committee.
The third reason why it is a well timed invention is that the services themselves more than ever before are learning the possible value of the input of external expertise and advice. The investigation conducted by Sir Michael Quinlan, the former Permanent Under-Secretary to the MoD, was of enormous value. So too was the examination conducted at GCHQ by Sir Roger Hurn, the chairman of Smiths Industries. Both have made contributions of great importance.
The committee is also aware, as are the services, of the lessons to be learnt from the experience of other countries. Like the services themselves, we have been studying most closely some of those implications. The noble Lord, Lord Kennet, referred to some lessons that might be learnt from the experience in the United States. We are looking at continental Europe as well as the rest of the Anglo-Saxon world for what might be learnt. The noble Lord was quite right to underline the importance of the Ames case: 10 years' continuously treacherous conduct by a senior CIA officer gives a warning that is perhaps even more alarming than any from the earlier years of our own services. The lessons of that case need to be studied most carefully.
The committee has one other possible merit, which to some extent surprises me: the ability that it may develop to take a panoptic view of all the services and agencies and of the lessons from comparing the problems and practices of the different services. I am now conscious of the fact that I have a broader and more comprehensive insight today than was ever available to me during 11 years' service in successive high offices of state.
Perhaps I may also say to your Lordships that I am encouraged by the way in which the committee has approached its task, taking full advantage of the strength of our constitution—namely, its multi-party nature—and taking full advantage of the diversity of experience of the members of the committee. Although all save two have had experience of office, the contribution made by those two is in no sense insignificant—one Labour member and one Liberal Democrat of long experience, the right honourable gentleman Alan Beith. All of them make a contribution that is well worth while. The only other member with previous Cabinet experience is my right honourable friend Tom King. I pay tribute to his well judged chairmanship of the committee, as also to the commitment of all my colleagues to a workload that is so Stakhanovite that I am becoming increasingly daunted by the prospect of remaining one of their number.
Let me draw my speech to a close. What is taking place here is an important exercise in open government. As many noble Lords pointed out, it goes far beyond anything that our media in particular might have dreamt of, even 10 years ago. Therefore, it is important—I echo a point made by the noble Lord, Lord Chalfont—to remind the fourth estate as well as ourselves of the role that it can and should wish to play in preserving the proper balance of our free democratic society. We are

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rightly reluctant to shackle the media with any kind of external regulation. That does not mean that they should regard themselves in this crucially important field as free from any kind of control whatsoever. Ideally, there should be self-regulation or, better still, informal instinctive self-discipline.
I close by drawing to the attention of the media an important observation that first came to me from a distinguished member of their own profession and one, incidentally, who did more than any other lay individual to promote televising parliamentary proceedings. I refer to Sir Robin Day and his book Grand Inquisitor. There he offers a quotation from the sometime Liberal Member of Parliament and Lord of Appeal, who died in 1921, Lord Moulton, who wrote as follows:
"There are three great domains of human conduct. The first is where our actions are limited or forbidden by law. Then there is the domain of free personal choice. But between these two is a third domain, that in which there is neither law nor unfettered freedom. This is the domain of 'obedience to the unenforceable', where people do right although there is no one and nothing to make them do right but themselves".
The price of freedom is not just eternal vigilance. It is also, on the part of the fourth estate as well as on the part of the rest of us, unflagging discretion, an obligation that rests on all those who claim a genuine interest in the security of our nation.
7 p.m.
Lord Bethell: My Lords, I believe that I am the only speaker so far in this debate never to have had any official connection with the intelligence or security services. However, I am one of those, like the others who have spoken, who have a great admiration for the services and for their achievements in recent years.
The reforms recently introduced by this Government are excellent and positive and I congratulate the Prime Minister and Ministers on bringing them about. It is essential that there should be a statutory basis for the services and if it were not for the reforms of the past few years we would probably not be taking part in this debate at all. My noble friend Lady Park mentioned that, in theory, there was always complete parliamentary accountability for the services at every point. But until recently, of course, there was a convention that the facts of the services were not discussed in this House or in another place.
My noble friend and the noble Lord, Lord Chalfont, are the only two who have spoken so far who have doubts about the changes that have taken place and who are prepared to emphasise the need for secrecy as overriding the idea that the people have, so far as possible, the right to know what is done in their name. There have been some important steps taken towards that right—it is a right and it is essential—because, while we must have guardians for the nation's security, someone must guard the guardians. The only body which can, at the end of the day, be that guardian is Parliament.
I realise that in the past Ministers—in particular the Prime Minister, the Foreign Secretary and the Home Secretary—have had control over the services. But, as has been pointed out, it is not easy for busy Ministers
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at the end of a day to go through detailed points about these sensitive issues to maintain the sort of control that is needed and make sure that Parliament is kept in the picture. Ministers often do not have the time to keep the necessary control.
Baroness Park of Monmouth: My Lords, perhaps my noble friend will give way; I want to make just one brief observation. When I made those comments I was talking about the intelligence; the product. I was not talking about issues like decisions on operations, clearances and so forth. Time is always found for that, both by Ministers and by us.
Lord Bethell: My Lords, I accept that Ministers and indeed Parliament can never have an overview of the operational day-to-day basis of the services. But there must be clear guidelines which must be known to Ministers and to Parliament, otherwise we shall find ourselves in a muddle.
In the past grave mistakes have been made by the services. I think in particular of the 1940s and 1950s when the campaign to roll hack communism turned out to be counter-productive and, in particular, I refer to the question of the Albanian operation. In that regard I must declare an interest because I wrote about it at some length.
Perhaps I can be guided by the adversaries of those who have been connected with our services—I have spoken to many of them in Russia in recent years. Retired members of the intelligence services of the Soviet Union have nothing but admiration for the work of MI6. They are touchingly appreciative of the professional capabilities of my noble friend Lady Park and her former colleagues. Whether or not that is a good thing, I should not like to say; I simply point it out.
One point that was raised by my noble friend Lord Campbell in his opening remarks was the question of co-operation. That issue needs to be looked at most carefully. Speaking to a senior member of the Russian intelligence services a few months ago, I was told—I am sure this has been spoken of publicly as well, but it was spoken of also in conversation—that the Russian services are anxious to co-operate with their British opposite numbers over a whole range of important issues, in particular nuclear proliferation, serious crime and terrorism. I hope that my noble friend the Minister will be able to say something about that. I gave him notice that I would be raising this point and we shall see whether or not it is possible for him to comment on it.
It would be a mistake, and indeed dangerous, for us to reject out of hand the suggestion of the Russian Government and the Russian services to co-operate with us over the important point of nuclear proliferation, whether to rogue states or to rogue groups. The matter was raised in terrifying detail a few days ago by my noble friend Lady Thatcher.
I know that we must not be naïve about that point. I know that one needs a long spoon before sitting down to dinner with the Russians. I realise that there are areas of conflict over Chechnya and perhaps over Serbia and Iraq. I listened carefully to the speech of my noble friend Lady Park, though I confess that I shall need to read

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it. She delivered it rather quickly and it was extremely detailed. Spoken as it was with the authority that my noble friend possesses as a former well-known officer of MI6 who served in the Soviet Union, I shall look carefully at what she said.
It seemed to me that my noble friend was saying—I am sure that she will correct me if I misunderstood—that the basic intentions of Russia today are so dubious, indeed so inherently hostile, that co-operation with them should not be countenanced. I wonder whether that is the view of the Government and whether my noble friend the Minister can say something in that regard. It is my impression that the Government as a whole wish, as far as possible, to be a partner of Russia today in a number of areas. I realise that there are many areas where we disagree; but I believe that the Government wish us to work with the Russians if we can. I know that that will break the habits of a lifetime for many of us. But the world has changed and East-West conflict on the nuclear scale is extremely unlikely. Instead, taking the place of Armageddon in the shape of the Soviet Union versus the United States, we have the horrifying spectre of terrorist groups acquiring weapons of mass destruction.
There is also the question of Russian help in the drugs trade. Russia itself is a major conduit for drugs coming from the Indian subcontinent to Europe and other areas of serious crime, including the Russian Mafia itself. If we can co-operate with each other in a way that is consistent with the interests of our country, of the Western world and of the Russians—and I believe that there are areas of common interest—then we shall be more effective at fighting those serious dangers that face us.
I believe that the services are vitally important to the future of our nation. It would be ridiculous of anyone to think of starving them of funds, reducing them or cutting them back. On the contrary, they are more important than they were. I wonder how many people thought when the IRA ceasefire was introduced a few months ago that the days of MI5 were numbered and are now eating their words. Clearly, the security services must be strengthened for the future as well as for the present. Today's dangers may disappear or diminish, but others will appear. We live in a very dangerous world. Therefore, we need these services most desperately. I trust that the Government will make sure that they are preserved and simply that they are directioned in the most effective and appropriate way so that the citizens get the most out of the money they spend in return for their provision.
7.11 p.m.
Lord Richard: My Lords, we have had a very interesting debate over the past hour and a half. Personally, I am very grateful to the noble Lord, Lord Campbell of Croy, for raising the subject this afternoon. It is timely that we had a look at the operations of the intelligence and security services. We have done that to a certain extent this afternoon, although inevitably within the limitations of a short debate.
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I thought that the noble Baroness, Lady Park, was a little over-sensitive about Scott. After all, if one read the report in detail, which I fear I had to do, one of the few bodies to emerge with a great deal of credit was her "old firm". The Secret Intelligence Service came out of it extraordinarily well for their preparation and preparedness to disclose to the defence documents that other people were not prepared to disclose and the extraordinary frankness of at least one or two intelligence officers who gave evidence at the trial. Reading the report and dividing it into heroes and anti-heroes, and a few neutrals between the two, I put the SIS very firmly in the hero bracket and I am delighted so to do.
I listened to the noble and learned Lord, Lord Howe, with great interest. He lifted the veil very slightly on the operations of the Intelligence and Security Committee. We look forward very much to reading the report. He prayed in aid the multi-party nature of the committee. I was not going to say anything about it until he did that. It was rather like the defendant who, at the age of 55, pleads for leniency on the ground that he is an orphan because his parents are dead. Technically, it is a multi-party committee. Its multi-party nature is one Labour, one Liberal and five Conservatives.
Lord Howe of Aberavon: My Lords, there are at least three Labour members. There is Dr. John Gilbert, Mr. Barry Jones and Mr. Allan Rogers. I do not believe that I have left any out. Certainly, it is a multi-party committee.
Lord Richard: My Lords, I am sure that the noble and learned Lord is right. Perhaps I may point out that according to a research paper from the Library of the House of Commons of 4th January, the membership is given as the right honourable Tom King, the right honourable Alan Beith, the noble and learned Lord, Lord Howe, the right honourable Sir Archibald Hamilton, Barry Jones, Michael Mates and Sir Giles Shaw. If that is wrong then the point I make is invalid. Certainly, as of the date of the publication of this report, the ratio was 5:1:1.
Lord Howe of Aberavon: My Lords, the second report we presented to Parliament was an interim one on the work of the security services against organised crime. The names are all listed as they were in our interim report of last May. I would not like to think that Mr. Barry Jones and Dr. John Gilbert, of all people, are overlooked by the noble Lord.
Lord Richard: My Lords, if it is a bad point, I would not dream of pursuing it, and I understand that it is a bad point. I hope that those responsible for the production of this document from the House of Commons' Library are prepared to read House of Lords Hansard to see that they have put me in a position of making a bad point. But there we are.
What is also interesting about this debate is the extent to which openness has been an issue and which the House has been prepared to discuss. That is openness in relation to the operation and role of the Security and Intelligence Service. I say to the noble Lord,

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Lord Bethell, and perhaps to the noble Lord, Lord Chalfont, that one cannot go back on the position that we have now reached. It would be quite impossible to reverse the extent to which these services are now in the public domain and subject to public and parliamentary scrutiny. The question that we have to ask ourselves is this: if we cannot go back how do we try to make this new system we have under the successor Act work, and work well? For my part—
Lord Bethell: My Lords, I must have made myself unclear in my remarks. I am very much in favour of the greater openness that has been introduced. In fact, I would like to see the system made more open.
Lord Richard: My Lords, surely I cannot make two bad points in the same evening! Certainly, I thought that I heard the noble Lord, Lord Bethell, say that. I have noted him down as saying that. It is certainly a good point as regards the noble Lord, Lord Chalfont.
Lord Chalfont: My Lords, perhaps I may intervene just to say that that is exactly what I did say and that the noble Lord has a very good point.
Lord Richard: My Lords, I am much obliged. Reinforcements have arrived. As I say, I believe that the issue of openness and the extent to which these services are now more subject to public scrutiny and disclosure is one which I am glad the House discussed this evening.
Perhaps I may make a basic point, as I see it, as regards these services. First, the collapse of the old Soviet Union empire in eastern Europe, and the apparent decline of Russian influence elsewhere, has not reduced the need for the Government to have proper secret intelligence. That seems to me to be the basic first point. The second point is that the uncertainties of the old Soviet Union and of the Middle East, as well as the interests of the United Kingdom in other parts of the world, have created a situation in which the UK's political, military and commercial interests still require the Government to be well informed about the intentions and activities of other governments and groups. The third point, which flows from the first two, is that this requirement is now made more pressing by the gradual spread of weapons of mass destruction, whether they are nuclear, biological or chemical. I therefore agree with a large part of what was said by the noble Lord, Lord Chalfont, and by the noble Baroness, Lady Park in this respect.
The fourth basic point is that the threat to British interests from terrorism has not declined. The return of the provisional IRA to violence is a great disappointment, but perhaps it is not entirely surprising in view of the history of the past two to three years. But it is a disappointment that they have apparently returned to a degree of violence. Middle East terrorists are still active. Some groups decline and others grow. But the need to maintain coverage of their activities is constant because it is difficult to predict when they will turn on British interests.
So I finish with the basic conclusion on this part of what I have to say. The continuing efforts by the security and intelligence services are clearly necessary
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in such an unsettled world. Indeed, the more unsettled the world is the greater the need for vigilance. The end of the Cold War and financial pressures have meant that the agencies, like other departments, have had to trim their budgets, but we must be careful that the cuts are not so severe that the agencies do not have the staff to respond to new threats. The coverage of organisations which threaten United Kingdom interests cannot be achieved overnight from scratch. Again, I agree with what the noble Baroness, Lady Park, said on this. Experience in this field takes time to develop.
The agencies have received a bad press on occasions in the past. Some of it was deserved, but much of it was not. As the noble Lord, Lord Cuckney, said, successes often cannot be told, and even when they can they frequently receive very little attention.
Public perception of the agencies has improved, thanks presumably to the introduction of the legislation and the new oversight arrangements. That has allowed proper debate about their role and, through the oversight bodies, a fairer assessment of their performance. I agree with the noble and learned Lord, Lord Howe, that the noble Lord, Lord Knights, should not apologise for raising the issue that he did. It is contemporary, it is pretty fundamental and it is something that I am not sure we have yet got right. Therefore, I should like to spend one or two moments trying to deal with the issues raised by the noble Lord.
The Security Service Act empowered that service to investigate threats to national security which were, in effect, espionage, terrorism and subversion. The extension of its responsibilities to cover organised crime is prima facie logical. Organised crime is growing, thanks to the money to be made especially from drugs; and the state of the world where, in countries like Russia, law and order seem to be on the verge of breaking down, thus allowing and even encouraging organised crime. We must also bear in mind the ease of travel and the speed with which money can now be sent through the banking system. In its more extreme forms, organised crime poses a threat to the security or, if your Lordships prefer, to the wellbeing of the nation.
I am not against the idea that the Security Service and other agencies should have their responsibilities extended because their skills can contribute to the investigation and combating of organised crime. Those skills have been learnt over many years and include long-term investigations using high quality personnel and methods. The Security Service, after all, has a proven track record of success in its work in support of the police against one of the most effective terrorist organisations in the world, the Provisional IRA.
The Security Service has some experience of investigations where it is necessary to collect evidence for presentation in court or to allow investigations to proceed in such a way that others, such as the police or Customs, may actually collect the evidence and bring the prosecution. Also, it has already had some years of experience of effective co-operation with the police and Customs. However, it is important to emphasise that the lines of accountability must be clear. As the noble Lord, Lord Knights, said, that is difficult, but that very difficulty underlines the importance of the point.

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The role of MI5 in relation to organised crime has to be one which is basically supportive. I believe that that is recognised by MI5 itself. I do not think that the public would be happy with a situation in which the security services were operating freely in a police environment. I believe that many people would accept that they should support the police in such important areas, but I do not think that people would accept that they should operate freely without the police being in the lead.
I conclude by thanking the noble Lord, Lord Campbell of Croy, for initiating a debate in which I have made at least two bad points, but I hope that I have made five that are good.
7.23 p.m.
Lord Chesham: My Lords, I too thank my noble friend Lord Campbell of Croy for tabling the Motion and all noble Lords who have participated in the debate for their thoughtful and stimulating contributions. I am almost overawed by the experience and knowledge of speakers.
I have listened with great interest to the debate, which has touched on a range of matters to which the Government attach considerable importance. As noble Lords are aware, the Government have taken a series of important steps towards greater accountability and openness, wherever possible, in security and intelligence matters. As has frequently been mentioned, with the passage of the Security Service Act 1989 and the Intelligence Services Act 1994, all three intelligence and security agencies are now avowed and have been placed on a statutory basis. The figure for their aggregate expenditure is published annually. In addition, a Committee of Parliamentarians, the Intelligence and Security Committee, established under the Intelligence Services Act, now scrutinises the expenditure, administration and policy of all the agencies, and has so interestingly been described by my noble and learned friend Lord Howe.
However, it is important to make a distinction between proper accountability for the agencies in areas such as finance and administrative policy, and the continued need for secrecy regarding operations. If the agencies are to perform their responsibilities effectively, they need the protection which secrecy offers. Hence, this Government, like their predecessors, have refused publicly to provide information on the operations of the security and intelligence agencies, including matters which fall within the scrutiny of the Intelligence and Security Committee. Comment on such matters, either through what is said or what is not said, could have a bearing on the effectiveness of the agencies, on the safety of their staff and those who co-operate with them, and on their ability to retain the confidence of those with whom they work. Those very considerations preclude me from responding to some of the issues raised by noble Lords.
I now turn to the functions appropriate to the agencies in the 1990s. The Cold War may have ended but, as has frequently been said, the world remains a dangerous place. One might say that though we have
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slain the dragon, we have entered a wood full of snakes. Threats to British interests worldwide continue to abound—international terrorism, weapons proliferation, espionage, serious crime in all its various forms, including drug and arms trafficking and financial fraud. Indeed, in the case of nuclear weapons proliferation, for instance, the risk has actually increased as a direct result of the break up of the former Soviet Union and its stock of arms. This general perception is shared by many of our allies and democratic neighbours, who, like us, see the need to maintain effective intelligence services.
My noble friend Lord Campbell of Croy mentioned co-operation with other countries, as did other noble Lords. The threats of terrorism and espionage and from proliferation are international, and are hence more easily identified if like-minded countries co-operate. The agencies therefore maintain contact with a wide range of individuals and organisations, a two-way process of advice and assistance which is of great benefit to the UK national interest. Close intelligence relations are maintained with allies, for example, in NATO. Liaison with other countries has given invaluable help in protecting UK interests.
My noble friend Lord Bethell asked specifically about co-operation with the Russians on, for example, drugs, nuclear proliferation and counter-terrorism. Her Majesty's Government have discussed with the Russian authorities the issues highlighted by my noble friend. The United Kingdom's security and intelligence agencies engage in collaboration with the intelligence and law enforcement agencies of a large number of countries where we have common interests and concerns. Such arrangements depend on confidentiality and it is not the Government's practice to comment on that or other operational activities of the agencies.
We have had some discussion of the Security Service Bill. Your Lordships' House will have an opportunity to debate that shortly. I refer to the serious crime function of the Security Service. Those provisions will come before this House soon. I do not want to pre-empt that debate, but I suggest that the Bill represents a good example of the sensible evolution of the role of an intelligence agency to take account of changing circumstances. The threat posed by organised crime is a serious one. It is also growing in sophistication and complexity. We must ensure that our law enforcement agencies have all the necessary skills, resources and support at their disposal to tackle that threat. They already benefit from the valuable support of SIS overseas, but the Security Service is not permitted by law to lend assistance here in the United Kingdom. The Government believe that it would be sensible to allow ourselves the opportunity of using the skills and capability of the Security Service, when circumstances permit and subject to appropriate controls, in support of the efforts of the police and other law enforcement agencies.
I assure your Lordships that extending the functions of the Security Service will not be to the detriment of its existing responsibilities. Dealing with terrorism will remain the service's top priority. The allocation of resources to the proposed new functions will be subject

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to the demands placed on its other functions. It is essential that the service retains the flexibility to respond to sudden demands in respect of any of its functions.
So far as concerns public acceptance of the security service—we are talking about openness and safeguards—the security service is the first to recognise in today's climate of openness the need for public understanding and acceptance of its role. To that end, a number of significant steps have been taken to provide the public with more information about the service and its work while bearing in mind the need to ensure that its operations are not compromised. That was a point emphasised by the noble Lord, Lord Chalfont, and my noble and learned friend Lord Howe.
In 1991, the director general was named for the first time. The location of the headquarters of the security service has been disclosed. The security service's booklet published in 1993 made available for the first time a considerable amount of information about the service's work. The director general has built on that during her three lectures to public audiences—the Richard Dimbleby and James Smart lectures in 1994, and her speech to the English Speaking Union in 1995.
But public acceptance is not just about openness. It stems also from the knowledge that there are proper statutory safeguards to ensure that the service acts only in accordance with its functions. Above all, it is important to understand that the security service is fully accountable to the civil and criminal law.
As my noble friend Lord Cuckney said, the Security Service Act 1989 established a number of safeguards. First, the Act provides for a tribunal comprised of senior members of the legal profession to investigate complaints from members of the public who are aggrieved by anything they believe the security service has done to them or to their property.
Secondly, the Act provides for a commissioner, who is a senior judge, to oversee the authorisation by the Secretary of State of warrants allowing the service to enter or interfere with property and to assist the tribunal in its work. Both the commissioner and the tribunal are independent.
In addition, the service is subject to the Interception of Communications Act 1985, which makes it illegal to intercept mail or telephones on the public network unless the interception has been authorised personally by the Secretary of State. The Act provides also for oversight by an independent commissioner and a complaints mechanism for members of the public. The Intelligence and Security Committee established under the Intelligence Services Act 1994 provides a further mechanism for oversight and accountability.
It is important that members of the service who are concerned about the nature of the work they are required to undertake can discuss their concerns with someone outside the service. That role is fulfilled by a staff counsellor who is independent of the service.
The noble Lord, Lord Kennet, mentioned co-operation with the USA. There is some history of that. US operations in the UK are covered by arrangements made under the 1951 agreement and the Visiting Forces Act 1952. No activity considered
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inimical to the UK's interest is or would he permitted. The US has undertaken to respect UK law under Article 2 of the NATO Status of Forces Agreement.
Lord Kennet: My Lords, does that apply to the presidential direction of last July to the CIA to engage in espionage on the industry and trade of friendly countries, including this one?
Lord Chesham: My Lords, it applies in that the US has undertaken to respect UK law. If it does not respect UK law, it is liable to the law in the same way as is everyone else.
The noble Lord, Lord Chalfont, mentioned counter-proliferation and so on. The agencies recognise the importance of intelligence gathering in combating the growing menace posed by the proliferation of weapons of mass destruction and missiles for their delivery. I can assure noble Lords that that is a requirement to which the intelligence agencies accord a suitably high priority, but noble Lords will appreciate why it would not be appropriate for me to elaborate further.
Mention has been made of the Scott Report and the suggestions made about the role of intelligence and government departments. Those recommendations on intelligence handling are currently the subject of interdepartmental discussions. Ministers have said that a report will be made to the ISC. It would not be appropriate to comment further until such deliberations have been concluded.
My noble friend Lady Park and the noble Lord, Lord Chalfont, talked about the continuing danger of the world in which we live, and resources. As many people have pointed out, giving real examples, the world remains a dangerous place. They have stressed that our intelligence agencies must retain the capacity to respond to complex and changing threats.
The Government share that concern about the instability that remains in the world. It is right that the agencies' budgets are scrutinised regularly, as is all government expenditure. There is no question of national security being put at risk or of the operational capacities of the agencies being undermined.
In conclusion, once again I thank my noble friend Lord Campbell of Croy for tabling the Motion which has enabled noble Lords to give us the benefit of their vast experience and a most interesting spectrum of views.
7.36 p.m.
Lord Campbell of Croy: My Lords, I am most grateful to all those who have spoken in the debate. They have spoken and expanded upon parts of the subject to which I did not have time to extend. I hope that the total of the contributions will provide food for thought for the Government. There is time for me to make one or two comments.
First, the noble Lord, Lord Chalfont, spoke realistically about the Russia of today and other nations which might have or try to obtain ballistic missiles with warheads which are nuclear, chemical or biological. He spoke also of the term "need-to-know", which is a

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familiar one to me. I hope that pressure in Parliament or in the media will not cause the Government to go further in the openness which they have so far established. I trust that heed will be taken of the noble Lord's words on that issue.
In case there is any misunderstanding, I repeat that I believe it is vital that secrecy be preserved. My noble friend Lord Bethell also said that. I hope that I made that clear at the beginning and the end of my opening speech. I am glad that the noble Lord, Lord Knights, decided to speak. He added a dimension to the debate with his special police experience. I hope that he will take part in the deliberations on the Security Service Bill when it comes before us after Easter.
I am especially grateful to my noble and learned friend Lord Howe of Aberavon, who made observations about the new parliamentary committee, of which he is a member—.the only one from this House. He spoke also of the essential ring of secrecy which has to be maintained.
I regard it as a compliment that the noble Lord, Lord Richard, the Leader of the Opposition has taken part in the debate. He took part also in debates on the earlier legislation. He made some very good points, so he need not worry about the others. I hope that he will bring his interest and knowledge to bear on the Security Service Bill when it is before us.
I am grateful to my noble friend the Minister. He had the task of replying to the debate and responding to points when he could do so without disturbing the veil of secrecy, which is a delicate operation. We have made suggestions during the debate. I did not expect or wish any reply to be made which would touch upon operations. I welcome my noble friend's statements about the need for the public to be reassured as to the general legality and accountability of the services. I am grateful to him for the considered reply he gave to the debate. I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

Disclosure and Use of Personal Health Information Bill [H.L.]
7.40 p.m.
Lord Walton of Detchant: My Lords, I beg to move that this Bill be now read a second time.
The principle of confidentiality is at the very core of the doctor/patient relationship and it is one wholly accepted by other healthcare professionals. However, no privilege attaches in law to communications between doctors and patients in the same way as communications between solicitors and clients are privileged and legally protected.
In various foreign legal codes, such as the French under the Code Napoléon, medical confidentiality is virtually absolute and must not be breached. That has never been the case in the United Kingdom and the professional regulatory authorities—such as the General Medical Council in the case of registered medical practitioners and
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the United Kingdom Central Council in the case of nurses, midwives and health visitors—regularly advise those subject to their jurisdiction upon the principles of confidentiality which they should follow.
From time to time, those principles are modified in accordance with changing circumstances. Thus, it has always been accepted that confidentiality may be breached with the express consent of a competent patient and doctors, nurses and other professionals may be ordered by a judge in a court of law to disclose information in the public interest. During my period of service as President of the General Medical Council from 1982 to 1989 the council was greatly exercised over issues relating to confidentiality involving minors when dealing with such issues as contraception and abortion and much detailed advice was offered to the profession on that issue. Problems subsequently emerged relating to those individuals infected with the human immunodeficiency virus (HIV) and yet again detailed advice was given.
We also embarked upon extensive discussions with the Home Office when the Police and Criminal Evidence Bill, subsequently an Act, was under discussion. It was eventually agreed that it would be proper for doctors sometimes to breach medical confidentiality when dealing with the investigation of a grave or very serious crime such as a terrorist act.
Careful consideration was also given to the circumstances in which it might be appropriate to notify the licensing authority that an individual suffering from epileptic fits was continuing to drive a motor vehicle despite being advised not to do so. Thus, from time to time professional regulatory authorities have felt it right in the interest of the public and patients alike to modify the advice given to their respective professions by defining certain exclusions to the rule of confidentiality. There are, of course, some others apart from those that I have mentioned.
When I retired from the presidency of the GMC, in 1989, I was delighted when Sir Robert Kilpatrick, a distinguished clinical pharmacologist and dean of the medical school in Leicester, was elected by the council to succeed me. It was, therefore, a particular pleasure to welcome him into your Lordships' House and to learn that he has decided to deliver his maiden speech later in this debate. I am sure that the wise advice, counsel and comments of my noble friend will be listened to with keen attention on this and many subsequent occasions. I look forward very much to hearing what he has to say.
In summary, although certain specific exclusions have been defined, it is the duty of doctors, nurses and those working in other related professions to keep confidential the personal health information which they acquire in the course of their professional practice. It is, of course, fully accepted that disclosure to another healthcare professional is wholly appropriate when the individual in question is involved in the care of the patient. But any doctor or other member of a healthcare profession disclosing information without the consent of the individual concerned, and in circumstances not subject to defined exclusions, may be brought before the conduct procedures of the relevant regulatory body and may be subject to disciplinary sanctions.

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However, no such formal sanctions apply to lay members health authorities or lay employees of the National Health Service, or to others working in the private sector such as secretaries of doctors. Ministers have regularly stated that all NHS bodies and staff have a legal duty to keep patient information confidential. They have gone further by saying, for example, in discussion with the BMA that everyone working in the NHS is under a common-law duty of confidence to patients. As recently as 7th March the Department of Health produced guidance in a substantial booklet entitled The Protection and Use of Patient Information, confirming that there is indeed a common-law duty except in relation to individuals with a sexually transmitted disease and AIDS where breach of confidentiality can be a criminal offence under statute.
Yet there is still no overarching statute relating to the disclosure of personal health information. To the best of my knowledge, no lay employee of a health authority or of a consultant or other doctor working in private practice has ever been prosecuted for a breach of confidentiality. To put it crudely, therefore, there is no existing statutory restraint to prevent such an individual from selling to the media confidential information about the health of a prominent public figure. No formal sanction can at present be imposed upon such an individual, except that of dismissal.
The purpose of the Bill, to which I trust your Lordships will give a Second Reading tonight, is to make such a disclosure a criminal offence subject to a fine if the offence is found proved. It is also important to recognise that the common-law duty referred to by the Department of Health and the detailed guidance now given in its comprehensive document cannot apply to the increasingly large private sector of health care. It is the intention of the Bill to embrace all areas of medical practice.
Your Lordships will be aware of recent reports in the public press and media of the unsavoury and disturbing fact that, for a modest sum, private inquiry agents have been able to obtain access to the confidential medical records of several public figures including, to his astonishment, the Chairman of Council of the British Medical Association.
A number of statutes are relevant. Under the Data Protection Act 1984 individuals may have access to their own health records when held on computer. Under the Access to Health Records Act 1990 such individuals may also have right of access to information about themselves recorded in manually held records. The Access to Medical Reports Act 1988 gives individuals the right of access to medical reports written about them for insurance or employment purposes by doctors responsible for their treatment. Indeed, it gives them the right to see such reports before they are sent.
Those statutes do not, however, include any clauses specifically relating to breaches of confidentiality, although that issue is dealt with in legislation on sexually transmitted disease, human embryology and fertilisation and abortion. Under the Criminal Justice and Public Order Act it is illegal to procure or sell computerised data, but manual data are not protected
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under the Act and it does not deal specifically with individuals disclosing information. The whole purpose of the Bill is to fill an important gap in existing legislation.
It is relevant to mention something of the history of the Bill. For many years a statute embodying these provisions was under discussion between officers of the Department of Health and a large number of professional bodies. For some reason, about three years ago the department withdrew from those discussions and I am unaware of the circumstances leading to that withdrawal. However, the Bill now before your Lordships has been sponsored by an inter-professional working group, including representatives of the BMA, the medical Royal Colleges and their faculties, the Royal College of Nursing, the Royal College of Midwives, the Council for the Professions Supplementary to Medicine, the Office of the Data Protection Registrar, and the Association of Community Health Councils. Many more bodies have expressed their support including, for example, the Patients Association. It is also my understanding that the Bill is supported in principle by the Law Society while the issue has been raised recently by the tabling of an Early Day Motion in another place.
The Bill is self-explanatory. It aims to ensure that personal health information is equally well protected when handled by non-health professionals both within and outside the NHS and it relates to both computerised and manual data. It mirrors the codes of practice set out by the professional regulatory authorities of the health professions and complements the Data Protection Act 1984. Its provisions are totally in line with the guidance now published by the Department of Health. It also addresses the requirements of the European data protection directive in ensuring that safeguards for monitoring non-consensual disclosures are incorporated into statute.
The Bill relates only to England and Wales and is divided into 15 clauses. Clause I deals with the circumstances in which a person or body may collect personal health information. Clause 2 outlines the duty of health professionals and health service bodies to preserve confidentiality.
The core of the Bill is contained in Clauses 3 and 4. Clause 3 prohibits the use of personal health information for purposes other than that for which it was originally given, with specific exceptions. Under that provision, information may be disclosed in cases where there is a pre-existing statutory requirement to report it; for example, to avert a threat to public health or safety, in response to a court order, or, as I have already said, for the prevention or investigation of a serious crime; and general information without identifying the individual concerned—that is, suitably anonymised—may be disclosed with safeguards for audit or research purposes. The remaining clauses go into some detail about the means by which that information and confidentiality can be protected.
The importance of the Bill has been heightened to some extent by the proposal that an NHS-wide computerised network of information should be

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established. I believe that we should welcome improved communications within the NHS and the valid transfer of appropriate clinical information. I must acknowledge that a carefully designed system with appropriate safeguards could well be of great benefit to patient care as well as to teaching and research. However, there is a serious risk that such a network might be introduced without adequate protection being put into place to maintain the confidentiality of personal health records. I am assured that it is possible to install safeguards within the network—technically known as "filewalls"—which prevent access by individuals who do not have an appropriate password to enter the system. Moreover, encryption of particularly sensitive information under programmes such as that entitled PGP—pretty good privacy—may also be used. But there is little doubt that the ingenuity of computer hackers would, if they were so determined, ultimately circumvent such barriers; and, of course, the risk of disclosure of such information in manual records is likely to arise even more frequently.
Therefore, I am happy to commend this Bill to your Lordships' House. I believe that it is a sensible, timely and even overdue measure. Should your Lordships decide to give the Bill a Second Reading there are undoubtedly adjustments which will require to be made in Committee. For example, I have learnt that the subsections under Clause 8 entitled "Duties of health service bodies" do not cover adequately the lay employees of doctors and others working in the private sector. Clearly, that is something which must be made watertight.
It has also been brought to my attention that Clause 11(1)may be interpreted as giving the Secretary of State for Health a Henry VIII power, which I have learnt is anathema to your Lordships' House. A minor amendment to the clause making it clear that the matter could be dealt with by regulations rather than by order would, I am assured by your Lordships' Delegated Powers Scrutiny Committee, deal effectively with that matter.
I am confident that this Bill will receive wide support, not just within the relevant professions but by the public at large. The Minister may say that the Department of Health feels that the issues under consideration can be dealt with effectively by the useful and detailed guidance now issued by the Department of Health. The essential difference between us is that the Minister is likely to claim that guidance and consequential protection of confidentiality by common law may be sufficient. After the most earnest consideration, my belief is that that would simply not be sufficient and that, even in the NHS, improper disclosure not at present defined by an over-arching statute should be made a criminal offence. But, above all, the Department of Health guidance leaves totally unaffected the growing private sector where I and many others feel that the risk of major breaches of confidentiality is even more likely to arise. I beg to move.
Moved, That the Bill be now read a second time.— (Lord Walton of Detchant.)
7.56 p.m.
Lord Kilpatrick of Kincraig: My Lords, a common thread in all of the maiden speeches given in this House that I have read is an acknowledgement of the friendliness and warm support that individuals in the House give to newcomers. I sincerely express the same appreciation. I must confess also to a quite marked perturbation. I have just taken my heart rate and it is now faster than it has ever been when I have had occasion to speak publicly. That is not very good for an ageing heart.
My noble friend Lord Walton has, as usual, been extremely comprehensive; and I am used to that. The General Medical Council gave a great deal of attention to the seriousness of breaches of confidentiality of medical records during the time that my noble friend was president and again in a major statement in 1994 when I was in that office. I believe that this Bill really began its drafting stage at or around that time.
The problem has burgeoned immensely. To a degree that is related to the computerisation which now exists in virtually the whole of the hospital sector and the general practitioner sector throughout the United Kingdom. Abuse is certainly occurring more frequently. I should like to communicate how grave a problem that is in relation to the standard of care which patients receive at present.
Bernard Shaw described the doctor's dilemma. Unusually for him, he was guilty of miosis. There are many dilemmas which face health professionals in everyday practice. I should like to discuss two of them. The first is related to the fact that patients trust doctors, especially those whom they come to know very well because they see them repeatedly. They often communicate information to them which is so sensitive and so potentially destructive that the consulting room is akin to a confessional. The first dilemma for a doctor is, "Shall I make a note?".
I should like to give your Lordships three illustrations of that dilemma based on my own experience. The first concerns a lady who was discussing with me the possibility that her son might have a heritable defect which could appear in later life. After several questions from me concerning her husband she said, "Doctor, I have never told anyone this, but my husband is not the father of my son". I would not make a note of such information. The only reason for making a note to breach in effect a very sensitive piece of confidence is that it may be of help in that patient's present or future care. That is the dilemma; that is the balance one has to strike.
My second illustration also, I am afraid, involves a lady. However, that is just coincidence. In fact, she falls into a small group of patients whom we all see and who are extraordinarily loquacious: they go on, and on and on. They have complaints referable to every anatomical part and to every physiological system. I have a device that I use in such cases: it was taught to me by a very distinguished teacher of mine. One says, "Just stop. Just

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think about this: when were you last perfectly well?" After a long pause, the lady said, "When my mother was six months pregnant with me she was kicked by a horse, and I have never been well". That may seem to be rather humorous, but it is also very important to put such information in the patient's medical record because it could be of great consequence in relation to the future care of that lady by other doctors.
I turn now to the most striking example I have about doctors. I should say that there are many of them who become accustomed to writing everything in the notes. This example concerns Dr. Nigel Cox who appeared in front of the Professional Conduct Committee when I was in the chair. He had written into the notes of his dying patient that he had given her a lethal injection of potassium chloride. That information was breached. He faced a charge of attempted murder and was convicted.
I should like to stress that my greatest concern about the problem of confidentiality of records and of information that patients give to doctors, nurses or other health professionals is that, if the abuse continues to increase and doctors become more and more aware that such information may be breached, they will be all the more likely not to put anything in the notes. In my view, that absence would impair the high standards of care that citizens in this country are accustomed to receiving.
The second dilemma—and, again, this was covered to a considerable degree by my noble friend Lord Walton—is when a health professional feels that he should breach confidence. There are clear guidelines given by the regulatory bodies on the balance required. By and large one should always maintain confidence, but there are occasions when one should breach it. It is not difficult when there is statutory provision for it and that is often the case. The most striking example is notifiable disease; that is, when there is a particular infectious condition whereby the public interest demands that notification be made and it is made, with or without the patient's consent, because the public interest is such that members of the community may be infected. I have in mind something like tuberculosis. However, there are many instances where it is much more difficult to make a decision.
I had another patient, a middle-aged man, whom I had seen on many occasions. I became increasingly suspicious that he may have been or was a paedophiliac. That is something that I would certainly breach. In my experience, the most difficult situation of all is where information is given to the doctor by children. The most extreme example I have experienced related to a 12 year-old girl who told me that she wished to give me information but insisted that I give her an absolute guarantee that I would not divulge it to anyone. As I said, that is a most difficult situation because the doctor must not give an absolute guarantee, especially before he or she knows the nature of the information. One has to try to persuade a child—and this one was 12 years-old—to the point where one would be able to weigh in the balance the information that the child would give in case it might imperil other individuals or, for that matter, the child.
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I hope that I have convinced your Lordships of the seriousness of the problem regarding the information that patients give to their doctors. Each patient believes that the history they give and the physical examination that the doctor makes will be totally confidential. Very often they believe that the information will only be seen by that particular doctor. All doctors, like myself, take pains to tell patients that the information is going into the notes because it may be of value to other doctors who will see them later. That is the essence of the matter. The problem is that other individuals who see a written record may not have sufficient self-regulation not to breach confidence. I believe that this Bill will add a further deterrent for individuals not to do so.
I should like to conclude by saying that I believe this is a matter of great gravity. I return to my previous concern: if the abuse of confidentiality continues to grow, I believe that doctors will make scantier and scantier notes. I have one further example in that respect. A previous colleague of mine was a surgeon. He made very bare notes—although, I should say that that is not unusual for surgeons—but he would then write a detailed letter about each patient to his or her GP. Therefore, the only individuals who received that information were the surgeon and the general practitioner. I believe that that was carrying it to an extreme degree. It meant that no one in the hospital service, other than the surgeon, saw a record of what had gone on.
I believe that it is quite likely that we will see a reduction in notes such that it may impair the very high standards of care which are consequent upon having detailed notes. I hope that we can return to the position whereby there is total protection of the privacy of the living and the dead.
8.10 p.m.
Lord Winston: My Lords, I rise, as the third part of this medical sandwich; I might add that I am the smallest part. I do so having listened carefully to the comments of the noble Lord, Lord Kilpatrick, on making a maiden speech. I must tell him that the myocardium, the heart muscle, requires a lot of training. I still find that my pulse rate rises considerably when I rise to speak in this Chamber. That may not be an entirely bad thing either. It is a real pleasure to thank the noble Lord, Lord Kilpatrick, for his remarkably important speech. We are most fortunate to hear his contribution on this matter because it is an area of medicine which he understands as well as anyone, having been associated with the General Medical Council for such a long time and having been its president for the past six years.
When I heard that yet a third ex-president of the General Medical Council was to join your Lordships' House I felt a slight frisson of horror because I realised that I would have to watch my personal conduct rather more carefully in future. Nevertheless, it is a great happiness to me and a privilege to welcome the noble Lord. It is a rare privilege to be able to welcome anyone who is so distinguished in medicine. The noble Lord has held three chairs and has been a Dean of two different distinguished medical faculties, one in Sheffield and

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subsequently in Leicester. Those are both internationally recognised medical schools of the highest standard. The noble Lord has received many academic honours and is widely respected, particularly as an absolutely outstanding administrator. Like the noble Lord, Lord Walton, we all greatly look forward to hearing many contributions from the noble Lord, Lord Kilpatrick, in this Chamber.
The noble Lord's point is well taken. Indeed, one is regularly put in the position of being taken into a patient's confidence. In my field of medicine which involves the family and sexual matters that happens literally every day. I declare my interest as a consultant obstetrician and gynaecologist. Patients frequently tell me in private—perhaps when the husband has left the room—that they have not mentioned a previous pregnancy which ended in a termination. That is important medical information which the doctor has to recognise in his overall assessment of what might be wrong with that patient and also in his assessment of how he might manage that patient not only in terms of physical management but also as regards psychological management. To risk not recording that information because the records might be open to unreasonable scrutiny is a matter of serious concern to any responsible doctor.
There is no doubt in my mind that a Bill of this kind is needed. This is an important matter. I am not entirely sure that this is absolutely the right Bill at present, but I have no doubt that it can be honed and fine-tuned, like all legislation in your Lordships' House, as it passes through its various stages. I am sure there must be unanimity among us all about the basic premise of this Bill, which is that people who seek medical help should have absolute privacy as regards their medical condition. That should not be breached except under the most extraordinary circumstances, which are already recorded in this Bill. We would expect that to be the case. That privacy should cover not only a patient's medical condition but should also extend to a patient's treatment and any social circumstances which a patient may need to divulge to his medical practitioner in the course of treatment. The noble Lord, Lord Walton, who I think is technically my colleague rather than my friend, at least in this House, is to be congratulated on bringing this matter to the attention of Parliament.
One of the reasons I think this legislation is of growing importance is the expansion of information technology. In large hospitals all sorts of personnel have wide access to hospital computers. My own hospital, for example, was one of the first hospitals to be computerised, and access to those computers is in some ways a matter of considerable concern because managers and non-medical staff who have absolutely no direct responsibility for patients have access to patients' records. There is no doubt that from time to time there has been evidence that the wrong sort of information has leaked out, and that has damaged a patient or her care, and has on occasion got into the hands of the press. I shall return to that issue in a moment.
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Quite clearly there is a growing urgency to protect patient confidentiality. The problem that I see at the moment is how all this might be regulated. I do not wish to go into a long screed about this because I have no doubt that the Minister will want to address some of these points. However, the issue was well described in a recent article in the British Medical Journal. The article was written by Dr. Ross Anderson of the computer laboratory of Cambridge University. The article contains a précis of a document describing the findings of the British Medical Association, which is concerned about confidentiality.
Ross Anderson makes some excellent points in the article. He referred to a matter which occurs in my practice; namely, the problem about divulging information separately to one partner of a marriage. This may seem like a silly example but it is one I have a real understanding of because I experience it every day. It is common in an infertility clinic for the wife to take the responsibility of being infertile, even though it is her husband who suffers from a poor sperm count. Frequently the wife will ring the hospital to try to obtain information about the sperm count. The question is whether that information should be divulged to the wife before the husband is told of it. In my view, in general, that should not happen because if one tells the wife first one may cause her a greater burden than she realises at the time because she then has to present that information to her husband. There is also the difficult issue of confidentiality as between husband and wife and to what extent information should be divulged separately. The article to which I have referred describes some of those problems in more general terms. It is an important document, as is the wider pamphlet from which it is taken issued by the BMA. I recommend that pamphlet to your Lordships.
However, Ross Anderson's article presents us with a huge number of problems which one can begin to understand when one is struggling with computer records. It suggests nine principles to follow to maintain data security. He refers to access control. He states that each identifiable clinical record should be marked with an access control naming the people or groups of people who should have access to that record. That is perfectly reasonable, but the problem is that it is difficult to police. He further suggests:
"That when a clinical record is accessed there should be a record made of that opening".
As far as I am aware, in practice that never happens with written records in hospitals. Therefore that process would set a new precedent as regards electronic material. Again, we would have to think about the implications of trying to implement such controls.
Ross Anderson also points out that one clinician who is in charge of a patient should have overall control of who has access to the records. There again one can see that that could constitute quite a problem as regards management. There are other issues about the persistence of records on a computer, how long they should remain in existence and as regards consent and notification and what patients should be told about who has access to their records and when.

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Certainly at the moment there is no doubt that the implementation of this kind of legislation on electronic data gathering presents problems. I promise the Minister that I am not making a political point here, but so many hospital records, including my own, are poorly kept. They are often out of order and out of synchrony. They are frequently illegible and parts are often missing. Often much irrelevant information is included in the records. In most clinics it is the case that the records of some patients who attend the clinic cannot be found. In most hospitals in the National Health Service—the situation may be better in the private sector—there is a problem with the proper storage of and access to clinical records.
There is an irony about this. If one looks at the records at Hammersmith Hospital, for example, right across the front of the record is the large admonition "NOT TO BE HANDLED BY THE PATIENT". In my view, probably the only person who should handle those records is the patient. Of course, as we now know, patients should and do have access to their records. So we have a long way to go with regard to record-keeping.
As the noble Lord, Lord Walton, pointed out, there is an important precedent for this legislation. That is why this Bill may be a way forward. Your Lordships will recall that in 1990 Parliament passed the Human Fertilisation and Embryology Bill. That Bill included fairly restrictive provisions with regard to the confidentiality of information concerning patients going through in vitro fertilisation which made it an offence to divulge records except under very stringent circumstances. In fact, the circumstances were so stringent that the legislation had to come back to Parliament to be modified two years later. Even now there are some problems with the implementation of that legislation, as the Minister is no doubt aware. There are some anomalies with that legislation. For example, as I understand it, that is the only instance where records have to be kept for up to 50 years. That is strange when we do not do that for any other aspect of medical treatment.
There are also restrictions on who has access to computer records. Your Lordships may be aware that in the high technology branches of medicine like in vitro fertilisation the computer plays an important part in maintaining audit. One of the problems we have in our own clinic is that of ensuring that only the right people have access to records. However, we have a problem because, with the internal market—and again this is not a political point; it follows that there must be audit of some kind whether there is an internal market or any other form of management—because it is important that managers know which patients come through the system, how often, what treatment they are having and so on. That means that one has to manage how one gives access to such information. That is a real problem with legislation of this kind. No doubt we shall have to have a detailed discussion on that aspect.
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Finally, I should like to deal with one point which is of particular interest to me. It is one which the noble Lord, Lord Walton, also touched upon; that is, the issue of the press interfering with patients. In my area of medicine, like so many areas, that has become an increasingly important problem. I should like to illustrate it by a story about some research we are working on in my unit at present.
My own unit at Hammersmith has been working in collaboration with the unit of Dr. Joy Delhanty of University College, London, on trying to detect the genes which might predispose to cancer in the human embryo. A number of families have a predisposition to breast cancer, bowel cancer or brain cancer. They carry these horrible genes. The families I am thinking of have lost five, six or in some cases seven members of the family before they reached the age of 40. It is a terrible sword of Damocles to have hanging over one's head. Women in those families who have married and become pregnant, knowing that they carry the genes, rather than opt for a termination of pregnancy, of which they do not approve or with which they have ethical problems, have opted for some form of embryo screening. Over the past few years Dr. Delhanty and my group have been trying very hard to screen embryos using genetic methods. We are on the point of making a small breakthrough in that area. There is no doubt that we shall be treating a number of patients this year.
Sadly, the first such patient was, as your Lordships can imagine, of intense interest to the press, first, because the case involved cancer; secondly, because it involved embryology, which for some reason invariably excites the press; and, thirdly, because of the issue of so-called designer babies. It has been a real problem. In spite of our greatest care with the patient, a journalist, who perhaps ought to remain nameless, dug out through, I believe, nefarious and dishonest practice, the name of the patient we were to treat. The patient came from a small town in the north of England and from a simple background. She had no idea what was about to land on her doorstep. She was anxious to have the treatment. Then suddenly she found that the national press, and particularly the local newspaper, had got hold of her name. She was put through the most appalling strain.
Under those circumstances, I have a real problem. I can deny that we are going to treat the patient. However, she will travel to London at some time, and that will become public knowledge to any inquisitive journalist. More importantly, she will undergo complex treatment with a considerable risk to her emotional status, not in private but in the glare of publicity.
This is an increasing problem in medical practice. That is not an isolated case. My problem is that I have no sanction whatever against those journalists. There is no way that I can dissuade them, because there is no law to stop them publishing those names. Afterwards the patient can perhaps sue if she feels that she has been damaged. However, the average patient, from a normal background, would not have the resources or the understanding to be able to do that.

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For all kinds of reasons I feel that this legislation is worth serious consideration. However, it is very complex and it will need considerable adjustment to make sure, first, that it is workable and, secondly, that it is effective.
8.25 p.m.
Lord Milverton: My Lords, it gives me great pleasure to rise to support the Bill that the noble Lord, Lord Walton, has introduced. It is rather frightening to follow three learned medical men. However, I hope that my few words will give not only my support but, because I am a priest, the support of a number of Church members.
I believe that the Bill is vital. I am sure that with the assistance of noble Lords who are present it can be improved and strengthened and many of the weaknesses removed. The Bill is essential for the sake of doctors and nurses.
There is a need to close the loopholes and prevent the leaks which occur, as the medical Peers said, whereby confidential material is leaked and misused. There is a need for a comprehensive measure to make the safety of this confidential material more certain in order that the confidence between doctors and patients and nurses and patients may be held in even greater security.
As has been said, the advances in scientific technology, the increase in data material which is available and digital scientific advances result in the possibility of this confidential material going far beyond the medical field. Therefore, one cannot emphasise too much that it is essential for the sake of doctors and nurses, who can be placed in very difficult situations.
We are very grateful to the noble Lord, Lord Kilpatrick, for his maiden speech. I appreciate the contribution of the noble Lord, Lord Winston. I remember that he kindly entertained me and informed me about embryology and in vitro fertilisation.
I hope that my noble friend the Minister will take the Bill on board so that we can do whatever is needed to improve it in order to secure the confidentiality of material so that patients, doctors and nurses may feel more secure about that than they do now. Others who have access to such material must realise that if they misbehave they will have to face the consequences. The media must also realise that they, too, will have to face the consequences. There are times when we must stand up to the media. We need to support the medical profession in that way. Therefore, I am very pleased that the noble Lord, Lord Walton, has brought this measure forward. One hopes that it will be a great advance with regard to confidential material.
8.31 p.m.
Earl Attlee: My Lords, I rise briefly to support the Bill, the purpose of which has been so well described by the noble Lord, Lord Walton of Detchant. The need for the Bill could not have been better explained than by the noble Lord, Lord Winston, who told us of the activities of the media.
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Before saying anything of substance, I, too, should like to pay tribute to the maiden speech of the noble Lord, Lord Kilpatrick of Kincraig. He has so well explained the need for confidentiality and the dilemmas facing the professional when deciding whether or not to disclose. But it is the professionals who have to make disclosure decisions and not the lay people. On the question of patient notes, I can never read my prescription, let alone any notes by the doctor. I am also very envious of any noble Lord who can speak lucidly with limited use, or even no use, of notes.
My support derives from the simple fact that I am astonished that there is a need for the Bill in the first place. I have no detailed knowledge of medical matters; I am merely an infrequent patient. I was always confident that medical information about myself was very hard to come by. That is due to the medical profession's ethos of confidentiality. I am sure that it is right that lay medical staff should be quite sure that they will be breaking the law by making any unauthorised disclosure.
However, anyone who dishonestly gains access to my records will be somewhat disappointed. The most titillating event to date would be the full oblation of my left large toenail in 1975 to cure an ingrowing toenail. But later there could be a much more—shall we say?—interesting event, and I should like that to be protected.
There may be some concern on the part of the insurance industry in that their ability to acquire information may be limited by the Bill. However, it is hard to justify the acquisition of medical information by dishonest means. I feel that an insurer should obtain full and voluntary access to the proposer's medical records at the time of the proposal. If that is not forthcoming, the insurer should draw the appropriate conclusions.
On a related matter concerning the principle of voluntary disclosure, the Inland Revenue was at one point making inquiries regarding my affairs. I immediately wrote a letter to the bank manager which effectively placed a duty on him to disclose to the revenue anything that he thought might interest it. Very soon afterwards all outstanding matters with the revenue were cleared up. Presumably it was confident that I had nothing to hide.
However, I have a general moral concern regarding medical, as opposed to life, insurance. I fear that in the long term we may drift towards universal private medical insurance instead of our current NHS arrangements. What will happen to people or families who are medical disaster areas? What would happen if we eventually reached the situation where one had to have private medical insurance to obtain decent medical cover but the premiums were based on medical history? I do not object to private medical insurance, but I fear it becoming a universal requirement.
As the noble Lord, Lord Walton, implied, the Bill does not go much further than the Government's amendment to the Criminal Justice Act except that it will cover information held on hard copy—that is, the medical notes. I hope that the Minister can support the Bill even if she would wish to amend it in Committee.
8.35 p.m.
Baroness Robson of Kiddington: My Lords, first, I welcome the Bill so ably introduced by the noble Lord, Lord Walton of Detchant, and thank him for the clear and detailed way in which he introduced it. I should like to say also what a very special privilege it has been to listen to the maiden speech of the noble Lord, Lord Kilpatrick of Kincraig. His speech was very moving with its vivid examples of the dilemmas faced by the health profession. One of the frightening suggestions that he made was that the fear of unwanted disclosure of confidentiality might lead doctors to reduce their notes to such an extent that they might not be as useful to the patient's care as they should be. We are grateful to the noble Lord and we look forward enormously to his taking part in debates in this House not only on the health service but, above all, on problems such as the one that we debate tonight.
In opening his address, the noble Lord, Lord Walton, pointed out that all the medical authorities—the nursing and midwifery authorities, the Association of Community Health Councils for England and Wales, the Patients Association and the data protection registrar—are in favour of the Bill. But, apart from that, the Bill has received all-party support from MPs from all parts of the House.
It is certain that such a Bill has been needed for a long time, but it has become even more important, as has been said by all speakers, in view of the intention to introduce a nationwide computer network to link clinics, hospitals and GP surgeries, as well as allowing access to other bodies and individuals engaged in the care of patients. That includes social services, voluntary bodies and private healthcare providers. Without a doubt, the introduction of a nationwide computer network can, if properly safeguarded, confer great benefits for the treatment of patients. But it must be accompanied by proper safeguards for the confidentiality of patients' records.
The Minister has been kind enough to send me a copy of the guidelines sent to all National Health Service bodies on the protection and use of patient information. I am grateful for that. However, in my view, guidance is purely guidance and has no statutory framework to enforce it. The guidance relates only to NHS bodies. Health care professionals are accountable already to their regulatory bodies for breaches of confidentiality. But the introduction of a nationwide computer network will enable many other people to have access to patients' confidential records and they do not have the same regulatory bodies governing their behaviour.
The Bill aims to ensure that personal health information is equally well protected when handled by non-health professionals, both within and outside the NHS. The noble Lord, Lord Walton, referred to the various Acts that exist to deal with data protection. In their own way they are laudable, important and necessary. Together, however, they do not cover the whole field of the protection of confidentiality. For example, Section 161 of the Criminal Justice and Public Order Act 1994, the latest Act, relates to computerised records only. It makes it illegal to procure or sell data,
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but it does not mention the illegality of procuring and selling manual data. The Act does not relate to individuals disclosing information. Manual records also include, for example, videos made for treatment or teaching purposes. There is a great danger in that field.
There is no overall statute relating to disclosure of personal health information, although such information may contain the most intimate details of a person's life. The Bill seeks to extend the principle of confidentiality to health bodies outside the NHS, including independent contractors. But also, for the first time, it extends the confidentiality principle to manual records. That is of great importance because we have all been present in GPs' surgeries where the same thing happens as was mentioned by the noble Lord, Lord Winston. In trying to find a patient's records, someone pulls out a number of records and they lie there. The opportunity exists for someone to gain information about another individual.
Clause 8, therefore, is important when it demands that all officers and employees, students, volunteers and independent contractors must have clauses in their contracts of employment to protect patient confidentiality. The other two most important clauses are Clauses 3 and 4. Clause 3 prohibits the use of personal health information other than for purposes for which it was originally given. That is except in cases where there is a pre-existing statutory requirement to report. The noble Lord, Lord Walton, referred to matters such as serious threats to public health or the risk of a serious crime being committed. Clause 4 defines when a health body or professional may disclose health information without the patient's consent.
The Bill is needed in order to safeguard the trust between health professionals and patients. The EC directive on data protection demands that the law be in place by 1998. The information technology revolution which is still in progress demands that we have on the statute book an Act to protect the personal information contained in patients' records, whether computerised or manual. I sincerely hope that the Minister will tell us when she replies that the Government will set aside time to enable the Bill to become an Act of Parliament and safeguard the private confidential information of patients.
8.45 p.m.
Lord Carter: My Lords, in speaking to the Motion I wish to make the usual disclaimer from this Box that as it is a Private Member's Bill I shall be speaking in a personal capacity and not as Opposition health spokesperson. I wish to thank the noble Lord, Lord Walton, for introducing the Bill and explaining it so clearly. He speaks with enormous experience and authority on the matter. Like my noble friend Lord Winston, I wish to give the Bill a cautious welcome. Also like other noble Lords, I should like to congratulate and thank the noble Lord, Lord Kilpatrick of Kincraig, for an outstanding maiden speech. It occurred to me, when he said that his heart rate had increased, that with the noble Lord, Lord Walton, and my noble friends Lord Winston and Lord Rea, he would have been in extremely good hands if anything untoward had happened.

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Having examined the Bill, we shall wish to introduce some probing amendments at a later stage. I shall briefly refer to the subjects later. The need for confidentiality of medical records goes back a long way. Like other laymen, I had heard about the Hippocratic Oath but I was impressed to discover that it includes the statement:
"Whatsoever things I see or hear concerning the life of men, in my attendance on the sick or even apart therefrom, which ought not to be noised abroad, I will keep silence thereon, counting such things to be as sacred secrets".
That is the essence of the Bill.
A regulatory framework which covers personal and sensitive information which is found in medical records is bound to be a difficult area. It must be informed by practical understanding of the implications that it has for the delivery of patient care and must reflect and facilitate a proper balance between the needs of the patient and the needs of the medical profession. The need for good practice in the secure and confidential handling of information is ever more fundamental to the professional responsibilities of all who are engaged in the provision of healthcare. We all understand that the quality and efficiency of healthcare services depend on good communication between patients, professional people and carers and other lay people involved who could be sited in home, community and hospital settings. Information is, and must be, shared within multi-professional teams which are often widely spread. It must be aggregated to provide the overview necessary for disease management and to guide the setting of policy and priority. That can only be achieved with, as we have heard, good management of the confidentiality, integrity and access of all information.
Obviously the whole area of computerisation comes into it and that has been mentioned. We can all agree that what is now needed is a way to manage the process of change so that the substantial benefits that computerisation can bring for individual patient care are realised.
If we put together all those considerations the question which the House must consider is how the Bill attempts to measure up to those considerable requirements. I was pleased that in introducing the Bill the noble Lord, Lord Walton, explained exactly who would be covered by it. I wondered about the private sector and how it would be covered. It would be helpful if, when he responds to the debate, he could make it absolutely clear that private hospitals, clinics and those who work in them, both the medical professions and laymen, are covered by the Bill's provisions and that patients in those establishments do not have to rely on the common law, as is the case at the moment, for the protection of their records.
A number of noble Lords mentioned the guidance. I too wish to thank the Minister for sending us a copy which has been extremely helpful. The guidance marches alongside the Bill because it was only produced on 7th March. How does it interact with the Bill? Does it have the force of law? I presume that only the common law can be relied upon to enforce the guidance except in certain specified examples which are given in
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it. I ask the noble Lord, Lord Walton, if the Bill becomes law, what is the status of the guidance? How does it relate to the Bill?
We have heard all about computerisation and the proposed NHS network. It is obviously part of the area covered and affected by the Bill. This is an opportunity to ask the Minister what is the situation regarding the negotiations between the BMA and other bodies and the NHS regarding the security of computerised information through the NHS network. How do the Government view the proposals for the encryption of medical data and the recommendations of Mr. Ross Anderson, the computer consultant, engaged by the BMA as an adviser? This point was made by my noble friend Lord Winston. Have the nine principles of data security set out in Mr. Anderson's article in the British Medical Journal on 13th January been accepted for the NHS network; or is negotiation still going on? We heard from my noble friend Lord Winston that there are some problems in this area. This is an opportunity for the Minister to tell the House how the negotiations and discussions are proceeding. They all relate to this Bill. It would also be extremely helpful to know the Government's stance regarding the letter sent to the NHS trust by Mr. Sandy Macara on 25th January.
I was struck by the example that my noble friend Lord Winston gave in relation to the Human Fertilisation and Embryology Bill. I was a health spokesman at that time, together with my noble friend Lord Ennals. We gave the most exhaustive consideration to the Bill, and to the Act in its first incarnation. I had to deal with it when it came back to the House. Already, within two years we found that we had missed something. We discovered that the original Act was much too restrictive in the area of exchange of information between doctors. That is an experience we must bear in mind. I am sure that the noble Lord, Lord Walton, will have that in mind when he considers how the Bill could be improved or extended to cover the sorts of points that, despite the most careful consideration, we discovered we had missed on the first run-through of that very important Act.
As we heard, the common law right of confidentiality has been relied on in the past as the basis for protecting the patient's rights. That right will still exist if this Bill becomes law. I ask the noble Lord: are there any areas of medical practice that are not covered by this Bill where the patient will still have to rely on his rights in common law to protect the confidentiality of his medical records?
I know that the noble Lord is aware that the Law Society has raised two specific areas of concern that we shall certainly wish to probe in Committee. The first relates to exceptions to the unlawful disclosure provisions where the information is required,
"for the conduct of proceedings before any court or tribunal (being proceedings that have been commenced or are reasonably in contemplation)".
The Law Society makes a point with which I know the noble Lord is familiar; namely, that opinion is that the wording of the Bill is,

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"insufficiently broad to cover all circumstances when a patient or ex-patient, or a solicitor or someone else acting on the patient's behalf, requires … [access to] the … records".
I am sure he will wish to deal with that.
The second point relates to the clause in the Bill that requires,
"the authorisation of a consultant or qualified health professional for the release of any personal health information, including in circumstances which fall within the exceptions defined in Clauses 3 and 4".
Again, the Law Society points out that that could,
"prohibit the speedy, efficient release of medical records to a patient, or his legal representative investigating a potential claim".
This is an area which we shall probably have to examine in Committee.
The Bill applies only to England and Wales. I was interested as a layman to know why, and how, the confidentiality of the records of patients in Scotland and Northern Ireland is protected. I was extremely pleased that the noble Lord pointed out before I did (he stole my point) the Henry VIII effect of Clause 11. As I understood him, he intends to introduce an amendment to deal with that. I think he should also consider that subsections (2) and (3) of Clause 11 give extensive powers by regulation to,
"extend the provisions of this Act to any other class of body or person connected with the delivery of health care … make provision for additional exceptions from Sections 3 and 4, and … different provision for different cases or classes of case, including different provision for different health records or different classes of health records".
When the noble Lord considers an amendment to this clause to deal with the Henry VIII point he might also consider whether in fact subsection (4) should be amended to include that statutory instruments should be subject to the affirmative resolution rather than the negative route. These are substantial changes in the nature of the classes that the Bill covers. It is the sort of area which I suspect precedent would show would be better dealt with by the affirmative rather than the negative route. It is a technical point, but an important one.
It will be clear from my remarks that we welcome the intention of the Bill. We shall certainly wish to probe in detail in some depth at later stages of the Bill. As this House always does, we shall wish to see constructive improvement where matters are not clear.
In conclusion, I repeat my thanks to the noble Lord, Lord Walton, for introducing the Bill. As we heard from the professionals in this debate, it deals with an important and sensitive area of public policy. We all await with interest the Government's view of the Bill.
8.55 p.m.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, whatever our views on whether further legislation is required in this area, we are extremely grateful to the noble and distinguished Lord, Lord Walton, for giving LIS the opportunity to debate this important and, over the years, very difficult and contentious subject.
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It also affords an opportunity to welcome the noble Lord, Lord Kilpatrick of Kincraig, past president of the General Medical Council, to this House. Many of us are aware of the noble Lord's outstanding commitment to the protection of patients and to improving standards of professional practice. His determination to ensure a safe passage for the Medical (Professional Performance) Act last year was impressive. It is certainly entirely fitting that his maiden speech should be devoted to the protection of patient information. We look forward very much to hearing more from the noble Lord. Without a doubt we shall benefit from his wise counsel and his delightful sense of humour. The noble Lord, despite his racing heartbeat, may be aware and, if not, I can reassure him, that their Lordships are renowned for many virtues, not least longevity.
The Bill is not a new subject for the House. Some of us may feel that we have been here before. But I have to say that my own sense of déjà vu is tempered by the knowledge—even perhaps the satisfaction—that lately we have made some very real progress.
We all rightly expect that our personal health information will remain confidential, as many noble Lords pointed out tonight. This principle already has legal force through the common law duty of confidence through the Data Protection Act for the increasing proportion of health records held on computer and through various specific statutory restrictions, for example, on the disclosure of information relating to sexually transmitted diseases. There is also legislation which applies in particular circumstances, such as the Computer Misuse Act and the section of the Medical Act which makes it an offence to impersonate a doctor.
In addition, the duty of confidence is set out clearly in the Patient's Charter. And, as the noble Baroness, Lady Robson, said, in the case of healthcare professionals, it is covered by ethical codes of conduct. Also, a number of NHS bodies include the duty of confidence in their employment contracts. However, whatever the safeguards, the unauthorised disclosure of patient information must be regarded as a serious disciplinary offence. So we already have quite a lot of rules and regulations.
The noble Earl, Lord Attlee, drew our attention to insurers saying that they should have access to information when an insurance proposal is submitted. It is right to get the balance correct between the interests of insurers and patients. The Access to Medical Reports Act governs reports written for insurers and employers and ensures that patients can see and correct or comment on their contents before insurers receive them. As a result of co-operation with the ABI following concern in this House, insurers no longer ask certain questions about whether a person has had an HIV test or not.
However, what we also need—I accept that the Bill sets out to do it—is an understanding of the circumstances in which it may be permissible to use identifiable information for purposes other than direct care and treatment. This need not be to the detriment of confidentiality. It is more a case of ensuring that such

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information is seen only by those who have a genuine need for it, who must use it only for a given purpose, and who fully understand the duty of confidence.
This is what the Department of Health's newly published guidance, referred to by the noble Baroness, Lady Robson of Kiddington, and the noble Lord, sets out to do. This booklet is the successor to a consultative document, issued in 1994, which drew 175 responses. These came from all quarters; from the professions, from patient groups, the NHS and the data protection registrar. The department has done its very best to take account of those views and indeed others expressed in a number of further discussions.
The noble Lord, Lord Walton, referred to withdrawal of the Department of Health from certain discussions. I understand from discussions only this morning with my right honourable friend the Secretary of State that there have been continuing contacts with a wide range of bodies on these issues. In particular there have been a number of meetings with the BMA over the past year and indeed, I believe, some recent correspondence which was good humoured.
The guidance emphasises at the very outset that patients—and that of course refers to all of us—do indeed expect personal information to be treated as confidential, as so forcefully put by my noble friend Lord Milverton. The guidance stipulates—and this underpins the guidance as a whole—that patients must be made fully aware of the reasons why NHS staff, and sometimes staff of other agencies, need controlled access to patient information. This is in order to deliver, plan and manage services effectively, to train staff, to research medical and health service problems, and to ensure public accountability. We appreciate, as does the noble Lord, Lord Walton, that information used for these broader purposes need not always be identifiable. So, as added protection, the guidance makes clear that such information must be anonymised wherever possible.
The noble Baroness, Lady Robson, I know, feels that the guidance may not be strong enough, and indeed the noble Lord, Lord Carter, asked how it reacts with the common law. It reflects the existing common law. It explains how the NHS can comply with that law. It is health service guidance and health authorities must make arrangements to comply with it by November. Health authorities are also strongly advised to ensure that the terms of confidentiality are in employees' contracts. We have tried to bolster it as much as possible.
We recognise that there is a balance to be struck between the undoubted right of individual patients to confidentiality and the interests of patients as a whole in having access to a health service that is able to respond to their varying needs—a point very graphically put by the noble Lord, Lord Winston. What we do not want—if I may borrow the metaphor of one clinician who has commented on this subject recently—is the modern day equivalent of a man with a red flag walking in front of a motor car.
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I have to say, frankly, that the Government's present view is that the various interests can best be met within the current law, bolstered as it now is by the department's guidance. There are several reasons for this.
Most importantly, the nature of health care and the public's expectations of it are constantly evolving. I believe our new guidance, backed up by the range of existing provisions and the use of clinical judgment, steers a careful path without imposing a straitjacket. It covers the point made by the noble Lord, Lord Kilpatrick, that it is of the utmost importance that patients are informed about the uses to which the information is to be put before the information is collected. The Bill, as I understand it, makes no such emphasis.
The noble Lord, Lord Winston, and the noble Lord, Lord Kilpatrick, also highlighted some of the difficult dilemmas faced by clinicians. This is precisely the reason why it is so difficult and may be undesirable to legislate. It could create more problems than it solves, as the experience of the Human Fertilisation and Embryology Act 1990 has already shown us.
We have also seen, for example, the sad results in some cases of people suffering from mental illness where information needed by one agency or member of staff is not, for whatever reason, passed on. As a result, both the patient himself and members of the wider public have been poorly served. I am not suggesting that information should be passed on without regard to its purpose. The new guidance makes clear that patients receiving joint care should be made aware, as part of routine care planning, that some information will need to pass between agencies if care is to be properly co-ordinated. That is another point aptly illustrated by the noble Lord, Lord Kilpatrick. We say also that a judgment may need to be made in particular circumstances as to whether the public interest or public safety outweighs the duty of confidence. What we do not want to do is risk legislative inflexibility. We have always been able to cope with exceptional or difficult circumstances and we need to be able to cover those in the future.
I would like to address the concern of the noble Lord, Lord Walton, that employees of health authorities, GPs and the private sector health care providers are not restrained from giving out confidential information. They are of course subject to the common law duty of confidentiality both to patients and their employers. Indeed, we have seen some recent cases that have been brought to court that have proved that the common law holds good.
My noble friend Lord Milverton and the noble Lord, Lord Winston, mentioned press interest in individual cases. Indeed, the Bill does not actually stop the press divulging confidential and sensitive information. It only binds the health professional once the press has the information from whatever source, and in this case the Bill has no application.
There are other considerations. The noble Lord, Lord Winston, said tonight that he felt that perhaps the timing of this Bill was not quite right, and that is a view

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that we share because by October 1998 the United Kingdom must implement the EC directive on data protection. This will apply both to computerised and certain categories of manual records. The directive is of general application and is not confined purely to the health sector. Its precise implications have still to be determined. The Home Office is about to mount a public consultation exercise which will seek views on the implementation of the directive, including its implications for health records. Some new legislative provision will almost certainly be needed. I suggest that we would be wrong to legislate specifically for patient information at this time when we are having to consider the need to make changes to the existing general data protection regime.
In the light of tonight's debate, I shall be glad to give a commitment to look at the need for further, specific legislation relating to health but as part of the wider consideration being given by the Government to implementing the European directive on data protection. At that time we shall be in a position to take into account the effect that our guidance has had as well as other work which may help to offer even greater reassurance to patients.
I know that the NHS executive has been giving detailed attention to computer security. An information security manual was published this week to support all the practical steps which must be taken to enable computer users in the NHS to follow the principles set out in those guidelines. The networking security policy and guidelines issued last December will ensure that future networking in the NHS will be much more secure than it has been in the past. The NHS executive will continue to study the means of making further improvements.
The noble Lord, Lord Carter, wanted to know the state of negotiation between the BMA and the Department of Health on computer security. The Department of Health and the BMA continue to have regular discussions on issues of security, including encryption. The noble Lord also asked about Scotland. I understand that Scotland has a non-statutory code which has worked well for several years. I am afraid that I cannot reply on Northern Ireland. I find that the noble Lord puts his points at a most alarming rate. It is rather like a battery of bullets that whizz over my head. I am aware that I have not answered all his questions but with his indulgence I shall write to him.
The Bill contains a number of features that we can readily commend. I doubt that the aims of the noble Lord, Lord Walton, and those who support the Bill and the aims of the Government are very different. It is clear that we both want patient information held securely. But if I may say so, the Bill concentrates unduly on the role of the medical profession in an age in which to be effective services must be delivered on a multi-professional and, as I said, a multi-agency basis.
We are concerned also by the burden of statistics collection that the Bill would impose, with the number and nature of disclosures being published on a statutory basis. We feel that that is very bureaucratic, if indeed it is workable, and not the best use of valuable staff time: patients before paper.
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The Government consider that their own guidance, based on the existing law, offers a more practical and flexible way forward. We shall carefully review its impact. If it proves to be insufficient, we can look at it again. We can do that once we know where we stand in relation to the EC directive. In the meantime, though I fully appreciate the best of motives behind it, I regret that the Government are unable to support the Bill, which, although it may be disappointing, comes, I know, as no surprise to the noble Lord, Lord Walton.
Lord Winston: My Lords, before the Minister sits down, perhaps I may raise one point. It seems to me that there is something of a paradox here. The Government supported the notion of protection of confidentiality for in vitro fertilisation and still regard that as useful. I wonder whether the Minister could briefly address the issue that troubles me and probably others also. There is one set of patients who seem to be legislated for but people going through other medical treatments are not so treated. Would she address that paradox? It seems to me to be an important principle in consideration of this whole matter.
Baroness Cumberlege: My Lords, quite frankly, there is something of an anomaly. The noble Lord will know that the Human Fertilisation and Embryology Act 1990 regulates the circumstances in which disclosure of specified information is permitted and that centres are licensed. It is a very draconian Act in some ways. As the noble Lord said earlier, it has brought us some difficulties. We are aware of that. Because we shall be subject to the EC directive, it seems to us inappropriate now to bring in more legislation which may land us in the same kind of difficulties as did the 1990 Act in the case of human fertilisation and embryology. Although we do not rule out legislation for ever and a day, the timing is not right. We should want to reconsider the matter when we have had a chance to build it into the EC directive.
9.13 p.m.
Lord Walton of Detchant: My Lords, I am very grateful to all those who have chosen to speak in what has proved to be for me an extremely interesting debate. In particular, I echo the congratulations which have come from all parts of the House to my noble friend Lord Kilpatrick on his sensitive and moving maiden speech, in which he painted a vivid picture of some of the everyday dilemmas of clinical practice that face all doctors in this very difficult area of confidentiality, based on his own personal clinical experience.
I was grateful to the noble Lord, Lord Winston, for his qualified but warm support for the principle of the Bill. I was grateful to him also for drawing attention to some of the problems that already exist in relation to the confidentiality of medical records and of the difficulties which arise in many medical records departments in the NHS. I thank him too for the points he made in regard to the problems with the media; they are extremely difficult. They are problems that might arise if the Bill progressed further, because the question would be: under law, who would be liable to a criminal prosecution? Would it be the media that used the

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information or the individual in the health service who released the information to the media, for whatever purpose? Those are difficult issues which may need to be examined.
I thank the noble Lord, Lord Milverton, for his talk from the standpoint of a priest and his willingness to support the view that we should close gaps in existing provisions. I express my gratitude to my noble friend Lord Attlee for his support and for drawing attention to the important matters relating to the stance of the insurance industry. That is an issue which may need to be further examined, though my belief is that the Access to Health Records Act and the existing recognition that a patient may give valid consent to the disclosure of personal medical information would meet most, if not all, the anxieties expressed by the insurance industry.
I am grateful to the noble Baroness, Lady Robson, for her welcome for the Bill. I was glad to hear that she feels that legislation is needed and that the guidelines alone must ultimately be reinforced by statute.
I thank the noble Lord, Lord Carter, for his cautious welcome and note that he would wish, if the Bill proceeds to Committee stage, to introduce some probing amendments. There is no doubt that he is right in saying that something must be done to protect the private sector, which is presently under common law duty. Those of us who have looked carefully at the issue do not feel that the existing common law provision is sufficient to protect confidentiality of sensitive information in that area. I can reassure the noble Lord that the intention of the Bill is to cover all areas of medical practice.
Scotland and Ireland are excluded because the laws in those two countries are somewhat different. If the Bill were to succeed, one would hope that, ultimately, similar statutes would be introduced in those two
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countries. The point made by the noble Lord, Lord Carter, in relation to the affirmative resolution in Clause 4 is one that can certainly be taken on board.
As usual we heard a carefully considered, thorough and characteristically sympathetic response from the noble Baroness, Lady Cumberlege. She is right in saying that real progress has been made. The noble Baroness drew our attention to the many statutes and provisions which protect confidentiality as matters stand at the moment. There is no doubt that the department's guidance is valuable. But I cannot do other than stress yet again that gaps exist in the guidance. There is little in it about the principle of informed consent on the part of patients. Above all, there is a lack of overarching statutes and provisions to cover all parts of the private sector, and that is a significant deficiency in the guidelines.
I would have wished to see the Government giving qualified support to the Bill, even with the provision that they might wish to introduce amendments at Committee stage to meet the points raised by the noble Baroness. Nevertheless, I was reassured by her comments that, in view of the European data protection legislation, whatever is done and in whatever way the guidelines are applied, a statute will be required by 1998 at the latest.
In the light of the assurances given by the noble Baroness I shall certainly consult widely upon what action will be necessary in the further consideration of this Bill. Nevertheless, I feel that the government guidelines, as they exist at the moment, are insufficient and that that crucial area of patient confidentiality will require statutory examination and control in the interests of the health of the nation and, above all, in the interests of our patients.
I trust that your Lordships will agree to give the 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 nineteen minutes past nine o'clock.