Lords Sitting of 27 March 1996

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

Fishing: ECJ Judgment
Lord Carter Lord Carter asked Her Majesty's Government:
Whether the worst effects of the recent European Court of Justice decision regarding compensation to foreign owners of British fishing vessels could be overcome by a suitable amendment to the vessel licensing arrangements.
Lord Lucas: My Lords, the Statement that I made to the House on 6th March explained in detail that the European Court of Justice's recent judgment in the Factortame case confirms the principle that those adversely affected by national legislation in breach of Community law are, if the breach is sufficiently serious, entitled to seek compensation through national courts. The ECJ judgment is now for national courts to consider. It cannot be undone by any future amendment to vessel licensing arrangements by fisheries departments.
Lord Carter: My Lords, I thank the Minister for that reply and also for the extremely helpful letter that he sent me earlier this week on the subject. Will the Minister confirm that, if we look to the future, the fisheries Commissioner, Mrs. Emma Bonino, has suggested that there are ways to deal with the problem of quota hopping in the future within Community and national law? Might that include: the payment of social taxes— for example, national insuranceto—the country of registration; a condition that the skipper and mate of the British registered vessels should hold UK issued tickets; and a requirement to land a proportion of the catch at a restricted number of nominated ports?
Lord Lucas: My Lords, we are greatly encouraged by the attitude that Mrs. Bonino is taking. On the best advice we have, we do not believe that any of the routes which she proposes will work but we are nevertheless examining them with a will. Nothing would please us more than to discover that we were wrong and that there is a quick way round the problems. The noble Lord mentioned the possibility that the skipper and mate might be British. Many other countries try that regulation and the Spanish have a highly practised route around it. They merely install in a cabin on the boat an equivalent of Captain Haddock and his bottle of whisky, and the mate Alan, who is Spanish, runs the boat. So far as we know, there is no way round the problem that works, either in practice or legally.
Lord Campbell of Croy: My Lords, as the Court's judgments have been based on a principle of non-discrimination between nationalities and as the fishing quota system is operated, in contradiction, entirely on separating nationalities, 'will the United Kingdom Government insist on changes in the common fisheries policy? Can my noble friend say any more about Signora Bonino's suggestion that there could be regional arrangements for the south west of England or off Scotland? Might it be another way of solving the quota hopping aberration?
Lord Lucas: My Lords, we will consider all ways round quota hopping. We are committed to pursuing it at the IGC if that is the only way forward, as looks like being the case at present.
Lord Mackie of Benshie: My Lords, have Her Majesty's Government thought of consulting the French Government? They know the way round most of the European regulations.
Lord Lucas: Yes, my Lords, we have. We have researched what happens in France where people are suffering as we are, although not to the same extent. They have about 20 Spaniards quota hopping on them and the French are among the most active of the European countries in the process of becoming distressed at what is going on.
Lord Tebbit: My Lords, does my noble friend recollect that he said that the Court of Justice had clearly established that there was a right of compensation where national governments breached Community law and damaged the interests of Community citizens? Can he say whether that right also applies in a case where the Commission is in breach of the law? For example, there is the flagrant breach of law by the Commission today in banning exports of British beef to third countries outside the European Community. Will the British Government now support British beef producers in suing the Commission for compensation?
Lord Lucas: My Lords, I cannot answer that legal technicality. The noble Lord may know what the Commission has decided but I have not yet received the news. If what it has done is to support what its veterinary committee said, we would find it an extremely distressing, unwelcome and unreasonable development. It will doubtless have repercussions for a long time to come.
Lord Bruce of Donington: My Lords, will the noble Lord give the House an undertaking—
Lord Stoddart of Swindon: My Lords, I have been cut out on two occasions recently so I am standing my ground. Is the British Government's view about our ability to secede from the common fisheries policy the same as that of Commissioner Bonino? She told fishermen in the South West that whether we did secede from the common fisheries policy was a matter for the British Government and the British Parliament—something that has been denied on several occasions in this House.
Lord Lucas: My Lords, I do not believe that I have said anything other than that it is a matter for the British Government and the British Parliament. I have merely pointed out that the negotiations that would be involved with our other 14 partners in bringing an end to that part of the treaty would be likely to be so expensive and so burdensome on us in their result as to make the whole exercise supremely not worth while.
Lord Bruce of Donington: My Lords, will the Minister give the House an undertaking that at the forthcoming Intergovernmental Conference the role of the European Court of Justice will be thoroughly reconsidered with a view to its political role being separated from its legal role, where that becomes possible to determine?
Lord Lucas: My Lords, that is rather drifting away from the Question. I refer the noble Lord to our White Paper. I am very satisfied with what is said in it.
Lord Carter: My Lords, is the Minister aware of a recent report which revealed that, of 371 infringements of the common fisheries policy notified in 1994, 119 involved British vessels; 73 French vessels; 62 Irish vessels; and only 22 involved Spanish vessels. How many of the 119 so-called British vessels were registered here, but were in fact Spanish?
Lord Lucas: My Lords, regarding the rate of infringement by Spanish vessels, according to our records—I cannot comment on the European report, of which we have not formally received a copy or had a chance review—generally last year, I believe there were 117 or 119 infringements in total. Of those, two involved Spanish-registered vessels and seven involved British-registered vessels landing in Spain. At those kinds of levels it does not seem possible to prove, or indeed perhaps likely, that the Spanish are worse than the rest of us.

"Sea Empress" Inquiry
2.45 p.m.
Viscount St. Davids Viscount St. Davids asked Her Majesty's Government:
Whether they will take steps to reconstitute the Donaldson Committee in order to inquire into the wider ramifications of the accident involving the "Sea Empress" in February 1996, in addition to the investigation being undertaken by the Marine Accidents Investigation Branch into the causes of the accident; and, if not, why not.
The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): My Lords, the report of the noble and learned Lord, Lord Donaldson, completed less than two years ago, set the broad framework for the Government's policy towards marine pollution from ships. Until the Marine Accidents Investigation Branch has completed its investigation into the cause of the "Sea Empress" grounding and the conduct of the subsequent salvage
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operations, it would be premature to examine whether its findings justify reconsideration of the report's recommendations.
Viscount St. Davids: My Lords, I thank my noble friend for his reply, although I think that it will bring little joy to Wales. I declare an interest as vice-president of the Welsh Wildlife Trust. Is my noble friend aware that it has been widely reported that the two-page interim report by the Marine Accidents Investigation Branch contains a number of errors of fact? Will he assure the House, and thus place on record, that the report contains no such errors?
Viscount Goschen: My Lords, I understand that the Chief Inspector of Marine Accidents has written to the honourable Member in another place who made these allegations defending and explaining the accuracy of the original bulletin. I therefore believe that bulletin to be accurate.
Lord Murray of Epping Forest: My Lords, will the Minister give an assurance that at an appropriate time, given the quality of the Donaldson Report, the noble and learned Lord will be invited to review the application of his report generally and at that stage take into account subsequent developments, including the consequences of the grounding of the "Sea Empress"? In relation to one particular recommendation of the Donaldson Report, can the Minister confirm or deny statements that the Government intend, for the sake of saving a little money, to cease stationing strong tugs at the Minch and off the Straits of Dover from the end of April at least until the beginning of October? Given the fact that those are key areas where dangers to shipping are particularly strong, if that is a true statement of intention, will the Government review their decision?
Viscount Goschen: My Lords, on the noble Lord's first point, I can assure the House that we will take extremely careful note of recommendations that the Marine Accidents Investigation Branch might make in its inquiry not only into the grounding of the "Sea Empress" but also into the conduct of the subsequent salvage operation. We will therefore use those recommendations and the information put out by that independent inquiry to look again at the recommendations of the noble and learned Lord, Lord Donaldson, to see whether they justify further work.
On the second point, it is important to know that until two years ago there were no government-sponsored tugs around the coast of this country. Subsequent to the Donaldson Report, we acted on its recommendation. We have held two trials—to put two powerful tugs for winter-only periods in Dover and in the Minches. We are currently reviewing the results of those trials. We will of course make clear our intentions for the future.
Lord Cledwyn of Penrhos: My Lords, does the Minister agree that the ramifications referred to in the noble Lord's question are wide and very serious? Does he further agree that they have caused profound concern in Wales, and especially in south-west Wales, where this

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terrible tragedy took place? Could he say when the report of the Marine Accidents Investigation Branch is likely to be published? Will he give an assurance that the suggestion by the noble Lord that the matter should be referred to the Donaldson Committee will be considered very carefully? Further, will he tell the House whether the Secretary of State for Wales has been consulted on this matter, and what his reactions are?
Viscount Goschen: My Lords, in reply to the noble Lord's first point, we understand the genuine concern of people throughout the country and especially within the region that has been hit by that very severe spill. Of course we understand their environmental concerns and concerns for the economy of the region.
Secondly, with regard to the estimate of time, the best indication is that the investigation into the "Braer" incident in the Shetland Islands took just under a year. We must give the chief inspector the time that he needs to make a thorough investigation into all the consequences and obtain all the information and all the facts as well as to interview all the witnesses that he needs to hear. We should not dream of constraining him in that regard. But I know that the chief inspector fully realises that the country is waiting to hear what his recommendations might be and his assessment of the situation.
On the noble Lord's third point, I believe that in answer to the noble Lord, Lord Murray, I gave a full explanation of the way in which we would take forward any recommendations that the chief inspector might make.
Baroness White: My Lords, is the Minister not aware that this very morning in Bangor, the Secretary of State for Wales made a very long and detailed comment on the whole situation? Has he not been informed of that? Has his office not been able to keep pace with what is happening in Wales? Is he not aware that this morning the Secretary of State appointed Professor Edwards to chair a steering group, which will have some extremely distinguished members in it, some of whom we know and trust?
We are still concerned about the rumours of commercial rivalry between local firms in the early stages at Milford Haven having seriously delayed effective salvage operations. I am astonished that the Minister has not been informed. All that information was available this morning. My noble friend Lord Clinton-Davis, myself and several others have full details.
Viscount Goschen: My Lords, I am astonished at the question and that the noble Baroness says that I am not informed by the Welsh Office. We have been working extremely carefully both at ministerial and official level between the two departments. The noble Baroness is confused between the technical investigation into what happened with the grounding and subsequent salvage operations and the environmental assessment that my right honourable friend the Secretary of State for Wales spoke about. They are two separate issues. Of course, we need to make sure that all the technical aspects are covered and that we learn all the relevant lessons for shipping safety. We must also make sure that we know exactly the consequences of the clean-up operation, including all the environmental consequences as well.
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There is nothing between the Secretary of State for Wales and my right honourable friend the Secretary of State for Transport.
Lord Tebbit: My Lords, is my noble friend aware that those of us who in the past have carried the responsibilities that he now carries believe that he has acted prudently, sensibly and in the best interests of all concerned? I am sure that that would also be the view of the noble Lord on the Opposition Front Bench who is about to ask a question, for he too carried those responsibilities and is well aware of the difficulties which he experienced from time to time in dealing with such matters.
Viscount Goschen: My Lords, I thank my noble friend for his very kind words. I would not seek to pre-empt the question which may be about to emerge from the noble Lord sitting opposite. My noble friend is quite right. These are difficult and complicated issues. We must make sure that we have the best shipping safety regime that we can practicably have and that we learn all the lessons that come out of that unfortunate incident to try to ensure that it is not repeated.
Lord Clinton-Davis: My Lords, from previous experience I am very much aware of the problems that the Minister faces. But does he agree that it is now self-evident that the narrow remit of the investigation currently being undertaken by the MAIB is insufficient? We already know that there are wide environmental implications involved and that wide international as well as national issues remain. The Government themselves to some measure are involved and their conduct has to be investigated. Is he aware that the noble and learned Lord, Lord Donaldson, would be prepared to have his committee reconstituted in order to deal with these matters? Does he agree that that would be a much more thorough way of dealing with the matter, particularly in the light of his suggestion that we may have to wait for one year before the report of the MAIB is available? What is now being done in relation to Milford Haven to ensure that no further accident of that kind can happen before the report is tendered to him?
Viscount Goschen: My Lords, the noble Lord is missing the essential point. The Marine Accidents Investigation Branch was set up to deal with specific circumstances such as this one. Following the awful tragedy of the "Herald of Free Enterprise", it was felt that the best way to investigate serious marine accidents was to set up a government body that would be totally independent of Ministers and officials from whatever department to investigate the cause of accidents and make recommendations to stop them happening again. The inquiry of the noble and learned Lord, Lord Donaldson, produced a much wider ranging report which looked at all aspects of maritime safety and pollution prevention. It is only two years old. It was a very thorough report and covered all the issues.
We have said that we shall look very carefully indeed at the recommendations and the findings of the Marine Accidents Investigation Branch report. We shall then consider whether the recommendations made by the

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noble and learned Lord, Lord Donaldson, only two years ago in his report, Safer Ships, Cleaner Seas, need to be re-examined. That is the essential point. We need to find out the facts and do it as quickly as possible.
With regard to Milford Haven, the chief inspector is able to put up interim recommendations and if he feels that those are required, he can do so at any point.

Wheel Clamping
2.57 p.m.
Baroness David Baroness David asked Her Majesty's Government:
Whether they have come to any conclusion on the regulation of wheel clamping of vehicles on private land and the legitimacy of fines imposed for the release of such vehicles; and whether they intend to introduce legislation to clarify the situation.
The Minister of State, Home Office (Baroness Blatch): My Lords, the Government are still considering what action, if any, should be taken to regulate wheel clamping on private land. We are looking at detailed matters, such as the level of fines imposed by wheel-clampers, and whether there is a need for new legislation, as part of that consideration.
Baroness David: My Lords, I do not find that Answer exactly satisfactory. As wheel clamping has become a growth business of the 1990s, and a very lucrative one at that—it is said to be worth £150 million a year—should not some action be taken quickly by the Government? Should wheel clamping on private ground be made illegal unless clear warning is given, on a sign adequately lit, with a notice of the fine that is likely to be charged, together with the name, address and telephone number of the clampers?
Baroness Blatch: My Lords, that is certainly one suggestion. The problem is neither so great as it was perceived when the Question was originally put nor so great as was anticipated by so many people. We know that many wheel-dampers have gone out of business, particularly the "cowboys" referred to in previous Questions. So, we are not convinced that this is quite the problem that it was. Also, there is now case law which has started to clarify what is legal and what is illegal in terms of parking on private land.
Lord Campbell of Croy: My Lords, although permission is of course required for parking on private land, has there been an improvement since my Question of 20th June in suppressing the menace of pirate clampers operating on disused or unsupervised land? Does my noble friend recall that there has been some progress in Scotland, where a judge ruled in court that in Scotland the practice is theft and extortion, as victims' cars are held to ransom for very large sums?
Baroness Blatch: My Lords, as I mentioned in my first Answer, we believe that the situation has much improved. Also, the situation is very different in Scotland. There is a different definition of theft in Scotland, for example. Wheel clamping on private land
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is effectively illegal, as the result of a ruling by the High Court of Judiciary in Edinburgh on 12th June in the case of Black and Another v. Carmichael that wheel clamping amounts to extortion and theft. However, as I said, the definition of theft is rather narrower than that in Scotland, in that Section 1 of the Theft Act 1968 requires that there must be an intention permanently to deprive. Generally, there is no such intention involved in wheel clamping.
Lord Harris of Greenwich: My Lords, when the noble Baroness says that the situation is much improved, how does she know? There is no regulation in this area at all. Also, since her predecessor, Mr. Michael Jack, said that pirate clamping would be examined with all urgency, why have not the Government come forward with precise proposals?
Baroness Blatch: My Lords, there has been a consultative exercise. We are convinced that it is not the problem it was. Many of the cowboy organisations have gone out of business and there are not nearly as many complaints as there were. We know too that there has been some clarification through the civil courts. For example, it was established in the case of Arthur and Arthur v. Anchor that it is legal for somebody owning private land to establish a wheel clamping system. In that case there were clear signs displayed and a reasonable charge levied for the recovery of the vehicle. That kind of case is therefore helpful. There have also been cases where the court has found in favour of the person clamped, which again goes to establish the law. We believe that that clarification is helpful. Material to that is the point made by the noble Baroness, Lady David; that is, that there should be clear signs and a reasonable charge levied for the recovery of the vehicles.
Lord Clinton-Davis: My Lords, can the Minister indicate how much longer the Government will require before they embark upon any substantive action, if it is required? When does she expect the report to be available?
Baroness Blatch: My Lords, I cannot say when the report is to be made available. It is not being given quite the urgent attention it was because the situation is not thought to be as urgent as it was at first count. Also, wheel clamping is an effective solution to prevent people parking illegally on private land. We must think of hospitals, schools, residents' parking bays, small businesses—especially those where they are loading and unloading goods—and small hotels. It is an effective remedy against people parking on private land illegally.

Selar Farm: SSSIs
3.2 p.m.
Baroness Hilton of Eggardon Baroness Hilton of Eggardon asked Her Majesty's Government:
In view of the proposed destruction of the habitat at Selar Farm in the Vale of Neath, what is their policy on sites of special scientific interest (SSSIs).
Lord Lucas: My Lords, the Government remain committed to the conservation of our natural heritage. We believe that the Wildlife and Countryside Act 1981 continues to provide an effective and flexible framework which protects wildlife and habitats.
Baroness Hilton of Eggardon: My Lords, that Answer makes no reference to what has happened in this specific habitat where, without a public inquiry, permission has been given for open-cast mining. Are the Government satisfied that there has been an adequate environmental impact assessment in this case? It threatens particularly the marsh fritillary butterfly. We have already lost 100 species in this country this year and this is yet another example of neglect of the environment.
Lord Lucas: My Lords, perhaps the noble Baroness's attitude is born of long periods in opposition and not having to deal with the practicalities of life where one must balance the needs of the local population, their employment and their industry, with that of the local nature. There will always be occasions when some SSSIs are damaged or destroyed because of the economic needs of the people living in the area. It is up to the Government and local authorities to balance those needs. We believe that they have done so properly in this case and that the conservation of the marsh fritillary butterfly is dealt with extensively in the biodiversity initiative documents we published. We are doing a great deal nationwide not only to preserve that butterfly, but to help it to increase and spread and make sure that it has a firm position in our natural fauna.
Baroness Nicol: My Lords, is the Minister aware that English Nature admits to damage to 104 sites last year? In Wales, of 899 sites, 20 per cent. suffered damage last year. That is an extremely large number. Scotland reports damage to 23 sites and reports that damage due to insufficient management is not recorded. What is special about damage due to mismanagement that results in it not being recorded? Surely damage to an SSSI, by any means, should be recorded and taken seriously by the Government. Is it government policy to accept all that without protest?
Lord Lucas: My Lords, the nature conservation bodies concerned take damage seriously. They try to pursue each case and make sure it is remedied. Their record in that respect is excellent.
Lord Skelmersdale: My Lords, can my noble friend tell me when it was, in recent history, that the SSSI designation became the equivalent of a glass case?
Lord Lucas: My Lords, never.
Lord Williams of Mostyn: My Lords, is there any proposal under present consideration for denotification of this SSSI? How many new, permanent local jobs will be provided as a result of the open-cast development? How does that figure compare with the figure of lost jobs in the mining industry over the past 17 years which has seen the devastation of that once proud and productive workforce?
Lord Lucas: My Lords, this has nothing whatever to do with the history of mining in Wales, though one can note that mining provided some wonderful wildlife sites on the old waste tips of the mines which have by now had time to develop wildlife which would otherwise be extremely rare in Wales. In relation to this development, I understand that in due course it will provide in excess of 100 jobs locally—and that, in an area where jobs are hard to come by, weighed heavily with the local council when it gave its support to the scheme. We feel that it got the decision right.
Lord Haskel: My Lords, my noble friend Lady Hilton speaks not so much from a few years' experience in opposition but after many years of distinguished service in public service.
Lord Lucas: My Lords, I do not doubt that.
Lord Pearson of Rannoch: My Lords, does my noble friend think it may be helpful if the Government considered introducing the Scottish system for SSSIs into England and Wales? That is a system whereby there is a separate advisory committee which advises on contentious issues. Since its introduction in 1991 it has proved to be a great success in Scotland.
Lord Lucas: My Lords, I shall certainly draw the attention of my colleagues in Wales to the Scottish SSSI system.
Lord Avebury: My Lords, does the Minister agree that, notwithstanding the merits of this specific application, there is a need also to balance the requirements of the present generation against those of posterity? Will there not come a point, with the loss of the SSSIs referred to, where that balance is struck improperly in favour of the present generation? How do the Government propose to address that question?
Lord Lucas: My Lords, we are addressing it by an extensive and extremely well-funded series of initiatives to improve the environment as a whole. The emphasis surely must be on increasing the wildlife value and the natural habitat available to species in this country, which we are doing through a large number of farm-based schemes as well as other environmental efforts. Occasional damage will be caused to some parts of that environment, but the countryside is not a museum; it is a living and developing system. As the noble Lord is doubtless aware, 10,000 years ago Wales was just a glacier. All that has appeared has done so since then. Sites of special scientific interest can be created and appear naturally as well as disappear.

Business
3.8 p.m.
Lord Strathclyde: My Lords, I should like to say a few words about today's debates. Other than the mover and the Minister replying, in both debates speakers will be limited to 10 minutes. I should remind your Lordships that if any noble Lord were to speak at greater length, he would be doing so at the expense of subsequent speakers in the debate. I remind your

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Lordships also that when the clock shows 10 minutes, the full 10 minutes have elapsed and the speaker is already trespassing on the time of others.

Business of the House: Debates this Day
The Lord Privy Seal (Viscount Cranborne): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debates on the Motions in the names of the Lord Howe of Aberavon and the Lord Skidelsky set down for today shall each be limited to two-and-a-half hours.—(Viscount Cranborne.)
On Question, Motion agreed to.

Procedure of the House: Select Committee Report
The Chairman of Committees (Lord Boston of Faversham): My Lords, I beg to move the Motion standing in my name on the Order Paper. I should perhaps say something in explanation.
On Item 1, the committee recommends that the Government should be invited to lay before the House an annual report listing all the Acts which have not been repealed or brought into force, giving reasons for any delay in each case; and that the first report should be laid early in 1997 and should be limited to Acts enacted before 31st December 1992. For future years, the committee favours an annual published report; but, as the committee's report indicates, it will be for consideration whether the information accessible from the Statute Law Database, which we understand will come on line in the course of 1997, will meet the need. The committee considered this matter at the request of the Delegated Powers Scrutiny Committee and hopes the House will find it useful to be able to monitor the extent to which legislation has not been brought into force.
On Item 2, the committee recommends that speeches by Lords whose names are not on the speakers' list and who therefore speak in the gap before the winding-up speeches should be limited to four minutes. As noble Lords will see, the committee recommends an appropriate amendment to the guidance contained in the Companion to the Standing Orders.
On Items 4, 5 and 6, the committee draws attention to three well-established conventions which have not always been followed recently. These are, first, the expectation that a Lord who takes part in a debate should attend the greater part of that debate, including the opening speeches and particularly the winding-up speeches; next, the convention that Lords should not leave the Chamber until a maiden speaker has been congratulated by the next following speaker; and then the custom that no Lord may pass between the Woolsack and any Lord who is speaking, nor between the Woolsack and the Table. I invite the House to take note again of these conventions, and the committee hopes that they will be observed fully.
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Moved, That the Third Report from the Select Committee (HL Paper 50) be agreed to.—(The Chairman of Committees.)
Following is the report referred to:
1. BRINGING ACTS OF PARLIAMENT INTO FORCE
The Committee has considered the recommendation of the Delegated Powers Scrutiny Committee "that the House seeks a mechanism to ensure that Acts passed by Parliament are brought into operation" (12th Report, Session 1993–94, HL Paper 90, paragraph 38).
The recommendation was made in the light of instances, such as the provisions of the Criminal Justice Act 1988 relating to criminal injuries compensation which were not brought into force.
Such instances can only arise because of the commencement provisions of the Act concerned, giving Ministers power to bring the Act, or parts of it, into operation. No recommendation by this Committee could override such provisions. It must be for the House in each case to decide whether commencement provisions in a bill are acceptable. In some cases it might be appropriate for a bill to lay down that the Act will come into force on a stated date if not brought into force earlier by means of a commencement order or orders. In others, it could be provided that the provisions of an Act would cease to have effect on a stated date if not previously brought into force.
While no formula is likely to be suitable in all cases, the Committee considers that it would be useful for the House to be able to monitor the extent to which legislation has not been brought into force. The Committee recommends, therefore, that the Government should lay before the House (perhaps as a Command paper) an annual report listing all the Acts and provisions within Acts which had been neither repealed nor brought into force, giving reasons for the delay in each case. Initially, such a report might be limited to Acts which had been enacted before a certain date.
The Committee understands that the Statute Law Database, a version of the statute book on computer, is expected to come on line in the course of 1997 and that the Database, to which Lords and members of the public will have access, may facilitate the preparation of such a list. The Committee recommends that the Government should be invited to lay the first report early in 1997 whether or not the Database is by then available and that the report should be limited to Acts enacted before 31st December 1992. So far as future years are concerned, the Committee favours an annual published report laid before Parliament. It will be for consideration, however, whether the information accessible from the Database will meet the need.
2. SPEAKING IN THE GAP
The Committee has considered whether a time-limit should be imposed on speeches made by Lords whose names are not on speakers' lists and who rise to speak before the winding-up speeches. The Committee concludes that such speeches should be limited to four minutes and that the guidance in the Companion to Standing Orders should be amended to read "Any such speaker is expected to be brief (not longer than four minutes)."
3. APPLICATION OF ROTATION RULE TO THE LIAISON COMMITTEE
The Committee recommends that the rotation rule, which is applied to most select committees of the House in order to secure a regular turnover of membership, should be applied to the Liaison Committee so as to require the retirement of one member per session.
4. ATTENDANCE AT DEBATES
The Committee again draws attention to the guidance in the Companion (at page 67):
"A Lord who is taking part in a debate is expected to attend the greater part of that debate. It is considered discourteous for him not to be present for the opening speeches, for at least the speech before and that following his own, and for the winding-up speeches."
Lords who become aware in advance that they are unlikely to be able to stay until the end should normally remove their names from the list.
5. MAIDEN SPEECHES
The Committee reminds the House that since maiden speakers are normally congratulated by the following speaker only, it is desirable that Lords should not leave the Chamber during such congratulations.
6. PASSING BETWEEN THE LORD SPEAKING AND THE WOOLSACK
The Committee reminds the House of the custom (set out in the Companion at page 64) that "No Lord may pass between the Woolsack (or the chair) and any Lord who is speaking, nor between the Woolsack and the Table".
Lord Boyd-Carpenter: My Lords, it is proposed that speeches in the gap should be restricted to four minutes but I have not seen in the report or anywhere else any particular argument in favour of that. A speech may be made in the gap because the noble Lord concerned was away the previous day and was not able to give notice; it may be on a matter of great importance and delicacy; it may be on quite a trivial matter. But we have not been told by the Procedure Committee which of these arguments caused it to put forward what is undoubtedly a penalisation of the noble Lord who speaks at that time. He will be anyhow penalised by coming in at the end of the debate after all the speeches other than the winding-up speeches. Why he should be penalised in advance, without any indication as to what are the grounds for penalisation, I do not know, and the Procedure Committee has not been good enough to tell us.
Lord Simon of Glaisdale: My Lords, perhaps I may draw your Lordships' attention to a matter that is not in the report but was before the Procedure Committee. I understand that the committee did not report on it because it considered that it was more a matter for government business than of procedure.
It is a matter of the very greatest importance because it affects your Lordships' legislative role and indeed your role in the constitution. The matter that was raised was the inconvenience—the undesirability—of taking controversial and important business in the supper adjournment. I drew three cases to the attention of the committee. One concerned a matter which had been raised by the noble Lord, Lord Houghton of Sowerby, who said that it had been raised by him on a number of other occasions.
The first example in my recollection occurred in July 1978 when no fewer than eight items were listed for the supper adjournment. Several of those items were of great importance. Two of them were Northern Ireland appropriation measures which were liable to take the whole of the time and, in fact, left only seven minutes for the remaining four or five items. One of those remaining items was the Matrimonial Causes (Northern Ireland) Order which in effect extended to Northern Ireland the provisions of the Divorce Reform Act 1969. I need not remind your Lordships, in view of the recent discussions on the Family Law Bill, how intensely controversial that was. Needless to say, it ran over the seven minutes, to the great inconvenience of those who were waiting for the main business, which was not concluded until nearly one o'clock in the morning.
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The second occasion was in 1989 when the noble Lord, Lord Houghton, referred to the impropriety of taking the business that was then listed for the supper adjournment and said he had protested on many occasions against that practice. That protest seems to have been effective because the practice was not revived until very recently—until in fact last summer—when a deplorable incident took place on the Criminal Appeal Bill. My noble and learned friend Lord Ackner had moved an amendment to provide for mandatory sentences for murder to be assimilated into the practice of discretionary life sentences, thus making them much more open to the public. That amendment was supported by my noble and learned friend the Lord Chief Justice, by his predecessor my noble and learned friend Lord Lane and by the former Chief Justice of Northern Ireland my noble and learned friend Lord Lowry, so its importance could hardly be exaggerated. The amendment was opposed by the Home Office Minister, although it was supported by the Opposition parties. All parties, though not of course the Cross-Bench Peers, had sent out Whips. It was very controversial as well as important. It was carried by a substantial majority in your Lordships' House—and that only happens when a great number of government supporters either vote against the Government or abstain, which is what happened on that occasion.
Evidently that was by no means congenial to the Government and arrangements were made to reverse your Lordships' decision in a whipped vote in the other place. That came on a Friday and indeed the majority in the other place naturally overturned your Lordships' decision. That fell for discussion on the following Monday only and on that occasion the business was listed in the supper adjournment. The Government had sent out a Whip, but of course none of the other parties had had time, even if they had had the inclination, to whip their supporters. With the result foregone, your Lordships' decision was reversed.
It is clear from that—is it not?—that your Lordships were effectively denied your proper legislative role. Your Lordships were given no real opportunity of adhering to your former decision nor even to adapt the misleading cliché of asking the other place to think again because it had only considered the matter once. It is because of the constitutional importance that I venture to bring this matter before your Lordships.
The Chairman of Committees, with his usual courtesy and helpfulness, notified me of what had happened because I could not attend the Procedure Committee meeting. I gather that the committee was generally sympathetic to the case put forward in the memorandum. There were three reasons why it declined to act. First, it was difficult to define what was important and controversial. There might be borderline cases, but in none of those I have mentioned would there have been the smallest difficulty in saying that the issues were important and controversial.
The second reason was that it is sometimes necessary or desirable to take important and controversial business in the supper adjournment. That was allowed for. I venture to suggest that the rule should apply only in ordinary circumstances, so that in exceptional

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circumstances such business can be taken in the adjournment after discussion with all concerned. The third was the real reason; namely, that it was considered more a matter of business management than procedure. I imagine that your Lordships will be quite content if the matter is taken care of under the aegis of business management so that in future noble Lords will not be frustrated in performing their constitutional role.
Lord Cocks of Hartcliffe: My Lords, following the noble Lord, Lord Boyd-Carpenter, the Committee must have examined the matter of speaking in the gap in some detail to arrive at the figure of four minutes. I ask the Chairman of Committees this question: what was the average length of the speeches in the gap which they examined?
As regards maiden speeches, the report states,
"The Committee reminds the House that since maiden speakers are normally congratulated by the following speaker only".
That is the theory. Twice in my short time in the House it has reaffirmed that only the following speaker should congratulate, but that is constantly ignored. Practically every speaker throughout the remainder of the debate, particularly the Front Bench speakers, are fulsome in their congratulations. No doubt they are well-earned, but that is very distracting in getting on with the debate. Does the Committee really believe that that is the normal procedure or has it given up the ghost and given up trying?
Lord Elton: My Lords, as a member of the Delegated Powers Scrutiny Committee which asked the Procedure Committee to find a means of ensuring that Acts passed by Parliament shall be brought into effect, perhaps I may commend the first item in the report to your Lordships. It introduces a means by which your Lordships can see for yourselves the extent to which Ministers do or do not use the important powers delegated to them of bringing legislation into effect.
As regards the intervention of my noble friend Lord Boyd-Carpenter, I regard it as anything but a penalty to speak in the gap. That is when everyone is pouring back into the Chamber to hear the really important speeches from the Front Benches. It is perfectly possible to get one's name on the list by telephoning if one is not in the House and in person on the morning of the debate. It is a great privilege to speak in the gap and it should not be regarded as being as of right.
Lord Dean of Beswick: My Lords, as regards the recommendation that the speaker in the gap should be allowed four minutes, if people constantly take those four minutes, does not that in fact mean the end of the timed debate? If a speaker takes four minutes in a timed debate, that can only be at the expense of the winding-up speakers.
Lord Nathan: My Lords, I follow the noble Lord, Lord Elton, as concerns the first part of the report, to which the Chairman of Committees referred. The report now under consideration states that the Delegated Powers Scrutiny Committee recommended in its 1993–94 report,
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"That the House seeks a mechanism to ensure that Acts passed by Parliament are brought into operation".
My concern is that this report does not do that. I shall come to what I believe it does, but I do not believe that it does that. The matter is very important. Failure to provide such a mechanism brings Parliament into disrepute. Further, time spent laboriously working on the Bill is wasted unless that legislation is brought into effect.
The Procedure Committee report refers to certain provisions of the Criminal Justice Act 1988 which were not brought into force because the Government rejected certain central provisions of the Act after it had become law; and they were able to do that because of the commencement provisions. These prescribed that provisions of the Act should be brought into force, by order, without limit of time within which any order must be made. It is a striking instance but far from unique.
Such an open-ended provision is objectionable and should only be enacted exceptionally when the Government have satisfied the House that there are the most cogent reasons for doing so, for such Acts are permissive and not mandatory on government: they amount to optional legislation.
The recommendation of the Procedure Committee that an annual report should be laid before the House listing provisions neither repealed nor brought into force, though welcome, does not address the problem. I wonder therefore whether the Delegated Powers Scrutiny Committee should be invited to report on open-ended commencement provisions, giving its opinion as to whether exceptional circumstances exist to justify acceptance.
Commencement provisions appear at the very end of Bills. At Committee stages they often fall to be considered at a late hour and tend not to receive the consideration that they should. I recall moving an amendment to one such clause and, although I was able truthfully to say that I received support from all quarters of the House, I confess there was only one of your Lordships in each quarter!
I cannot refrain from referring to the very sad death of Lord Airedale, of which we learnt only the other day. It was he who annually at this time of the year referred to the Easter Act passed in the 1920s, which is still not in force. He would, I am sure, have supported my plea for action.
Lord Pearson of Rannoch: My Lords, I join my noble friend Lord Boyd-Carpenter in querying the wisdom of limiting speeches in the gap to four minutes. I believe that that very much depends on the length of the gap, which can be quite long. Sometimes the gap is long enough to cause surprise and inconvenience to speakers in the following debate because the current debate ended so early.
In addition to the points made by my noble friend Lord Boyd-Carpenter, there is the point that a noble Lord may have been unsure whether he was able to attend a debate that morning so had not put down his name. He may then attend the whole debate and feel

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that he has something important to add. I agree that four minutes is probably enough, but it may not be and therefore I believe it unwise to impose that limit.
Finally, when I joined your Lordships' House some six years ago, I got quite a lecture from the then Clerk of the Parliaments, Sir John Sainty, who felt that our debates were becoming rather stereotyped. He asked me to do what I could to encourage genuine and open debate. I would have thought that speeches in the gap fall within that category. It is that admonition which emboldens me to query the wisdom of limiting speeches in the gap to four minutes.
Lord Bruce of Donington: My Lords, I support the noble Lord, Lord Boyd-Carpenter, in his remarks about speeches during the interval. I have had the honour of being a Member of your Lordships' House for 20 years but have not once spoken in the gap. Personally, I am not interested in the matter. But I can conceive of circumstances where a Member of your Lordships' House has something to contribute to a debate covering a field in which he or she has specialist knowledge, which fact he or she may not have been able to communicate to the usual office in time. I believe that to fix a time for these interventions is arbitrary. In my experience, the House has its own way of expressing disapproval of those who intervene without any justification and who, in many cases, may have come into the Chamber just prior to delivering their speeches. I suggest that the Procedure Committee takes this back again without imposing any time limit. The House can enforce its own disciplines, more particularly under the leadership of the noble Viscount the Leader of the House.
Lady Saltoun of Abernethy: My Lords, as a member of the Procedure Committee I should like to deal with speeches in the gap and the practice of noble Lords walking out of the Chamber after maiden speeches. If one has only just come into the House one has no business to speak in the gap. One should be there for the whole of the debate. It is amazing how much can be said in four minutes if one puts one's mind to it. A limit of four minutes will concentrate the mind.
I believe that the practice of walking out immediately after a maiden speaker has sat down is deplorable. It is right that Members should wait for the congratulations to the maiden speaker. But the committee was referring to the congratulations from the speaker following the maiden speaker, not any congratulations from other Peers later on. I am aware that other noble Lords have been asked not to congratulate the maiden speaker, but if in a time limited debate a subsequent speaker chooses to sacrifice some of his slender ration of time to congratulate an old friend perhaps we should not be too hard on him.
Lord Monkswell: My Lords, I speak as someone who has noted the wish of the House to limit the length of his speech. I hope that the House accepts that sometimes I can appreciate the feeling of the House. I shall deal with the first section of the report, admirably introduced by the noble Lord the Chairman of Committees. The Procedure Committee has found an
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ingenious mechanism that ensures the House is made aware of any problems that may exist but does not constrain the House in the way it deals with those problems.
The cut-off date chosen for the first report is a little curious. The report will be for the edification not only of Members of your Lordships' House but will be available to Parliament as a whole and the country at large. It is suggested that the first report will be published early in 1997 and should include only those Acts passed up to December 1992. Effectively, there will be almost a five-year gap. Although it does not directly affect us, we should note that in the next year there will be a general election. It is only right that in a general election the people of this country make a judgment of the performance of the Government that has been in office in the previous Parliament.
If we put before the British people a report that gives information about Acts of Parliament passed up to 1992, they will have no information about principal Acts passed by this Parliament since the last general election. I am sure that that is not the intention of the Procedure Committee. I hope that the committee will reconsider the cut-off date in the interests not only of this House but of Parliament as a whole and the British people.
Lord Henderson of Brompton: My Lords, perhaps the noble Lord the Lord Chairman can give the House an indication of the Government's intentions in regard to paragraph 1. If so, how and when will the Government indicate whether or not they agree with this recommendation?
The Chairman of Committees: My Lords, I should like to turn first to the particular point raised by the noble Lord, Lord Boyd-Carpenter, and other noble Lords. Arguments were not put forward in the report because it is not customary to do so. For the convenience of the House, the committee seeks to keep those reports as brief as possible. This is a matter which is not unfamiliar to your Lordships. For long there has been guidance on this matter in the Companion to the Standing Orders. I quote briefly from the bottom of page 65, where reference is made to speeches made at that time:
"Any such speech should be brief".
The Procedure Committee decided to give additional guidance to your Lordships. Some discussion took place about the amount of time that should be suggested to your Lordships as a reasonable limit. The noble Lord, Lord Cocks of Hartcliffe, asked about the average. Statistics were presented to the committee by the Clerk. The average worked out at between three and four minutes. That was of assistance in recommending to your Lordships that the maximum should be four minutes. The Procedure Committee very much hoped that noble Lords who chose to speak in the gap would not necessarily go up to the limit of four minutes but might take a shorter period. There were a number of exceptions in the length of speeches in the gap. In one particular case the length of speech was 14 minutes. However, there had been a dispute as to whether or not the speaker concerned had made an effort to give notice that she wished to take part in the debate.

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I hope noble Lords will forgive me if I do not mention all those who have spoken on this report. I trust that what I have said will give an indication. As always, in procedural matters we feel our way when new proposals are put forward. The matter is always in the hands of your Lordships. This is your Lordships' House and it is your Lordships' committee. It is always possible to consider matters if evidence emerges that changes need to be made at any time. That was the firm recommendation of the committee.
Lord Boyd-Carpenter: My Lords, as several noble Lords have indicated that a rigid limit of four minutes is inappropriate, will the Procedure Committee give further consideration to this matter at its next or future meetings? If the average is four minutes, there may be a very important matter that may take eight or 10 minutes, which may be offset by matters that may take a minute and a half or two minutes, and so four minutes will probably be excessive. Can we be told that the Procedure Committee will have another look at it?
The Chairman of Committees: My Lords, no. My remarks were not intended to convey that impression. It is a firm recommendation by the Procedure Committee to your Lordships on the basis of the thorough discussion that we had. If your Lordships agree the Motion today, your Lordships will be adopting that recommendation, among the other recommendations before you. Of course, at a subsequent time, if evidence emerged—as I was seeking to say just now—that changes were desirable, then the matter can always be returned to by your Lordships in the familiar way.
Perhaps I may now turn to the matter raised by the noble and learned Lord, Lord Simon of Glaisdale. I am grateful to him for having mentioned beforehand that he proposed to intervene in this discussion. It is true that that matter, although considered in thorough detail by the Procedure Committee, is not in the report. There is a simple reason for that: it is customary, as your Lordships will, I hope, be aware, not to report things upon which the Procedure Committee, or indeed other committees, do not make recommendations, and to leave things as they are. Were we to embark upon a change in that custom, your Lordships would find that we would have an endless series of proposals of a negative character only ending up in a report with a series of negative recommendations which would probably not be too helpful to your Lordships. As I said on another matter just now, it is sought to keep reports to a minimum size, if possible.
There is also a distinction to be drawn between this matter and, for example, the Consolidated Fund Bill which was reported upon in a recent report by the Procedure Committee. That was the subject of discussion on a number of occasions within the Chamber itself.
Lord Simon of Glaisdale: My Lords, if the noble Lord will allow me, so, in fact, were the three instances to which I referred. Evidently, in addition, the noble Lord, Lord Houghton, had raised the matter on a number of other occasions.
The Chairman of Committees: My Lords, had the noble and learned Lord, Lord Simon of Glaisdale, waited for a moment or two, he would have found that I was going on to deal with those matters. The distinction which I was seeking to draw was that the matter had been raised a number of times on the Floor of the House. It had also been referred recently three times to the Procedure Committee. On that particular matter, the Procedure Committee in one of its recent reports made a positive recommendation, which was that it felt that the matter had been aired sufficiently. It recommended to your Lordships—and your Lordships accepted the recommendation when you accepted the report—that the matter should not be raised again. There is a distinction. That is why that matter is not reported upon in the report itself.
As I hope the noble and learned Lord, Lord Simon of Glaisdale, will know from what I had an opportunity to say to him before the debate, his case was presented thoroughly by the noble and learned Lord, Lord Ackner. We had the benefit of a detailed memorandum from the noble and learned Lord, Lord Simon of Glaisdale, and the advocacy of the noble and learned Lord, Lord Ackner. Perhaps I may say as an aside that this is the first time that I, as a mere silk, have had the opportunity to congratulate a judge, and a senior judge at that, on his advocacy. I hope that he will not consider it presumptuous or impertinent of me to have done so. After all, one of the blessings of this place is that we do not just have the benefit of the judicial participation of our—if I may call them this—noble and learned friends; we have the benefit of their advocacy on legislative matters. It is partly as a result of their supreme advocacy that they have reached the pinnacle of the judicial system.
I say all that merely to reassure the noble and learned Lord, Lord Simon of Glaisdale, that his proposals were considered thoroughly. Although it is true to say that his worries were carefully listened to and discussed by the Procedure Committee, where there was some sympathy for the points he was making, the Procedure Committee was in no doubt whatsoever that it was in fact a matter for the business management of the House. Perhaps I may add to that that the point made by the noble and learned Lord, Lord Simon of Glaisdale, so ably—if I may say so—put by the noble and learned Lord, Lord Ackner, was taken and well understood. I feel sure that it will be dealt with sensitively. I do not believe that there is any cause for qualms upon that score.
Perhaps I may turn now to item one which was raised by the noble Lord, Lord Nathan, and referred to by the noble Lord, Lord Henderson of Brompton. I shall deal first with the short point made by the noble Lord, Lord Henderson of Brompton. The Government will of course be studying the report and will be making their views known about it at some point in the future. I would just say this, because I believe that it is important to have some flavour of the discussions which took place in your Lordships' Select Committee: it was on the initiative of the noble Viscount the Leader of the House, supported most constructively by the other leaders in your Lordships' House and the Convenor of the Cross-Bench Peers, who suggested about a year ago

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now, that the database mentioned might provide a vehicle for providing your Lordships with facilities for that aspect of scrutiny. He and others have since been pursuing that matter. It is also thanks to the noble Viscount's suggestion that, whether or not the database is on line at the beginning of or in the early part of next year, a report will in fact be produced. So that time limit will be met.
On the substantive matter raised by the noble Lord, Lord Nathan, I would say that that is a significant step forward. I am grateful to the noble Lord, Lord Elton, for what he said on behalf of the Delegated Powers Scrutiny Committee. I know of course that the proposal made in the report of the Procedure Committee does not go as far as the noble Lord, Lord Nathan, would have wished, although I understand—I am grateful for this—that he supports the measures even though he feels that they should go rather further.
As with other matters—I believe that this is a significant step—we are again feeling our way. It would he possible to look at this after it has been in operation for a short period to see whether there is any other way in which we might improve it. We will also have the benefit of the Government's clear advice on these matters and no doubt an opportunity to reconsider them then. I suggest that we try this scheme.
The noble Lord, Lord Monkswell, mentioned 1992. We did have some discussion about the date. There is nothing inviolate about a particular date. I do not believe that there will be any point in the Procedure Committee returning to that matter at a very early date, because it has just had an opportunity to discuss the matter thoroughly. However, we can keep that in mind. The question of a time limit has not escaped attention, but the substantive point which the Procedure Committee had in mind was its concern about Acts that were seemingly passed a long time ago and have not been enforced as opposed to more recent Acts, some of which, for obvious reasons, should be allowed a little time.
The noble Lord, Lord Nathan, made a specific suggestion. I hope that he will forgive me if I say, first, that it is not within my power to commit the Procedure Committee to anything, still less your Lordships. I certainly should not wish to trespass in the province of the chairman and members of the Delegated Powers Scrutiny Committee. However, it is clearly within the right of the noble Lord, Lord Nathan, and any noble Lord to seek guidance from that committee, as it would he in this case, to see whether it would be prepared to consider the matter. Perhaps the best way forward might be to leave the matter in that way to be followed up as the noble Lord, Lord Nathan, chooses.
I turn to commencement provisions in principle, which are matters fundamentally for your Lordships when legislation is going forward. If a battle is to be fought on whether commencement provisions are needed or are adequate, it must be fought when the Bill is going through your Lordships' House. That is when your Lordships' minds need to be settled on the matter, whatever else is done. If we can further improve the
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scrutiny functions of your Lordships' House, its reputation will be enhanced by their operation, as has been the case in respect of other matters.
Lord Dean of Beswick: My Lords, I am sorry to intervene at this late stage but the Chairman of Committees took almost 10 minutes to reply to a 10-minute speech of the noble and learned Lord, Lord Simon of Glaisdale. I briefly raised a point relating to the four-minute limit for speaking in the gap, which has not been answered. If we are to continue with time limited debates, will not those additional four-minute speeches wreck the programme and curtail the speaking time of noble Lords in winding up the debate?
Lord Boston of Faversham: My Lords, I was conscious that the noble Lord, Lord Dean, had intervened on that matter. I venture to suggest that he is right in saying that the programme could be wrecked. Indeed, difficulties can arise if noble Lords on the list of speakers take longer than the time limit expressed. Although the noble Lord, Lord Strathclyde, is always at pains to emphasise the point about time limits, I venture to suggest that his words need to be taken yet more seriously than they appear to be by some Members of your Lordships' House. Damage is caused to subsequent speakers if earlier speakers go over the time limit prescribed. I hope that that will provide some comfort to the noble Lord, Lord Dean, as regards his valid point. I commend the Motion to your Lordships.
On Question, Motion agreed to.

Tax Legislation: Simplification
3.54 p.m.
Lord Howe of Aberavon Lord Howe of Aberavon rose to call attention to the opportunities, as well as to the case, for simpler and more user-friendly tax legislation, and to the proposals to that end recently made by the Institute for Fiscal Studies, the Inland Revenue and the Chancellor of the Exchequer; and to move for Papers.
The noble and learned Lord said: My Lords, perhaps I may first express my gratitude to my noble friends who have encouraged me in the formulation of today's Motion and supported its appearance on the Order Paper. I am also grateful to noble Lords on all sides of the House who have given notice of their intention to speak today.
We owe thanks to several generations of workers on this topic, starting with those who for a number of years have urged the strong case for reforming the whole process of law making as a general matter. For example, more than 20 years ago my noble friend Lord Renton presided over a distinguished committee on The Preparation of Legislation and has argued the cause ever since.
My noble friend Lord Rippon was more recently invited by the Hansard Society to produce a further report on Making the Law, again a general one. More particularly in this field there are those who have been pressing the case for improvement in fiscal legislation. Perhaps I may mention the Institute for Fiscal Studies

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and the Tax Law Review Committee, of which I have the honour to be the extremely passive president. I pay tribute to the chairmanship of that committee by Graham Aaronson and to the work of his colleagues, including a number in this House. I am glad that today we shall be hearing from the noble Baroness, Lady Seear, who is one of its members, and from a former director of the institute, the noble Lord, Lord Taverne.
The other report relevant to the debate is that produced by the Inland Revenue as a result of an amendment to last year's Finance Bill by Timothy Smith. It required the Revenue to produce a report which appeared under the title The Path to Tax Simplification and which received the benediction of the Chancellor of the Exchequer.
My role in this general field I described at too great a length in the debate initiated by the noble Lord, Lord Nathan, almost two years ago. Suffice it to say—and I disclose some sense of guilt—that it is almost 20 years since as Shadow Chancellor I addressed the Addington Society and denounced what I called the:
"incoherent drift towards a tax system that is incomprehensible, unrespected, unenforceable—and spinning like a top".
Even so, after 11 years in government, almost half of them as Chancellor or Leader of the other House, little has changed since I made that enunciation.
It is not that I did not try, but I was certainly unable to mobilise the huge political will which was, and which will be, essential if we are to effect the fundamental changes that are needed. In one respect there has been helpful change since those days as evidenced by the documents to which I draw attention in today's debate. There is now a much stronger head of steam in support of the cause for change. The purpose of today's debate is to help turn that pressure into more solid progress.
The problem manifests itself in two ways: first, the surging volume of tax legislation and, secondly, its mounting unintelligibility or inaccessibility. There is all too often a tendency to justify the situation by saying that the problem is world-wide. Indeed, it is. During the past quarter of a century our tax law has grown from 2,000 to 6,000 pages. The Australians have doubled theirs in the past 10 years, and many other nations suffer the same fate. However, we cannot accept that growth with hand-wringing inevitability and do nothing about it. We do not have the option of doing nothing.
The problem falls into two halves: to improve the quality of legislation yet to be born; and if we are to achieve that, it is essential to improve the quality of that which already exists. That is a much longer and more difficult task.
Some people believe that we might achieve that by searching for a better, simpler tax policy. Of course, policy is relevant to the objective of simplification in the sense that policy makers should always have it in mind as a consideration. However, in a debate on the Finance Bill in April 1994 my noble friend Lord Cockfield, who was kind enough to include me among the Chancellors who from time to time had simplification as an objective, pointed out that the policy changes cannot be sufficient to achieve the cause of
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simplicity. Canada, for example, appointed the Carter Commission to achieve global simplification of tax law. The results of that were described in retrospect as Mr. Trudeau's "economic Vietnam". In this country we need no reminder of the fact that simple motivation for tax change implies many losers as well as winners and often does not work as well as expected. I mention sotto voce the poll tax.
But the objective of simplicity must always be a dominant consideration. We should not disregard it, but we cannot regard it as offering anything like the complete answer to the problem of simpler taxes. The most important factor is whether we believe it is possible at all to achieve improvement in the quality of our tax legislation. I am happy to say that all who have considered the question reply with a strong affirmative.
Plain language law, law which is user friendly, is obtainable. The Tax Law Review Committee and the Inland Revenue agree on the key components: a clearer structure of what you are trying to do; much shorter sentences; and modern design, modern layout and headings that help the reader. Of course, simplification cannot be at the cost of clarity. You have to balance the two. But one cannot seek complete precision at the price of infinite prolixity.
The fact that one can make those improvements is clear from the examples contained in the appendices to the reports to which I have drawn the attention of the House. I suspect that I am not alone in preferring the more radical approach of the Tax Law Review Committee to that exemplified by the Inland Revenue. The Tax Law Review Committee's approach coincides with the style of the Special Committee of Tax Law Consultative Bodies which offers a sample of legislation—what it calls rent-a-room relief. The verdict of the writer in the periodical Taxation is one which I welcome. He described the TLRC's redraft of roll-over relief as "magnificent".
There is no dispute that plain language can bring huge benefits. It can bring about a reduction in compliance costs. It is estimated that the cost of compliance for Inland Revenue taxes alone amounts to some £4 billion per year. It can help us to ease the process of future policy reform if we enable future finance Bills to be simpler and clearer. But, if that is to be achieved, it will require a very substantial culture change for everyone involved in producing fiscal legislation. The TLRC emphasises that. There is no doubt that that culture must change.
We need to have and to enforce stricter rules to secure more advanced decision-making, fewer last minute scrambles. There should be no law making on the hoof; no Dangerous Dogs Acts. There should be—in two words—more time. We need more human resources, above all, in the engine rooms of parliamentary draftsmanship—in the Revenue departments as well as in the Office of Parliamentary Counsel.
Parliamentary counsel are often criticised—I see my noble friend Lord Carr sitting there; he will join me in this—for what has been described as an unduly,
"rigorous, arcane and somewhat inflexible craft-tradition".

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Without disclosing any secrets, I recollect that at the time that my noble friend and I were setting about the draftsmanship of the Industrial Relations Act in 1970, we dared to suggest to senior parliamentary counsel at the time that it might help if words which were defined in the definition clause were printed in italics—as now recommended by the TLRC. That simple proposition evoked a five-page reply telling me why that was not possible.
But I must not be unfair, because parliamentary counsel need time to do their work properly and we do not often give it to them. They need their resources strengthened. And we have had much help from them for the TLRC and, in particular, from the presence there of Sir Peter Graham, who was First Parliamentary Counsel until 1994.
As I said previously, if the process is to work, it needs a senior Minister (or ministerial group) in overall long-term charge. Theoretically, the Prime Minister is responsible, but I dare say that he is too busy. The Attorney-General by himself is not strong enough. One needs to integrate and draw together the authority of the Leaders of both Houses, the Attorney and the Lord Chancellor.
Even then, we need to agree on what we are setting out to do. We need to commit ourselves to a rewrite, over a period of not more than five years, of all fiscal legislation. We should start with the taxation of income, as the TLRC suggests, and have a pilot scheme in that area. There is no reason why Customs and Excise should not look at its area too.
There are many key propositions which I believe need further consideration but to which at this stage we should give only provisional answers. Should we opt for what is called purposive legislation? More statements of purpose are desirable but I am doubtful whether the concept of "purposisation" should be "totemised" as an answer to the problem.
Should we consign more to secondary legislation? Up to a point maybe, but if we look at the way in which we handle secondary legislation at present, which the Rippon Committee described as "highly unsatisfactory", I am not confident that that would be the right way forward.
We must recognise that the process will involve more than mere consolidation. It should allow for the recommendation of at least minor changes. But those too will need parliamentary endorsement. Should we hand over the management of all the details to a new extra-parliamentary body? I confess to little enthusiasm for that because in my days as Minister for Trade and Consumer Affairs I established a body called the Consumer Protection Advisory Committee with the intention that that should do the same in the field of consumer affairs. One of its early chairmen was the noble Lord, Lord Borrie. It was by no means a success, but that was probably my fault rather than his.
But we do need institutional changes. Outside Parliament the planning work and the shaping of proposals must be done by a specialised body. I do not think that that should be a Royal Commission. It should not be as detached as the Law Commission. Rather, it
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should be a joint project team, a working party, drawing together the talents of the Revenue and the private sector.
There is a question about who should be in charge of that. I think there will probably be a need for continuous ministerial leadership, as well as parliamentary oversight.
Finally, we need to concentrate on what changes are necessary in Parliament itself. In that context, there is a clear need for special legislative vehicles, special tax simplification Bills, and an equally clear need for a special track for the processing of such Bills. If we get that right, that may well pave the way to an acceptance of the notion of a regular annual Tax Management Bill as part of but distinct from the regular Finance Bill routine.
The experience of both Houses now, although still quite limited, very strongly supports the case for handling such legislation by means of a Special Standing Committee. The House of Commons Procedure Committee recommended that frequently for that House, and in this House that has been recommended by the committee presided over by my noble friend Lord Jellicoe. In both Houses it has been relatively little used so far.
The Law Commission produced a report in November 1994, Parliamentary Procedures and the Law Commission. It asked why the Special Standing Committee procedure had been used so seldom when in both Houses it has been regarded by those who have tried it as a great success. My right honourable and learned friend Sir Patrick Mayhew, for example, has commended it very enthusiastically more than once.
The reasons given by the Law Commission paper were, first, that a Special Standing Committee is:
"Not popular with either of the Departments or business managers";
and, secondly:
"All that is lacking is the necessary will of the Government Department".
I plead guilty in that respect also because that procedure was never used in my time as Leader of the House of Commons.
Finally, one must consider the relationship between the two Houses on this matter. Can there be a role for your Lordships' House in this field, notwithstanding the fact that Bills will concern either money or supply, on which we are precluded from making amendments? The Tax Law Review Committee answers that by saying no, but I believe that it would be a great pity so to conclude when one sees the outstanding role played by this House in connection with Law Commission Bills and thinks of the presence in this House of fiscal experts ranging from Law Lords like the noble and learned Lords, Lord Nolan and Lord Simon of Glaisdale, to my noble friends Lord Cockfield, Lord Rees, Lord Boyd-Carpenter and Lord Hayhoe, who are to speak later.
If this House is to have a role in that field, does it make sense to have separate Special Standing Committees? It is difficult to believe that it would be useful for outside experts to be involved in giving

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evidence to two separate parliamentary committees on each piece of legislation. Perhaps my most radical proposal is to ask whether there is a case for establishing, to handle that task, a joint Special Standing Committee of both Houses, albeit with Members of the House of Commons in the majority. There is only one precedent in the non-fiscal field for such a Joint Special Committee. That was on the Highways Bill in 1958–59. But is that not a change that would make sense? It would maximise the impact of the expertise in both places and secure a legitimate role for your Lordships' House.
I have closed on probably the most important procedural question, at least so far as concerns this House. Those are some of the questions on which my colleagues and I on the Tax Law Review Committee will concentrate in the preparation of our final report and on which I believe the authorities in the Treasury, in the Inland Revenue and in both Houses should now be focusing their attention. It would perhaps be suitable for all of them to bring their reports to a conclusion together, ahead of the probable date of the forthcoming general election so that early practical arrangements can be put in place for a new Parliament by a freshly elected (or, as I should hope, a freshly re-elected) government. My Lords, I beg to move for Papers.
4.10 p.m.
Lord Taverne: My Lords, as usual, I find myself in almost complete harmony with the noble and learned Lord, Lord Howe of Aberavon. We have co-operated on a number of reports in the past and, once again, on the question of tax reform, we find that we are very much at one. I too very much welcome the reports that we are debating. I find that the report of the Inland Revenue is a very positive document, especially on the central issue of the rewriting of tax law. However, I want to concentrate on the report of the Tax Law Reform Committee issued by the Inland Revenue.
First, perhaps I may tell the House that I take special personal pleasure in the quality of the reports produced by the Institute for Fiscal Studies. I very much appreciated the friendly remarks made after my maiden speech by the noble and learned Lord, Lord Simon of Glaisdale. Certainly, looking back on the vagaries of my career, what gives me the most sense of satisfaction is the fact that I played some part in the setting up of the Institute for Fiscal Studies. After I left the institute it really started to prosper and it now goes from strength to strength.
I approach the discussion of this kind of issue with great humility because I am by no means an expert on the technicalities of tax. It takes a very brave critic to question the judgment of the very learned members of the Tax Law Review Committee or, indeed, to take on or tangle with the Inland Revenue on technical issues. I should like to make a few comments. First, I want to echo what the noble and learned Lord, Lord Howe, said on the importance of the issue. It is indeed of very considerable economic importance. Tax compliance alone, for which the noble and learned Lord gave figures, amounts to over 1 per cent. of GDP. It is not just a question of the cost; it is also a question of justice.
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We may not be entitled to expect complete certainty in tax law. Perhaps sometimes we err too much in our devotion to the search for certainty which is a very illusive concept and that search often leads to unduly complex legislation. If we are not entitled to expect certainty, we are entitled to expect the lack of total incomprehensibility. An example was given in the report of the Tax Law Review Committee. At page 33, the report cites one part of the National Insurance Act 1946 which I believe is worth reading to your Lordships:
"For the purposes of this Part of the Schedule a person over pensionable age, not being an insured person, shall be treated as an employed person if he would be an insured person were he under pensionable age and would be an employed person were he an insured person".
I remember at one stage that I tried to find out what the definition of "income" was for the purpose of income tax legislation. The conclusion that I came to was that the only meaning that the word could be given was that it is a particular form of increase in wealth which is subject to income tax legislation—a totally circular definition.
How can we avoid that nonsense? How can we improve the law and achieve a greater degree of comprehensibility? There are two main recommendations made in the interim report from the Tax Law Review Committee. The first is greater use of explanatory memoranda. That certainly seems to me to have a great deal to commend it. It is much more satisfactory than finding out the purpose of a particular piece of legislation by referring to Hansard. It may be that there is a very clear explanation in the speech of the Minister introducing a particular tax measure, but it has not been outside the experience of the other place that the Minister does not altogether understand the tax law that he is introducing. All right, the brief is probably written for him or her by the Inland Revenue or Customs and Excise, but odd comments may be made in the course of the speech, there may be answers to questions, there may be a political spin given to it; indeed, there may be all sorts of reasons why Hansard is not necessarily a very accurate guide.
A clear explanatory memorandum or memoranda for different clauses is a much more satisfactory guide and a most important one. It is an important democratic principle that legislation should be interpreted in the way in which the Government, as sanctioned by Parliament, intended.
However, much the most important recommendation—indeed, the absolute centre of the reforms—is that the primary legislation of tax should be rewritten in a simple way. I was delighted to see that the Inland Revenue has accepted that task and that it reckons, perhaps to my surprise, that it could be done within five years. We should remember why that is so important. Again, perhaps I may quote from a section of the committee's report where it deals with the fact that tax legislation tends to be built on previous legislation. Paragraph 3.6 at page 18 says:
"Each year's Finance Act has built upon the structure left by the previous one so that we now have a huge edifice that bears little resemblance to the original, modest single-story block from which it has slowly metamorphosed".

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That is the trouble. One cannot really clarify the law unless one starts, as it were, by rewriting the whole.
The only regret that I have from the report—and which, as I understand it, is now to be remedied—is the fact that it does not mention the very important way in which we can improve the scrutiny of legislation. Obviously we want to get away from elaborate schedules. Sometimes it is the fault of politicians that so much goes into a schedule. I remember one occasion when the Chancellor said, "I want a short Bill", but the Inland Revenue said, "Yes, but we have to get this and that in". So the temptation arose and the question was put, "Can we not put it in the schedule?" There is very little scrutiny of a schedule and often very little understanding of it. In fact, it has always been the case that schedules have not necessarily been scrutinised.
Some noble Lords may know the apocryphal story of the town clerk in Birmingham in the 19th century, when divorce was only possiblle by an Act of Parliament, who was, unfortunately, unhappily married. It so happened that he was responsible for drafting a very complex local water Bill. When the legislation was finally passed into the law there, hidden away in the corner of its schedule, were the words, "The Town Clerk's marriage is hereby dissolved".
The question is: how can we effect better scrutiny? As the noble and learned Lord, Lord Howe, said, part of the problem is time. Indeed, the pressure on time can be very considerable. I remember that the pressure of time on one occasion was such when I was in the Treasury that we found ourselves debating highly technical provisions in the early hours of the morning. At that stage, two Ministers were in charge of the Bill. My colleague was the late Lord Harold Lever. One of the Members of the Opposition asked, not unreasonably, "Can we know which of the two Ministers is answering the debate, so at least one of the two can wake up?". Well, it was true that both of us were asleep, but it was in fact Lord Lever's particular debate. Never has my admiration for that learned and witty man been greater than it was then. He jumped up, straight out of deep sleep, and said to his opponent, "The Hon. Member would no more be justified in inferring from the fact that our eyes are closed that we are asleep, than we would be in inferring from the fact that his eyes are open that he is awake".
It is of supreme importance that we have proper scrutiny. The answer must be a permanent Standing Committee to look at tax. That committee could have three functions of great importance. First, it could look at the technical changes. The point is often made that it is sometimes difficult to distinguish between technical changes and the mainstream kind of policy changes contained in finance Bills. It may sometimes be difficult to distinguish, in which case it should be kept in the main body of the Bill. However, there are other occasions when it is clear that changes are technical. They should be considered by a Standing Committee.
Secondly, such a Standing Committee could also look at the periodical reports from the review of legislation being carried out by the Inland Revenue—the re-write of the primary tax legislation. Thirdly, it could look at
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proposed changes in tax law. A very good report was produced when it was proposed that there should be a wealth tax. Proposals for all sorts of new taxes could be examined by such a committee. More MPs would become knowledgeable; there would be less pressure of time during the Finance Bill; and the quality of taxation could be greatly improved.
4.21 p.m.
Lord Brightman: My Lords, I would like to take the opportunity provided by this very useful debate to address one point only, and that is the urgent need for the simplification of the capital gains tax system for the benefit of the ordinary investor. I trust that in doing so I am speaking within the intention of the debate, notwithstanding that I am descending from the general to the particular.
Basically, capital gains tax is a very simple tax and not an unfair tax. I do not seek its abolition. I ask only for a more user-friendly structure.
As your Lordships will know, in essence, the tax is this: if the sale price of a share exceeds the purchase price, you deduct one from the other, and that is a capital gain which is taxable above a certain level. Nothing could be simpler or easier.
The complication arises from the fact that a gain is taxable however many years it took for that gain to mature, up to a total of 16 years; that is to say, from March 1982 to the present day if the share has been held for that length of time, or from the date of purchase if it was bought after March 1982. But money has fallen in value by over 80 per cent. since March 1982. Consequently, it has been recognised that it would be unfair to tax a gain which has resulted only from the fall in the value of money and not from any real increase in the value of the share. There has therefore been built into the capital gains tax legislation what is called an indexation allowance. It is here that the complication starts.
To calculate a taxable gain you have to take five steps, which I must regretfully explain to your Lordships in order to sustain my plea for a simpler tax structure. Step one: you deduct the retail prices index at March 1982, or at the later date of purchase, from the RPI at the date of sale in order to obtain an adjusted RPI. Step two: divide the adjusted RPI by the RPI at the date of purchase in order to obtain a re-adjusted RPI. Step three: you multiply the cost price of the investment by the readjusted RPI in order to obtain the indexation allowance. Step four: you add the indexation allowance to the actual cost price in order to obtain the adjusted cost price. Step five: you deduct the adjusted cost price from the sale price and there is your taxable gain.
However, that is not the end of the agony. It is only the beginning. If rights issues have been made during the time that the share has been held, the same exercise has to be gone through for every such issue, because there will be a different RPI at the date of the rights issue from that which prevailed at the date of the purchase of the share.
Furthermore, if the investor has been trying to save by accumulating dividends—that is, by using dividends to buy more shares, which is a popular way of saving in

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these days—the exercise which I have outlined will have to be carried out every time a dividend is declared. So, at the end of the day, there may be 28 occasions in the case of a single investment where it is necessary to carry out this procedure if the share has been held since 1982. Of course, all this assumes that the shareholder has kept immaculate records of the history of his investment over the years that he has held it.
Of course, what happens in practice is that the investor throws up his hands in horror and passes everything over to his accountant at £100 an hour, or whatever is the going rate for an accountant. To me, the case seems overwhelming for another look at capital gains tax in order to avoid these horrors.
If capital gains tax on ordinary Stock Exchange investments were limited to gains made, for example, over the past two years, there would be no need whatever for any indexation allowance because there will have been no, or very little, inflation; or investments held for more than two years could be taken out of the charge to tax altogether.
I do not know how much money is yielded by capital gains tax—perhaps we may be told—or whether it would cost very much to apply a two-year time limit. But I do know that the present system produces a very great deal of wholly unproductive work for tax experts which adds nothing whatever to the prosperity of this country.
Therefore, I would like to hear an assurance from the Government that they will at least have a look at capital gains tax to see whether it might be given a slightly more user-friendly face.
4.26 p.m.
Lord Rees: My Lords, first of all may I express my gratitude to my noble and learned friend Lord Howe of Aberavon for enabling us to debate this important subject. I offer my apologies that, due to a long-standing prior engagement, I may not be able to stay until the end of the debate.
In common with my noble and learned friend, I express suitable contrition, I hope, because, as the table to the Revenue's paper shows, I cannot pretend that during the period that he and I laboured at the Treasury, along with my noble friend Lord Cockfield, who I hope is going to enlighten us further on this particular subject, tax legislation became less voluminous, less complex or more user-friendly. We did our best in a modest way, but the time and the pressure of events perhaps disabled us from doing as much as we would have liked.
It must be common ground between both sides of the Chamber that the system is absurdly complex, absurdly voluminous, difficult to understand and expensive to administer, both for the taxpayer and, indeed, for the Government. However, I do not believe the problem to be just a question of more skilful draftsmanship.
We all know the charming aspiration of Oliver Cromwell to simplify and reduce legislation to one small book. I believe that merely shows that, while a very capable soldier and a very capable administrator, he had
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not a very great deal of experience of legislation and, of course, the world in his time was slightly simpler than it is now.
I am full of admiration for the part of the paper which, under the presidency of my noble and learned friend, the Institute for Fiscal Studies has produced for us to work on and which I have read with great profit. It has attempted to re-draft roll-over relief and post-cessation expenditure relief. Certainly, even I can see that it is expressed in words of greater clarity and greater elegance, but I am not really capable of judging how successful it may have been. Perhaps some noble and learned Lords will be able to enlighten us on that with their keen judicial minds and greater experience of construing such measures.
The point I want to make is that clarity is certainly one objective, but, as my noble and learned friend conceded in his opening remarks, certainty is another. I do not know whether such attempts to redraft in elegant and clear language will actually stand the test of close scrutiny by the courts and the keen eyes of accountants and members of the legal profession. I suspect that it will be found to be bristling with difficulties in the actual application.
I now turn to how the legislation might be improved. There is, of course, a keen debate, which again my noble and learned friend has touched on, as to whether it is possible to confine legislation, or primary legislation, to the statement of general principles, leaving the application to the good sense of the courts. This, of course, is the historic basis on which the corpus of fiscal legislation was built up. The doctrine of judicial precedent has enabled all sorts of amendments, amplifications and enlargements to be grafted on. I entirely accept what the noble Lord, Lord Taverne, has said, that perhaps it is a rickety and rather complex structure. That is not entirely due to the doctrine of judicial precedent but because of additions over the years. Like so many British institutions it is developing, but in this case it has not developed into something simpler, but has taken a rather more complex direction. The objection to the statement of principle approach to draftsmanship is that it does not enable the taxpayer to know with certainty what his position may be against any new piece of legislation that is introduced. My only answer to that is that it is questionable how far the taxpayer or his advisers are any more certain nowadays when legislation runs to an infinite number of clauses and an infinite number of pages.
Against that background, I hope that I played some modest role in stimulating the helpful innovation—this has been an innovation over the past decade or so—of the publication of explanatory memoranda. They are certainly a guide to comprehension of the basic thrust of the legislation. However, I am not certain how far they really assist, when it comes to litigation, to the construction of fiscal Acts before the courts. Equally, I applaud the greater use—I believe the courts are moving much more towards this—of permitting travaux préparatoires on the Continental basis. That is an increasing tendency which I applaud.

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I turn now to the process of legislation itself. Again I believe that my noble and learned friend, and I to a lesser degree, can claim some credit for the increased introduction of Green Papers and draft clauses produced in advance of the finance legislation itself. This may have made a significant contribution to informed debate. As I have said, I think that the current administration can claim some credit for that.
As regards the legislative process itself, one of the important factors is that there should be an opportunity for a slower, more leisurely, and more considered review of the legislation after it has been published. It should be considered in a less adversarial and less highly charged forum. I have spent too much of my life in another place in the pitched battles over finance Bills that have dragged on through the afternoons and nights of the summer months.
I wonder whether it would not be possible after a finance Bill has been published, and after the Second Reading has taken place in another place, that it should be consigned to a Select Committee with liberty to call evidence. Of course it is objected that this would be a time consuming procedure, but now that the Budget is introduced in an earlier part of the parliamentary year and has become an autumnal rather than a spring rite, I hope that time might be available for that approach. Obviously I am not suggesting that the underlying policy should be subject to such scrutiny but at least the detail of fiscal legislation would be given a more detailed and a more leisurely scrutiny. I certainly warm to the suggestion which my noble and learned friend made that such a Select Committee might even be a Select Committee of both Houses. There is a precedent although it may not be an exact one. I think of the Consolidation Committee on which I sat many years ago, and which was composed of Members from both Houses. I hope that that suggestion may be given a little more consideration.
In the same vein, I wonder whether governments could learn to exercise a slightly greater self-restraint in their fiscal legislation. Is there any need for the annual legislative orgy which finance Bills have become? I am not saying that this is a fault confined to any one party. Of course rates may need to be fixed annually, but I wonder whether the more technical aspects—I know all the difficulties of distinguishing between what I call the more political and the more technical aspects of finance Bills, but it is possible in many cases to draw that distinction—could be confined to technical finance Bills or even to secondary legislation, provided that it is susceptible of amendment.
I now turn to the background to fiscal legislation because I believe it is impossible to divorce the complexity and the mild absurdity of the present fiscal structure. It derives from the complexity of modern life both in the private and the commercial spheres. There is also the international context. Taxation, although naturally the responsibility and concern of domestic legislatures, impinges on transactions that straddle many frontiers. There is the need to reconcile measures, for example, of dividend taxation, with similar measures overseas, the need to consider double taxation, and all those other aspects of our tax structures. Then, again,
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there is the use of taxation for purposes of social engineering. Here I know that I touch on perhaps controversial political matters. When one has confiscatory rates of direct taxation of 83 and 98 per cent., which we endured up to 1979, it is inevitable that the tolerance of taxpayers and the whole approach of the tax paying world to the fiscal system will be different. The period between 1945 and 1979, with short periods of intermission, resulted, I believe, in a dramatic increase in the complexity and the weight of taxation and, as I say, reduced the tolerance of ordinary taxpayers.
I shall not today in the time available touch on the question of tax avoidance. I notice that the Institute for Fiscal Studies has for the moment put that aside, but there is a case for considering whether a simpler, fairer, lower rate tax system—I shall mention a precedent for that—might lead to a different relationship between the taxpayer and the Revenue. However, it will take time to reverse attitudes. I am well aware that even after the fairly impressive reductions in direct taxation which have been put through in this country, there will still be a tendency to tax avoidance. I turn now to the overseas examples. There is a helpful—
Lord Lucas: My Lords, if I may call my noble friend's attention to the time.
Lord Rees: My Lords, this Administration over a period of time has reduced taxation. It has abolished a number of taxes. I hope therefore that Mr. Blair's latest statement shows that there is some common ground between us. I hope that we may profit from the example of New Zealand and I hope that a low tax, simple environment may lead to genuinely user-friendly legislation. I hope that that is not too optimistic a note on which to end my overlong speech.
4.37 p.m.
Lord Simon of Glaisdale: My Lords, we are singularly fortunate that a Chancellor of the Exchequer of such distinguished service as the noble and learned Lord, Lord Howe, should focus our minds on this aspect of our fiscal system. We are also greatly indebted to the three reports to which he referred. Particularly, it was most encouraging to read the two models on which we might base a complete rewriting of our fiscal code over the next five years. I mention the three reports at the risk of impertinence after the contribution, referred to by the noble Lord, Lord Taverne, of the Institute for Fiscal Studies. It has been consistently useful, not least in its latest report.
There are two different types of legislation. One is designed for ordinary people. An example of that would be the recent Family Law Bill which has been before your Lordships. Whatever one may say about its thrust, it is well drafted and can be understood by the people it affects—the ordinary people in the streets. Then there is technical legislation, for which one can reasonably be required to have recourse to an expert. For patents, one goes to a patent agent; for landlords and tenants legislation, to a solicitor, and for the revenue statutes to a solicitor or accountant. However, there is no excuse for the complication and obscurity of much of our fiscal

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code. An accountant ought at least to be able to understand the provisions of a Bill at First Reading, yet there is no question but that he cannot do so at the moment. The legislation needs to be reconsidered and rewritten.
I shall not attempt to cover points made by noble Lords who preceded me. Many of them have had far more recent experience of Treasury and fiscal matters than I and I shall not be affronted if the Minister tells me that I am discussing a Jurassic fiscal code. I venture to agree with practically everything that has been said but I wish to submit three broader considerations for your Lordships, for what they are worth.
First, we use our fiscal code for economic engineering. That is permissible, but it almost inevitably leads to great complication because it needs fine tuning. Frequently, what is required to be done by the fiscal code could be done in other ways; for example, capital allowances by direct grant. One would have to interpolate some body like the University Grants Committee or the Arts Council to make the necessary adjustments. We are used to such machinery and I suggest that whenever the fiscal code is used to implement an economic policy or even to guide personal behaviour, one should find out whether there is a simpler method of achieving the same result.
The second consideration which I wish to point out is how profoundly I agree with what the noble and learned Lord, Lord Howe, said about the haste with which much of our fiscal legislation is prepared. It is almost always due to an excessive desire for secrecy. When I was a Treasury Minister, no one outside the Treasury was allowed to see a Finance Bill until it had been published. That was relaxed painfully, and the Law Officers were finally allowed to see it. The secrecy was unnecessary. Some things are highly secret, like Customs and Excise legislation, where a change in duty may lead to reticulation. But income tax and other matters concerning the Inland Revenue are not so secret and could well be widely discussed, particularly with a view to ensuring perspicuousness.
The third consideration which I suggest is that one-fifth of our fiscal legislation relates to anti-avoidance provisions. They are incredibly complicated. The reason is that the tax avoidance schemes are often complicated. With our tradition of fiscal equity, the Inland Revenue follows the convolutions through so as to hit precisely one scheme and no other. By that time, the provision is often quite incomprehensible.
I once had such a provision, and an accountant on the Back Benches pointed out that in certain remote circumstances, it would involve a double charge to tax. That was a challenge to the Inland Revenue, which proceeded to chase it further to ensure that there was no double charge to tax. It succeeded, but at the cost of complete incomprehensibility. When I was challenged as to its meaning, all I could do was to repeat what Sir John Simon, with his incomparably clear legal brain, said: "What the Inland Revenue intends to do by this is so-and-so. I don't see how it does it, but that is the way
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they tell me they will administer it. I hope you will allow it to pass on that basis". They did allow it and allowed me to pass it on that basis too.
We can sweep away the great bulk of the anti-avoidance provisions by a simple provision such as exists in the United States and Australia. Any transaction, the dominant purpose of which is the avoidance of tax, shall be void for that purpose, though valid for any other. The law is quite capable of dealing with a dominant purpose. I ask that the point be considered.
4.48 p.m.
Lord Cockfield: My Lords, the issues raised by my noble and learned friend Lord Howe and the report of the Tax Law Review Committee are of great importance. However, I wish to go further into the causes of the trouble than that report or my noble and learned friend's speech went. The report deals essentially with the effects and not with the causes. It deals with symptoms, not the disease itself. Although there is a great deal of merit in the relief of symptoms, there is much greater virtue in trying to tackle the causes.
My noble and learned friend kindly referred to the speech that I made in your Lordships' House nearly two years ago. On that rare occasion noble Lords were permitted by the usual channels to discuss the Finance Bill, and I analysed the reasons for the complexity of fiscal legislation. I do not propose going over the whole of that field again. But I want to make one comment which links back to those remarks.
The guilty parties, if I may use such a phrase, in this field are successive Chancellors of the Exchequer and also the legal profession, particularly the judiciary. I shall come to the latter point in more detail in a moment. So far as Chancellors of the Exchequer are concerned, it is not simply a question of failure to simplify taxes; it is a penchant they have for introducing new complications. Almost every Budget has its list of what that very great Financial Secretary to the Treasury, Lord Lever of Manchester, described as "ripping little wheezes". Those are what in these days are called "tax shelters" designed to attract public attention and, no doubt, the plaudits of the business community and particularly of the financial services industry, in whose pockets for some strange reason the benefits of the tax relief almost always end up.
We should be much better if we had much lower rates of tax—I entirely agree with my noble friend Lord Rees—but no tax shelters. The two things go together. If there are a lot of tax shelters, there are high tax rates. What we want are no tax shelters and much lower tax rates.
I now turn to the question of the legal profession and the judiciary. One has to be very, very careful what one says here. As we know, the judges are a very sensitive lot, much given to criticising one another (if one studies the minor incident of the Scott Report) but somewhat adverse to people criticising them.
It is very well known that the standard of proof in criminal cases is very much higher than the standard of proof required in civil cases. That is not so much a

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matter of statute law as of judicial decision over a long period of time. Equally it is the case—I agree that they are not entirely ad idem—that the judiciary applies very, very stringent tests indeed to the interpretation of fiscal legislation. Indeed, in one of the leading cases on which I was brought up, the judgment of the learned judge concerned could well be regarded as incitement to tax avoidance. It is not surprising, if that is the attitude on the part of the judiciary, that there is then the growth of a prosperous tax avoidance industry. The effect of that is that the Inland Revenue in turn sets out to pre-empt what it thinks will be the activities of the tax avoidance industry, and then if it finds it has failed it comes along with even more complicated legislation. Somehow we have to break through that vicious circle. I shall be absolutely frank: I do not know how that is done.
I listened with great interest to the remarks of the noble and learned Lord, Lord Simon of Glaisdale. One of my earliest jobs when was very young was cleaning up the excess profits duty of the 1914–18 war. That contained an anti-avoidance provision; so, indeed, did the excess profits tax of the 1939–45 war; so did the excess profits tax of the Korean War. I was involved in the administration of all three. I hate to say how old I am, but noble Lords can draw their own conclusions from my remarks. There can be provisions of that kind in times of war. First, people are prepared to tolerate them, and secondly, on the whole the standard of behaviour on the part of the kind of people who normally go in for tax avoidance is inhibited by public opinion. Incidentally, in both of the first two instances we had exactly the same sort of body as the noble and learned Lord suggested. I believe it was called the Board of Referees, which pontificated on whether or not the main purpose of the transaction was tax avoidance. A few years ago, in the Ramsay case, it looked as though the judiciary was taking a rather stronger line on purely artificial transactions, but I believe that has gradually been chipped away at in subsequent cases.
In the end, the attitude of the judiciary in this respect is a reflection of public opinion as it existed a generation or so ago. It has been said, and the quotation will be familiar to noble and learned Lords, that the law lags behind public opinion and public opinion lags behind the truth. In the present instance the time lags are very considerable. I believe that the general attitude in the country towards taxation is somewhat different to what it was, for example, at the time of the Civil War. I refer of course to the Civil War in which Oliver Cromwell and Charles Stuart were involved. The origin of that civil war rested on taxation considerations. The whole emphasis after those events was to cut down the power of the Crown to tax the citizen.
There has been a change in this quite extensive period, and people accept that there is a legitimate place for taxation and that it is not simply a question of the Crown getting money out of the citizen for purposes of which the citizen would not approve. Of course some governments take too much money, and for purposes that not everyone will support. But, as a general proposition, I believe there is a greater acceptance today that the state has a greater role than it had before the war, and certainly a greater role than it had before 1914.
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That is inevitably reflected in the level of taxation. But it is also affected by public opinion on the question of tax avoidance.
At the end of the day, this issue is capable of resolution only if there is a state of public opinion under which it is unacceptable. In those circumstances, a general anti-avoidance provision may take us some way further forward. But in the end, that can happen only if there is a change in the ethos and outlook of people in the country, of the legislature itself and particularly, at the end of the day, of the judiciary, whose job it is to enforce the standards by which we all have to live.
4.59 p.m.
Lord Boyd-Carpenter: My Lords, I have been taking part in financial debates in one House or the other since the year of grace 1951. I must say at once that, of all those debates over all those years, I have never heard one opened better than this one, introduced by my noble and learned friend Lord Howe of Aberavon. His speech was masterly, it gave a splendid set-off to the debate and it demonstrated a greater quality of understanding of the hideously complex issues with which we are concerned in these debates than any I have heard. The House has every reason to be greatly indebted to him.
I want to deal quickly with one or two particular aspects of the matter and first of all with the need for simpler and more friendly financial legislation. That is becoming more difficult because of the curious way in which the Inland Revenue appears to be handled.
For many years I dealt with Inland Revenue offices in the town of Rugby, where I was an administrator, and in London where I lived mostly, and in Hampshire with a tax office close to me. It now appears that it is the policy of the Inland Revenue to move their offices very largely away from what I might describe as "inhabited areas" and put a considerable distance between a great many taxpayers and their offices.
Perhaps I may quote from my own experience. When I was chairman of Rugby Portland Cement, I dealt with the tax office in Rugby. Later I and my wife dealt with tax offices which are located, believe it or not, at Walsall and Bootle. I do not know how many noble Lords are familiar with those no doubt distinguished areas, but they are a very long way from those who live in the south of England.
I wonder whether my noble friend the Minister will say whether there is a deliberate policy of moving tax offices into remote parts of the country, with the consequence that proper, immediate contact with the tax office is much more difficult. If the tax office is in the same town or area in which one lives or works, many small points of difficulty can be easily resolved by a visit to the office and having a word with an official. But if the tax office is located, as in my case, hundreds of miles away, every issue, small or great, that one wants to take up with that office has to be dealt with either by prolonged and expensive telephone calls or by extended correspondence.
I wonder whether it is pure chance that I have been affected or whether it is the deliberate policy of the Revenue to move its offices out of the south of England

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in particular and install them in areas which are, no doubt, significant in themselves but are a considerable distance from where quite a large proportion of the population lives. It is important to get that point clear.
I turn to particular forms of taxation. I agree wholly with what was said earlier today; namely, that the best system of taxation is taxation at low rates with very few concessions. Once taxation is at a high rate and, to prevent causing hardship, it becomes necessary to allow a great many concessions, the whole system becomes infinitely more complicated. Can my noble friend the Minister say whether it is the policy of the Government to impose rates of taxation which are as low as possible, even though that may involve it being levied over a fairly wide area?
Here, I should like to comment on a tax which I believe is a thoroughly bad one; namely, VAT. VAT involves imposing an additional charge on a vast number of goods. In truth, it is inflationary because it inflates prices arbitrarily. It also operates in surprising areas. Some noble Lords may recall that a little time ago I raised in your Lordships' House the extraordinary business of VAT being imposed on repairs to old churches. If ever there is an area which would seem to be justifiably made free of tax, it must surely be work on old churches. When a small country parish, such as the one with which I am associated, has to repair its lovely but ancient little church and finds that, in addition to the building costs involved, it is also taxed on the money used for that purpose and the expense incurred, that seems to justify criticism of the tax system. I believe that VAT is a very bad tax. Its effects on the economy are very serious indeed.
It has been said earlier in the debate that the more there is a tax burden in one direction or another, the greater is the incentive to take steps to avoid it. Tax avoidance is a very serious matter. I know from my own experience at the Treasury that a great deal of energy has to be devoted to making sure that taxes are not avoided. But, the higher the rate of tax—whether it be VAT, income tax, surtax or whatever—the greater the incentive for taxpayers to avoid it and not, in that respect at any rate, to be taxpayers at all. Therefore, again I want to know the Government's policy in that direction.
Finally, if taxation is to be restrained, it is necessary that there should be economy in public administration. There are innumerable directions in which we all want to spend public money and know that spending public money will do good. But if we comply with those demands, we shall push tax rates up to dangerous heights.
In that context, in the moment that remains to me, I beg my noble friend the Minister to say that legal aid will be cut. In the past day or two there has been the example of a German who has undertaken litigation with a company in this country and who apparently has received£½ million in legal aid. As a taxpayer, I object to contributing to that amount of legal aid and in particular to assisting the efforts of a German to litigate against a British company.
5.8 p.m.
Lord Ashburton: My Lords, not for the first time I find myself speaking in a debate in which, compared at any rate with the galaxy—if that is the appropriate collective noun—of former Treasury Ministers who make up such a large proportion of the speakers on this occasion, I am definitely a lay person, perhaps a lay Lord, albeit one with several decades of working experience of the two particular aspects of this matter that I want to raise. Since there are only two aspects, I hope to be brief. Given the fact that each speaker has 10 minutes, I may even under-run rather than over-run the time. I hope that one day it might even be possible to auction one's under-run to one of your Lordships who wishes to be more loquacious than he is allowed.
I cannot pretend that I have fully absorbed the detail of the Inland Revenue and IFS reports. But I have no difficulty in applauding their general tone and particularly the optimism about improvement which comes through in the report of the Inland Revenue. Some of the comparative examples of rewritten New Zealand and Australian tax legislation strike one forcefully as examples of what should be aimed at whenever possible.
In the course of my browsing I found one—perhaps other noble Lords also found it—rather pleasing double entendre. In paragraph 6.8 on page 22 of the Inland Revenue background paper, which is concerned with understandability of legislation, it says,
"Many critics have argued that it is not easy for users to find their way around our present tax legislation".
Generally, it seems to me that rational people have to approve of simplification and thereby user-friendliness in every legitimate human activity. In the case of taxation there seem to me to be two principal reasons. First, a democratic one: it must be right that taxpayers as a whole accept the system of taxation as fair and rational. They cannot possibly do that wholeheartedly unless they have a reasonable understanding of it and indeed may well not accept it even if they do understand it.
There is a horrible jargon word in management speak—to "own". The various layers of management have to "own" corporate policy before they can effectively manage; taxpayers have to "own" the tax system before they will pay taxes happily and not spend excessive time trying to avoid payment. If your Lordships will forgive me, perhaps I can recount my daughter's experience. At the age of about 18, between school and university—I hope she is out of the tax net; this is around 20 years ago—she took a job at the Ideal Homes Exhibition. She came home waving around £45 in her hand and I said, rather facetiously, "I hope you are going to put aside some money to pay the tax on that". She turned round and said to me, "Daddy, what do you think you are talking about? I earned this!"
The second reason why simplification is desirable is that it should at least make some dent in the size of what is, in my view, an unnecessary industry. Fiscal advice employs an amazing number of highly paid professionals whose time could be redeployed. Given

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the present tax system, they could not be described as unproductive, but in any national calculation their time could be better otherwise employed.
I am well aware that it is not difficult to parade desirable simplifications without taking adequate account either of the knock-on effects or the need to replace the revenue which simplifications tend always to reduce. I doubt whether the noble Lord, Lord Cockfield, will remember, but he taught me a lot about how easy it was to ignore this side of changes when I discussed with him some ideas I had on the tax system in the late 1960s. I have always been grateful to him for opening my eyes.
The two aspects I should like to raise relate to CGT. Like the noble and learned Lord, Lord Brightman, I hope that this comes within the scope of the debate. In my view, CGT is not a satisfactory tax as it is now. However, it is too big a subject to embark on at this time except in one or two details.
CGT, at the taxpayer's marginal rate of up to 40 per cent. at the top, is a tax which can badly distort personal investment decisions. As a simple example—I know that one must be wary of simple examples—an individual buys a holding of shares for £1,000 and happily finds that, to his surprise, the price has quickly risen further than he feels is justified by the facts available to him to, let us say, £2,000. He would like to sell but that would involve him in paying somewhere between 25 and 40 per cent. of the gain in tax, leaving him with somewhere between £1,600 and £1,750 to reinvest.
Anyone who has tried to run investment portfolios for others, professionally or for himself, is aware that to find an alternative investment which will do as well from a base of £1,600 as the former will from £2,000, is something of which one dreams. To act on that belief takes a lot of confidence. There must be hundreds of thousands, possibly even more, of investment holdings which should rationally be switched but where the tax cost is such a heavy disincentive that they are left untouched.
I know that individuals can and, under the present tax regime probably should, invest through CGT-exempt vehicles such as investment or unit trusts. But the very existence of such vehicles seems to me to be clear evidence that CGT at present rates is too high and that switching investments should not be a taxable event as such. If there is one way of deterring individuals from bothering to understand and appreciate the workings of commercial undertakings, I can think of no better way than giving an incentive such as now exists to put all such decisions in the hands of a relatively small number of professional managers. I may be wrong, but I suspect that the raising of the base rate of CGT to 40 per cent. from the 30 per cent. rate then charged—already a heavy deterrent to switching—was probably intended as a simplification. In my view it remains as an awful warning of unintended disadvantageous side effects.
Simplification is bound to involve compromise. But I add my plea to that of the noble Lord, Lord Cockfield, and others that the best simplification that could possibly be introduced would be to lower drastically the rates at which taxes are levied and to reduce equally drastically the exceptions. In the specific case of CGT that would save an enormous amount of time and money.
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I know that there are problems galore in all of this and the question of how to tax those whose income is made by effectively trading in shares is one of the more obvious. If we can agree that income should legitimately be taxed, however it arises, but that switching of investments should be a legitimate non-taxable event as it is for investment and unit trusts, then the compromise should lead one to a low rate of tax without exceptions. Certainly any system which attempted to determine annually what proportion of an individual's investment profits had been spent rather than reinvested would be a nightmarish step directly away from simplification.
The second point on which I should like to touch briefly—I seem to be overrunning my time already—is the current resurrection of the argument that capital gains tax should be paid at a lower rate according to the length of time an investment has been held. That would undoubtedly be something of a simplification in that it would help to allow the abolition of index linking, though one must remark that the best way of abolishing index linking is by abolishing inflation. I hesitate to criticise any move which tends to lower tax rates. But long experience has taught me that the correlation between the time an investment has been held and the social worthiness of that investment is tenuous in the extreme. I was going to say "tends towards zero" when I realised that that would not stand up.
I know that the received wisdom is that long term is good and short term is bad; that speculation is undesirable and can be logically separated—I know not how—from investment which is desirable. But those views do not stand up to dispassionate examination. All investment involves speculative analysis of prospects and, in our heart of hearts, surely, we know that. The desirable thing, it seems to me, is that investment decisions should be well informed and rationally arrived at, not that they should be judged with the criterion of how long they are held.
Occasionally, a short-term sale of an investment is the right thing to do. The price of a share can run up against all expectation to a level where the only proper response is to sell it. By so doing the investor is actually doing good, by tending to reduce unrealistic pricing in the market and helping, in however small a way, to make the market more rational. The investor does not deserve to be criticised therefore nor taxed more heavily.
As I said, a graduated CGT may well be a simplification and better than nothing. But I fear that some people kid themselves and would happily kid the public at large that there is some moral merit in holding investments for a long time. Though it is not relevant to the present debate, I am equally unhappy that the word "stakeholder" is in danger of being used in the same way as "long term". They sound good, but do not necessarily stand up to dispassionate analysis. Roll on simplification; but caveat simplificator.
5.19 p.m.
Lord Hayhoe: My Lords, having served as one of his Ministers of State in the Treasury when my noble and learned friend Lord Howe of Aberavon was Chancellor, I am delighted to support him again today. Our debate

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is about simpler and more user-friendly tax legislation, and rightly we concentrate today on tax. But the general principles have much wider application. Indeed, my noble and learned friend referred not only to the report of the Institute of Fiscal Studies but to the Hansard Society Commission chaired by my noble friend Lord Rippon of Hexham, in which I had some hand because in those days I was chairman of the Hansard Society and persuaded him to serve. There was also the seminal report from the committee of my noble friend Lord Renton in 1975 and before that the Heap Report in 1970. So there has been a long run of these reports. The Hansard Society Commission report stated:
"The Heap Report was followed by other critical studies. In 1972 the Stow Hill Committee … recommended solutions to the problems outlined in the Heap Report. In 1973, following further comments by a Procedure Committee of the House of Commons, the Renton Committee was appointed by the Lord President of the Council 'to review the form in which Public Bills are drafted'; it reported in 1975, making 81 detailed and technical recommendations for change. The sorry fact is that despite these critical but constructive reports almost nothing has been done to improve the situation".
Some improvements had been made. The revenue departments had consulted more widely, as my noble and learned friend Lord Howe said. The draft clauses of significant parts of tax legislation had been published during the early 1980s, as described by my noble friend Lord Rees. But the major reform for which all of us have been waiting so long has at long last been given real impetus and prominence in the Inland Revenue's plans for tax simplification which were published last December. I am delighted to give a warm welcome to those proposals.
As is made clear in those reports, there is scope for simplifying the language of the law. The examples given in the report of the Institute of Fiscal Studies and in the appendices to the Inland Revenue report are striking. How could anyone not want to see this kind of change being made? There is also scope for improving and simplifying the policy content of tax legislation. I shall not repeat many of the comments that have been made except to note that recently in the United States the fashionable thing was Mr. Forbes and his flat tax, which was designed to do away with many of the complexities. It seems to have had a fairly limited life and has gone into the ground, though it may be resurrected for the Republican platform for this year's presidential election.
I am delighted that the Inland Revenue report makes it clear that both aspects are now to be addressed. One recognises that much of the complexity of the law arises from the pursuit of fairness, and the elimination of present complexities will almost certainly give rise to greater inequalities and inequities in the way taxes fall. A proper balance has to be struck and no doubt this will be extremely difficult to achieve. The Inland Revenue's plans and proposals deserve every encouragement. They are in tune with the plans for self-assessment. If one thinks just of self-assessment of capital gains and what we have heard of today, simplification on that front will be helpful for those people who are making gains of more than £6,000 a year, because under that figure a blanket opt-out or relief is available under existing provisions. I hope that real progress will be made on
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the re-writing programme set out in the Inland Revenue report—re-writing over about five years most of the primary legislation on Inland Revenue taxes in simpler and more user-friendly language which will be easier for everyone to understand. What a delightful and welcome prospect that is.
I want to say a few words about explanatory memoranda. The Institute of Fiscal Studies and the Hansard Society Commission argued for a much greater use of explanatory memoranda. The Inland Revenue report concludes rather more cautiously, but certainly not discouragingly, that progress could be made on that front. I agree that there would be implications for other areas of UK legislation. One has only to look at some of the complexities concerning local government finance or our social services to realise that explanatory memoranda would have a part to play.
I should like to see a much wider use of explanatory memoranda. I agree with the noble Lord, Lord Taverne, that it is more sensible for reference to be made at a later stage to explanatory memoranda than to what appears in Hansard. I remember only too well my first intervention as a new Minister at the Treasury on the Finance Bill in the very early hours of the morning on a subject about which I knew absolutely nothing but on which I had a marvellously thick book of briefing from the Inland Revenue. I appropriately read out the response to some detailed points that had been made by one of the Opposition spokesmen who stood up afterwards to say how well I had dealt with the point he had raised and welcomed my first intervention in Finance Bill Committees. However, I discovered from my private office afterwards that I had read out the wrong reply to the amendment. Clearly, it made not the slightest bit of difference but it underlines the point that with some of the very complex provisions of Finance Bills very few of those speaking on them really understand the detail. I therefore welcome very much what is being proposed.
I was disappointed by the Government's response to our debate on "the legislative process" which was initiated by the noble Lord, Lord Nathan, in December 1994. I am now greatly encouraged by the Inland Revenue's plan, The Path to Tax Simplification. I wish it well.
Finally, I endorse and commend two of the final points made by my noble and learned friend Lord Howe of Aberavon. He spoke of using the Special Standing Committee procedure on matters of tax legislation and also of the possible future role of this House perhaps in a joint committee of that kind. I think that such a combination, together with the efforts that are now to be made by the Inland Revenue with the support of the Government and the Chancellor, could lead to a considerable advance in the simplification of our tax legislation. It is something surely that in all parts of the House we would warmly welcome.
5.29 p.m.
Lord Shaw of Northstead: My Lords, I thank my noble and learned friend for initiating this debate today, a debate which is a valuable start to what must be a fairly long process. I was interested to hear my noble

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friend Lord Hayhoe admit that in his first appearance on a Finance Bill Committee he read the wrong brief at a very late hour. As I suspect that I was probably chairman of that committee I hope that I was not guilty of allowing him to talk out of order. Be that as it may, it shows the need for simplification so that even Ministers may have a chance to understand what they are saying.
The Path to Tax Simplification discloses the quite horrifying figures of increases in the total amount of tax law in the 18 years between 1952 and 1970. What was, in 1952, 1,076 pages, in the next 18 years became 3,119 pages: in the past seven years it has become 3,483 pages.
We must all welcome the initiative taken by the Chancellor of the Exchequer to try to simplify the tax legislation for the benefit of businesses and taxpayers generally. Reform is not going to be easy, as I believe nearly every speaker this afternoon has said. It certainly will not be quick. It is forecast that a complete rewrite will take around five years. I am not surprised, but this massive task is only worth undertaking if it is to be done thoroughly and with full consultation.
The Inland Revenue has, most welcomely, already made a start in its document The Path to Tax Simplification, which happily concludes—to fortify the thoughts of most of us this afternoon—that it is satisfied that a rewrite is technically feasible and that its benefits will substantially outweigh the cost—a note of optimism not usually shown by the Inland Revenue.
Today we are not, of course, discussing taxation policy, but rather the language and form in which taxation law is written and presented. As the Tax Law Review Committee tells us on page 5 of its report,
"Frequently, you cannot see even the broad outline of the picture without solving the puzzle. To this extent the legislation is written in an impenetrable style with no way in … But sometimes the puzzle is insoluble and the legislation is then incomprehensible".
The difficulties in understanding tax legislation arise partly in its wording and layout and partly also in the pattern of its intent, for every aspect of a subject is sought to be covered. It has not been good enough, and nor will it ever be in my view, to lay down the law simply as a general principle or intention. The detail has had to be spelt out. Consequently, as Bennion is quoted as arguing in the TLRC report,
"in the UK we prefer to be ruled by a democratic legislature which passes Acts after full, public debate and which weighs and argues over almost every word in almost every Act".
Frankly, too often, this is simply not true. I have served on a number of Finance Bill Committees both as a Back-Bencher and as chairman. Too often, the more complicated the clauses, the less difficulty the Government have had in getting them through. I say immediately that I make one notable exception. When I first became an MP in 1960, the noble and learned Lord, Lord Simon of Glaisdale—I hope that I may say "my noble and learned friend" because he was a constituent of mine for a number of years—played a leading part in the preparation of the 1960 Act. That Bill contained some very complicated clauses on anti-avoidance. I have looked them up. They were widely debated, but clarity was not an obvious result.
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I do not in any way blame my noble and learned friend for that. The Treasury had clearly looked at them and put the brief firmly on his knees so that he would have to deal with them.
Anti-avoidance is a matter which has not been looked at yet, as we have been told, but in fact it will be looked at as something entirely separate. I am sure that that is right. It is a field where specialists in the Inland Revenue battle with taxation specialists in the private sector. Sometimes a lack of clarity results in uncertainty, and that in itself may, it is hoped, deter attempts at avoidance. But sometimes, as has been said this afternoon, a lack of clarity is the result of a lack of clear instructions to the legal draftsman. All that raises the question as to whether notes and explanations attached to legislation should be encouraged.
The modern custom of providing Notes on Clauses has been very successful. It has been helpful not only to committee members, but also to the poor old committee chairman who, in another place, has to have a good understanding of what is the subject of debate to keep the debate in order. I believe that such notes, or other notes made in some other way, along with ministerial comments made during the passage of Bills, should be available to the courts should litigation arise at a future date. I say that because those notes and the explanations given by Ministers must have been a part of the reasoning by which Parliament passed the legislation in the first place.
The TLRC report suggests that there should be a project team drawn from various disciplines. Chapter 7 states,
"The main function of the rewrite would be to improve the clarity, comprehensibility and accessibility of the legislation".
I entirely agree with that, and I entirely agree that the resultant Bill would be a Finance Bill and therefore that it would not go before a Committee of your Lordships' House. Nonetheless, the report suggests that any such rewritten proposals should be referred to a specially created independent review body, which would report on the proposed legislation prior to its introduction into Parliament. Such a review body, it says, would be comprised of tax practitioners and hence represent a formalised consultation.
Whether the rewrite is done by a project team, as described by the TLRC, or by the Inland Revenue, I accept that outside consultations must take place and since the objective is not to raise money, but
"to improve the clarity, comprehensibility and accessibility of the legislation",
we should seriously consider ourselves being involved at some stage in the consultation process. It must be borne in mind that the results of this rewrite are bound to have a significant effect on legislation far wider than financial legislation. Indeed, why are we having this debate today if we have not a proper and valid interest in what is being proposed? I believe that our interest should be maintained throughout the period of the rewrite and our views made available to the review body.
5.37 p.m.
Baroness Seear: My Lords, as the noble and learned Lord, Lord Howe of Aberavon, mentioned in opening this debate, I am, very much to my surprise, a member of the Tax Law Review Committee. I sit on this committee in a state of considerable trepidation as I am surrounded by persons who are extremely experienced and expert in the field. They are judges, accountants of the highest calibre and legal advisers, and a very formidable body it is. However, it includes two or three chosen ignoramuses—I speak for myself; the others are not ignoramuses, of course—who have no such qualifications. I assume that we are there in order to look at what is being considered from a political point of view, because several of the members are MPs—and that is why I made the qualification that I did a moment ago. But we look at the issues even more from the point of view of what we would now have to call the person on the Clapham bus, because if there is any legislation which directly affects every citizen in the country it is tax legislation. It affects them in the most sensitive place, namely their pockets, and therefore it is important that the ordinary taxpayer's point of view should be considered when changes in the tax system are being discussed.
From the point of view of the taxpayer—even more importantly with the coming into force of self-assessment—the three matters that must govern all tax legislation and reviews of tax legislation are clarity, certainty and democratic control. Nobody can possibly disagree that the present legislation is almost impossible to understand. I am reinforced in that by the fact that the most eminent of the people who sit on this committee from time to time confess that they do not understand it and that it takes them an interminable time—which is wasted time—to find their way through the present legislation. There is no question but that it needs to be clarified.
One welcomes the decision to try to rewrite the tax legislation in plain English. Those of us who are concerned with trying to write plain English know that this is no easy task. To write about an extremely complicated matter in plain English and to make it accurate at the same time is very difficult. Five years is not too long for such an undertaking. As I listen to the discussions in the committee, it occurs to me from time to time that in the desire to achieve clarity, accuracy and therefore certainty may be sacrificed. Certainty is vitally important. Before people embark on any expenditure, or any activity, they want to know what the tax liability will be. They must be able to find out within the legislation how tax will impinge upon them.
While I very much welcome the determination to rewrite the legislation in plain English, I enter the caveat that there is a considerable risk that in so doing we may lose certainty, which is important from the point of view of every taxpayer in this country. There is a tendency in the discussions to believe that everything will be fine if one gets it more or less right. That description of the discussions is perhaps a little unkind, but I do not believe that that is good enough from the point of view of the taxpayer. It has to be exactly right. The overworked expression, "The devil is in the detail",
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applies pre-eminently to tax. One may well be caught out in a plan on which one embarks because of a detail of taxation that has not been entirely clear. Much as the rewriting of the legislation in plain English is to be welcomed, the need to get it absolutely accurate must not in any circumstances be sacrificed.
A suggestion has been made—which has been accepted only in modified form—that the legislation should be written in purposive terms and that the detail should be left to regulations. Here the parliamentarian in me is very much stirred. Noble Lords have often complained about the tendency in modern legislation to leave matters of importance to regulations. Your Lordships' House has been extremely vigorous in ensuring that that does not happen more than it absolutely must. But I suggest that in the field of taxation this practice may be particularly dangerous if regulations are not subject to detailed and rigorous scrutiny.
It has been suggested that a Special Standing Committee should be set up to go through the regulations and vet them and that they should come back to Parliament for final sanction. That democratic sanction is very important. We must be on our guard against making it simply a rubber stamp. It has already been suggested by the noble Lord, Lord Shaw, that that is too much the case at the present time. The reform will be very imperfect if that continues. After all, the basis of Parliament is that there is no taxation without representation. If our representatives do not have a real input into the scrutiny and an opportunity to object, however good the committee may be that has gone through it, we shall not achieve what we should achieve and the safeguards for the taxpayer will not be adequate.
5.45 p.m.
Viscount Chandos: My Lords, I should like to join in thanking the noble and learned Lord, Lord Howe of Aberavon, for initiating this important and interesting debate. His role extends to the presidency of the Tax Law Review Committee, whose interim report has been the kernel of this afternoon's debate. Both in his speech and in his foreword to the interim report, the noble and learned Lord has demonstrated his knowledge of the subject, commitment to reform and his customary frankness in admitting lack of progress in this direction in all the years that he was (in the words of his noble friend Lord Cockfield) one of the guilty parties.
The noble and learned Lord might have said that he had wrestled for too long with the obstacles to the production of a comprehensible, efficient and modern framework for tax legislation. But on this side of the House, we might derive two conclusions from the admissions of the noble and learned Lord. First, over the past 17 years the Conservative Government have not slayed all of the dragons—not even the right ones—and may have shied away from the dragons with the longest tails and most toxic breath.
Secondly, in a more bipartisan spirit, the task of reforming both the existing body of tax legislation and the future legislative process is a formidable one. The noble and learned Lord's speech and recommendations

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are a positive and valuable contribution to building the momentum that has been absent in the past, alongside the Inland Revenue's uncharacteristically positive document and the excellent interim report of the Institute of Fiscal Studies, whose work over the past 20-odd years is something of which the noble Lord, Lord Taverne, can be justifiably proud—awake or asleep! The increased recognition on the Government's part of the deficiencies in the status quo, and the cautious start now being made to address this, are also welcome; but inevitably the burden of taking this forward will in large part fall, along with so much else, on the next government.
The importance of action to improve the clarity and consistency of tax legislation cannot be over-estimated. This has been recognised by my honourable friend the Shadow Chief Secretary, notably in his speech in May of last year. The interim report points out in Section 1.29 that the estimated burden of the present inefficiencies and inadequacies amounts to £10 billion, of which as much as £7 billion falls directly on the taxpayer as compliance costs. That is even higher than the £4 billion suggested by the noble and learned Lord, Lord Howe.
In terms of fairness and equity—a subject stressed by the noble Lord, Lord Taverne—the complexity and opaqueness of the present position unduly penalises the less well-off. Sophisticated professional advice of the kind needed to navigate through these murky waters inevitably is affordable by and hence available to, only the wealthier individuals and larger companies. Above all, the overwhelming complexity which arises from faults in the underlying policies, overlaid with the effect of excessively detailed drafting to create intended clarity, comprehensiveness and certainty, produces a system in which action taken on both a macro and a micro-economic basis can become so distorted that the intended effect can be blunted or negated, while setting off a whole series of after-shocks and knock-ons in unexpected areas.
Although the main thrust of today's debate and of the interim review—and even more so, that of the Inland Revenue's report—is in the area of language, and the form of tax legislation, it is, as other noble Lords, particularly the noble and learned Lord, Lord Brightman, and the noble Lord, Lord Cockfield, have argued, unavoidable that the substance of tax policy has to be considered at the same time.
The analysis in the interim report of the implications of operating under common law rather than the civil law which prevails elsewhere in much of Europe is, speaking as a very unlearned Lord, illuminating; the consequences of building, higgledy-piggledy, uneven brick by odd-shaped flint, on a 19th century structure, as highlighted by the noble Lord, Lord Taverne, are only too clearly demonstrated; but we must ask at the same time whether the fundamental tax policies of the past 17 years—or even of the past 150 years—have sought to emphasise simplicity and efficiency whenever possible?
Of course the world has become more complex, none more so in the areas of foreign exchange and financial instruments, wherein some of the most fiendishly
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difficult and incomprehensible tax legislation has been introduced in recent years. The proposed rewriting of existing legislation will in time reveal how much of that legislative complexity was necessary.
But what is already clear is that, despite the Government's regular pronouncements on removing special tax allowances and the like (the noble and learned Lord, Lord Howe, laid claim to that while he was Chancellor) we have been presented with a continuing stream of special schemes—"ripping little wheezes"—with the consequential increase in legislative complexity on the one hand, and economic distortions on the other: Business Start Up Schemes changed to Business Enterprise Schemes, which changed to Enterprise Investment Schemes, with hundreds of clauses of legislation over 15 years. The legislative effect has been burdensome and the economic effect—well, my Lords, the Exchequer has financed fine wine, classic cars, residential property, but precious few productive businesses, certainly in comparison to the tax revenue forgone.
These Benches therefore wholeheartedly support the noble Lord, Lord Cockfield, in his advocacy of lower taxes and no tax shelters, with the important condition that the lower taxation is fairly applied, not concentrated upon those who currently benefit from the tax shelters which abound.
I return to the narrower but vital issue of tax legislation and the related parliamentary procedure and scrutiny. We on these Benches also give our strong support to the key recommendations of the Tax Law Review Committee, in terms of plain language, the use of explanatory memoranda, and a rewrite of existing legislation, starting with that relating to the taxation of income.
Even if the Minister's own understanding of tax and other complex issues is such that Hansard's record of his contributions will be a model of clarity and usefulness, I most strongly support the general advocacy by the noble Lord, Lord Taverne, of explanatory memoranda, in preference to the deliberations of the Minister's less clear-headed colleagues.
On these Benches, we look forward to the accelerating progress of tax simplification—form and substance alike—under the strong direction of the Minister and his colleagues—and of their successors.
5.54 p.m.
The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, we have had a most interesting debate. I stand to sum it up with trepidation. It seems to me that I come at the end of what could be described as a stream of penitent Chancellors, Chief Secretaries, Financial Secretaries and Ministers of State at the Treasury attempting to explain why they did not do what they thought they ought to do when they held office. It has been a kind of mea culpa all afternoon. I felt at one stage that I should perhaps rush to the Bishops' Bench and absolve them all from their responsibilities for that.
There is appropriateness in the day chosen by my noble and learned friend Lord Howe of Aberavon, because the other place is this day dealing with the

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Report stage of the Finance Bill. Sometime within the next few weeks your Lordships will have an opportunity, I suspect, to have a Second Reading debate on the Finance Bill when it wends its way to us. I do not believe that I should be saying anything too controversial if I doubt whether it will be a good example of clarity when I come to explain to your Lordships some of the parts of the Finance Bill.
Lord Simon of Glaisdale: My Lords, will the Minister then ensure that it does not come on a Friday before a bank holiday this year?
Lord Mackay of Ardbrecknish: My Lords, I think that I can give the noble and learned Lord the assurance that it will not come on a bank holiday.
My noble and learned friend Lord Howe has given us the opportunity to discuss three documents which are really two reports: one from the Tax Law Review Committee and the other from the Inland Revenue. The proposal contained in both those documents, and agreed to by every Member of your Lordships' House who has spoken, is to rewrite primary tax legislation to make it clearer and more user friendly, which is an important and interesting suggestion, as has been demonstrated by today's debate.
In recent years the complexity of tax legislation and the criticism of that complexity have been growing. In part, it concerns the complexity of the underlying rules. There are a number of reasons for that. The tax system has to cope with an ever more complex modern world, while continuing, as the noble Baroness, Lady Seear, pointed out, to give certainty and equitable treatment to taxpayers.
There has also been criticism of the way those complicated rules are expressed. Many argue that the style involves complicated syntax, words with special legal meanings, long sentences and archaic or ambiguous language. Much tax legislation is also very difficult because it has been drafted to cover every conceivable situation.
From his position as one-time chairman of Finance Bill Committees, my noble friend Lord Shaw suggested that the more complicated a clause, the easier it was for the Government to get it through and that that may not have been entirely a good thing when it came to the proper scrutiny of legislation.
Against that background, a key event was the setting up in late 1994 of the Tax Law Review Committee, whose role my noble and learned friend Lord Howe has described. A number of your Lordships, including the noble Baroness, Lady Seear, are involved in it.
In parallel, the then Financial Secretary to the Treasury asked the Inland Revenue to look at the options for the simplification of tax legislation. That exercise was given added impetus by Section 160 of the Finance Act 1995, which required that a report be laid before Parliament by the end of the year. In the event, the two reports were published within a few weeks of each other: the TLRC's on 23rd November and the Revenue's on 12th December.
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There were many similarities in the conclusions reached by the report both as to the reasons for tax law being so complex and on the practical scope for simplifying it. My noble and learned friend Lord Howe has described the TLRC's work. I need not repeat what he has said, but I should like to say a little more about the Revenue's report. The Revenue's findings were set out in The Path to Tax Simplification and an accompanying background paper. The report was based upon extensive study and consultation.
The main conclusion is that all the primary tax legislation covering Inland Revenue taxes (almost 6,000 pages) should be rewritten to make it clearer and more user friendly. That proposal was announced by my right honourable friend the Chancellor of the Exchequer in his Budget Statement last November in another place. That announcement has been widely welcomed on all sides.
As my noble friend Lord Shaw said, this is a major project. It is also an all-or-nothing venture. It would create a nonsense to rewrite only a fraction of this legislation, leaving the rest of it untouched. To rewrite 6,000 pages of legislation will take about five years and involve some 40 highly skilled and professional staff. This is a measure of the priority which is being given to this project and of the Revenue's commitment and determination to do it and do it well. The noble Lord, Lord Taverne, welcomed that determination. My noble friend Lord Hayhoe described it as a delightful and welcome prospect. In so far as taxation is ever a delightful and welcome prospect, I am grateful to him for his remarks.
Perhaps I may say something about what the rewrite would involve. There is no single technique which, if applied across the board, would solve problems arising from the way tax law is currently structured and expressed. The Revenue is therefore examining a package of techniques which, used together, will produce simpler legislation.
The noble Baroness, Lady Seear, said that certainty was important. I am not entirely sure that the complicated way in which we have dealt with the matter over the years has brought certainty. Dare I suggest that, if it had done so, Finance Bills would not have had to revisit tax legislation in previous Finance Bills in order to make the position clearer, to close loopholes and to catch those not caught who were originally intended to be caught—
Baroness Seear: My Lords, when I asked for certainty in the rewrite I was not implying that there was already certainty; on the contrary.
Lord Mackay of Ardbrecknish: My Lords, I am glad to hear that. I had thought that the noble Baroness was doing so, but I am pleased to hear that she is with me and other speakers in this respect.
The first of these techniques we wish to look at is plain language; using simpler and clearer words and sentences to make tax legislation more accessible. The noble Lord, Lord Ashburton, put it well in saying that people should feel that they own the tax system and that

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they might accept it better if they understood it better. My noble friend Lord Rees indicated the need for clarity and certainty to help taxpayers to understand.
The Revenue is also looking at the overall structure of the tax code. A better structure and order, possibly accompanied by a new numbering system, could help to make the tax code easier to understand. Various signposting techniques might also be helpful such as explicit cross-referencing, clearer headings and so on. More radical suggestions, such as using flow charts, graphics and notes to the legislation, are also being assessed.
Changes could be made in the ways in which definitions are used so as to make it easier for users of tax legislation to identify them. My noble and learned friend Lord Howe drew to our attention the five-page submission he received when he suggested that the words to be defined might appear in italics. We believe that the defined terms could be printed in a different typeface. I notice that in the examples given in the report italics are used for all the words which are subsequently defined.
It will he necessary to examine carefully the legal effect of all of those techniques in order to ensure that they do not inadvertently cause uncertainty and inaccuracy. The look and style of legislation also affects the ease with which it can be used and is a matter for Parliament, not for the Revenue. However, I welcome the fact that thought is being put into that area, as do all noble Lords who have taken part in the debate. All those techniques may have a role to play in making tax legislation simpler and more user-friendly and the Revenue proposes that they should operate as a package. The Revenue is of course aware of the importance of a coherent structure to all this in order to ensure that old style and new style legislation do not co-exist in the same provisions.
The rewritten law would not of course be new law. Apart from some minor changes to simplify the tax regime, it would be the same law expressed in a clearer and more user-friendly way. Major policy reforms have always been a Budget matter and will remain so. The rewrite will not hinder reforms; indeed, by making existing law easier it will assist the policy reform process. The subject of the debate and the two reports is the reform of the way in which legislation is set out and reforming existing law. It is not about reforming certain aspects of policy underlying the tax law.
The noble and learned Lord, Lord Brightman, and the noble Lord, Lord Ashburton, drew attention to the difficulty that one has in understanding the capital gains tax legislation. The noble and learned Lord, Lord Brightman, read out explanations and the tax legislation and he made his point well because he lost me quite quickly. At the risk of bringing the noble and learned Lord, Lord Simon of Glaisdale, to his feet, perhaps I may say that I should have preferred the algebra which was attacked in a previous piece of legislation that I took through the House. Algebra might have been a good deal easier than the explanation which the noble and learned Lord read out.
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The noble Lord, Lord Ashburton, referred to the distortions which can be caused to those who have to make investment decisions by application of the capital gains tax laws. Those matters are not the subject of this debate and this particular issue, although if the law were written more clearly they would be easier to understand and to deal with or would be more clearly seen as requiring reform and change. Therefore, one must separate reforming the principles, the policy behind the tax law, and reforming the way in which legislation is expressed.
The noble and learned Lord, Lord Simon, and my noble friends Lord Hayhoe and Lord Cockfield spoke of the Government being secretive as they devise the Finance Bill. The Revenue's report deals with that point. The amount of consultation on the Finance Bill has increased significantly, as my noble friend Lord Hayhoe pointed out. The Revenue's report proposes that that should be built on by making even more legislation available in draft and by developing a code of practice on consultation to ensure that everyone involved is aware of best practice. That would be a major step forward as regards new legislation but not as regards the rewrite of existing legislation.
Many noble Lords, in particular the noble Viscount, Lord Chandos, mentioned explanatory memoranda and their usefulness in considering the purpose of the legislation. The Government are already publishing notes on clauses in order to give brief explanations of individual Finance Bill clauses and schedules. The Revenue's report proposes that they should be expanded to give more information on the Government's intentions and the impact of the measures.
The noble Lord, Lord Taverne, suggested that perhaps referring to reports in Hansard of what a Minister said is not the most reliable way of backing up what the Government mean. I understand the point because a few years ago I was horrified to discover that, as a result of the Pepper v. Hart decision, remarks made in 1985 during the Committee stage of a Bill were to be prayed in aid in court in defining what the Government meant. As that was a serious matter involving salmon poaching I was concerned that my definitions would hold water, or not hold fish, as the case may be. I am happy to say that my definitions stood up in court, but I was given pause for thought in realising that what I said perhaps off the cuff in Committee would be prayed in aid in a court some years later. I agree with the noble Lord, Lord Taverne, that it is preferable that explanatory memoranda are used in court cases rather than the words of the Minister at the Dispatch Box perhaps attempting to answer on the hoof clever and not so clever questions posed by the Opposition. Therefore, there is something to be said for explanatory memoranda and I do not believe that there is a great deal of difference between the reports of the Inland Revenue and the TLRC in that regard.
Another point was raised which overlapped policy and the reports' request for simplification of the legislation rather than the policy itself. It was made in particular by the noble and learned Lord, Lord Simon of Glaisdale, and my noble friend Lord Cockfield. It was the issue of tax avoidance. I believe that the noble and

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learned Lord stated that one-sixth of legislation deals with avoidance and that it can be most complicated. I understood him to suggest that we should not have so much legislation and that it should be left to the courts to judge against the simple principle that any transaction whose dominant purpose is for tax evasion is illegal if it is used for that purpose. I hope that I have understood him correctly. I shall certainly draw that to the attention of my right honourable and honourable friends at the Treasury who have responsibility for those matters. It may be on the same basis that the noble Viscount, Lord Chandos—
Lord Simon of Glaisdale: My Lords, since the noble Lord quoted me, perhaps I may just put that right. I said that it was void for that purpose but valid for all others. It would not be illegal.
Lord Mackay of Ardbrecknish: My Lords, I should not draw my words to the attention of my friends in the Treasury but rather the Hansard quote, which will be exact. I am sure that the noble and learned Lord is right that that is what he said. I managed to note down just a small part of it.
The noble Viscount, Lord Chandos, took up the point made by my noble friend Lord Cockfield about "ripping wheezes". I was rather worried that the noble Viscount thought that the phrase referred only to some of the business undertaken by my noble and learned friend Lord Howe. The originator of the phrase was the late Lord Lever who suggested to the 1974–79 Labour Government a number of "ripping wheezes" to get round some of the serious financial problems that they had. I read about that with pleasure during the Christmas Recess in an autobiography coming from a member of the government of that time. But I believe that we all agree that we should not base our tax legislation on how many "ripping wheezes" we can find. We should base it much more soundly than that. I am sure that the noble Viscount and I agree about that entirely.
Before I leave the policy principles, perhaps I may refer to an issue raised a number of times by my noble friend Lord Boyd-Carpenter. He seems to object to parts of the Civil Service being dispersed around this country. He seems to feel that all Inland Revenue matters should be dealt with by people in London and the south-east of England in their friendly neighbourhood offices, so to speak.
Slightly later in his speech he also encouraged me to look for economy in public administration. Partly for the sake of economy in public administration and partly based on the principle of attempting to bring jobs to the most seriously disadvantaged parts of the country, for many years now governments of both political complexions have attempted to disperse jobs around the country. Many of the Inland Revenue jobs which have been dispersed are very valuable in the local economies where they are based; for example, in Glasgow. Jobs in my department, the Department of Social Security, have been resited in, for example, the Blackpool area in order to provide important employment opportunities there. The Contributions Agency is based in Newcastle.
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I do not subscribe to the view that everything should be based in London and the south-east of England because the majority of people live there. Both for the integrity of the Union and for economy in public administration, to quote my noble friend, it is foolish to base everything in the most expensive part of the country; for example, as regards rent, property and labour costs. Therefore, I am afraid that my noble friend will not be surprised to hear once again that I disagree with him profoundly about the point that he made in relation to the relocation of Inland Revenue offices.
Lord Boyd-Carpenter: My Lords, I am much obliged to the Minister for his reply. Of course, he has no doubt deliberately over-stated what I said. I did not say that all the tax collection machinery should be in the south of England. But I did suggest that to remove the Inland Revenue and so on from an area where a large proportion of the population lives was making the tax system much more oppressive because people could not make quick personal contact with those who interpret the law and interpret what are their liabilities.
It is a fact, which my noble friend has now admitted, that the Government have deliberately moved the Inland Revenue, thereby adding to the costs of administration and to the difficulties of taxpayers in a large section of the country.
Lord Mackay of Ardbrecknish: My Lords, I do not believe that it has in any way added to the difficulties. It has made good sense for the Union and for economy of administration. I do not believe that many people need or want to visit their local tax office. They either want to communicate with it as little as possible or communicate by telephone or letter. I do not believe that it is nearly the problem that both today and in the past my noble friend has made it out to be.
I turn to the point of the two reports; namely, the simplification of tax legislation. The Revenue will not carry out that work alone or in isolation. The widest possible consultation is essential in order to ensure that genuine user-friendly legislation is produced by the rewrite. The Revenue consulted widely with the professions and business when preparing its report and is committed to maintaining that approach. There will also be close consultation and involvement of parliamentary counsel.
It is clear that there will be a formal consultation procedure for the long-term project. The Revenue will discuss the options informally with the representative bodies in the next few months. The Revenue also intends for the final rewrite team to include recruits from the private sector to provide a different and useful viewpoint on that work.
The next major stage in the rewrite project will be the publication of a consultative document later this year. That will give more details on the proposals and seek views of interested parties on the way forward. It will cover such areas as the case for restructuring for the Taxes Acts, drafting styles, priorities for rewriting and consultation arrangements.
The Government have already begun work to consider the various procedural options available. One option which it is clear even at this stage is not available

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is the consolidation procedure. The noble Lord, Lord Taverne, drew our attention to paragraph 3.6 in the Inland Revenue's summary. This is because the wording of the legislation will be changed and some minor policy changes will be involved.
In his introductory speech my noble and learned friend Lord Howe suggested a Special Standing Committee of both Houses. We shall have to give attention to how Parliament as a whole deals with the changed legislation as it is brought forward. I am grateful to your Lordships for the suggestions which have been made on how Parliament should be involved. I am grateful also for the suggestion that this House should be involved in consideration of those matters. Because of constitutional arrangements, we are not involved in the consideration of finance matters, but your Lordships have made a good point that we could have a useful role to play in looking at the changes which that rewrite will bring forward.
It will be helpful to have a better idea of how the rewrite is developing and what the rewritten legislation will look like before making a final decision on the most sensible procedures to use in Parliament. There should be very important benefits for business and taxpayers from the project. The overall reaction of the representative bodies, and your Lordships this afternoon, is that quite clearly they see that the benefits should substantially outweigh the costs. The benefit to all users will come from tax law which is easier to understand and can be grasped more quickly. There should also be benefits to taxpayers who use professional advice or guidance material from the improvements in advice from practitioners and the Revenue. The benefits will be of particular importance under the system of self-assessment which starts in April 1997. This system will place more responsibility for getting their tax affairs right on the 9 million or so people it will cover.
The project will contribute to the Government's deregulation initiative aimed at reducing the costs to business of complying with legislation. It will also contribute to the Inland Revenue's continuing efforts to improve customer service.
In conclusion, there is clearly a lot of work being done, and needing to be done, and it will take time to get it right. The first tranche of rewritten legislation should be ready around the end of 1997. It is a major task, but this project is clearly a worthwhile one which deserves the widespread support it has attracted, and I am pleased to see that that widespread support was echoed from all parts of your Lordships' House this afternoon.
6.19 p.m.
Lord Howe of Aberavon: My Lords, in closing the debate, I thank all noble Lords who have joined in the proceedings and in particular those who have extended their thanks to me for initiating the debate. I particularly appreciated the generosity of the language used by two of the most—if I may borrow the adjective—Jurassic ex-Treasury Ministers who joined in the debate; namely, my noble friend Lord Boyd-Carpenter and the noble and
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learned Lord, Lord Simon of Glaisdale. They were very generous in their remarks about me and I appreciated the wisdom that they brought to our proceedings.
As always, I enjoyed the contribution made by my noble friend Lord Cockfield. He did not disappoint me because, as usual in our many discussions, he was able to refer to his experience in dealing with the management of taxes dating back to World War I, World War II and the Korean War. My noble friend has never been lacking in depth of experience of that kind. In fact, my noble friend was in an unusually Elysian mode for him. He talked almost hopefully about the prospect of our being able to achieve such a simple, allowance-free low tax system. I entirely agree with my noble friend about its desirability. I also very much value the help that he gave me in trying to move in that direction in the simplifications that we did make; for example, in abolishing the reduced rate ban, which was reversed some time later.
However, we struggled in vain to challenge the principle of mortgage interest relief, which is an allowance of huge size with huge complications, because it is relatively popular. I was also struck by my noble friend's visionary insight into the world in which we might actually tolerate a general anti-avoidance provision of the kind visualised by the noble and learned Lord, Lord Simon of Glaisdale. Indeed, it would be marvellous if public opinion reached the point where such a provision became tolerable. But I hesitate to believe that it will be with us very quickly.
I recollect the occasion when the then chairman of the Board of Inland Revenue was giving evidence to the committee in the other place which deals with Treasury and Civil Service matters. He was asked the rather telling question, "Tell me Sir Lawrence"—for that was his name—"do you pay your window cleaner in cash?". He was compelled to answer that in the way in which I suspect all of us would be obliged to do. Nevertheless, that is the right objective to set ourselves.
Two of the non-Treasury Ministers—the minority taking part in the debate—were in fact my noble friend Lord Ashburton and the noble and learned Lord, Lord Brightman, who both focused on capital gains tax. It is now far too long a time since I last wrestled with the subject for me to begin contending with them on the detail. My noble friend Lord Ashburton is only relatively innocent when compared with former Treasury Ministers, but, as a former chairman of a merchant bank, a former chairman of an insurance company and a former chairman of our large oil company, he is quite a sophisticated fellow. He drew from CGT two points: first, that our noble friend Lord Lawson had got it wrong by simplification; and, secondly, he put forward proposals to improve the situation—the graduation of CGT—which would have added greatly to its complexity. It was a remarkable but nevertheless stimulating and interesting contribution.
The point that I would prefer to take from the noble and learned Lord, Lord Brightman, relates to his experience in chairing the Jellicoe Committees which

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have been functioning in this House over the past two or three years. He has played a pioneering role in that respect. I believe that those committees represent the shadow of what we would need to construct, embracing Members of both Houses. I was very glad that my noble friend Lord Shaw was one of several speakers who emphasised the desirability of engaging Members of your Lordships' House in that joint task for the future.
I was delighted that the noble Lord, Lord Taverne, and my noble friend Lord Hayhoe also endorsed—as, indeed, did the noble Baroness, Lady Seear—the idea of a special Standing Committee as being the right vehicle for tackling the matter. I very much hope that that central point will be taken on board. I believe that it was endorsed by the noble Viscount, Lord Chandos, in a speech, if I may say so without undue condescension, of high quality from the Front Bench of the party opposite in summing up such a debate.
However, I am glad to say that it did not match the quality that we have long since come to expect from my noble friend the Minister who wound up the debate. I was struck by my noble friend's modesty and I share his instinct in preferring reference to be made to explanatory memoranda rather than to speeches made by Ministers. I particularly welcome, as I am sure the whole House did, the firmness of his commitment on behalf of the Government to proceed with the matter with the seriousness and the urgency that it deserves.
I am delighted with the welcome given to the proposition. I beg leave, not before time, to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Tax, Benefits and the Family
6.25 p.m.
Lord Skidelsky Lord Skidelsky rose to call attention to the effectiveness of the current tax and benefit system in supporting the family structure; and to move for Papers.
The noble Lord said: My Lords, I believe that the debate which I have the honour to open comes at a turning point in the fortunes of the family. For two decades opinion makers have been proclaiming the family to be economically obsolete and politically incorrect. But suddenly politicians on all sides have at least started to pay lip service to the value of the family. I believe that the time has now come to translate those words into action.
People do not all agree about what the family is. There are many kinds of families and we are told that we must not be judgmental about different lifestyles. I make no apology for saying that the family structure most in need of support today is the traditional, mainly one-earner family. That is not because other forms of family life do not deserve respect, but because it is the traditional family which is and has been under the greatest threat and whose disappearance, or even further weakening, would inflict the greatest losses on society. Putting it simply,
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well-functioning labour markets and strong families are the best guarantee of a free society and a limited government, as the East Asian economies show us.
If family networks are weakened, expenditure on social security will become uncontrollable and the increased taxes needed to pay for it will undermine families still further. We would then not have a welfare state of the familiar kind but a state on which a large fraction of the population would depend from cradle to grave. Such a state would be far more repressive than the most oppressive of traditional families.
I also believe that supporters of the traditional family have public opinion on their side. Attitude surveys show that most young people want and expect to get married and to have children. Indeed, 64 per cent. of women believe that being a housewife is just as fulfilling as working for pay. Over 60 per cent. of men and women believe that the mother should stay at home when there is a child under school age.
Despite that support, evidence of family breakdown is striking and alarming. Fewer people are getting married and more are getting divorced; fewer children are being born to married couples, more to unmarried mothers. More and more children are being brought up in lone-parent households. The trend in all those areas has become dramatic in the past 25 years.
I shall not bombard your Lordships with figures, but one set of statistics is particularly striking. In Henry VIII's time, church registers recorded that 4.4 per cent. of births were to single mothers. When our present Queen Elizabeth came to the throne in 1953 the percentage was almost identical—namely, 4.8 per cent. In the intervening 400 years the percentage had moved within a very narrow range. Even in 1976, only 9 per cent. of children were born out of wedlock. By 1993 one birth in every three—over 30 per cent.—was outside marriage. In absolute numbers, 217,000 of the 674,000 births registered that year were out of wedlock, the vast majority to never-married mothers—children for whom the father, as Charles Murray put it,
"will be a fleeting presence in their lives or missing altogether".
With a 13 per cent. increase a year in births to unmarried mothers, the majority of our children will be born out of wedlock in 20 years' time. A feminist Utopia or a social nightmare?
I suggest it will be the latter, for three reasons. First, lone-parent households are poorer than most two-parent households. Seventy per cent. of lone parents obtain all or most of their income from public assistance, whereas only 12.5 per cent. of families headed by a couple are on income support. Lone parenthood has become the chief cause of poverty.
Secondly, illegitimate children and children from broken homes get a much poorer start in life than children of married couples except at the highest income levels. They have higher mortality and sickness rates, are more likely to be abused, do less well in schools and are more likely to turn to crime. One-half to two-thirds of prison inmates come from broken homes or never-married parents. Illegitimacy is the best predictor of childhood and adult failure, the single most important cause of a self-perpetuating and expanding underclass.
A high proportion of these children become wards of the state, supported by public funds from cradle to grave, in and out of custody. Again, research confirms what common sense has long known: children flourish best in loving, stable and committed families; a father, especially, is an indispensable role model for young males.
Finally, there is the budgetary cost of all this. The cost to the social security budget of lone parents comes to £9.4 billion a year, an increase of 200 per cent. in real terms since 1978–79, and equivalent to £1,500 in tax for every working family. That does not include the indirect costs of lifelong care and surveillance, the wasted human capital, the physical and moral degradation which show up in the law and order budget, the health budget, the education budget and so on.
In considering how to try to retrieve this situation, it is important to ask what has caused it. Some causes of family breakdown reflect general changes in society. Of these, the foremost is the increased earning opportunities for women, which both raise the opportunity cost to them of having children and reduce the gains from co-operation. The less specialised the roles of men and women become the less sense does the family make as an economic institution, a partnership to rear children. Two-earner families have fewer children and are more likely to divorce than one-earner families. This trend, of course, is likely to continue, and it would be foolish to deny the gains it has brought to many women.
Another cause of this breakdown which is, perhaps, more special to the last 20 years, goes under the gradiose title of "depletion of the marriageable male pool". This chiefly affects the family structure at the lower end of the income scale. The basic idea here is that males become superfluous except as casual lovers unless they can provide women with the resources they require for rearing children. However, the employability as well as earning power of brawn has been steadily declining relative to brain. Since the 1960s Britain has lost 3 million relatively well paid full-time jobs for semi-skilled and unskilled male factory workers, with a corresponding decline in the labour force participation rate of men. There has also been a large increase in the inequality of male earnings, leaving many unskilled men with wages below the level of income support. Women are faced with a reduced pool of useful husbands; not surprisingly, an increasing number of them choose to marry the state.
Getting young unskilled males back into work must be a priority for any government seriously concerned to protect the family, not least because it will relieve the pressure on women to take wretchedly paid part-time jobs as an alternative to child rearing. I am not at all sure how this can be done. It is a very difficult problem because, in many cases, we are dealing not just with economic casualties, but with social casualties—young people who lack not only skills but also motivation. We need to consider very seriously the use of the state as an employer of last resort. Might it not be reasonable to incur the short-term economic costs of creating or
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subsidising jobs which, strictly speaking, do not pay in order to prevent the much greater costs of complete family breakdown at the lower end of the income scale?
Faced with these general trends to family breakdown, the least we can ask of government is that they do not give them a helping hand. However, in two respects, I suggest, government have done just that.
The first is by what Patricia Morgan has aptly called the "legal disestablishment of marriage". As a result of changes in the divorce laws, marriage has been transformed from a binding contract into one which can be terminated at will, a fact which is reflected in the explosion in the divorce rate. Do we really believe that what both the Prime Minister and the Leader of the Opposition have called "the bedrock of society" is not entitled to legal protection against the pressures of modern life and against the selfishness of human behaviour?
I shall not say anything tonight about the Family Law Bill, except to regret that it was felt necessary to have a Bill at all at this moment. It would have been much better to wait for five or 10 years to allow the growing pro-family sentiment to crystallise.
Secondly—and here I come to the heart and conclusion of my speech—the tax and benefit system operated by governments since the 1970s has progressively reduced the fiscal advantages of having children in traditional families, while enhancing the attraction of single parenthood to women with poor earning opportunities. It gives two-earner families a higher net income than one-earner families, even when both types of families earn the same before tax. It gives a married couple with two children less take-home pay than a lone parent with two children earning the same before tax. It makes a lone parent with two small children who works part time better off than a family in which the father works full time but at a low wage.
A lone mother who works 20 hours a week at £5 an hour ends up with a net income, when family credit is added, of £188 a week; a married father of two small children who works 30 hours a week at the same wage takes home £142. If you raise the gains from lone parenting relative to the gains of marriage, it is hardly surprising that you get an increase in the number of lone parents and a decrease in the number of marriages.
The details of all this are fiendishly complicated, but the outline is clear enough. Although tax rates have gone down since 1979, taxes have started to bite much lower down the income scale for families with children, largely because of the withering away of dependants' allowances, coupled with increases in national insurance and local taxes, while the Government at the same time have been improving the means-tested benefits package available to lone mothers. The net result of these changes has been to leave low-waged traditional families too rich to gain from means-tested benefits, but too poor to gain from general tax cuts; it has left most lone mothers too poor to escape poverty, but too rich to marry low-waged men. Support for lone parent families increases their number, while the supply of intact families falls as resources are transferred away from them.
The only remedy favoured by all political parties is to force more and more lone mothers into the labour market, where they drive down the wages, or increase the unemployment, of low-skilled men, thus making them even less eligible as marriage partners. This in turn increases the pressure to provide subsidised child care. As Martin Woolf has written:
"The state would then provide the child-care, which is what women offered in traditional families, while the working mother would play the traditional male role".
Is this what we want?
How can we break this chain of perverse effects? As a first step governments should ensure that all changes in taxes and benefits should be explicitly considered from the point of view of their impact on families and should be accompanied by a family impact statement. Within this framework we should begin to shift tax and social security benefits towards the family, and particularly towards the father within the family.
I return to my starting point. We stand at a fork in the road. We can either do nothing and watch the social life of large parts of our society replicate that of the black ghettos of the United States, or we can start to translate words in favour of families into deeds in favour of families. If we have the courage to do the second, I believe public opinion will be overwhelmingly on our side. I also believe we shall be occupying the moral high ground. After years of welcoming every symptom of family breakdown as a sign of progress, we return to the basic realisation enshrined in Article 16 of the Universal Declaration of Human Rights that,
"Everyone has the right to marry and found a family. The family is the natural and fundamental unit of society and is entitled to protection by society and by the state".
I beg to move for Papers.
6.41 p.m.
Lord Haskel: My Lords, on this occasion I am doubly grateful to the noble Lord, Lord Skidelsky, first, for introducing this important debate about tax and the family and, secondly, for giving me the opportunity of reminding your Lordships that since April 1993 there have been 22 tax changes affecting a typical family, all but one of which have been tax increases. These have resulted in a total increase in the family's tax bill of £668.25 a year, and that from a Government that promised no tax increases, and claim to be committed to helping the family.
I should like to consider how these tax rises have affected the family. In doing so, I do not wish in any way to criticise single parents. Single parents are equally valuable as members of society as married parents, but the Motion on the Order Paper refers to "the family" and therefore I shall stick to using that term.
In April 1993 there was the first of five alterations to the married couple's allowance. It has not been uprated in line with inflation in any of the three Budgets since then, and has been restricted first to 20 per cent., and then to 15 per cent. That means that since April 1993 our average family has been £202.50 worse off per year.
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The interesting thing about the married couple's allowance is that since the previous Budget the allowance has in fact become a tax credit. Noble Lords will have seen it as a new item on their tax codes; namely, "allowance restriction". During the time that the married couple's allowance has been frozen and then restricted, by contrast the single person's allowance has been marginally increased. Perhaps this is what drew Patricia Morgan, who published a paper in January last year about the family and tax, to say,
"The state is making it abundantly clear that it is not prepared to support a man's efforts to provide for a family and does not recognise his costs when his wife cares for his children".
According to Monday's Daily Express, next Saturday the Prime Minister is to introduce a scheme described as,
"a plan to bolster the family. It will offer tax incentives to encourage mothers to stay at home and look after the children instead of going out to work…In his Budget Speech in March 1990 when Chancellor, Mr Major said … 'we have always made it clear that it is not for the Government to encourage or discourage women with children to go out to work'".
Is this going to be another U-turn?
I shall quickly pass over the tax increases on vehicle excise duty and fuel duties, which of course affect our average family. I come to the reduction in mortgage interest relief in April 1994 to 20 per cent., with a further reduction to 15 per cent. a year later. That adds £240 to our typical family's tax bill.
I do not need to explain to your Lordships that the most important element in supporting the family structure is a home in which to live. This is another U-turn in government policy, from using the tax system to encourage home ownership to discouraging it by reducing mortgage interest relief. It has resulted in making home buying more expensive and has helped the slump in the housing market. Apart from contributing to insecurity, this has also resulted in a powerful disincentive to move. That has always seemed to me a curious policy for a Government which are constantly telling us how important it is to have a flexible labour market. Surely an important element of a flexible labour market would be to enable families to move easily in order to find work, or to move with their employers. Yet the tax system now puts difficulties in their way.
The next tax change to hit the family structure was in April 1994 with VAT on domestic fuel. That added £65.99 to the costs of our typical family. In the past the Government argued that VAT was made less regressive because the essentials of family life were zero-rated. That is why food, children's clothing, public transport, books and education, and domestic fuel were all zero-rated. The Prime Minister himself promised on several occasions that that would remain so. Indeed, when the European Commission asked for VAT to be charged on some fringe items of food, to their credit the Government objected vigorously. Then, in complete contrast, they imposed VAT on domestic fuel. I remind your Lordships that without Labour's opposition the tax would have been levied at 17.5 per cent. instead of 8 per cent. This is not only contrary to the Government's promises but is directly aimed at the family. It is indiscriminate and hits the poorest families hardest.

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The next tax rise to hit our typical family arrived in October 1994 when the Government introduced a tax on insuring the contents and structure of our homes. That added £5.14 to the tax paid by our typical family. That is hardly a factor which contributes to the support of families.
Car insurance tax then went up, and the following month so did fuel duties. Then we had the airport tax. All these taxes have affected family mobility.
Then last October we had a new tax on mortgage protection insurance policies. It is either a demonstration of extreme cynicism or of the fact that the Treasury or the Inland Revenue just do not talk to the Social Security Department that the Minister's department can remove mortgage protection from the benefits system and exhort people to protect their mortgages themselves by taking out an insurance policy, and at the same time cheerfully see a tax imposed on that insurance policy.
In November 1995 we had fuel duties increased by 2.3p above inflation, which added another £35 to our typical family. But as the election approaches there is a tax reduction on the horizon. From next month we should have a 1p basic rate cut in tax which would benefit our typical family by £179.95. However, I should add that prescription charges and school meals have gone up. Council tax is also going up, and all these will affect our average family.
What has been the effect of all this on children? In recent years the benefits system has certainly tried to target children but, as the noble Lord, Lord Skidelsky, told us, little has been clone by the tax system to take into account the costs of bringing up children. As Patricia Morgan said, the tax system now penalises married couples with children. Is that why more children than ever are now living in poverty? According to the Child Poverty Action Group, one in three children were living in poverty in 1992–93, compared with one in 10 in 1979. It is couples with children who account for the largest group in poverty and not, as the noble Lord, Lord Skidelsky, said, single parents, with 37 per cent. of those in poverty falling into that group in 1992–93. To help them escape from this poverty, families need child care. At present the only tax incentive for child care is tax relief when an employer provides workplace nurseries. This tax relief was announced by John Major when he was Chancellor in March 1990 and he said that he had introduced it to,
"help the labour market to work better".
If this tax allowance is designed to help the labour market to work better, why is it only limited to nurseries or play schemes at the workplace? Employees may find it hard to transport their children to a nursery at their own workplace, especially if the parent commutes into a city centre. Also, very few employers are in a position to provide that benefit. Small businesses certainly would find it difficult to set up nurseries.
This litany of increasing tax burdens on the family clearly demonstrates that the Government's words supporting the family have not been carried out. I welcome the call by the noble Lord, Lord Skidelsky, to put those words into action; otherwise, in practice we shall have a clear case of saying one thing and doing another.
6.51 p.m.
The Lord Bishop of St. Edmundsbury and Ipswich: My Lords, I too am grateful to the noble Lord, Lord Skidelsky, for providing the opportunity for this debate. The family and family life are the bedrock of society. Anything that undermines the family undermines society itself. I am sure that every Member of the House would agree with that.
The General Synod Board for Social Responsibility produced a report recently called Something to Celebrate. The media attention focused on some perhaps rather unwise comments in it on cohabitation, which led to the rest of the report being totally overlooked. However, in answer to the question: "What do families need in social and economic terms in order to thrive and fulfil their caring roles?", one requirement which the report highlighted related to the essential material needs of families: a secure and reliable income, secure housing, access to education and health care, and special help which may be needed at extraordinary times such as chronic illness or family conflict.
I do not believe that total security and upholding and support of family life in this country can simply depend upon legislation. They depend on a great many other factors which include the Church, the culture in which we live, public perceptions and many other matters. I recognise that legislation—the law—has a substantial part to play.
We need to see whether we can define what we are talking about. The noble Lord, Lord Skidelsky, referred to the traditional family. I wish to articulate that a little further. The traditional family is the tradition of the Judaeo-Christian history, which is our past. I am sure that noble Lords will expect me to say this. The traditional family is that which consists of a man and a woman, husband and wife, who are committed to each other for life in love and who, as part of their loving of each other, are committed also to bringing up children within their family.
The roles played by both the father and the mother are vital. I believe that their roles, even in the traditional family, are changing and I have no quarrel with the change. Greater father involvement in upbringing and greater mother involvement in wage earning seem to me to be the way that life is now, until the children are brought up, leave home and found families of their own, within the context of an extended family which consists of aunts, uncles, grandparents and so forth. When it works, that is the best model that we can conceivably have. Though there are times when it certainly does not, when it does work it is the most secure bedrock that society can require.
I say that that is in the Judaeo-Christian tradition, because it is. I believe it is also God-given and is the best response to the deepest needs of our human nature. The fact that it exists very much within those terms in other major faith traditions than our own is an indication that that is true.
But—and there is a but—the noble Lord, Lord Skidelsky, focused on the family structure and at the beginning he referred to other alternatives and other models. I do not believe that we can simply ignore the

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other alternatives and models, whatever we might think about them in terms of moral judgments. We live in a mixed society today. All family structures where parents or parent and children live together are families. Some of the family structures are consequential on the breakdown of the traditional model in their own circumstances; some are experimental. Cohabitation has become a much greater factor in our social life, sometimes cohabitation with total commitment of the couple to each other. I suppose one could say that it is common law marriage. Some family structures are experimental, some are serial. I do not wish to uphold those as a model in any sense. Some are the result of breakdown or death.
The Church of England Children's Society sought in a paper last year to define what there might be in common to all examples, to see whether, as a society, we could go forward. The society came up with five points which I will list: disruption and insecurity are always unhelpful; inadequate living standards are damaging to families; extended family links should be fostered and encouraged; men's parental responsibility should be given greater emphasis; families should be enabled to help themselves. Noble Lords might feel that the list is thin, but it has been worked out and all would have it in common. If legislation enabled that to occur across the whole spectrum, society would be better off than it is.
My concern is that, although I uphold vehemently and vigorously the Judaeo-Christian tradition of marriage, I am well aware that what we are talking about at root is the well-being and welfare of children. Large numbers of children are now born outside marriage, as the noble Lord, Lord Skidelsky, said. Thirty two per cent. of births take place outside marriage; 1.8 million children live in single parent families. Many of those women—and 90 per cent. are women—are not in that situation because they wish to be, but because circumstances have forced it upon them. Whatever one might think about the morality of the mother's position—and each individual case must be considered in its own right—the children are never responsible for it.
Anxieties have been expressed to me which will come out further in the course of the debate about the legislation as it stands or as it is proposed, and its effects upon the children outside the traditional standards of marriage. Concern is expressed about the Social Fund mechanism and its current inadequacies, about married couple's allowances and housing benefit proposals. The particular concern expressed to me is about the proposals to freeze the levels of lone parent and one parent premiums. If they are frozen and if there is any inflation at all, there will be a reduction in benefits. I know that the House is sensitive to the subtleties of what faces us. I believe that we need legislation that supports the traditional structure, and if anything undermines that traditional structure or fails to support it or encourage it to grow, it needs close examination, but not at the cost, I plead, of support for children who are brought up outside that structure.
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One of the greatest Archbishops of Canterbury this century, William Temple, talking at the end of the Second World War about social arrangements, suggested that the society we then needed to build was one that suggested fellowship rather than rivalry. I suggest that that is still true today.
7 p.m.
Baroness Young: My Lords, I, too, add my thanks to my noble friend Lord Skidelsky for introducing this very important debate. I might almost say that it is one of the most important debates that we have had for a very long time. I believe that central to our society today is a real concern about the breakdown of marriage and the family, to which the tax/benefit system has in itself made a contribution. My noble friend made that very clear indeed.
This debate follows logically from our many discussions on the Family Law Bill. My views on that Bill are well known. Certainly they have not changed in the course of the debates. Whatever our differences, there is broad agreement right across the political spectrum that the breakdown of marriage and the traditional family—the high divorce rate, now running at some 42 per cent. of marriages and the number of births out of wedlock, now over 30 per cent.ߞhas had disastrous effects on the whole fabric of society. Having listened to the remarks of the noble Lord, Lord Haskel, I hope that he shares that general view, although I was not clear whether he felt quite as strongly as I do.
During the course of our debates on the Family Law Bill, I said that I considered most unhelpful the statement by the Law Commission that the high rate of divorce and births out of marriage was not having any effect on the fabric of society. The evidence is quite to the contrary. It is there for everybody to see who cares to look at it. My noble friend Lord Skidelsky gave examples. Anyone who teaches knows perfectly well that the high divorce rate, the high number of single-parent families, does have, and has had, a very marked effect in the education system. To put it absolutely at its lowest, the cost of counselling services required to help the children is money out of the education budget. It is not being spent directly on education at all.
My noble friend Lady Elles quoted on at least two occasions during the course of debates on the Family Law Bill the evidence from the Home Office that the large numbers of (as it usually is) young men aged between about 16 and 22 who commit crimes are nearly all from broken homes. A great deal of research evidence shows that it is the children of divorced and separated parents, of single mothers, who have worse health, do less well at school, are less likely to be able to get a job, take to crime and, finally, repeat the pattern of a broken marriage. Very few people dispute those facts. As a society, we are paying an immensely high price—some £9 billion—supporting this state of affairs. If we pause to think of other desirable objectives in our society on which we might spend just a portion of that money, we see what a terrible situation we have brought ourselves to. As we know, all this has happened within a generation, stemming from the 1960s. No one knows

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where it will end unless this trend is halted and reversed. We are in uncharted waters. Quite a number of people think that the number of divorces will equal the number of marriages in a very short time.
I believe that one of the purposes of law on social matters should be to buttress marriage. I have said so on many occasions. In preparation for this debate I looked again at the book by Patricia Morgan, Farewell to the Family? It is quite clear from what she says that the tax/benefit system has helped lone mothers and their children, and has disadvantaged married couples with children. Indeed, the majority of lone parents depend on welfare help of one sort or another and are usually considered to be the poorest families.
However, I believe it is true—the noble Lord, Lord Haskel, made this point—that couples with children outnumber lone parent families in the lowest income groups. At the same time, the burden of taxation has increasingly been shifted onto married parents to support, through the tax system, single parents. The traditional concept of the family wage has to a large extent been abandoned, together with the recognition that taxation should be related to the number of dependants on a particular income. The very elaborate means-tested and selective benefits that have taken its place are almost entirely for the benefit of lone parents.
I believe that that trend should be halted and reversed. I cannot believe that it was ever the intention of Parliament, however this may have come about, that so much legislation in the tax/benefit world seems to have failed to draw a distinction between marriage and cohabitation; that married families should in fact be disadvantaged vis-à-vis those of single parents, and that this has continued for some time. Can my noble friend who is to reply to the debate tell us whether the interdepartmental working party on marriage has had anything to say about the way in which the tax/benefit system has operated in this way?
We have had much talk of reconciliation. It would be helpful to know whether there has been any research into the effects of the lack of money on married couples, particularly at the birth of the first child, and whether that has been a contributory cause of divorce. The pattern of women's lives is that they work until they have their first child and then take a career break. Curiously, the effect of the tax/benefit system has not necessarily been to enhance the opportunities for women. It has made it much more difficult for the woman who wishes to stay at home and bring up her child to do so.
I do not want in any way to be seen as someone who is trying to punish one-parent families. There are single parents who, against all the odds, do very well. But all law sends out a signal, and the signal of tax law is very clear: you are financially better off if you are not married than if you are married. And it appears to be a message that is being listened to. A lot of young people simply say: why marry at all?
I was pleased that the last Budget made an attempt to redress what has been a trend for a very long time. We have lower income tax. The married couple's allowance has been increased. We had the removal, referred to by
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the right reverend Prelate, of the discrimination in favour of lone parents that has come from the one-parent benefit and the lone parent premium. Whatever may be said about that, is it right that lone parents should have more money than the married couple? That is the question that we need to address. I was pleased to see that that, too, is being put right, as well as such matters as the doubling of the level of capital disregard from £8,000 to £16,000 for those who have to go into long-term care.
I very much hope that that trend will be continued in future Budgets. I say that because I believe we are on the verge of an unprecedented social experiment. So far as I know, there has never been an open, democratic society that has not been based on the family. There has never been a society of any sort that has not been based on the family.
We are creating now a society in which, as my noble friend Lord Skidelsky pointed out, men are becoming peripheral. That is creating daunting problems for us. Quite apart from the complications of the labour market, there are fewer male role models for boys and less adult supervision of children, particularly by men, which leads to more indiscipline. Most dangerous of all, through the tax/benefit system, the state is moving in as the provider of the missing parent's functions. The traditional father is rapidly being replaced by the state. The state takes on the functions of the father, particularly as the provider of the income, and then moves on to take over the nurturing functions of families.
What conclusions can be drawn? I believe that the state should treat married parents as well as it treats single parents. That should be the first objective of the tax system in that regard. That ought to be a top priority for a future Budget. I hope very much that my noble friend the Minister can assure us on that point when he comes to wind up.
7.11 p.m.
Lord Simon of Glaisdale: My Lords, we are deeply indebted to the noble Lord, Lord Skidelsky, for this debate, which is in every way a suitable adjunct to our deliberations on the Family Law Bill. We are also indebted to him for the moving and informative speech with which he introduced the debate, though I am bound to say that, as he developed his argument, I heard it with increasing concern for the welfare of our society.
It is a great privilege to follow the noble Baroness, Lady Young, who gave so valiant a lead on the Family Law Bill, in which the tide of parliamentary opinion on the whole was against the integrity of the family, notwithstanding that lip service was paid to it. The noble Lord, Lord Skidelsky, made it clear that he was talking about the traditional family; that is to say, as I understand it, a husband and wife joining together with promises to live together exclusively during their joint lives, with the object in general of raising a family. As such it is also a primary agent for sociologists considering the welfare of society.
I suppose that most Members of your Lordships' House attach some importance to tradition. The reason is that tradition is generally the fruit of a process of

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reasoning, part of which may have disappeared from society's memory; it is the result of a series of experiences which may have vanished from the communal sense. But they can be recovered. So far as traditional marriage is concerned, a great deal was recovered on the Family Law Bill and more has already been recovered this evening.
Of course, the right reverend Prelate was right to say that legislation cannot do everything. Indeed, it cannot operate by itself. Other things are required, if we are to restore the faith and cohesion of our society.
I speak with diffidence in the presence of a historian of the eminence of the noble Lord who introduced the debate. But there is the striking example in history of the Emperor Augustus, who inherited a completely demoralised society and, by patient and detailed adjustments, much legislative and some not, reconstituted and affirmed it, so that it lasted to the general benefit for another 400 years and, indeed, bequeathed its spirit to the Papacy, the Holy Roman Empire and, more recently to the Concert of Europe.
There is a good deal that can be done by legislation, some of it outside the scope of this debate. Three Law Commission Bills are outstanding, dealing with matrimonial property. They translate into legislative terms the promise that was made at marriage to share worldly goods. It seems a matter of profound shame that the Government, during the past four or five years, have devoted themselves to a measure relating to the dissolution of marriage, while leaving those Law Commission proposals waiting—it is 15 years now and we are told that it will be another three years before they can be taken on.
There is also devolution of property on death. The Scottish system is much more user-friendly—I am sure that the noble Lord will bear me out—and much more family-friendly than our own, but nothing has been done there.
This debate valuably concentrates our minds on the fiscal and social security systems. Before venturing to make one or two specific proposals, perhaps I may make two general points. The first is that discrimination in favour of the family can always be made to look as though it is discrimination against those outside it. Discrimination in favour of married people living together can be made out to be discrimination against cohabitants without marriage.
The second point is that there is no doubt, and we must face the fact, that fiscal purists—I see that the noble Lord, Lord Lawson, is present—dislike the system of allowances because it operates particularly to the advantage of those who least need it, perhaps because it operates on marginal rates of tax. Similarly with social security, the purists will say that social security is designed to relieve need. Once one goes outside that to relieve those whose needs are not immediate, one is wasting the taxpayers' money.
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We must recognise the force of those arguments. The answer to them is the one that is being given in this debate: that the family is a fundamental unit of society and society is entitled, even at the cost of fiscal purity, to discriminate in favour of the family.
Having said that, perhaps I may mention one or two other matters. I know that the married couples' allowance is not popular with the Inland Revenue, for the reasons that I gave. Nevertheless, also for the reasons that I ventured to give, it is justifiable that we improve it further. It went back for some years; it was improved at the last Budget but not so as to restore its former value.
The second fiscal measure I wish to mention is the substitution of a succession duty in place of an inheritance tax—a succession duty which favours the family specifically in comparison with those outside. The third measure is capital transfer tax. At present that favours the family in that transfer to a spouse is excluded from capital transfer tax. Remembering that the family is not just two persons, but those two and their children, should we not also make the same tax concessions on the capital transfer tax to transfers in favour of children?
I have completed my time. What I would have said about social security has already been said better than I could possibly put it, by the noble Baroness, Lady Young. Therefore I shall merely end as I began. We are justified in discriminating in favour of the family even at the cost of fiscal purity.
7.21 p.m.
Baroness Elles: My Lords, I too thank my noble friend Lord Skidelsky, not only for introducing this debate, but also for choosing this specific subject and the way in which he introduced it. After so many weeks of debate in this House on the Family Law Bill, and after hearing so many different views, it was a great pleasure to hear what he had to say about the family and his concept of the family in society today. I am sure that he evoked many feelings of support from what he said.
We are well aware that the cost of benefits to the taxpayer is increasing annually, from around £30 billion in 1971 to over £90 billion recently or, as it is often described, £15 per day from every person in work. The Secretary of State's initiatives in considering methods of controlling expenditure while retaining the fundamental purpose of welfare—this was repeated by various noble Lords—to alleviate poverty and assist those who need financial support are to be welcomed. It is paradoxical that, as the country's standard of living and wealth increases, poverty also seems to increase relatively so that around half the population live in households dependent on one of the means-tested benefits. That surely cannot be right.
There are a great many issues involved—whether benefits are or should be means tested; at what levels they should be introduced and to whom; the great difficulty of discontinuing one form of assistance without being sure of genuine suitable alternatives; above all, how to move from dependency to self-support or to avoid the poverty trap; the changes in life expectancy and the question of income support.

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In recent weeks we have had the opportunity to debate at some length the position of the family in today's society and I do not intend to cover that ground again. Problems of family structure cannot be isolated from the question of the range of benefits and taxes that we are considering this evening. For example, it has been said that it is not unemployment which is the biggest burden on the benefit system, which is often assumed; it is single parenthood whose annual claims amount to £8 billion a year and are the major cause of family poverty. The same author of those words, the honourable Member for Birkenhead, Mr. Frank Field—who I am sure is widely respected in this House and in another place for the work he has done for many years—in his book Making Welfare Work, said,
"No system of welfare can be independent of values. Is it right for example that young never married mothers should gain additional income support premiums when few if any voters hold that such behaviour is acceptable, let alone rewardable?"
It should be emphasised that this is not a party matter; it is the way we view the way in which poverty can be relieved and how we can best help those who need that relief. Yet the figures in his book show an escalation. In 1971 there were 571,000 single parents, of whom 90,000 never married; and in 1993 there were 1.4 million single mothers, of whom 490,000 never married; and, in all, they were responsible for 2.3 million children. It is not the parent or deserted parent that we are discussing; it is the effect on the children. Many noble Lords have emphasised that that is what we are considering—how we can help the children of disadvantaged parents.
Is there any difference in the tax treatment of married couples which might act as encouragement to the young to get married and establish a home together? My noble friend Lord Skidelsky gave some examples. The House of Commons Third Report, Review of Expenditure on Social Security, Session 1994–95 Annex A, does not give much encouragement. It says that a married couple with one child of three years old, with a gross weekly income of £100, after rent and council tax are left with £112.92; a lone parent with one child aged three, with the same relevant reductions, has a net income of £115.40. Again, with a gross weekly income of £140, a married couple is left with £114.14 and a single parent is left with £118.26.
That surely does not make sense. Although there is only one adult to be fed and clothed, in the latter case there is a one-parent benefit paid to lone parents as well as child benefit. That can add up to £6.15 a week extra. The lone parent also has, tax advantages in that he or she is entitled to the additional personal allowance, rendering the tax position equal to that of a one-earner couple. The lone parent has further benefit compared with the married couple, paying 75 per cent. of the council tax, whereas the married couple pays 100 per cent.
From that comparison between the tax and benefit treatment of lone parents and married couples, there is little incentive, at any rate on financial grounds, to marry. This year's increase in the tax allowance for married couples, raised from £1,720 for 1995–96 to £1,790 for 1996–97—which is to be welcomed, of
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course—applies equally to the lone parent in the form of additional personal allowance. The discrepancies in the figures therefore remain.
My noble friend Lord Skidelsky quoted from a study by Dr. Patricia Morgan, of the Institute of Economic Affairs, who kindly allowed me to quote from some of the things she has written. The conclusion to which she came from the figures quoted by my noble friend was that,
"At every wage level a lone parent has more than two adults and two children even if she is not claiming child care costs, and far more when she does. There is nothing for the support of a second parent providing the child care in the two parent family. Instead, the family earner has less for more people!"
She continued,
"When a lone parent claims for child care costs, she gets more for part time work than a family breadwinner gets for full time work … All the father's income goes against the family's entitlements, but everything the lone parent's boyfriends provide is extra".
That is a clear indictment of the balance between tax and benefits relating to single parents and also with regard to married couples. The tax regime clearly does not help married couples. If we want support for the family, regardless of measures being applied to benefits, the tax system must be more positive. In saying that, I am not decrying the benefits that the single parent receives; I am trying to emphasise the need for married couples to have better tax treatment.
Can anything be learnt from other European Union countries where the divorce rate is lower and the number of illegitimate children is also lower? If we look at some of the figures, some comparisons may stimulate my noble friend the Minister into taking some positive action. Income tax and social security as a percentage of gross salary (£17,000 or equivalent) taking global figures, in the US is 12 per cent.; Japan, 15 per cent.; and Switzerland, 16 per cent.; yet the income tax and social security as a percentage of gross salary in the UK for married couples is 26 per cent.
In each of those three countries, unemployment is considerably lower than in the United. Kingdom, and while not being able to pin down the cause, it could well be a greater incentive to come out of the dependency syndrome if tax burdens were lighter and thresholds for the imposition of tax were raised. In France income tax is geared to help the family. Deductions for health insurance and other social security contributions are allowed. Although on a different system, the quotient is two for a married couple, regardless of whether the wife earns, and one unit for a child.
We had a debate recently on the elderly, so I will not repeat what was then said except to draw attention to the question of inheritance tax, to which the noble and learned Lord, Lord Simon of Glaisdale, rightly referred. It causes so much despair to the elderly who have put their life savings into a house and then have to sell it to be able to pay for residential care. After all, grandparents and parents are still part of the family, whatever age they may be. One has to consider the whole range of ages of the family. It is suggested that the seven-year rule should not apply in those cases where the family home is left to the descendants of the owner, so that he or she can enjoy remaining at home

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without having to enter a residential home. There are more than a quarter of a million people in residential homes. They could stay in their own homes with the comfort of their spouses and with home help.
I should like to set out two or three measures which I should like to see considered in order to alter the tax burden on married couples. The personal allowance should be double that of a single person, where the wife does not earn. This could also encourage her to stay at home while her children are below school age. The family allowance for children should be reinstated, increasing according to age, as expenditure increases. How I agree with the statement of the noble and learned Lord, Lord Simon of Glaisdale, that tax purity is not always the best reason for changing and helping families. There should also be changes in inheritance tax, either by abolition or by exemption on passing the family home to direct descendants. There should be encouragement for personal tax exempt savings schemes—possibly a lump sum exemption on marriage, with limitation on size and on date of withdrawal of the contributor. Finally, to help those who have become dependent on benefits, the tax threshold should be raised on taking up work. The margin of gain at present does not seem to encourage the taking up of work. This syndrome must be broken and would be possible with a tax threshold higher than the personal allowance for the first year in work, or some other equal period.
It is appreciated that each country has its own traditions and problems, and it is to the credit of this Government that unemployment is lower than most western European industrialised countries, as well as people in Britain having put aside nearly £600 million for their retirement. If the distant future for the national debt, according to the OECD, is encouraging, there is nevertheless urgent need for encouragement to be given to families in the immediate future.
7.33 p.m.
Lord Harris of High Cross: My Lords, I am grateful to the noble Lord, Lord Skidelsky, for introducing this Motion and I have learnt much from the other speeches made so far. I have one quibble with the Motion. It refers to,
"the effectiveness of the current tax and benefit system in supporting the family structure".
It should refer to the "ineffectiveness". There is no dispute about that. I understand that the noble Lord, apart from natural courtesy and gentleness, has to be better behaved on the Tory Benches than I can allow myself to be from the Cross Benches.
In the short time available to me I do not wish to qualify all I have to say. I wish to declare some missionary truths as they have struck me not only recently but in watching the developing situation of the welfare state since I taught this subject back in the Scottish university of St. Andrews 40 years ago. Then there were high hopes in the wake of Beveridge that we could solve all the pre-war problems of want, hunger, idleness and so forth. With social benefits now roaring towards £100 billion, those high hopes of post-war reformers have been totally shattered. Multiplying
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benefits have not only failed to usher in the millennium or satisfy the general social aspirations; they have had unmistakeably a perverse effect: they have aggravated the problem by attracting ever more claimants.
This perversity of outcome is no accident. Indeed, market economists used to distinguish between what they called the income effect and the price effect of a subsidy. Thus when the Government offer cash or free services to help particular groups of people judged to be deserving, the direct, immediate and intended effect is to raise the real incomes of the recipients. Alas, inevitably, at the same time the indirect longer term unintended effect is to offer an inducement for other people to put themselves in the position of beneficiaries enjoying these new subsidies. If sceptics doubt that, the noble Lord, Lord Skidelsky, might confirm from his great knowledge that such a sensitive observer as Lord Keynes acknowledged that even the inadequate and derisory dole of the 1930s had some effect in diminishing the incentive to work. In a radio discussion reproduced in the Listener in 1930 Keynes, talking to Lord Stamp, acknowledges that,
"the existence of the dole undoubtedly diminishes the pressure on the individual man to accept a rate of wages or a kind of employment which is not just what he wants or what he is used to".
These effects at the margin of decision, of people going for jobs or not going for jobs, switch people into totally the wrong direction and those marginal changes build up to massive redirections in lifestyles and employment.
In economic terms, if you offer a higher price for the unemployed, you will get a larger amount of unemployment. That is what Keynes taught. He called it voluntary unemployment. He did not wish to stand in judgment. That was just an effect that these subsidies had. If you offer a higher price for single parent families, you will get more single parent families. That is a matter of ordinary common sense. I do not regard the cost of £9.4 billion a year as the major cost to our society of this development. I regard the main cost to our society as the effect on children. The noble Baroness, Lady Young, has told us about presenting young children, the victims of this system, with the prospect on average of much worse life chances in employment and education and of future delinquency and so on. It is on the children that the handicaps are visited.
A number of speakers have quoted from a study, Farewell to the Family? by Patricia Morgan of the Institute of Economic Affairs. Some statistics have already been deployed so I shall add just two or three others from this splendid volume, priced £9 while stocks last. Of all families with dependent children, lone mothers and fathers, excluding widows, increased two-and-a-half fold, from 7 per cent. in 1971 to 18 per cent. in 1991; while the proportion of the total population living in single parent families increased fourfold, from 2.5 per cent. in 1961 to 10 per cent. in 1991.
The noble Lord, Lord Skidelsky, said that single parent families also suffer disproportionately from poverty. According to Patricia Morgan, that is not exactly the position. In the bottom decile of income distribution in 1991, pensioners accounted for 11 per cent., single and married persons without

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children accounted for 30 per cent. and single parent families with children accounted for only 11 per cent. Couples with children—theirs is the burden and the handicap—accounted for 49 per cent.
Baroness Hollis of Heigham: My Lords, would it not be more helpful for the noble Lord to remind the House of the proportion of households that each of those types of family represent and then see what proportion they contribute to poverty? As a result, I believe that the noble Lord will find that the number of lone parents is about 6 per cent. of the population but 11 per cent. of those in poverty. That is the key statistic of which the noble Lord needs to remind us.
Lord Harris of High Cross: My Lords, that not does disturb the facts that I have laid before the House; namely, that couples with children represent 49 per cent. of the lower decile, whereas single parents with children represent only 11 per cent.
There is not sufficient time to deploy one of the major forces that operates here, as in so many other sectors of our economic and social policy. Professors Tullock and Buchanan in America developed a marvellous analysis of what they call "public choice" or the economic analysis of politics, in which they show the way in which our famed democracy can be so easily corrupted by the influence of pressure groups. They show how single-issue lobbies have a disproportionate weight in influencing government because they are concentrating single-mindedly their effort on particular demands that they wish to have satisfied. Against that concerted, orchestrated and persistent pressure, there is no counter-pressure from the general body of taxpayers and citizens who are in the end going to pay the price, so one has all the time pressure towards expanding government in the benefits that explicitly suit minorities.
In the long run there is no solution unless we restore the public philosophy of limited government and a presumption against the automatic enlargement of government to meet every problem. Buchanan and Tullock in America have shown how that presumption would have to be entrenched in some kind of constitutional deal to stop politicians constantly yielding to the temptation to buy votes by offering taxpayers' money to these persistent pressure groups.
I turn briefly to remedies. I make no apology for saying that we should shift the tax/benefit bias back at least to neutrality, if not in favour of married couples with families. It is wholly preposterous that my preferred family choice and that of many other noble Lords who have spoken so eloquently is handicapped and disadvantaged through the tax system. In the earlier debate the noble Lord, Lord Cockfield, urged that we should reduce income tax and the loopholes and, I am adding, raise the starting point to allow gross income to he reflected in higher take-home pay. Another figure from Patricia Morgan shows that in 1950 a married man with a wife and two children had to earn average manual earnings before starting to pay income tax. Today, tax begins to be deducted from earnings at one-third of average manual earnings.
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If there were time I would argue that even the restoration of child adoption would make some contribution to rescuing children from some of the disadvantages which they suffer in these families. We should tackle the entitlement mentality that has grown. I recall my noble friend Lord Jakobovits, when we were debating the Family Law Bill, arguing that in Jewish families divorce was less common, although all the social pressures were the same as on the rest of the community, but he said that the stigma prevented Jewish families yielding to that pressure. Stigma is only the other side of pride in independence. That becomes caricatured as a stigma if we prefer independence to dependency on government.
The last refuge of a noble mind is to propose a Royal Commission. I very much supported the noble Baroness, Lady Thatcher, in her time in office, turning her face against Royal Commissions. They have been too easily resorted to by government for passing the buck to others. But I urge that we have a Royal Commission on the subject of the respective roles of the state and voluntary agencies in the future of the family. One of the most neglected publications in my lifetime has been Lord Beveridge's third volume on voluntary action. The other two volumes were on social insurance and full employment. The right reverend Prelate said that if we could stress the role that the Church and other voluntary organisations could play in helping to redress the position of the family, that would be a great advantage.
7.45 p.m.
Lord Griffiths of Fforestfach: My Lords, like other Members of your Lordships' House, I too would like to thank the noble Lord, Lord Skidelsky, for giving us the opportunity to discuss this issue and also for giving such a comprehensive review of what is actually quite a narrow and technical subject. He gave a wonderfully comprehensive introduction to it.
I believe that what we are discussing tonight—and the noble Baroness, Lady Young, mentioned it—is an extremely important subject. Yet I believe that all too often, because of the sheer complexity of our tax and benefits systems, that complexity serves to disguise what is really happening and what incentives are created, and discourages those like myself who are amateurs in this field, from seriously looking at the matter. So we are really indebted to the noble Lord, Lord Skidelsky.
I also believe that one cannot approach this subject from the point of view of neutrality; one must have some starting point. I would like to make explicit my starting point, which is that I believe we have to recognise the benefits which are conferred on our society by the traditional family; that is, husband and wife who accept responsibility in marriage for bringing up their children. We should no longer be indifferent as to whether the norm for family life in this country is the traditional family or what has come to be called "the mother-child unit".
I say that because a growing body of research evidence is using different methods, such as longitudinal studies, cohort studies and clinical studies, which are

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drawn from samples of children of different ages, and from research work in different countries, but which reach similar conclusions. The relationships involved in these research studies are complex, and I acknowledge that. What I find extraordinary is that the conclusions are clear and have a great deal in common. They are that divorce has a serious and a long-lasting impact on children and that lone parenthood, regardless of the socio-economic status of the mother—and I in no way want to criticise any lone parent in any way this evening—has a damaging effect on the wellbeing of children.
To put the same point positively, children of parents who follow the traditional norm are significantly advantaged with respect to self-esteem, health, educational performance in school, employment and long-lasting personal relationships, and are less likely to commit crime or to become deviant.
I was very impressed by the foreword to an excellent study on this subject—and not by Patricia Morgan this time. It was published by the Institute of Economic Affairs. The foreword is by Professor Halsey of the University of Oxford, a great authority in this area as well as someone who has been a life-long socialist. In assessing the evidence he said,
"The children of parents who do not follow the traditional norm, (i.e., personal, active and long term responsibility for the children they generate) are thereby disadvantaged in many major aspects of living a successful life. The evidence all points in the same direction, is formidable and tallies with common sense".
Therefore, my starting point for asking the question in terms of this Motion, as to the effectiveness of the current tax and benefits system, is this research evidence which comes out conclusively in defence of the traditional family.
Despite the growing body of evidence, the tax and benefits system fails to support the traditional family structure. I believe that it creates the wrong incentives. I give two examples. First, the tax and benefits system encourages fatherless families. For a given level of earnings, a married couple with children receive less income than a lone parent with the same number of children. That cannot be right. We do not have a level playing field in that respect. If one takes into account the research evidence, one may well conclude that the playing field should be tilted through fiscal and benefits policy in favour of the traditional family.
Secondly, our tax and benefits system discriminates against those mothers who, for whatever reason, wish to stay at home and have a particular relationship with their children. A one-earner couple with two children pay more in tax and national insurance than a two-earner couple with two children on the same gross income. The numbers are impressive. Forty-eight per cent. of all mothers of children under the age of five, 29 per cent. of all mothers with children aged between five and 10 and 22 per cent. of all mothers with children aged between 11 and 15 stay at home. That is a total of two and a half million mothers.
We discriminate against people who believe in the traditional family and want to develop the relationships and give up work for however short or long a period of
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time. I do not suggest that taxes and benefits are the most important factor that is taken into account in making decisions in this area, but they are one factor that impacts most seriously on low-paid, hard-working married men with families.
The tax and benefits system is also a powerful symbol in our society. It embodies our values and sense of fairness. I believe that the present system sends out negative messages. Over recent decades the family has been treated, not as a unit in which people are dependent on each other, but as a set of people with individual needs who just happen to live under the same roof. This started with the introduction of family allowance which was paid to the mother because the father could not be trusted. He might simply fritter it away in the pub. Next, the child tax allowance was withdrawn. Major support for children was then provided through child benefit, income support and family credit. At the same time, the married couple's allowance was frozen until the last Budget. We then moved to a system of separate and independent taxation of husband and wife.
What messages do we give our society as a result of all these changes to the tax and benefits system? I suggest three. First, fathers are totally marginalised in the family. Irresponsible fathers are hounded by the CSA, but responsible fathers who work hard to look after their families receive no recognition whatever either through tax allowances or benefits. Secondly, those who earn income are not helped to support the family; rather, the benefits come from the state. Our tax and benefits system has made children the responsibility of the state, not the family. If there is a problem the Government will deal with it, not help the family itself to deal with it. Thirdly, there is an individualism that pervades this approach which is particularly reflected in the reform of personal taxation which I believe is destructive of community.
My noble friend Lord Skidelsky said that we had to put words into action. The problem that the family faces today is not simply that of changing values but that the tax and benefits system drives the trend that we see. We can do something about that. We must be prepared to change structures. If the existing inequities continue I cannot see why the trend will not continue. Children in single parent families must not be made to suffer. The noble Baroness, Lady Young, is right to say that they must not be punished. But if we simply address short-term poverty, we will never create a long-term structure to solve the problem. Therefore, we must be prepared to change the structures.
In conclusion, I make two proposals: first, the reintroduction of child tax allowances; and, secondly, the adoption of the proposal, contained in an eloquent Government White Paper in 1986, for personal transferable tax allowances. I believe that both would strengthen the family.
7.56 p.m.
Lord Ashbourne: My Lords, I also thank the noble Lord, Lord Skidelsky, for initiating this debate and giving the House an opportunity to discuss these important matters.

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Central to government's understanding of how an individual relates to his community are the virtues that that individual develops, the values he learns and the relationships which he builds within the family. The traditional family develops an individual identity and teaches self-reliance and personal responsibility for oneself and others. Today, the family is not, as Neil Kinnock claimed, "changing" but it is in danger of disintegrating.
Some families never start properly because mothers and fathers do not make a commitment to one another before they have children. Increasingly, it is recognised that children are safer and more likely to develop and flourish within the traditional family. Some talk in an ill-defined way about "community", yet if we look for a major cause of crime, a key reason for educational failings and an explanation as to why the social security budget grows so quickly, we should consider the decay of family life and particularly the marriage bond.
Cultural forces power the decaying pattern of family life. Nonetheless, let us not be guilty of abetting these malign cultural forces hut turn to every corner of public policy to ensure that the traditional family, centred on marriage, is not disadvantaged. At the very least, the Government should call for fair treatment for marriage. Some argue that there should be incentives for those who get married and remain married. After all, marriage is a public commitment as well as a private relationship. The Government should support marriage in every reasonable way, remembering that frequently it is the taxpayer who bears the cost when marriage fails.
Despite claims to the contrary, the Government's policies tend to undermine the family, as rising numbers of one-parent families, divorces, out-of-wedlock births and the increasing popularity of cohabitation testify. At any given level of earnings, the lone parent will derive a higher income than a married man with the same number of children. As a result of the child care allowance, which was introduced in October 1994, a lone parent with two small children can work for 20 hours at £4 per hour and end up with a net income of just under £164 after rent and tax. A married father of two small children who works for 40 hours at the same hourly rate takes home just under £131.
The situation has been aggravated by the destabilisation of male employment. Joblessness correlates with an unmarried status for men, and becoming unemployed increases the chance of divorce. For all practical purposes, the mother/child unit is the family type for which family policy is designed. The two-parent family is discriminated against. Being brought up in broken, incomplete, or reconstituted families has serious detrimental effects upon the health, education and delinquency of children.
I turn now to the married couples' allowance. The indexation provision for that allowance is to be welcomed. At the time of the introduction of independent taxation in 1990, the married couples' allowance was set at £1,720. It was given at the taxpayer's marginal rate of tax—either 25 per cent. or 40 per cent. Since then, the rate at which it is given has been cut: first to 20 per cent., and then to 15 per cent.,
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as was explained to the House by the noble Lord, Lord Haskel. That amount has been frozen. It has taken £2 billion out of family budgets—on average, £3.30 a week for each family. The indexation increase this year is the first change. Meanwhile, for comparison, the personal allowance has been raised from £3,005 in 1990 to a proposed £3,765 for the coming year—an increase of over 25 per cent. It is still allowed at the taxpayer's marginal rate.
That shift in allowances has had a marked effect upon the relative tax burden of families and single people. As a result of the changes in allowances since 1990, including those proposed in the Finance Bill, the annual tax bill of a married couple with one earner will have gone down by £42 since 1990, while that of a cohabiting couple with two earners and no children, will have gone down by £365 a year. That follows a continuous shift of the tax burden on to families since 1964. For example, a single earner married couple with two children under 11 on average earnings was then paying 8 per cent. of its income in tax. Today, after allowing for the shift from child tax allowance to child benefit, the figure is 22 per cent. Most other taxpayers have seen their tax bills rise, but by far less.
Hitherto, governments have recognised that the tax system should take account of the special relationship which exists within marriage; for example, the 1986 Green Paper on personal taxation stated:
"The Government reject the view that the tax system should pay no regard to the special relationship which exist within marriage".
Before the Budget, the Prime Minister said:
"The Government believe that married couples should receive recognition in the tax system".—[Official Report, Commons, 6/11/95; col. 547.]
Marriage requires men and women to make a long-term commitment to each other and to their children. It provides the best means for children to have a loving, stable, and committed environment within which to grow. That is not to suggest that marriages are without their problems or that many cohabitees and lone parents do not bring up their children excellently; but research shows that children whose parents separate are more likely overall to have adverse education, health, and behaviour problems than children whose parents stay together.
Even with a high divorce rate, cohabitational arrangements last a far shorter time than marriages. There is also research evidence to show that children who live in a lone-parent family do less well in educational terms, and that married couples live longer, have healthier lives, and suffer less stress and mental illness than single, widowed or divorced parents.
The looser ties of co-habitation may well provide less support for caring for elderly parents than the shared responsibilities and commitments provided through marriage. In short, marriage is the foundation for a stable and cohesive society. As Cardinal Basil Hume, the Archbishop of Westminster, at the Philip Lawrence Memorial Mass said:
"if we lament, and rightly so, violence in our streets and much else that is wrong, then let our society look to the quality of family life in the nation and to the serious commitment which the marriage bond should be".

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I end by saying how important it is to ensure that the tax and benefit system supports the family and buttresses marriage in our society.
8.6 p.m.
Lord Zouche of Haryngworth: My Lords, I, too, am grateful to my noble friend Lord Skidelsky for moving for Papers on this important issue, thus giving me the opportunity to participate in the debate. The Motion calls attention to the effectiveness of the current tax and benefit system in supporting the family structure.
It is a fact of life that charities are being called upon increasingly to provide support facilities for disabled people and their families. That important aspect of the charities' work is being undertaken following a recession which has not merely increased need but has substantially reduced the giving to charitable causes.
As government move away from the statutory provision of services, assistance for disabled people is being provided increasingly by charitable organisations. Charities can charge central and local government for the services which they undertake, but in many cases the fees paid do not match the costs of services being provided.
The Government recognise the importance of the charitable sector, and have introduced various measures to increase giving to charities, including payroll giving and gift aid. The Government have moved in the right direction, but sadly what has been given with one hand has been taken away by the other. For instance, a reduction of one penny in the pound means that charities have less tax to reclaim. That may seem a trifling amount, but it has been estimated that it could cost Oxfam as much as £150,000 a year. The previous Budget cost charities, including those helping disabled people, in excess of £5 million overall.
What is the answer? How can we help the people in our community who most need assistance? What more can be done to support a family whose breadwinner is disabled and is currently being assisted by one of the many charities which together raise many billions of pounds each year? One of the most significant ways to help, particularly the service-providing charities, would be to introduce relief from irrecoverable VAT. Charities are hit severely by irrecoverable VAT. Recent research has demonstrated that charities are losing over £350 million a year in VAT.
The imposition of VAT is governed by EU law (the sixth directive). Because charities provide mainly exempt services or services (at below cost, at no cost, or at no charge) which are outside the scope of VAT, they are unable to recover the VAT associated with the purchases needed to provide those services.
The problem is unique to charities. Local authorities providing the same services do not have to pay any VAT on their expenditure, and commercial organisations are allowed to recover the associated VAT. They are not as seriously affected by VAT as are charities. The most badly affected groups are those providing services—the very charities upon which the Government are now depending. Charities which raise money and do not
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spend it benefit from concessions on giving and do not have the same problem with VAT. It is precisely those most useful in the community which are penalised.
What is the solution to the VAT problem? With the introduction of a simple grant-in-aid scheme by which charities could reclaim VAT incurred on their non-business expenditure, the level of grant could be varied by the Government in recognition of economic constraints, but any percentage—let us say 25 per cent.—would most significantly reduce VAT and mean that an additional £75 million was available for charitable spending. Such a scheme operates most successfully in Canada, where charities are automatically eligible for a refund of 50 per cent. of general sales tax at the end of the financial year.
It is not as though any grants would be taken as profit; they would be ploughed back into providing existing services. By limiting any scheme to non-business expenditure, any concerns about fraud are overcome. The European Commission has only recently reiterated its view that such a scheme is perfectly permissible under EU law. The introduction of grant-in-aid mechanisms would not, in overall public expenditure terms, cost the Government a great deal and the return in terms of additional targeted and cost-effective services would be considerable.
The Government have argued that it is preferable to encourage giving rather than offering indiscriminate VAT relief and have introduced a number of concessions accordingly. However, that fails to take account of the current environment in which charities operate. As the reduction in the basic tax rate continues, measures to encourage charitable giving are no longer sufficient. The Treasury estimated that the measures introduced in the March 1993 Budget would benefit charities by £30 million. However, that did not compensate charities for the total loss in income of £130 million as a result of other Budget measures. Unfortunately, the trend has continued and each of the recent Budgets has eroded the position of charities still further.
The recent recession has resulted in a falling off in voluntary giving. Charities are therefore facing significantly higher demands for their services at the same time as coping with a reduction in income. Furthermore, measures to encourage giving do not benefit all charities because some services, albeit vital for their recipients, are not as easily "sold" to the public as others.
Despite the concessions, there is a significant imbalance in the way in which the current tax regime impacts on the sector. Those organisation which do not provide services do not have a significant VAT burden but those which are service providers are penalised because the amount they receive in tax reliefs is often far outweighed in the amount they pay in irrecoverable VAT.
In conclusion, I wish to say a few words about Europe. Charities have been fearful that the imposition of VAT on fuel and power could be seen as the start of the gradual dismantling of zero rates. That would have disastrous effects on charities. Previous research

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indicates that a complete loss of zero rates would result in the trebling of VAT bills paid by charities. The Government must stand firm on the retention of existing zero rates in forthcoming EU negotiations on the permanent VAT system. They must not give away what they have achieved in previous negotiations with their European partners, which they have spent many years negotiating.
It would also be helpful if the Government could seek a solution to this problem at a European level, possibly through encouraging the Commission and other member states to review the position of charities under the sixth directive, which is in any event being redrafted as part of the work towards a permanent VAT regime.
8.14 p.m.
Baroness Hollis of Heigham: My Lords, it has been a most interesting debate and I believe that I speak for all Members in thanking the noble Lord, Lord Skidelsky, for introducing it tonight.
Essentially, it has been a debate about the effectiveness of the welfare state and I believe that, therefore, it has been a deeply uncomfortable debate for all of us, wherever we sit in the House. Why? First, social security expenditure has risen remorselessly. It is now one-third of all public expenditure. However, I believe that we all accept that DSS expenditure is largely a response to problems generated outside the social security system—for instance, high unemployment, the lack of decent childcare and the deregulated housing market—and that therefore a solution to those problems also lies elsewhere. But far from the tax and benefits structure mitigating those problems, since 1979 we have seen inequality widen and poverty deepen. Today one child in three under the age of five in Britain is in a family on income support. One-quarter of Europe's poor live in Britain. I do not know which is the more shaming statistic.
However, whereas in the past poverty was the unwelcome property of sickness or old age it is now increasingly the fate of families. The noble Lord, Lord Harris of High Cross, gave some figures. For example, pensioners make up about one-fifth of the population but only about one-tenth of those defined as poor. The same is true of couples without children. Those people who make up about three-fifths of the population represent only about two-fifths of those who are poor.
However, the reverse is true for those with children, whether they are in two or one parent families. Those families are disproportionately poor. They represent about two-fifths of our households and about three-fifths of our poor. As the new CPAC guide, Poverty, the Facts, shows, children make a family and families with children are disproportionately poor. Our welfare state, our tax and benefits system, has failed those families.
As the right reverend Prelate the Bishop of St. Edmundsbury reminded us, families come in many shapes and sizes. Today the two parent family is still the case for approximately seven out of 10 children but increasingly the number of children come from families in which the parents cohabit, are separated or divorced, have remarried or re-partnered or have remained lone
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parents. They are all families. The noble Baroness, Lady Young, was right in saying that children are much better off in families with their two natural parents. However, from these Benches I vigorously resist the arguments by implication or explicitly from the noble Lords, Lord Skidelsky and Lord Harris, that we should seek to strengthen so-called traditional families by making the children in non-traditional families poorer. It is the combination of single parenthood and poverty which gives many of those children the bad start which the noble Baroness, Lady Young, rightly and dramatically described to us.
Why have we failed those families? Whether they are two or one parent families, why increasingly are they in poverty? First, we have failed them in the labour market. I was surprised that so little was made of that point tonight. Only one British worker in three now works the nine-to-five day five days a week on which the secure mortgage, the secure income, the secure pension and the secure family rests. Outside that group of workers are those in part-time work, contract work, temporary hours work, zero hours work, weekend work and shift work. They are the new casual army of reserve labour, in and out of the labour market as the employer determines, carrying all the economic risks and uncertainties on their shoulders. One cannot build a secure family on insecure work. In addition, there are the unemployed. During the past five years 40 per cent. of people have been unemployed. Today, one million children are in families without a breadwinner.
We all accept that much of what I have described is global. However, the consequences for our society have been made worse by the policies deliberately adopted by the Government. The Government have deregulated the labour market, scrapped wages councils, withdrawn employment protection and seen wages fall. They are then surprised when the lean, mean, insecure, competitive individuals of the labour market do not become the responsible family men caring for others that we all wish to see.
The noble Lord, Lord Griffiths, is right that if there is individualism in the labour economy it is difficult to expect social responsibility in the domestic economy. Divorce damages, but so does the divorce that the Government have helped to preside over; namely, the divorce between individualistic behaviour to make a living and the behaviour that we all recognise is necessary to live a family life.
Just as the Government encourage a labour market made up of self-seeking individuals but want society somehow to be made up of responsible families, so we see the same moral schizophrenia when it comes to tax and benefit structures. My noble friend Lord Haskel made the point very well that the Government have raised taxes but have raised them in such a way that they fall most heavily on the poor and on families and, as I have tried to suggest, increasingly, they are the same people.
As regards direct taxes, we have seen a cut in the top rate of tax. Half of all the tax cuts enjoyed since 1979 have been enjoyed by just the top 10 per cent. of the population. But by cutting the top rates of tax and

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reducing the rates within the bands but not increasing personal allowances to keep the poorest out of tax and by freezing the married man's allowance, those measures have all hurt families and in particular, poor families.
Add to that a child benefit which has not even kept pace with prices let alone earnings, together with national insurance which is capped at just over £20,000, which is therefore regressive in its effect on families; and add beyond that a taxation burden which is felt increasingly through indirect taxes such as VAT on fuel, which cannot be discretionary for families because they have to spend to survive; and we can see how the tax burden has damaged families and increasingly helped to put them into poverty.
If we look at the tax structure over the past 10 years, who has gained and who has lost? Those who have gained are people with above average earnings. It is those who are single and employed, those without children and those in work. They have done quite nicely. But those who have lost out under our tax structure in the past 10 or 15 years are those with below average earnings, married couples, people with children and especially the unemployed. If you are married with children and unemployed, you have footed the biggest bill of all.
That list of winners and losers is not accidental. It has been constructed by the Government and the price has been paid by families who are poor. In other words, the tax system is increasingly wiping the concept of the family out of the Inland Revenue computer. To avoid taxing a two-earner family as though it is a one-earner family, the Government have ended up with a far worse anomaly: a one-earner family is treated as though it is a single person. That is absurd.
The inequities of the tax system, as many noble Lords have said this evening, have been reinforced by the perversities of the benefit system. Means-testing is increasingly replacing insured benefits. For example, JSA has replaced unemployment benefit and has cut the contributory insured period. The result of that is to damage families. If any member of the family tries to help himself, he is penalised. Let us take family credit as an example. If a family man with two children earns £3.75 per hour, whether he works 16 or 40 hours per week, he is only £5 better off. If any member of the family—for example, the wife—obtains a part-time job, her husband loses benefit pound for pound. There is a marginal tax rate of 100 per cent. if you are poor while for the best off it is reduced to 40 per cent. Means-testing damages families, increases poverty, extends dependency, reduces family savings, discourages families from working and probably encourages fraud.
Cruellest of all has been what has happened to the housing market and the role that the Government have played in that. As my noble friend Lord Haskel rightly said, mortgage payers who lose their jobs will no longer receive income support. Therefore, those who are most likely to lose their jobs and who are least likely to have
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insurance face repossession. There are 1,000 repossessions per week with devastating consequences for the family.
As regards rented housing, the Government first deregulated rents and extended the dependency of families on housing benefit and then capped housing benefit in a landlords' market, thus ensuring that the poorest families will be evicted for arrears. Having made them dependent, they then make them homeless. Add to that the new Housing Bill which your Lordships will soon be debating and we shall find that families unable to pay mortgages and unable to pay rents will suffer an itinerant life of temporary tenancies. Many a family will not survive.
Can we not do better than that? The Government utter platitudes about family life while their labour market policies, tax structure and benefit system batter those very same families. The state cannot make families strong or happy but it can do the opposite. It can increase their insecurity and put them under stress. I believe that that is what the state has done.
Families need a fairer tax system than we have, stronger employment policies and a statutory minimum wage. They need also a welfare-to-work strategy which emphasises training and child care together with an intelligent and not perverse benefit system. Such an agenda for families is not beyond the wit of government to devise. That is what the next Labour Government will offer.
8.27 p.m.
Lord Mackay of Ardbrecknish: My Lords, by and large this debate has followed the course of the last debate until, perhaps, it came to the speech of the noble Baroness, Lady Hollis; namely, a certain amount of cross-party general agreement. The two debates are not unrelated and I may refer some of your Lordships to the previous debate when I answer some of the points raised in this debate.
I think that nobody disagrees with the proposition that the family is of crucial social significance. For the majority of people, the family is the focus of their emotions and aspirations. It is where they learn to distinguish between right and wrong. It is where they learn to experience and give love and to grow up, we hope, in a happy and loving relationship.
Families pass on the experiences of previous generations to new generations. In doing so, they equip the new generation to live in society. It is the main channel through which the cultural, religious and moral values of society are transmitted from one generation to the next, and it provides the fundamental building block for our society. I do not think that anybody who took part in the debate disagrees at all with that.
My noble friend Lady Young asked me specifically about the inter-departmental committee on marriage and what it is doing. That group has been carrying out a review of the support services available to married couples. It is a major piece of work to identify which services are required by married couples and to map out the services currently available. That will allow us to ensure that we are making the best use of resources by

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providing the right support to married couples experiencing difficulties or, indeed, the right advice and preparation for young couples considering marriage. I am sure that my noble friend and other noble Lords will agree that that is an important piece of work.
The past few decades have seen major changes in the structure and stability of family life. Those rightly concern your Lordships and they concern the Government too. There have been increases in the rate of divorce and increases in the number of children born out of wedlock. More than 2 million children are brought up in lone-parent families and many more as members of step families. Those are worrying developments. But do not let us become too involved with our worry beads because there are two points that we should bear in mind.
First, the majority of parents raise their children in unified families and two out of three marriages stay united. Secondly, the changes seen here are not unique to the United Kingdom. Similar changes are occurring worldwide in countries with very different tax and benefit systems and very different social and economic policies.
I suspect that the suggestion that the tax and benefit system is very much the cause of the trend that we have seen is perhaps not true. Indeed, that memorable phase of the 1960s which some noble Lords will remember—namely, that the civilised society is a permissive society—has a great deal more to do with the problems that we have been discussing this evening.
I thought that I would look at the most recent statistics on lone-parent families. They show divorce in 35 per cent. of cases; separated from marriage in 22 per cent. of cases; and 42 per cent. never married. But of that 42 per cent., 24 per cent. are separated from cohabitation and 18 per cent. have never lived as a couple. My noble friend Lord Skidelsky when opening the debate and, indeed, my noble friend Lady Elles, referred to the relative stability of births over a very long period. I do not think that the example of Henry VIII was a good one. My recollection is that his view of the sanctity of marriage was loose even by today's standards. While the statistics are interesting—and I have quoted some which show the same trend—one has to be a little careful when judging statistics from today (when we collect them rather carefully) with those from previous years.
After all, when we match the statistics for conceptions out of wedlock, we may well bring into our consideration the rather more old-fashioned view than today of the so-called shotgun marriage when the subsequent birth after marriage disguised the fact that it was actually conception out of wedlock. I started with Henry VIII; perhaps I may commend to your Lordships as night-time reading a book by the great Scottish poet, Robert Burns, as an example of how such things were organised not just in rural Scotland but also in rural Britain in the 18th century. I suspect that we get a little upset by the figures that we see today when we compare them with what we believe was an idyllic position previously. It was perhaps not quite as idyllic as we would like to think. But that does not get us away from the fact that it causes problems.
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I believe that those problems were well defined by my noble friend Lord Griffiths of Fforestfach when he said that children of parents following traditional norms are significantly advantaged over a range of factors in comparison with other children. There is absolutely no doubt about it. If one were to give a child advice before it was born, one would advise it to be born into a stable, married family relationship. While I am not saying that it is all disaster the other way, the odds are very much more in favour of that child than they are as regards all the alternatives.
I turn away now from that issue, although I may wish to return to it later. I move on to the position of the tax/benefit system which is the bedrock of tonight's debate. Although I have already said that I do not believe that people marry or do not marry because of the tax system, or that people get divorced or do not get divorced because of the tax system—indeed, read for tax: benefit system—I appreciate that there are some strange anomalies which make it look as if the state is either neutral or not actually giving marriage the tick of approval that some noble Lords believe it ought to have.
As a Government, we believe firmly that the tax burden is too high for all types of families. We are committed to reducing it as my right honourable friend the Chancellor of the Exchequer, Kenneth Clarke, has made absolutely clear. Indeed, I should like to challenge the noble Baroness, Lady Hollis, in that respect. I do not want to spend my speech arguing with her, but I should like to remind the noble Baroness, as she rails against the top 10 per cent. of taxpayers, that the latter paid 35 per cent. of all tax paid in 1978–79. If one listens to the noble Baroness, one might think that that group was actually paying less tax today. However, that is not so. Those people are actually paying 45 per cent. of all tax paid today. Therefore, we have the interesting phenomenon, which is worldwide, that as you reduce the burden of taxes on the better off, they actually produce more tax for the Exchequer and more tax for the spending departments in Whitehall, such as the Department of Social Security.
The noble Baroness should be more careful about following that line of argument. Equally, as regards the noble Baroness's suggestion that an unemployed married man with children has lost out most of all in the changes over the past 15 or 16 years, perhaps I may point out to her that the average income of such a man with two children has increased by around 20 per cent. since 1979, after allowing for inflation. I believe that that counters the view of the noble Baroness that we have particularly penalised that group of men by the tax and benefit system.
As I said, I do not believe that manipulating the tax system will prevent those social consequences. I believe that they have much more to do with the way that society has changed. I referred to the civilised society and the permissive society. I believe that that kind of view has meant that one's responsibilities are just those which one chooses to take and that if one has made that choice one can lay it down quite happily if one wishes to do so. Those factors are much more important as regards the social problems that we are seeing.

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At this point I should like to mention the speech made by my noble friend Lord Zouche of Haryngworth. He has taken me a little away from the normal part of my response but it is only fair to respond to him. I note what my noble friend said about charities. I accept that a reduction of 25 per cent. to 24 per cent. means a decrease in what charities receive as regards the advantages in tax giving. However, I am afraid that that is not a terribly good argument against, for example, not reducing the tax; and I could say that, when tax was increased, the opposite happened.
As far as concerns VAT, I should simply commend my noble friend to read the report of the last debate on tax simplification. I believe that his suggestion would make the system more complex. The general view of the last debate was that we should be trying to go in the opposite direction.
I do not necessarily believe that the Government are in a pivotal position when it comes to encouraging the continuation of marriage and the responsibilities of family. I wonder whether I dare say to the right reverend Prelate that I believe there are a number of other organisations, including the Church, which have a major responsibility to signal to the public, and to the world at large, in a clear way what their position is in—as the right reverend Prelate correctly said—the Judeo-Christian tradition. I sometimes think, not just in his Church but in all the Churches, including my own Church, the Church of Scotland, that I do not hear the signal as clearly as I would like. However, I welcome it when I do hear it. I believe that it should be said loudly and clearly.
The Government must deal with family life as it is when we come to supporting families rather than as we would like it to be. We should then look at how we can support the family. We can make it clear that the major responsibility for children rests on their parents, not on the taxpayer. We believe that parents are responsible—that is, both parents—and that taxpayers should only be involved if the parents do not have the means to support their own children. That responsibility continues even if, sadly, the parents no longer live together. The Child Support Agency was established to implement that principle. Interestingly enough, the difficulties facing the agency have come about because many parents—by and large, I am ashamed to say, men—are not willing to accept the responsibility of family life. As a Government we should try to create the economic and social conditions in which families can grow and develop.
I believe that we have done the latter, although there is always plenty more that we can do. For example, my noble friend Lady Young said to me accusingly that the tax system no longer takes account of the number of dependants. That is true, but we have changed the tax system to the child benefit system. The child benefit system gives support to families regardless of whether or not they pay tax. It gives it directly to the mother. I do not want to continue in that respect, but I feel quite strongly that the advantages of the child benefit system
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are quite considerable as against the tax system where the benefit went to the father and was not always, I regret to say, passed on to the mother.
My noble friend's other point was about the first child and, of course, we recognise that the first child is the more or the most expensive, depending on how many children you end up having. We recognise that because child benefit is higher for the first child than it is for the subsequent children. We have helped in that way and, indeed, average incomes have increased in real terms for all family types since 1979. Married couples with children enjoy an average increase in income of some 39 per cent. over inflation.
It is true, and some of your Lordships have pointed it out, as did the noble Baroness, that high unemployment and high rates of lone parenthood certainly co-exist in the same geographical area. It is important that we tackle the problems of joblessness and welfare dependency for their own sakes and not just because of the impact they have on families. If we have improvements in family stability as a result, that will be an added bonus. My noble friend Lord Skidelsky as well as the noble Baroness, Lady Hollis, drew my attention to this aspect of Government policy. We have announced over the last two or three Budgets a comprehensive package of work incentives. We have made further improvements to in-work benefits so that people can have an even greater return from working—£10 extra in family credit if you work for more than 30 hours. We are attempting to smooth the transition from benefit to work by easing the gaps in income and speeding up the payment of benefits, such as housing benefit and family credit. We are encouraging employers to provide more jobs, particularly for people with few skills and those who have been unemployed for two years or more. We are piloting new ways of helping low-paid people in work who do not qualify for family credit because they do not actually have children. We are doing all that.
My noble friends Lord Skidelsky and Lady Elles, and indeed the noble Lord, Lord Harris of High Cross all quoted extensively from Patricia Morgan's book, which I read with concern, I must say, but one has to be a little cautious about it because the figures quoted by my noble friends were constructed on the assumption that the lone parent receives assistance with child care costs of £40 per week which, of course, the married man does not incur. My noble friend Lord Ashburton made that point, but I am afraid that I do not think he carried it to its logical conclusion. When the child care costs she has to pay are knocked off her net income so that the disposal income of the lone parent and the couple are truly comparable, I believe my noble friends would find that the gain from working is similar for both types of household.
My right honourable friend Peter Lilley announced last November that changes in social security benefits would be implemented which would narrow any residual gap. We accept that it is wrong for a lone parent to take home a greater income from the same gross earnings than a couple with an extra adult to support—three mouths against two mouths. However, we have to accept that child care costs need to be met if we are to

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encourage lone parents to go to work, which is the one very clear way in which they can improve their standard of living and their children's standard of living. We will continue to support families to work if they are able to do so and we have particular measures in place—family credit, for example—which encourage couples with children to work and, if their earnings are low, do not allow them to fall into the unemployment trap or the benefit trap and simply make it not worth their while to go back to work. I believe that we have done that.
It is an interesting fact that the majority of couples who need family credit need it for only one six-month spell to help them over temporary problems. Two-thirds of the couples leave family credit for markedly improved financial circumstance reasons—i.e. higher earnings. That is an important point to underline to your Lordships.
Of course we recognise the difficulties of lone parents and we believe that we have to help them. We want to see an improved incentive to work, as I have mentioned; secondly, we want to ensure that they receive regular maintenance from the absent parent, as I have mentioned; thirdly, we do want to ensure that the benefits system is even-handed. The right approach is, therefore, neither to penalise them nor to promote them. That is why we announced last November a restructuring of the benefits system to emphasise that point. Of course we have now frozen one-parent benefit and lone parent benefit. In actual fact, in all the calculations I have seen on the Patricia Morgan point, it is one-parent benefit and lone parent benefit which causes the diversion. That is the actual arithmetical reason for the diversion. Therefore, by deciding to freeze it, we will erode the differential and we will take away what my noble friend Baroness Young indicated was a signal in some way that we value lone parents' children higher in the benefits system than we value married couples' children. That certainly is not the Government's intention and that is certainly one inference that people can draw.
We are very much committed to helping and encouraging married couples. I say to my noble friend Lord Ashburton and others: married couples have considerable advantages in the tax system. My noble friends may want them to have more. A married couple would pay around £5 a week less in tax than most single people on similar incomes. Married couples, of course, are treated more favourably for inheritance tax, transfer tax and capital gains tax reasons. A married couple can shift money from the husband to the wife so that she can use her personal allowances and her lower tax bands, and she can do that without taxation.
Of course, I will draw these points and all the others to the attention of my friends in the Treasury and my other friends in the Department of Social Security. I take on board the point about passing on to one's children, but I certainly believe that there are considerable advantages to marriage. Indeed, one key advantage that I came across recently in my study of pensions is that in the case of a cohabiting couple or, as they are called in the north east, a "bidey-in" couple, if something happens to the man—the man dies—then the woman is not considered to be his widow and does not receive a pension, whereas the married lady does, rightly, receive a pension. That is a
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distinction which perhaps is lost on a lot of people until the awful event happens, but it is something we should underline.
We are committed to ensuring that the tax/benefit system supports family life and encourages and sustains the two-parent traditional families. I believe that that is important. The noble and learned Lord, Lord Simon of Glaisdale, said that you do not need to discriminate against the one in order to discriminate in favour of the other.
We have had an interesting and useful debate. All the debates on a Wednesday afternoon in which I am involved start off by seeming to be another chore, but end up by being extremely useful. They add to my knowledge and add to the admiration I have for your Lordships for the width and breadth of experience which you bring to all these debates. This one this afternoon was no exception.
8.48 p.m.
Lord Skidelsky: My Lords, it only remains for me to thank all those who have taken part in an interesting and thoughtful debate. I draw a lot of comfort from what was said because I do not think that we could have had a debate in these terms five years ago. I believe that we have made progress. All noble Lords who took part recognise that the decline of the family is a serious problem and threatens social disaster if it is allowed to continue without something being done about it.
Everyone has agreed that the tax/benefit system as it now operates has contributed to the decline by sending out the wrong incentives, although noble Lords disagree about how central a part it has played in that decline, as compared to more general economic and social forces. All noble Lords have agreed that we can do something to make the tax/benefit system more family friendly.
Some interesting suggestions emerged which I hope will not be lost. I note in particular the importance of higher tax thresholds; the introduction of transferable tax allowances; and equal fiscal treatment for married and unmarried parents. One not mentioned, incidentally, which I think is worth considering, is income splitting, which would give equality between one-earner and two-earner families which does not exist at the moment.
There was a little disagreement, as was to be expected, about what we mean by the family. I agree with the right reverend Prelate that there is a variety of family styles. He believed, I think, that the Judaeo-Christian concept of the family was in retreat. I do not know whether he thought it was in permanent retreat. I wonder whether he took sufficient account of the possibility that policy legislation, including the tax/benefit system and the way we work it, might alter the balance as it now exists and reverse the trend.
I wish to thank the Minister in particular for his participation. He was generous enough to say that he enjoys these debates. He has been doubly worked today. I wonder how he was able to disentangle himself so successfully from one tax debate and make a completely different speech on the second tax debate. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Civil Aviation (Amendment) Bill [H.L.]
8.52 p.m.
Lord Brabazon of Tara: My Lords, I beg to move that the Bill be now read a second time.
I wish to start the debate by giving a little background to why I am introducing this Bill today. A little over a year ago my attention was drawn to a number of serious offences that had taken place on foreign registered aircraft landing in this country. These included the attempted rape of a stewardess on a flight from Hong Kong, a serious assault on a flight service director on a Qantas flight from Australia and a fight among three British passengers on a Royal Air Maroc flight to Manchester which resulted in grievous bodily harm. In each case when the aircraft landed here the police were unable to take action because the incidents took place on foreign registered aircraft outside United Kingdom airspace.
These matters have been drawn to my attention by the Board of Airline Representatives in the UK, BAR-UK, which represents almost 90 airlines, all but six of them foreign airlines, flying to and from this country, which are of course vulnerable to the loophole in the law which this Bill would stop. Qantas had earlier commissioned a legal opinion on the subject by Mr. Robert Webb QC, Mr. David Hart and my noble friend Lord Hacking, who I am sure will say more about this in his speech later.
The Bill before your Lordships this evening has been prepared for me by BAR-UK, and it has the support of the Association of Chief Police Officers, the Air Transport Users Committee, which is the statutory consumer protection body set up by the Civil Aviation Authority, the airport companies BAA plc and Manchester Airport, British Airways and the Police Federation.
During my Question in the House a year ago, my noble friend Lady Blatch undertook to look into the matter and in due course the Home Office published a note reviewing the position. In it it posed a number of questions: first, is there a gap in the criminal law, and is it a serious gap—are serious offenders getting away? Secondly, are there a sufficient number of incidents each year in which offenders escape justice for action to be necessary; and, lastly, if action is required what measures can be taken?
On the first point, I quote from the Home Office paper, paragraph 25:
"Unless the offence takes place on a British-registered aircraft, on a foreign-registered aircraft in UK airspace, or on a foreign registered aircraft outside UK airspace where the safety of the aircraft is endangered, our police and courts have no authority to take action against the perpetrator. Serious physical and sexual assaults against members of the cabin crew or passengers may be committed with impunity unless the state of registration of the aircraft decides to instigate extradition proceedings. Even if it decides to do so the police here can only detain the alleged offender until such time as they establish that an offence has not been committed within UK jurisdiction; this may not allow enough time to arrange for issue of a provisional warrant of arrest pending extradition. Not only may serious offenders therefore escape justice but the victim(s) of the offence will not be afforded any protection under the law".
That I believe makes the case for me.
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On the second point, the number of incidents, a survey was undertaken during September and October last year. This showed some 10 incidents on aircraft landing at Heathrow, Gatwick and Manchester. Of these, four occurred on British aircraft, two leading to charges and two to cautions. One of those charged was sent to gaol for assault. Six took place on foreign aircraft, including cases of drunkenness and abusive behaviour, spitting at the crew and assaulting passengers and crew. In each of these cases the aircraft was met by the police but they were powerless to act. I believe these and the incidents that I have already described demonstrate that there is a problem that needs to be addressed.
This is a particular problem for this country. I was somewhat amused to read in paragraph 31 of the Home Office paper the description of Heathrow as,
"probably the UK's busiest airport with a large number of scheduled flights by foreign airlines".
Heathrow is not,
"probably the UK's busiest airport";
it is easily the UK's busiest airport, with some 52 million passengers a year, rising at 6 per cent. a year. It is the busiest international airport in the world, with 82 foreign airlines operating at it, which I suspect is a world record, and with an average of some 550 arrivals a day.
On the third question, if action is required, what measures can be taken, I believe this Bill provides the best solution; that is, to amend Section 92 of the Civil Aviation Act 1982, which deals with the application of criminal law to British controlled aircraft, to cover UK-bound foreign aircraft. I am well aware that we are talking here about extra-territorial jurisdiction, and that is an issue that has received much attention recently.
I would say that this country already exercises extra-territorial jurisdiction, and has done for many years in a number of areas. Slavery, piracy and war crimes are examples. Under the Merchant Shipping Act of 1995 which consolidated the old 1894 Act, British subjects, not being crew members, on foreign ships and foreigners on British ships may be tried in this country if they commit offences which would have been offences if they had occurred in the UK. The Aviation Security Act 1982 has given jurisdiction to the UK courts over hijacking and other offences committed on or in relation to aircraft in flight, wherever they are and whatever their country of registration. But these provisions apply only to conduct which destroys, damages or endangers the safety of the aircraft, or may do so. With a few exceptions, if the aircraft is not harmed or put at risk, the courts have no jurisdiction over the sort of cases I have described.
We are out of step with the rest of the world. Many countries, including the US, Canada, Australia, France, and Belgium, already have similar jurisdiction. The laws in France and Belgium include the commendably simple formula that if the aircraft lands in those countries after the offence, the offenders may be charged and prosecuted.
Far from creating difficulties with other countries, the Bill would bring us into line with much of the rest of the world. Legal advice has confirmed that there would

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be no conflict with the treaties. The Tokyo convention on crime on board aircraft expressly states that it is not to exclude criminal jurisdiction under national law.
At the most recent meeting of the International Air Transport Association in Kuala Lumpur last October, the following resolution was adopted:
"Whereas offences continue to be committed against passengers and crew on board aircraft without states being able to take effective legal action in certain circumstances against the perpetrators when the aircraft lands;
The 51st Annual General Meeting calls upon States to take all steps necessary in order to enable the exercise of full jurisdiction over all offences committed outside their airspace on board aircraft operating to and from their territories".
Therefore, unlike some measures on extra-territorial jurisdiction, I believe that the Bill would be popular throughout the world, not just in this country.
The Government have announced a review of the law on extra-territorial jurisdiction which would cover crimes on foreign aircraft, but only by UK nationals. This could result in an anomalous situation if British but not foreign participants in an affray on the aircraft were to be prosecuted. Incidentally, that might make an interesting story for the tabloid press if it ever happened like that.
The proposals to extend the jurisdiction of our courts to deal with sexual and other offences abroad which were recently debated in this House have drawn attention to the practical difficulties of prosecuting those committing offences abroad where it may be impractical to get victims and other witnesses to give evidence in court here. Those difficulties would not apply to crimes on aircraft where all the parties are present in the UK immediately after the commission of the offence. The overseas airlines in membership of BAR-UK have given me an assurance that in appropriate cases their staff will come to this country to give evidence in court later.
I acknowledge the need for clarity as to what offences would be caught by the Bill. The solution proposed is simple. The Bill would give our courts jurisdiction over crimes on foreign aircraft which actually arrive in the UK. This would apply whether the arrival were scheduled or not. Thai: is necessary, for example, to cover the case where a foreign aircraft makes an unscheduled stop to put off a violent passenger. Conversely, where a flight has several stops, only offences committed on the last leg before arrival in the UK would be covered by the Bill.
Proper control over bringing prosecutions would be exercised in England and Wales by the Director of Public Prosecutions, whose consent would be required to proceedings, just as it is where offences are committed on British controlled aircraft. The law allows suspects to be arrested and detained while the DPP's consent is sought. That in practice is often obtained within hours.
I hope that I have demonstrated the need for the Bill, that it would work and that we need it now. The police are, I know, frustrated by their inability to act in the cases I have described. It goes against all their professional instincts and training. For other passengers on a flight, it can be an alarming and frightening experience to witness violence or worse, with no means
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of escape. But, above all, for the victims of the crime it must be heartbreaking to find out that even when the police have met the plane on landing they are powerless to act and the offender will get off scot-free. I hope your Lordships will support the Bill. As noble Lords know, most Second Reading speeches end with that phrase, but for a Private Member's Bill it is absolutely essential that it be supported by all sides of the House. I very much hope that that will be the case this evening.
Moved, That the Bill be now read a second time.—(Lord Brabazon of Tara.)
9.4 p.m.
Baroness Mallalieu: My Lords, from these Benches this short, commendably clear and necessary Bill has our support. We are satisfied that there is a real problem which is causing growing disquiet about our law among overseas airlines flying to this country. We are satisfied that there is at present a gap in our law which, in consequence, leaves both passengers and crew members on foreign aircraft flying here in some cases without effective protection from crime committed on board, during the flight and before the aeroplane reaches British airspace. We are also satisfied that the Bill provides a means of closing the present lacuna in the law which on occasions denies that protection to airline staff and travellers alike.
This House is grateful to the noble Lord, Lord Brabazon of Tara, for outlining the need for the Bill and its provisions with such clarity and force. The present position is clearly wholly unsatisfactory. In general terms, as I understand it, the police in the UK can arrest a passenger on a foreign registered aircraft on arrival following the commission of a criminal offence committed on board during the flight only if the offence either occurred in UK airspace or involves an act of violence which endangers the actual safety of the aircraft. That last phrase is currently being interpreted by the enforcement authorities as meaning an act which interferes with the body of the aircraft—for example, damage of a kind likely to cause decompression—or an attack on a member of the flight crew who is actually in control of the plane.
Where the United Kingdom authorities do not consider that they have jurisdiction under those provisions, the alternative recourse is to the Tokyo Convention, under the provisions of which the offender may be extradited back to the country where the aeroplane is registered. But then, as the noble Lord has already indicated, difficulties arise in obtaining provisional warrants under Section 8 of the Extradition Act, both because it takes time and also because the country which has jurisdiction may take the view that the cost and trouble of extradition proceedings are disproportionate to the offence, especially if the victim is not one of its own nationals. That country can and often does decide to do nothing, sometimes even in serious cases, and then the offender escapes scot-free.
The noble Lord, Lord Brabazon, has already given two examples which have come to his notice. A third serious one came to mine. On a flight from Bahrein to Heathrow, a male passenger sexually assaulted a female

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passenger, then assaulted another woman and her husband for good measure, before being arrested and restrained for the rest of the flight. He was then handed over to police here, but they decided they had no jurisdiction because the offences had occurred before reaching British airspace. In that case, the best that the police here were able to do, because the man was still drunk when reaching United Kingdom airspace, was to ensure that he was taken before a court for being drunk and disorderly, for which he received a small fine.
Offences of theft, sexual assault and violence are being committed, unhappily, with impunity in those circumstances. The problem is not likely to decrease; rather the reverse, as more people travel by air and more people use long-haul flights. It simply cannot be right that someone travelling to this country on a foreign airline can get away with impunity with sexually molesting the stewardess, punching his fellow passengers or stealing their belongings simply because he commits the offence before entering United Kingdom airspace.
Surely it is also important that Britain should play its part in seeking a general improvement in international air safety, including safety from in-flight crime, by enacting legislation such as that proposed in the Bill which is already in force elsewhere. I understand that there has already been extensive consultation and widespread support for the Bill. We should not allow crime in the air to go unpunished simply because there is a gap in our law. This Bill is a means by which that gap might be closed.
9.8 p.m.
Lord Lester of Herne Hill: My Lords, as the noble Baroness, Lady Mallalieu, just said, the noble Lord, Lord Brabazon of Tara, deserves public gratitude for having introduced this Bill to tackle a real mischief. As the noble Lord so clearly explained, the mischief is that our courts have no power to deal with crimes committed on board foreign aircraft while in flight to the United Kingdom, even when this is the first country in which the aircraft lands after the crime has been committed.
Unlike the position in Australia, Canada, the United States and other countries, Parliament has failed to extend extra-territorial jurisdiction over serious criminal offences, for example, as was stated, involving physical and sexual assault committed in foreign aircraft on scheduled flights. In the case of Canadian and United States law, the jurisdiction of their courts apparently includes incidents between passengers. Again, unlike the laws of Canada and the United States, our law does not permit prosecutions to be brought for other serious offences committed on board foreign aircraft, such as receiving stolen property or theft.
The noble Lord and the noble Baroness gave graphic examples of serious incidents that have taken place on foreign flights to UK airports in the recent past. Those incidents, involving considerable disturbance to other passengers and crew and serious offences against the person, have not been able to be dealt with by our courts even though all the witnesses were present in this
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country in the aftermath of the crimes, and even though this was the first country in which the aircraft had landed after the crimes had been committed. Nor have the perpetrators of those crimes been extradited. The fact that the Bill has the support of the Board of Airline Representatives of the United Kingdom, of the police and of consumer organisations is cogent testimony to a pressing need for the Bill so as to provide passengers and air crew with more effective legal protection.
It is just 30 years since the publication of a third edition of the book by Shawcross and Beaumont, Air Law, to which I contributed, as one of three editors, as a young, aspiring aviation lawyer who never quite made it in that field. In that sense, I declare a professional interest, although my only experience of the criminal law in this field is in defending glamorous women pilots, one of whom flew under a bridge on the motorway on the way to Oxford in making a film. In that book, I quoted all those years ago from a splendid lecture given by the noble and learned Lord, Lord Wilberforce. I am sorry he is not in his place. It was on crime in aircraft, and was published in the journal of the Royal Aeronautical Society in 1963. The lecture is even more relevant today than it was when it was given. I hope noble Lords will allow me to quote a passage from it. This is what the noble and learned Lord wrote:
"50 years ago the idea that aircraft might become a field for the application of the criminal law would have seemed fanciful. Even 30 years ago our legislators would have thought it premature to contemplate legislation on the subject. A dozen or so people, probably all men, flying together for an hour or two in conditions of discomfort would have hardly had either the opportunity or the vitality to be otherwise than law abiding. Now we have 100–200 people flying together, commonly for four to seven hours, at times from 12 to 15 hours. They fly in conditions of security and comfort. They have room to move about. They include both sexes. They are plentifully supplied with alcoholic stimulants…and the purely statistical chances of abnormal behaviour are obviously greatly increased. Moreover, aircraft pass rapidly over frontiers which on land may be carefully controlled. They offer great opportunities for the transfer from one country to another, possibly a thousand miles or more away, of commodities for which a high price will be paid and which cannot pass to their most profitable market by land or sea: things such as gold, drugs, diamonds, secret plans and designs. It is very tempting for passengers on these aircraft and for their crews to undertake or lend themselves as accessories to these trades. So crimes may be committed on aircraft, and aircraft may be used for unlawful activities".
Those observations by the noble and learned Lord, Lord Wilberforce, have even greater force today, 33 years later, when there are ever larger aircraft, many more passengers and much more frequent use of long-haul flights. The incidence of in-flight violence and other crimes on aircraft have become a real and pressing problem for the airlines, their crews and their passengers.
In that lecture the noble and learned Lord, Lord Wilberforce, also pointed out that many different parties, often with differing interests, may be concerned when a crime has been committed on board an aircraft. For example, when a crime which occurs on an aircraft registered in state A while flying over state B is committed by a national of state C against a national of state D, after which the aircraft lands in state E, all five states A, B, C, D and E may claim jurisdiction; and

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the aircraft operator, the captain, the crew, the ground authorities and the passengers all have particular interests requiring consideration. I believe that the state in which the aircraft lands—for these purposes the UK—has as legitimate an interest in dealing with crimes committed on the aircraft as does the state in which the aircraft is registered.
I have asked myself whether there is any objection in principle to extending extra-territorial jurisdiction in the way proposed by the Bill, whether as a matter of international law and international comity or as a matter of British constitutional principle and convention. I do not consider that there is such an objection in the situations covered by this Bill.
The traditional basis for criminal jurisdiction in this country is territorial. Our courts are concerned only with conduct which is an offence against our law. The general assumption, as we all know, is that to be an offence against English law, conduct must in some degree be connected with the territory of England and Wales. In most cases that means that the conduct must occur in England or Wales. Unless the contrary appears expressly or by necessary implication, Acts of Parliament are not concerned with matters taking place beyond UK territorial limits.
But, as the noble Lord said, there are significant exceptions. Particular kinds of conduct by persons outside the territory have been made an offence under English law. If I may add to the list, that applies, for example, to crimes having an international character: hijacking, drug trafficking, terrorism, genocide or torture, where Parliament has enacted legislation to give effect to international conventions dealing with those serious transnational problems.
It is because international carriage of passengers and goods by air requires the highest standards of safety and good order that the international community has entered into the Tokyo, Hague and Montreal Conventions. But those conventions are inadequate in grappling with the problems that the Bill now raises. Luckily, the Tokyo Convention, as the noble Lord said, specifically provides that it does not exclude any criminal jurisdiction exercised in accordance with national law. It leaves the states parties free to enact a Bill of this kind.
Another problem is that the Tokyo Convention obliges countries to take into custody only those who have been involved in a hijacking or who have committed a serious offence according to the penal code of the state of registration of the aircraft. Furthermore, they can keep such persons in custody only for such time as is reasonably necessary to enable extradition proceedings to be instituted.
It is profoundly unsatisfactory that the only safeguard that now exists is the wholly ineffective safeguard that the wrongdoer may be extradited to the state of registration of the aircraft; that is, to the state of the law of the aircraft's flag. It is wholly ineffective not only because the state of registration may he reluctant to apply for extradition, but also because by the time that extradition takes place, all the witnesses will have dispersed across the world and memories will have become stale.
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Furthermore, the powers and duties of states in Chapter 4 of the Tokyo Convention have not been fully incorporated into our legislation as they apparently have been in Australia and North America. The result of the failure to enact the convention more fully into our law is that there is apparently no power for UK authorities to take into custody people who have been delivered to them by the aircraft commander pursuant to the Tokyo Convention.
I saw that point in the admirable opinion written by the noble Lord, Lord Hacking, Robert Webb QC and David Hart. I wrote to the noble Baroness the Minister to ask whether the Government agreed with the opinion of the noble Lord, Lord Hacking, on that point. I hope that she will be able to deal with that matter in her reply. I also hope that, if the noble Lord, Lord Hacking, is right—as, with respect, I believe that he is—that further gap in our legislation may be filled by this Bill at Committee stage.
Just as the unique circumstances of the international carriage of passengers and goods by air have caused the world's community to enact conventions dealing with threats to the safety and security of passengers and crews, so our national legislators are, in my view, fully entitled to go beyond international minimum standards and assert criminal jurisdiction over serious criminal wrongdoing recognised as culpable by the national criminal laws of all nations.
I can see that it may be desirable for the scope of the Bill to be confined to the kind of serious offences made unlawful under, for example, Australian, Canadian and United States law. But that is a matter of detail for the Committee stage. In principle, I can see no threat to international comity by asserting criminal jurisdiction concurrently with other states, notably the state of registration of the aircraft and the state of nationality of the criminal wrongdoer. I realise that that may encourage some other states, whose national legal systems are less obviously procedurally fair than is our own system, to assert a similar jurisdiction so that we, the people in this country, may find ourselves liable for similar misconduct to answer for ourselves before foreign courts; as it were, the procedurally unfair courts of Ruritania. However, I do not regard that as a major obstacle to the enactment of the Bill.
The enactment of the Bill may encourage the world community to strengthen the Tokyo Convention on similar lines. I believe that that would be an excellent result because international legislation provides the best means of tackling the menace of crimes in the international airspace, coupled always with strong and effective national measures. I therefore greatly welcome the Bill. I hope that it will have the Government's support and will be speedily enacted. Accordingly, I hope that your Lordships will give the Bill a Second Reading and that the Government will give their crucial support to it both in this House and in another place.
9.21 p.m.
Viscount Simon: My Lords, I am delighted that the noble Lord, Lord Brabazon of Tara, introduced this Bill. It may appear odd that a mariner with 10 years' service

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as a navigator in the Merchant Navy should be taking part in this aviation Second Reading; after all, I am more familiar with the Merchant Shipping Act. However, as an enthusiastic amateur, I have been a keen follower of aviation matters for many years. I intend to be brief, making only a few general observations.
It is not so long ago that aircraft could fly for a maximum of maybe three or four hours before having to land to refuel for an hour or so before taking off again. That was a not unpleasant means of long-haul travel. Nowadays, aircraft remain airborne for much longer and, despite in-flight entertainment, boredom can set in. That, combined with the effect of alcoholic beverages, can lead to a lack of consideration towards other passengers.
Presumably, because of a lack of self-control, incidents such as those already mentioned can and do occur. On short-haul flights the alcohol alone can be the catalyst. What does the pilot do if suitably worried? He can report the incident to air traffic control, who will report it to the police, who in turn may well be powerless to do anything at all. I would love to know how many times that situation arose when the noble Baroness, Lady Blatch, was an air traffic controller.
That leads me neatly on to the Home Office note and the observation that there may be insufficient instances to warrant any action being taken. I hope that I am not being too simplistic when I say that one sexual assault or one physical attack is one sexual assault or physical attack too many. If that is being naïve, where do we draw the line? If there are very few cases, then they will take up less court time and cost less than if they were numerous. To be able to prosecute everybody who commits an offence on a foreign airline is surely preferable to letting that person go uncharged and able to repeat the offence. The court machinery of course already exists.
I shudder to think what will happen when our aircraft can fly to and from Australia without landing. Perhaps a suitable sleeping draught will be put into passengers' drinks to overcome potential problems. I support the Bill.
9.24 p.m.
Lord Hacking: My Lords, my noble friend Lord Brabazon and the noble Lord, Lord Lester, were kind enough to refer to a legal opinion that I wrote three years ago with Mr. Robert Webb QC and Mr. David Hart of counsel. It therefore may be of some interest to the House if I explain my involvement in this matter. I do not do so to declare a financial interest—at least not a relevant financial interest—but because I always think that one of the helpful things which your Lordships can do in coming to the House is to give the benefit of professional and other experience outside the House.
It was four years ago, in about June 1992, that Quantas Airways, which instructed then my former law firm, sought my advice about one of the incidents to which my noble friend Lord Brabazon referred. It was a very painful incident. A British passenger boarded a Quantas flight in Bangkok on a flight bound for London.
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He was only taken on board by the flight service director, who noticed that he showed signs of intoxication as he stood at the cabin door. Because it was the night of the Bangkok riots and because there was a great deal of uncertainty in Bangkok that night, out of kindness to a passenger Quantas took that passenger aboard.
He behaved disgracefully during the flight and culminating his appalling conduct with a "Liverpool kiss" to the flight service director. Unfortunately, the flight service director did not know what a Liverpool kiss was and certainly did not have time to avoid the vicious headbutt that was occasioned to his face. So serious was the headbutt that it damaged the nasal septum of his nose. He had serious numbness in the cheekbone and suffered cervical spine damage.
It is some time since I practised in the criminal courts—if I get this wrong I think the noble Baroness, Lady Mallalieu, will be able to help me—but I identified that offence, if it had taken place in the United Kingdom, as grievous bodily harm with intent under, if my memory serves me correctly, Section 18 of the Offences against the Person Act. I am very glad to have nods from the noble Baroness because I have not looked at that for some time.
I had to advise Quantas Airways that, regrettably, the police at London airport were correct when they refused to exercise jurisdiction over this offender. I was then instructed to institute civil proceedings, but the difficulty there was that the assailant had disappeared off—he was an oil-rigger—to Pattaya City in Thailand and service difficulties of the civil documents was such that the case had to be abandoned. It was in those circumstances that Quantas Airways generously instructed my then law firm and Mr. David Hart of counsel and Mr. Robert Webb QC to write the opinion. Therefore, it has been most satisfying that since that opinion was written in June 1993 there have been such wide consultations.
I would particularly like to refer to the Home Office memorandum of March 1995 of my noble friend the Minister which I found to be a very constructive document looking at this problem. It has also been very reassuring to find the support that has been given to the Bill—support by all the speakers in the debate. I am delighted to note that the noble Baroness and the noble Lord, Lord Lester, found no threat to international comity in Britain seeking to extend jurisdiction in the circumstances of the Bill. A number of noble Lords who are unable to be present in the House tonight have indicated to me their support for the Bill—the noble and learned Lord, Lord Archer of Sandwell, the noble Lord, Lord Geddes, the noble and learned Lord, Lord Griffiths, and the noble Lord, Lord Williams of Mostyn.
It has also been nice to record the support of the BAA, Manchester Airport and the police. Congratulations should go to the Board of Airline Representatives in the UK for the initiative that it has taken and to overseas airlines for all the support they have provided. It is very nice that the managing director in Europe of Quantas Airways is present in the House

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tonight and that there are representatives listening to your Lordships' debate from Cathay Pacific, Austrian Airlines, United Airlines and British Airways.
Indeed, the chief executive of British Airways wrote a letter to my noble and learned Lord the Lord Chancellor, which I hope has been shown to my noble friend the Minister. In the second paragraph of that letter he wrote:
"I very much hope that the Government will support the proposed legislation. The commission of criminal offences on board aircraft is increasing, and we consider that the proposed legislation will close a loophole in the law which effectively exonerates offenders who commit crimes on board foreign registered aircraft en route to the United Kingdom".
The letter goes on to give particular reasons why British Airways itself supports this Bill.
While the number of incidents may be limited, our failure to exercise jurisdiction does cause grievous upset. Perhaps I may refer to another incident which my noble friend mentioned—the incident on a flight from Hong Kong. The airline concerned, Cathay Pacific, was so upset that it wrote to the Minister of State in these terms: we are,
"left in the invidious position of being legally unprotected against assaults by passengers when operating into the United Kingdom".
Crime, as this Bill recognises, has become an international matter. As the noble and learned Lord, Lord Griffiths, said in the Somchai case:
"Unfortunately in this century crime has ceased to be largely local in origin and effect. Crime is now established on an international scale and the common law must face this reality".
So must statutory law, and therefore we should all be very grateful to my noble friend for introducing this Bill.
He has referred to other jurisdictions, as indeed has the noble Lord, Lord Lester, which exercise jurisdiction over incidents taking place in aircraft coming into their airports. I believe that the most touching reference I can make is the application of United States law which exercises, as the noble Lord, Lord Lester, said, jurisdiction in these circumstances. Judge Jack Weinstein, a well-known Federal judge in New York, said this about American law:
"The criminal statutes at issue here afford comfort to both American and foreign passengers flying aboard foreign airlines into United States … There can be little doubt that some passengers travelling with young children might feel some added sense of security in knowing that this country was reaching out its protective arm from the point of embarkation abroad to the point of arrival in this country. While the effect on number of passengers may be slight, it is not too negligible for Congress's … concern".
That does contrast, does it not, with the anguished protest that one of our foreign airlines had to give to our Government when it felt helpless as a result of no jurisdiction being exercised when one of its air hostesses suffered a fearful attack?
I believe that this Bill provides a simple remedy and it is therefore very reassuring that my noble friend has received such good support. However, the noble Lord, Lord Lester, raised an interesting point about a deficiency in our current law relating to the Tokyo Convention and Article 13(2), as the noble Lord knows. Consideration was given by my noble friend, who was kind enough to invite me into the consultations concerning the preparation of this Bill, as to whether we could include this measure which the noble Lord,
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Lord Lester, suggested. It was not included for a very practical reason. It was thought that if we exercised jurisdiction and dealt with the offenders here in the United Kingdom, there was no need to take that additional step under the Tokyo Convention. Therefore, it was really a practical approach.
Perhaps I may end by pointing out the practical advantage of the measures proposed in this Bill. Years ago, when I practised in criminal matters at the Bar, I remember being instructed in affray and assault cases. The problem then was that the victim went in one direction and the witnesses went in another and the evidence became dispersed over the streets. The fact that an offence is taking place in an aircraft is an evidential dream to a prosecutor because out of that cylinder of the aircraft comes the victim, the offender and all the witnesses. They are all there ready to give evidence. As a prosecutor one cannot think of a more perfect collection of evidence. Of course, it arises out of very imperfect circumstances. We should be grateful to my noble friend Lord Brabazon for introducing this measure.
While the safety of the aircraft may not be at risk, the safety of the persons in it is certainly at risk. There is great fear among other passengers who are travelling in the aircraft to have a serious violent incident in such a small restricted area as an aeroplane. There is no escape from this very frightening experience. I am delighted that my noble friend has introduced this Bill to your Lordships' House. I hope that my noble friend will accept it and accelerate its journey on to the statute book.
9.35 p.m.
Lord Mountevans: My Lords, I hope to be brief because so many of my points have already been well made, not least by my noble friend Lord Brabazon of Tara in his opening speech. Since leaving the Front Bench, he has developed a remarkable record in getting Private Members' Bills on to the statute book. I hope that his luck stays with him on this Bill. I share the view of all other speakers that it is a Bill of the greatest importance. Any Bill that is to do with transportation safety is a matter of the greatest importance. I believe that every speaker has used the word "safety", en passent, in his or her remarks.
The list of supporting bodies mentioned by my noble friend—I looked for the word "endorsements", but for those with driving licences, it means something else—underlines the importance that the aviation industry and related parties place upon our efforts tonight. While BARUK is essentially a body for foreign airlines, it has five or six British members. Although they are not covered by the Bill that we are discussing this evening, those airlines—our own very successful British industry—also support it. That seems to me to be of the greatest importance. That impresses me, as does the brief supplied to me by the police authorities at Manchester Airport. Recently voted the world's best airport, Manchester is at the heart of Euro 96, the European football championships. Football violence is a fact of life and is not confined to the Brits or to terra firma. The police at Manchester have experience

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of offences provided for under the Bill but not, alas, under the present legislation. We would do well to note the force's wish that they already had the powers which the Bill seeks to give them.
Many noble Lords have spoken of crimes of a personal nature: assault, affray, attempted rape and drunkenness. Another dimension is fire. Many airlines operate no smoking policies, including those that fly domestic sectors in the US where smoking in flight carries a penalty of up to $10,000. Much more insidious, vicious and certainly more dangerous are the asylum-seekers who, at embarkation, have survived the carrier's liability enforced (wrongly so in my view) upon all airlines flying to the United Kingdom. There are documented cases of such passengers who burn their passports and other relevant documents in flight. I have said before that the potential consequences of such activities terrify me.
Whether on-board offences are against people or property, they differ in two major respects from similar offences on the ground: one is safety; the other is that on the ground bystanders can walk away from an offence, but at 35,000 feet that is not an option.
More than 100 years ago the regulation of railways Act created the offence of endangering the safety of passengers on the railway. The powers are still used. Tonight, we are discussing the opportunity to give similar powers in respect of a specific group of aircraft. It relates perhaps to under 50 per cent. of those aircraft which arrive in this country, but it is a fairly broad band. As I and other noble Lords have said, safety must be our principal motivator. It is for that reason that I wish the Bill a happy landing.
9.40 p.m.
Baroness Blotch: My Lords, I must first congratulate my noble friend Lord Brabazon on introducing this Bill and on his helpful explanation of what it will achieve, and on all the support that he has received from around the Chamber.
I agree with my noble friend that it is wrong that someone should be able to escape prosecution for an offence committed on board an aircraft just because that aircraft was not registered in the United Kingdom. The Government agree that it is right that that anomaly should be addressed and the courts given jurisdiction over offences committed on a journey by air to the United Kingdom, if this country is the first place that the aircraft lands after the commission of the offence.
The Bill will require some amendment in Committee in order to ensure that the principle of dual criminality applies to offences committed on these aircraft; that is to say, that the act committed must be an offence both in this country and in the state of registration of the aircraft. In practice, I do not think that that condition will inhibit the prosecution of offenders, but it is an important principle. Our courts cannot take jurisdiction unless the act is a criminal offence in this country and should not take jurisdiction if the act is not an offence in the state of registration of the aircraft.
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I shall not detain your Lordships by adding to the catalogue of dreadful stories that we have heard. Suffice to say that I do not believe that they have been exaggerated. They are not occurrences which are too common, but they are common enough to give us concern.
The noble Viscount, Lord Simon, asked whether I had ever experienced while on duty in air traffic control an aircraft landing with troublesome passengers. That was not an experience which I ever had. The aeroplanes had usually one person on board and that was the pilot, who was often a test pilot. If there were any passengers, it was often a navigator, but no one more troublesome than that. I cannot say that they were not troublesome when on the ground, but certainly not in the air.
The noble Lord, Lord Lester, was kind enough to let me know that he was to raise the question of the implementation of Chapter 5 of the Tokyo Convention which deals with suspected offenders acting in breach of the convention. He will appreciate that questions relating to this country's compliance with its international obligations are serious ones to which we shall want to give fuller consideration than has been possible in the time available. I believe that I can reassure him in general terms. As my noble friend Lord Hacking said, Article 13 of the Tokyo Convention allows the commander of an aircraft landing in the UK to deliver to the British police any person who has committed an act on board the aircraft which would be an offence according to the law of the state of registration.
Article 13 imposes also an obligation on the UK to take delivery of that person; and a further obligation to take that person into custody, but only
"upon being satisfied that the circumstances so warrant".
Custody may last only
"for such time as is reasonably necessary to enable criminal or extradition proceedings to be instituted".
The noble Baroness explained the difficulties with that.
In our view UK law implements that article. A person may be taken into custody on being delivered to the British police by the commander of an aircraft if the circumstances warrant it. Custody will be justified either by a provisional warrant under the Extradition Act 1989 or by the bringing of criminal proceedings, if the offence is one over which we have jurisdiction.
We do not consider that that part of the convention means that the UK must take criminal jurisdiction over all offences committed by persons who may be delivered to the British police under Article 13. Had that been the intention, the convention would have said so in Chapter 2. Moreover, the convention cannot be read as envisaging custody without the prospect of subsequent proceedings, either criminal or extradition. That would be contrary to other, more fundamental, principles of international law.
However, the effect of the Bill is to go beyond the convention by extending UK jurisdiction to offences committed on incoming aircraft. That will make it more likely that a person delivered to British police under Article 13 will be held in custody for the purpose of prosecution.

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Therefore, detention would be warranted if an offence was committed on a British registered aircraft or if a provisional warrant had been issued under the Extradition Act. As has already been said, the police would also detain someone who had committed an act of violence which endangered the safety of the aircraft or who had seized the aircraft, whatever the nationality of the offender or the state of registration of the aircraft. Those provisions flow from the Hague and Montreal Conventions rather than the Tokyo Convention, to which the opinion compiled by my noble friend Lord Hacking relates.
The Bill will give us jurisdiction over any offence committed on board a foreign registered aircraft landing in the United Kingdom. I hope that the noble Lord, Lord Lester, will find that explanation helpful. But, as I have already said, we wish to study his remarks carefully and will consider whether anything more is needed. At present our view is that adequate powers exist.
Lord Lester of Herne Hill: My Lords, I am grateful for the Minister's clear statement but, obviously, I should like to consider it when I read it in Hansard. Before she moves on perhaps I may ask one question. The Minister raised the possibility of limiting the scope of the Bill with a requirement of double criminality. My concern is that if the law of the state of Ruritania, for example, must be ascertained before a prosecution can take place a great deal of delay may well be caused while witnesses are within the jurisdiction. Is that necessary? Have any of the other countries—for example, the United States, Canada and Australia—which have asserted territorial jurisdiction limited themselves in that way rather than sensibly saying, "Our law will apply only to serious criminal offences which we will define". Presumably all nations would find them criminal. Every nation would regard assault, battery, rape and so forth as crimes of one kind or another. Therefore, is it necessary to include the provision for reasons of international diplomacy or otherwise? Is it not self-defeating and are we not frustrating the object of the Bill by introducing such limitation?
Baroness Blatch: My Lords, I do not have the information about all other countries. That is an important issue in respect of which I shall undertake work and return to the noble Lord. Dual criminality is a principle that we regard as important, other than transporting our own version of what is or what is not an offence for these purposes. All we would have to ascertain is whether an offence is an offence in another country. How the offence is dealt with in another country would not be material. It is a question of whether an act is an offence both in this country and in the country of registration. It is an important question and I wish to return to it.
I conclude by warmly welcoming the Bill and its introduction by my noble friend Lord Brabazon. On behalf of the Government, I wish it well through its remaining stages in your Lordships' House and in another place.
9.48 p.m.
Lord Brabazon of Tara: My Lords, I am most grateful for the response that the Bill has received tonight. In concluding my opening speech I said that I hoped that Members on all sides of the House would give it a rousing endorsement and that it would become law fairly quickly. However, I did not expect quite such a rousing endorsement, including that from my noble friend the Minister.
I thank the noble Baroness, Lady Mallalieu, for her words of support. She was right to say that existing law applies only if the safety of the aircraft is endangered and that we were all right in that regard but not as regards the type of offence that has been described tonight.
As noble Lords will know, I am a great fan of the aviation industry and I do not wish to cause too much alarm and despondency by implying that such incidents happen on every flight every day. They do not. However, there are a sufficient number to make what we are tying to do tonight worthwhile. Both the noble Baroness and the noble Lord, Lord Lester of Herne Hill, said how difficult it is to try to deal with the problem through extradition. Obviously, that has been difficult because it is just not happening at the moment. Therefore, that problem is self-explanatory.
I very much enjoyed the speech of the noble Lord, Lord Lester of Herne Hill, and particularly his reminiscences of what the noble and learned Lord, Lord Wilberforce, said some 33 years ago. As the noble Lord said, aviation has moved on an enormous amount since then. The size of the aircraft has doubled and the distances which can be travelled non-stop have probably more than doubled. Nevertheless, what was said all those years ago is just as relevant today, if not more relevant than it was then. The noble and learned Lord, Lord, Lord Wilberforce, showed a great deal of foresight in saying what he did.
I am grateful to the noble Viscount, Lord Simon, for his support. He brought out the point that before very long we shall have non-stop flights halfway round the world, and the opportunity for this type of incident to occur on such a flight is obviously even greater.
I referred to the opinion which my noble friend Lord Hacking, with others, prepared for Qantas. I was grateful to him for giving the background to that opinion. There is the Tokyo Convention and other measures but this provision seems to me the simplest way of dealing with the problem. To amend the Civil Aviation Act 1982 by changing just a few words is the simplest and, I hope, the best way to deal with the matter.
My noble friend Lord Mountevans was kind enough to say that in recent years, since I left the Government Front Bench in 1992, I have had some success in getting Private Members' Bills through this House. I must confess that although I have managed to get a Bill through this House every year until now, they were all government hand-out Bills which started in the other place through the ballot. Therefore, that was not too difficult. If this Bill is passed, that will be the first time that I have managed to steer through a Bill which started

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in this House and which was not a government hand-out. My noble friend the Deputy Chief Whip is trying to indicate that there is no such thing as a government hand-out Bill, or at least that may be what he is trying to say. He and I know better than that, as do other noble Lords.
I am grateful to all those who have spoken, and particularly to the Minister. My noble friend agreed that there is an anomaly which needs addressing. She pointed out the possibility that the Bill may need to be amended in relation to dual criminality, and there was an interesting exchange between my noble friend and the noble Lord, Lord Lester. I am not a lawyer; if that is required in order for the Bill to reach the statute book, I am happy to take that on board.
Finally, I reiterate what I said at the end of my opening speech, to which my noble friend Lady Blatch referred. It is very frustrating for the police, witnesses and, in particular, victims of these crimes when there is no power to do anything about the crimes and the offender gets off scot free. As one noble Lord said, if I go into a pub on the way home this evening and there is a fight taking place I can walk out, but I cannot do that if I am on an aeroplane at a height of 35,000 feet. I can do nothing in that situation. I hope that this Bill will go some way towards addressing that problem.
Lord Hacking: My Lords, before my noble friend sits down, could I intervene? In his speech he referred to dual criminality and indicated that he would be happy to include such a provision if that enabled the Bill to pass through both Houses of Parliament. I wonder whether my noble friend and my noble friend the Minister could consider that issue more carefully. I believe that the noble Lord, Lord Lester, put his finger on the difficulty. I have examined the laws of Canada, Australia, and of the United States of America. I can tell your Lordships that none of those laws has a dual criminality requirement. I venture to suggest that that would be an unwise inclusion in the Bill. It would be very much better to rely upon our own law.
After all, the invitation has been made to us by overseas airlines, and effectively by overseas countries, in order to help them. To add the extra complication of having to apply the laws of other countries as well as our own is, in my view, unnecessary. Perhaps my noble friend would also comment on the fact that there is already protection in the system under the Bill; namely, that no prosecutions can be brought without the consent of the Director of Public Prosecutions? That prevents the prospect of the trivial type of offences coming in. Therefore, that mechanism is already available. I wonder whether my noble friends would agree to reconsider the principle of dual criminality.
Lord Brabazon of Tara: My Lords, I had not in fact thought about dual criminality; indeed, it was suggested by my noble friend the Minister. I merely said, perhaps naïvely, that if that was what was required to get the Bill through, then I would be happy to accept it. However, it is a Committee point. If amendments are tabled at that stage, then obviously that would be the time to debate the issue.
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I take the point that my noble friend Lord Hacking made that, at the beginning of the whole process, it is up to the police to decide whether to take action and that, following on from there, it is up to the Crown Prosecution Service to decide whether to do so. Indeed, action will not happen on its own; it is up to the relevant authorities, when the aircraft lands, to decide whether to take matters forward. That is a most important point. As I said, that is a matter which we can discuss in Committee. I shall of course be in touch with my noble friend the Minister or with her advisers on the matter. We shall see what transpires as a result.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Sexual Orientation Discrimination Bill [H.L.]
9.57 p.m.
Baroness Turner of Camden: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Baroness Turner of Camden.)
On Question, Motion agreed to.
House in Committee accordingly.
[The DEPUTY CHAIRMAN OF COMMITIEES(Lord Dean of Harptree) in the Chair.]
Clause 1 [Discrimination on grounds of sexual orientation in employment field]:
Clause 1 agreed to.
Clause 2 [Interpretation]:
Lord Monson Lord Monson moved Amendment No. 1:
Page 2, line 18, at end insert ("male").
The noble Lord said: In moving the above amendment, I shall, with the leave of the Committee, speak also to Amendment No. 3. It may seem like a technical amendment but it is rather more than that. I am sure that every Member of the Committee will agree that Acts of Parliament ought rigorously to safeguard the integrity of the English language. I pointed out on Second Reading that the word "lesbian" was a tautology as the word "homosexual" embraces lesbian, so to speak. However, as I interpreted it, the noble Baroness, Lady Turner, argued in effect that Acts of Parliament ought to be intelligible to the individual in the street who probably would not realise that "homo" derives from Greek and not from Latin and has nothing whatever to do with man.
Accordingly, I suggest the compromise to be found in the amendment whereby the word "lesbian" would be retained. In that case, it is essential to insert the word "male" before "homosexual" otherwise the phrasing would be nonsensical. Indeed, it would be rather like stating:
"This Act applies, firstly, to human beings and secondly to women".

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I am sure that women would be most insulted if that were to happen. I beg to move.
The Minister of State, Department for Education and Employment (Lord Henley): I did not intend to intervene on these two amendments or, for that matter, in the next grouping of amendments to be moved by the noble Lord, Lord Monson. I made the Government's position quite clear on Second Reading. We do not believe that the Bill is either necessary or particularly desirable.
However, I should underline what the noble Lord said when moving the two amendments. If the promoters of the Bill believe that it is important, necessary or indeed desirable, obviously it is important for them to address the serious problems relating to definition and ensure that the legislation makes sense. Therefore, depending on what the noble Lord wishes to do with the amendments, I hope that those promoting the Bill will take note of what he has to say.
10 p.m.
Earl Russell: This is an unnecessary amendment. I do not think there is any doubt about what the Bill means and, while the noble Lord, Lord Monson, may be correct in his grammatical arguments, we have to face the fact that language changes. Language in this area is used by people under 25 years of age; it is used with a very different set of meanings from that with which it may be used in this Chamber. I think it reasonable, in drafting a Bill, to draft it in such a way that it will be useable to those at present under 25. Therefore, this amendment is not only unnecessary, it may even be undesirable.
Baroness Turner of Camden: I share the view that has just been expressed by the noble Earl, Lord Russell. I see no reason for this amendment. I believe that the terms used in my Bill are very widely understood. Indeed, as recently as this week there was an article by a well-known counsel, David Pannick, QC, in The Times, where he actually made use of the phraseology. He says:
"Discrimination against homosexuals and lesbians"—
—note, "homosexuals and lesbians"—
"in the workplace remains common. Of course, legislation should not impose unreasonable burdens on industry. But for Parliament to do nothing would aid and abet injustice."
Throughout his article he makes use of the terms which are in my Bill. As I said earlier, they are very widely understood, and I see no reason to import into the wording of my Bill the extra word referred to in the amendment. Therefore, as the sponsor of the Bill, I do not find the amendment particularly acceptable.
Lord Monson: I am grateful to the noble Lord, Lord Henley, for his support. I am afraid I cannot say the same for the speeches of the noble Earl, Lord Russell, or the noble Baroness. As for people under 25 using incorrect English, I believe we should do well to educate people and to encourage the use of correct English rather than succumb to what they happen to feel like speaking at any particular moment. Perhaps we should also educate some of our QCs, too, if they cannot speak English properly.
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Furthermore, my amendment does not make the clause less easy to understand, even for those who are ignorant of the slightest degree of Greek or Latin. It simply clarifies it. However, at this stage of the evening in an exceptionally thin House, there seems no point in pushing the matter to a Division. It would give a distorted result. Therefore, I beg leave to withdraw the amendment while reserving the right to reintroduce it at a later stage.
Amendment, by leave, withdrawn.
Lord Monson Lord Monson moved Amendment No. 2:
Page 2, line 19, leave out ("lesbian or bisexual") and insert ("or lesbian").
The noble Lord said: With the leave of the Committee, in moving Amendment No. 2, I will speak at the same time to Amendment No. 4. These are probing amendments. At Second Reading, I questioned whether genuine bisexual orientation existed. One hundred per cent. homosexuals who are quite unable to have relations with the opposite sex fall into a different category. One has to feel sorry for them and a case could be made for outlawing discrimination against this specific group, although it would still be anomalous, as there would remain many other physical conditions against which it would remain perfectly legal to discriminate. However, bisexuality is surely a matter of choice, of taste, of convenience. The Sunday Telegraph last Sunday on page 27 described a left-wing university in California where bisexual experimentation was almost compulsory as a result of peer group pressure. The place seems to be stuck in a 1960s time-warp, the idea being to demonstrate contempt for bourgeois conventions.
At Second Reading I spoke of behaviour in single sex institutions and of the cynical bisexual sensualist to be found in the novel of Simon Raven. A few such characters exist in real life. This group cite the Ancient Greeks to justify their behaviour, but the point about the Ancient Greeks is not that they possessed an abundance of "bisexual genes" but that they did not subscribe to Judaeo-Christian morality. There were therefore no religious or cultural barriers to their having sexual relations with almost anything that moved, if they felt so inclined. The Ancient Greeks had a word for it—hedonism.
In a free society people have the right to be hedonistic or self-indulgent if they choose, but in return they should not expect the civil and criminal law to force other people to welcome them with open arms, metaphorically speaking. If, and only if, medical evidence can be produced to demonstrate that a substantial proportion of bisexuals genuinely cannot help their behaviour, then I might be prepared to change my mind, but not otherwise. I beg to move.
Lord Rea: I feel that the noble Lord by his speech hoists himself by his own petard because if people can be persuaded—if you like—into bisexual activity so easily as he suggests, it emphasises the point that perhaps many of us are possibly a little ambivalent in our sexual orientation, much more so perhaps than is commonly admitted. If that is the case, it seems to be

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all the more important that someone who has been labelled as bisexual should not be discriminated against in questions of employment. I found the noble Lord's argument singularly unconvincing.
Earl Russell: I noticed with interest the remarks of the noble Lord, Lord Monson, on this subject at Second Reading. I very nearly challenged them then. He is, I believe, quite seriously mistaken when he queries the concept of a bisexual orientation. To argue that case I need not take him to California; I take him no further than Whitehall Palace, to the case of King James VI and I—a fairly well documented life. There is no doubt whatever of James's homosexuality. He had male lovers at various stages of his life from his teens down to his 60s, but he also had a long marriage and three children begotten in lawful wedlock. If that does not make a person bisexual, I do not know what does.
There are also a number of people of a predominantly homosexual orientation who at least once in their lives have found themselves attracted by a woman. One must consider the existence of these people and one must have a law that provides for them. If this amendment were to be carried, we would have the potentially illogical and indeed confusing situation that heterosexuals are protected from discrimination, homosexuals are protected from discrimination, but those who have experience of both ways of life are not protected at all. It gets a little like Hilaire Belloc's garden party and the people "in between" look poor and underdone and harassed and mean and horribly embarrassed. I really do not think that that is necessary. One must also consider the effect of introducing an amendment which might risk disqualifying from the protection of the Bill anyone who has had one heterosexual experience. One effect of this, of course, is that anyone who is predominantly homosexual in orientation would be deeply discouraged from attempting any heterosexual experience, which would mean that any prospect of their orientation changing—as has been known—would be very much reduced. I wonder whether that was what the noble Lord intended.
One must also consider the possibility of an employer, perhaps one suffering from a great deal of prejudice, who might search to find this single heterosexual experience to justify a dismissal which perhaps might have been undertaken purely for economic reasons. I do not know also whether the noble Lord is familiar with the case of Pepper v. Hart and its implications. It is now possible for judges to look, if there is doubt, at what was said in the House. That means that the effect of having the word "bisexual" in the Bill and then cutting it out again would be different from the effect of never having included it in the first place. The courts would see a deliberate desire to exclude, which would mean that one lot would be included, the other lot would be included and the people in between would be left to Belloc's garden party. I see no sense in that.
Baroness Turner of Camden: I agree entirely with the noble Earl on this amendment. I find it unacceptable;
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it makes no sense whatever to me. It means that, if the Bill went through, an individual who was totally homosexual or lesbian would be covered by the protection of the new legislation, but one who was mainly heterosexual but also had orientation occasionally towards a person of the same sex would not have protection. That would be quite unacceptable and would not fall within the general feeling of the new legislation.
Oscar Wilde was bisexual—a well documented case to which I referred at Second Reading. As we know, he had male lovers but he also had a family and children. There are many cases of bisexuals and I am surprised that the noble Lord, Lord Monson, should believe apparently that the category does not exist. It does and we want it to have the protection of the legislation. I oppose the amendment.
Lord Monson: The noble Lord, Lord Rea, and the noble Earl, Lord Russell, accused me of missing the point. With respect, I suggest that it is they who have missed the point. The fact that James I had relations with both men and women does not prove that he was a compulsive bisexual. It shows that he was self-indulgent, spoilt and hedonistic and could get away with it by virtue of being a king.
Earl Russell: Can the noble Lord tell me how he knows that?
Lord Monson: I do not know it, but suspect that, if he had not been a king but had been a serf or someone in those days of relatively low status, subject to the ecclesiastical and criminal law of the day, he could have controlled his urges, had he wished to. He did not need to because he was king.
I said that this was a probing amendment and that I was prepared to change my mind on the production of solid medical evidence to the contrary. I do not believe that we have had that solid medical evidence, despite what the noble Lord, Lord Rea, said. He did not give medical grounds for his assertion. Nevertheless, for the time being I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
Clauses 3 to 5 agreed to.
Clause 6 [Equal Pay Act 1970.]:
[Amendments Nos. 3 and 4 not moved.]
Clause 6 agreed to.
Lord Monson Lord Monson moved Amendment No. 5:
After Clause 6, insert the following new clause—
ARMED FORCES
(" Nothing in this Act applies to any person serving as a member of the naval, military or air forces of the Crown or to any person employed by an association established for the purposes of Part VI of the Reserve Forces Act 1980.").
The noble Lord said: When one considers the hours and hours spent arguing over race relations, sex discrimination and disability legislation, it is curious that the Committee is so thin tonight when we are discussing matters of great importance. I am the last

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person who should move the amendment since I did not serve in the Armed Forces and never rose above the rank of lance-corporal in the school cadet corps. However, no one else has added their name to the amendment, so it falls to me to move it.
I am happy totally to trust the judgment of senior officers who say, after careful consideration, that they do not want the existing homosexual ban in the Armed Forces removed. However, I wish to make two additional points. The main purpose of the Armed Forces is not to provide employment. If it were, the case for the ban might be a little weaker. That may seem self-evident, but I well remember watching the news at the time when the task force was being despatched to the Falklands. Angry mothers were being interviewed: "My boy did not join the Army to be shot at", exclaimed one, "he joined to learn a trade". Vigorous nods of assent came from half a dozen other mothers in the background.
The purpose of the Armed Forces is not to teach a trade but to defend this country in an increasingly dangerous age. The Japanese-American professor who claims that we have now reached the end of history and can look forward to 1,000 years of peace and prosperity is talking through his hat in my opinion.
The second point is this. We hear a lot from activist homosexuals and their supporters about the disappointment and sadness homosexuals feel about being excluded from the services. I do not doubt that that is the case. But there is another side to the story.
One Saturday afternoon last November I was driving down to Kent and switched on my car radio to find a phone-in taking place on the subject of homosexuals in the Armed Forces. The most impressive caller was an intelligent and articulate young woman who told the audience that she had always wanted to join the Navy since she was a very small girl. In due course she did so, progressed very well, obtained promotion and was extremely happy in her job. Unfortunately, she then encountered a lesbian superior officer who constantly made passes and tried to get her into bed, but who was astute enough to do that when there were no witnesses present. The girl was driven to distraction. She did not want to complain, partly because of reluctance to let the side down and partly because, in the absence of witnesses, she doubted whether she would be believed. In the end, in despair she resigned, her long-hoped-for naval career at an end.
I know it would remain an offence, were this Bill to go through unamended, for an officer to make a pass at a subordinate. But that sort of incident is bound to become more frequent if the ban disappears. I beg to move.
10.15 p.m.
Baroness Turner of Camden: I hope that the noble Lord will not feel that he has to press ahead with this amendment tonight. As I said at Second Reading, my Bill is essentially an employment Bill. It is intended to extend the provisions of the Sex Discrimination Act to give protection to homosexuals, lesbians and bisexuals. That legislation, anyway, excludes women in relation to
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combat duties. That presumably would apply here. Indeed, the relevant section of that Act states that nothing in the Act shall render unlawful an act done for the purpose of ensuring the combat effectiveness of the naval, military or air forces of the Crown. So it is quite likely that the MoD would anyhow argue that the ban was necessary to ensure combat effectiveness.
It would be quite premature to try to include in this Bill a reference to the Armed Forces. Among other things, an attempt is being made, I understand, in the House of Commons by means of an amendment to the Armed Forces Bill. Quite apart from that, a Commons Select Committee is considering the whole issue in relation to the Armed Forces. The House of Commons will have an opportunity of making a determination on this issue in relation to the Armed Forces and not in regard to a straightforward employment Bill. Therefore, I hope that this amendment will not be pressed tonight. Quite frankly, it would be pre-empting a discussion which anyhow is taking place in another place and on which, obviously, there is quite a lot of controversy. Clearly, the other place must have the opportunity of making a determination on this major issue.
Lord Henley: I am very interested in the noble Baroness's remarks in terms of her interpretation of previous Acts and the whole interpretation of this Bill as it stands. I will certainly look very carefully at what she had to say and consult those who advise me in these matters. As the noble Baroness knows, I have considerable sympathy for an amendment of this sort. Like the noble Baroness, I hope that the noble Lord will not press it today for the reasons that he gave earlier.
That said, as I made quite clear earlier, we do not see it as either desirable or necessary that this particular Bill should reach the statute book. But in relation to this amendment we have made our position absolutely clear on a number of occasions. We should certainly not want provisions of the kind that the noble Lord, Lord Monson, wishes to become part of the general law as the result of the passage of this Bill. It remains our view that homosexuality is incompatible with the special conditions of service life. I expanded on that point in some detail at Second Reading and I shall be more than happy to expand on it again at this stage, should other noble Lords wish me to do so. I shall not do so on this occasion but, if I am pressed, no doubt I shall come back to it.
Earl Russell: I am very happy to be able to agree with the noble Lord, Lord Monson, about something. I agree with what he said about the Japanese professor who thought that he had discovered the end of history. In fact, he is an American-Japanese professor. But I agree that he is talking through his hat. I might have tried to wrap that comment up a little more, but I shall not argue with calling a spade a spade.
Lord Henley: If I might interrupt my noble kinsman, it might do him out of a job if the end of history came about.
Earl Russell: There is plenty of work left to do in all kinds of fields, including this Chamber.

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Like the noble Lord, I am not a member of the Armed Forces. But my right honourable friend Mr. Ashdown, as is well known, was a member of the Armed Forces for quite a long time. In a speech at our party conference recently, he described how his life had been saved in battle by a gay officer who subsequently was excluded from the service because he was gay. At this time of night I am not about to start giving examples of gay people who have been extremely successful soldiers. It would be possible to keep the Chamber up all night. But there was a perfectly coherent line that in the past the Ministry of Defence could take. I agree with the line of the noble Baroness, Lady Turner; namely, that the matter is not to be settled by this Bill. But since the argument has been opened, both sides should be heard, even if only to be read in another place.
It was possible in an all male Army to argue that sex and duty did not mix. But it seems to me that the Army sold that pass as soon as it admitted women. I read in the newspaper today that in fact it is considering allowing women to take part in front-line combat. They are already allowed to sail in Royal Navy ships. It gives rise to a certain amount of trouble but I have not heard any suggestion that the trouble is insuperable.
The question is whether having homosexuals in the Armed Forces gives rise to more trouble than having men and women together in the Armed Forces. If the noble Lord's amendment is to be sustained, he has to have a reason for arguing that that is the case. I do not quite see what that reason might be. The noble Lord gave the example of a lesbian officer who kept making passes at another officer. I entirely agree with the way that he feels about that case. It was an abuse of power and should not have happened. But I am not convinced that homosexuals are in any way more given to making unwelcome advances and abusing their power in order to do so than are male heterosexuals. Were it to be proposed that male heterosexuals should be excluded from any part of the public service for that reason, I must declare an interest in the fact that I would resent such a proposal.
It seems to me that the line that we must draw is that what is an abuse is the abuse of power, the forcing of unwanted attentions, homosexual or heterosexual, and in particular the deployment of superior rank in order to do so. That is an offence whatever the sexual orientation of the one who does it and whichever sex does it. That is what we should concentrate on prohibiting.
If we were once clear as to what is the offence to which we object, we should have a better chance of creating a culture which does in fact prohibit it. I cannot see for certain anything arising through the presence of homosexuals which is on the level of the recent Tailhook Convention in the US. That resulted in the departure of an admiral from the service in circumstances in which I feel that his superiors in Washington were thinking more readily of a silver bullet than a golden handshake.
There is also the fear, regularly expressed, of living in close quarters with someone of a different sexual orientation. Again, the point stands that the culture of
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unwanted advances applies very much less here than it does when heterosexuals of the opposite sex are next-door. There is also a question, when one thinks about conduct prejudicial to good order and discipline, of exactly what is prejudicial to good order and discipline. I recall a former colleague—and every time I listened to the noble Baroness, Lady Faithfull, whom I much miss, I was reminded of her. A proposal was being discussed to get younger people into a university committee. The opposing argument was that the committee was too big. This lady said, "Yes, I sympathise with that argument. The committee is too big. Maybe some of the older people ought to come off it".
If we consider the question of good order and discipline, I wonder whether the prejudice to good order and discipline would arise from homosexuals who keep themselves to themselves or from those whose vigorous intolerance makes their life there so difficult. I read on the evening paper placards this morning that in the parallel case of intolerance of difference of race the Army intends to declare war on racism. I am glad to hear that. Why does it not do it here too?
Lord Rea: I wish to make only one brief point that has not so far been mentioned. It may be the case that in a few years—five, 10, who knows?—the law will change with regard to the admission of homosexuals into the Armed Forces. If so, and the noble Lord's amendment is accepted, then this Bill, were it enacted, would have to be amended and this part of it would have to be repealed. If we do not accept the amendment, that would be completely unnecessary.
Earl Attlee: I rise and declare my interest as a serving officer in the Territorial Army. The hour is late and I support the approach of the noble Baroness to this amendment. However, I look forward to a detailed debate on the topic when the Armed Forces Bill comes to this Chamber. The debate will be valuable and intense and I look forward to taking part in it. But I do not think we should discuss the matter at this hour.
Lord Monson: I am grateful to all those who contributed to this debate. The noble Baroness, Lady Turner, contends that the current law protects the services in so far as combat effectiveness is concerned. But we are not only talking about front-line jobs and combat effectiveness. We are talking of jobs throughout the armed services.
I agree with the noble Earl, Lord Russell, that abuse of power is deplorable, whoever exercises it and of whatever sexual orientation they may be. My point was that if the ban is lifted I suspect that those incidents may happen more frequently. He suggests also that I must have a reason for the amendment. My reason is that, from everything I have read, the great majority of officers, non-commissioned officers and other ranks, are against lifting the ban. I am sure that one can rely on their views. If they feel that they would be less effective as a fighting force to defend this country if the ban were lifted, we should take those views seriously.
It is late in the evening. The Committee is not representative, as I am sure Members will concede, and therefore I beg leave to withdraw the amendment.

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Amendment, by leave, withdrawn.
Lord Monson Lord Monson moved Amendment No. 6:
After Clause 6, insert the following new clause—
PRIVATE HOUSEHOLDS
(" . Notwithstanding section 80(1) of the 1975 Act, nothing in this Act applies to employment for the purposes of a private household.").
The noble Lord said: I cannot believe that anybody will be in opposition to this amendment. Initially, employment in private households was exempted from the provisions of the 1975 Sex Discrimination Act. However, Section 80 of that Act permitted the Secretary of State to revoke that exemption subject to parliamentary approval.
It would seem that this exemption has been revoked where sex discrimination is concerned, although I am not quite sure when that happened. However, I submit that sexual orientation is a very different matter. I cannot believe that anyone would wish to force people to employ male or female homosexuals as nannies, au pairs, gardeners, cooks or handymen against their will or for that matter to force a homosexual couple to employ a heterosexual in their household against their will. I beg to move.
10.30 p.m.
Baroness Turner of Camden: I oppose this amendment. What we are trying to do in the Bill is simply to extend the coverage of the Sex Discrimination Act to people who are homosexuals, lesbians or bisexuals and I see no reason to depart from that. We have already accepted what the Act says about genuine occupational qualifications. Indeed, Clause 3(2) of the Bill states:
"Sexual orientation is a genuine occupational qualification for a job only where the holder of the job provides individuals with personal services promoting, their welfare or education, or similar personal services, and those services can most effectively be provided by a person having a particular sexual orientation".
That exemption clearly covers the issues about which the noble Lord, Lord Monson, seems to be concerned. The amendment would make it legal simply to sack one's cleaner because she was suspected of being lesbian. That would be very unfair and really rather unjust and it would be an issue under which people with a particular sexual orientation were being treated less favourably than they otherwise would be. That is what the Bill is all about and I really cannot accept the amendment.
Lord Henley: Unlike the noble Baroness, I understand why the noble Lord has moved the amendment and I accept that it is a sensitive issue. I agree with the noble Lord in saying that householders' rights have to he considered alongside the general principle which underpins the Bill; namely, that there should be no discrimination on the ground of sexual orientation. Having said on earlier occasions—and I reiterate it now—that we do not support the Bill, I can say that we have no
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particular view on this matter. We do not support the Bill but I understand the concerns behind the amendment put forward by the noble Lord.
Earl Russell: I wish to take up the noble Lord's reference to children. Nothing in the Bill does anything to help paedophiles of either sexual orientation. That is a quite separate problem. There is no tolerance for them being suggested and I only wish we knew what to do with them instead of tolerating them.
Lord Monson: I am grateful to the noble Lord, Lord Henley, for his support. I am astonished by the noble Baroness's determination to leave the Bill in the state it is so that it actually intrudes into private households in this way. The exemption for genuine occupational qualifications is not really a safeguard because the clause refers to services that can be more effectively provided. I am not talking about effectiveness. A homosexual nanny may be absolutely excellent in her way but not desirable.
As for paedophiles and protecting children, there are young men of between 16 and 18 who are not strictly, by definition, children who might be affected, so I do not think that that is a valid argument.
I shall certainly return to this matter at a later stage but, for the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Remaining clause agreed to.
House resumed: Bill reported without amendment; Report received.

Dangerous Dogs (Amendment) Bill [H.L.]
10.35 p.m.
Lord Chesham: My Lords, I beg to move that the House do now resolve itself into Committee (on Re-commitment) on this Bill.
Moved, That the House do now resolve itself into Committee (on Re-commitment).—(Lord Chesham.)
On Question, Motion agreed to.
House in Committee (on Re-commitment) accordingly.
[The DEPUTY CHAIRMAN OF COMMITTEES (Lord Brougham and Vaux) in the Chair.]
Clause 1 [Discretion of court to deal with dog other than by destruction order]:
On Question, Whether Clause 1 shall stand part of the Bill?
Lord Templeman: On the Motion that Clause I shall stand part of the Bill, I understand that this is an appropriate and courteous stage to draw the attention of the Committee to the report of the Select Committee which was appointed to consider the Bill and has done so. I understand also that the Minister is in attendance to give the views of the Home Office and the Government, which, at present at any rate, are adverse to the views

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expressed by the Select Committee. I must therefore spend a few minutes, even at this late hour, outlining the report of the Select Committee. The first thing I must say is how pleased we all are to see the noble Lord, Lord Houghton of Sowerby, back in the House this evening.
Noble Lords: Hear! hear!
Lord Templeman: Secondly, I must express the gratitude of the Select Committee for the oral and written evidence which it received, and in particular to the Home Office which provided all the statistical information on which the report is based. I must also thank the Clerk, Mr. Tom Mohan, and his staff, who were of the greatest assistance to the committee and organised us, and without whose work we would have spent longer and achieved less.
The Bill is a simple one. It does not aim to alter the law at all. What it does is this. Under the Dangerous Dogs Act, if there is a breach of the provisions of Section 1 or Section 3, the owner of the dog in question has committed a criminal offence. He can be prosecuted and, on conviction, he can be sent to prison for six months or be liable to a fine of £5,000. The Bill does nothing to alter that. But the Act provides that when the owner is convicted the dog must be destroyed. It is that which the Bill proposes to alter by substituting for the draconian and mandatory requirement that the dog should be destroyed a discretion in the magistrates' or Crown court before which it comes to allow the dog to live. Apart from that, the Bill makes no alteration.
The Bill arises out of the fact that there have been cases in which the courts have chafed at the Act's mandatory requirement that the dog must be destroyed because courts, in certain circumstances, have been satisfied that it will be safe for the public if the dog is allowed to live. The most notorious case—others were brought before the House on Second Reading—involved the offence of having a pit bull terrier in public without a muzzle, but the muzzle had been taken off because the dog was choking. There have been one or two other cases where the courts have been convinced that the dog was not a danger to the public and, if they had power to do so, they would have allowed the dog to live. The Select Committee concluded that to give the courts discretion in those circumstances would not be adverse to the public interest.
There are three instances in which discretion may be exercisable. First, the Act provided that all pit bull terriers and like types should be eliminated. It did that by making it unlawful for anybody to keep a pit bull terrier unless it was registered and exempted by 30th November 1991. To gain exemption, the owner had to consent to the dog being neutered so that no progeny could result, and obey the rules relating to third-party insurance. More particularly, the owner had to ensure that as long as the dog was in public it was muzzled and kept on a lead. That provision has been successful. The committee was reluctant to do anything that might be against the policy of the Act in getting rid of pit bull terriers. There were 8,600 registered. At the end of 1994, the figure had fallen to 3,600. They have all been
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neutered. Therefore, as far as concerns registered dogs, they will die by natural causes by the end of the century. That has been wholly successful, and nothing in the Bill will modify that situation.
If one of those dogs which is exempted has been brought up as a pet and is docile and yet by an accident gets its muzzle off, or it is found in a public place without a muzzle or lead, the law at the moment is that the dog must be destroyed. The Bill will empower the court to allow the dog to live. But the report is mindful of the very real evils which the 1991 Act was designed to avoid. In paragraph 40 it is recommended as guidelines to magistrates—which no doubt the Home Office will draw to their attention if the Bill is passed—that discretion should be exercised to preserve the life of an exempt dog only in circumstances where the court is satisfied that the protection of the public does not require the destruction of the dog. Thus, if the owner of an exempt dog, far from complying with the Act, allows the dog to roam and takes off the muzzle and lead, without extenuating and mitigating circumstances, no doubt the magistrates will exercise their discretion by condemning the dog to death, not because it has done wrong but because the court cannot trust the owner. The discretion will be exercised if the destruction of the dog is not required because the court is satisfied that, not only is the dog docile, but the owner is responsible and that the breach has taken place by accident. The owner can still be convicted and fined or sent to prison.
I turn to the question of dogs which are not registered. It is apprehended that for a variety of reasons a good many dogs were not registered and have since been concealed. It is impossible to know how many there are. Of course, as long as they are concealed they are not a danger to the public. The minute that such a dog appears in public the fact that it has not been registered and exempted means that the owner can be prosecuted and convicted and the dog must be destroyed. The police say that there are three types of dog which may have been concealed. One is those dogs which criminals have used to terrify the police and security guards. The police believe that as a result of the Act they have disappeared entirely. They have no reason to believe that those dogs still exist. If they do, if any dog appeared from concealment and terrified the police or security guards, no doubt the magistrates would order its destruction. The discretion would not be exercised in favour of keeping that dog alive.
Similarly, there are still some dogs—not many—kept by their owners as fighting dogs. They are travellers and difficult to track down, but if they are tracked down, I cannot conceive that any magistrate would exercise discretion to maintain the life of a dog which had been trained to fight and was clearly a danger.
Then there are dogs which are kept because they are docile, notwithstanding the fact that they are pit bull terriers. They are pets and they are docile. They are concealed because their owners are attached to them, and they are terrified that if they bring them out into the open they will be ordered to be destroyed. In that case, the magistrates would have a discretion to exercise. They would have to be satisfied, as the courts were satisfied in certain instances, that the dog was docile and

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not a menace. Under the Bill, they would be obliged to register the dog and to have the dog neutered; in other words, the dog would be subject to the same conditions and restrictions as were imposed on dogs under the Act.
Again, we think that no harm can result, and, again, the committee has recommended that discretion should he exercised only where the court is satisfied that it can trust both the dog and the owner; in other words, it would have to be proved to the court that, notwithstanding that the dog is a pit bull terrier, and has been concealed, the attachment between the dog and the owner is such, and the evidence is such, that the court believes the owner to be responsible; that he would keep the dog muzzled and on a lead; that the dog is docile; and that the dog as well as the owner can be trusted.
In Clause 3 there is a provision which applies to all dogs, and not merely to pit bull terriers. That clause provides that if any dog is in a public place, out of control, and causes personal injury, it must be destroyed. That offence can be committed in relation to any dog. Again, the owner can be convicted of an offence, and can be punished. In addition, as the Act now stands, the dog must be destroyed.
The difficulty about having a mandatory sentence which no one has the discretion to alter is that that never allows for extraordinary and mitigating circumstances. Let us suppose, for example, that a dog is provoked. The dog's master or mistress may be attacked and the dog goes to defend its master or mistress. Or let us suppose that someone may be foolish enough to take a bone away from a dog when he was enjoying British or foreign beef. That would not be the dog's fault, and the court could be satisfied that the dog presented no danger to the public.
The committee recommends that there should be the discretion, set out in the guidelines to the magistrates, that the court should not exercise the powers proposed by the Bill unless the court were satisfied that in the result the public would be adequately protected, and that the destruction of the dog in question would be unnecessary and unfair. It is in those cases where unfairness results in the future, as it has resulted in the past, that discretion would be exercised.
The Home Office's objection, as I understand it, is that the Act was a good thing; it had a good effect on pit bull terriers. With all of that, the committee agrees. The Home Office takes the cautious view that any alteration in the Act's provisions weakens its operation. With respect, I do not agree.
Let us take the case of an exempt pit bull terrier. At the moment, if the pit bull terrier appears in public without a muzzle and without being on a lead, the dog must be destroyed. Under the Bill the magistrates would have that limited discretion to allow the dog to live.
The owner of the pit bull terrier will know that if he produces his dog in public unmuzzled and not on a lead, the magistrates have power to order its destruction. He will know that unless there is a very good excuse, the dog will be destroyed. It will be the duty of magistrates to destroy the dog in circumstances in which, in effect, the owner was flouting the law. The owner will know that it will be only in the extraordinary circumstances
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which I have mentioned and which could happen again—namely, that without fault of the owner, the dog has lost his muzzle or the muzzle has broken away from the lead—the magistrates have a discretion, but even so they might not exercise it. The discretion will be narrow and will be narrowly construed, and in the unanimous view of the Select Committee there will be no weakening of the provisions of the Act.
The Home Office courteously sent me a letter dated today. It stated that the Act would be weakened because the exempt dogs would not disappear at the rate now contemplated. As I have said, the number of exempt dogs fell from 8,000 to 3,000-odd by the end of 1994. All exempt dogs have been neutered and so if one or two were kept alive, they would die in the normal course of events and would die out by the end of the century, as is now provided.
The Select Committee considered that it was not contradicting the views of Parliament expressed in 1991; that the Bill does not undermine the efficacy of that Act; that it does not increase the dangers to the public; but that it would be right to have a discretion which would be exercised when fairness ever required that the dog should not be put down. Those are the views of the Select Committee which I had the honour to chair.
Lord Houghton of Sowerby: I am under the impulse of deep emotions about this matter. I have been working hard for four years to get the public, the magistrates and the police to understand the way in which the Government of 1991 defrauded the public as regards the extent of the danger and the problems which the nation faced. Most were totally untrue and they have not been proved otherwise.
We have tried hard to get some deeper consideration of the various civilised aspects of the matter. I am sure that we are all most grateful to the noble and learned Lord, Lord Templeman, and his colleagues on the Select Committee who devoted their time to the study of the problems at first hand and in detail. We are on the eve of consideration of the final outcome of the Select Committee and just prior to the Third Reading of the Dangerous Dogs (Amendment) Bill tabled for next Tuesday. We are treated, as everything connected with this issue is treated by the Home Office, with the utmost contempt and indifference. We have had to put up with it for so long that in some quarters, patience is becoming very much exhausted.
I am grateful—as I am sure are all Members of the Committee—to the noble and learned Lord for the statement which he made a few moments ago. We thought that such a clear and positive line for change brought forward unanimously by the Select Committee would be sufficiently impressive to convince the public and many others that we are endeavouring to find a better answer to our dog problem than we have.
No other country in the world has in existence a mandatory dog destruction system. Other countries have found different ways to solve the problem. We were rushed into this and both Houses sacrificed their full responsibilities at the time. That left an Act of

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Parliament containing such excesses as those which have been described which are regarded as commonplace to our system of dog control.
However, we may have passed the point at which we can expect to achieve any change of circumstances this side of a general election. One cannot say how soon that may come. But I am quite sure that there are some elements in this which will have a considerable political influence. Animals and their welfare has become one of the primary considerations of the public mind. One only has to look at what is taking place at present to understand how deeply people feel about those matters. Before very long, there will be a moral wave of great force and intensity sweeping over the country which demands that we find a different answer to the uncivilised way in which we are conducting our affairs and relations with other species.
Therefore, I am profoundly grateful to be here to listen to the noble and learned Lord. I hope that many people will be influenced by what he said. I also thank other members of the Select Committee and, in particular, my noble friend Lady Mallalieu. We shall persevere so far as we can in order to have this change brought about. That is all I have to say. I hope that I shall speak again on Tuesday when we shall have the Third Reading debate. We shall see what happens.
10.59 p.m.
Baroness Mallalieu: I know that I speak for those on all sides of the House—but in particular for those on these Benches—when I say that it is a real pleasure and privilege both to see and hear the noble Lord, Lord Houghton of Sowerby, in his place this evening.
When the Dangerous Dogs Act passed through this House in 1991, the noble Lord warned that its mandatory destruction orders would cause injustice. His words were not heeded by the Government at that time. Time has proved him right in that, as in many other respects, during his long, political career.
That the Select Committee has recommended to the Committee of this House that the Bill of the noble Lord, Lord Houghton, should now proceed without amendment is in large measure a reflection of his tenacity and determination to correct what he perceived to be an unfair law which others now believe needs to be changed.
The depressing response from the Home Office, of which I have received information only this evening, indicates that there is still some considerable way to go. However, if it is of any reassurance to the noble Lord, he is not now a lone voice; indeed, I believe that he is no longer even in a minority. In due course, I hope and believe that this House and another place will come to admit that the noble Lord was right all along.
I had the honour of being one of those who served on the Select Committee. I would also like to pay tribute to its chairman, the noble and learned Lord, Lord Templeman. His questioning of the witnesses who gave evidence before us was, I could not fail to notice, of an altogether gentler style than that which he customarily employs when questioning members of the Bar
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appearing before him in the Judicial Committee. However, he was as characteristically searching and revealing for all that. The chairmanship of the noble and learned Lord enabled the arguments of both sides to be fully and fairly presented to us and properly considered. That makes the response of the Home Office all the more disappointing.
Of course there remain serious public concerns which are reinforced each time someone, particularly a child, is attacked by a dog, concerns which we on this side all share; namely, that dangerous dogs should not be permitted to present a threat to members of the public, especially children, and that proper control should be exercised over them by their owners.
If accepted, the recommendations made by the Select Committee to the House would not, I believe, detract from the powers of the courts to order destruction of a dog in any case where it was merited; but it would, I hope, empower the courts to avoid doing so in cases where a real injustice would result to an otherwise responsible dog owner and, of course, his dog.
The written response from the Home Office makes depressing reading. It concludes that the Government do not believe that it would be right to weaken the message of the original Act. I could say a great deal about the suggestions that it makes and about the report, but I shall not do so because the report has been covered in detail by the noble and learned Lord, Lord Templeman; and, indeed, the hour is late.
However, if that is to be the response of the noble Earl, it will be clear that the Government are not prepared to listen to the message which has come back from almost every body and organisation which is directly concerned with the legislation—for example, the vets, the magistrates, the Royal Society for the Prevention of Cruelty to Animals and the police, to name but a few. That message is that hard cases make bad law. This Act, whatever its intentions and whatever its benefits, has proved to be unfair in relation to parts of its application. It is also unfair because it makes no distinction between the responsible dog owner and the irresponsible one; and it makes no distinction between the dangerous dog which attacks a child and a well-behaved one which is technically in breach of the Act.
If the Government refuse to listen to that message, reinforced as it now is by the report of a Select Committee which has heard and considered a great deal of evidence and expertise in the field, the message which they send back to the country will indeed be one of weakness. To refuse to admit when you have got something wrong and then to refuse an offer to put it right—made, in this case, by the noble Lord, Lord Houghton—is a classic sign of weakness, not simply in men but also, I am afraid, in this Government.
11 p.m.
The Viscount of Falkland: My Lords, I shall be brief. I have spoken on the subject on a number of occasions; and, indeed, I had the honour to introduce the Bill in the absence of the noble Lord, Lord Houghton, who was ill at the time. Like other speakers, I am

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delighted to see the noble Lord back in your Lordships' House this evening and to hear him speak with his usual vehemence on the subject. I only hope that his pessimism is something which will not be reinforced in the medium and long term.
As other speakers have said, I believe that the Government are bent upon digging in their toes on the issue. I do not know why. They seem to do so on many issues, but it appears to be just pure obstinacy on this occasion in the face of almost universal support for the views expressed both by experts and the public.
I should like to thank the noble and learned Lord, for his excellent chairmanship of the Select Committee. I should like to thank Lord Houghton for making it possible for the Select Committee to take place and, again, to thank the noble and learned Lord for tonight giving us such an expert and concise summary, not only of his Select Committee's views but, indeed, of the problem which the Select Committee addressed.
It was on a fairly narrow issue—the issue of discretion—that the Bill was brought before your Lordships, and it was on that issue of discretion that the Select Committee deliberated. In another place another committee is looking at the wider issues in the Bill. All this will be brought to bear on the Government, and we await their reactions with interest—I cannot say with any great hope. I am looking forward to the noble Earl's reply this evening.
It has been a great privilege to read the report. Anyone who is interested in this particular Bill and the working of the Act which brought about this amendment Bill can do no better than to read the Select Committee's report. It is all in there. II: goes beyond the actual subject of discretion. If you want to know about dangerous dogs, read the Select Committee's report. The hour is late and I am hoping that the noble Earl's reply will be more cheerful than I anticipate.
The Earl of Courtown: My Lords, I am grateful to the noble and learned Lord, Lord Templeman, and to the members of the Select Committee for their report on the Dangerous Dogs (Amendment) Bill, introduced by the noble Lord, Lord Houghton.
Before dealing with the substance of the report, I wish to associate myself with the comments which have been expressed about the noble Lord, Lord Houghton, and say how glad I am, as my noble friends are, to see him in this place tonight.
As the noble and learned Lord, Lord Templeman, has explained, the committee's conclusion is that the amendment Bill introduced by the noble Lord, Lord Houghton, should pass Committee stage without amendment. In effect, the committee has supported the Bill's central proposition, that the courts should be allowed discretion in each case where the 1991 Act currently provides for mandatory destruction.
There are, broadly, three situations in which mandatory destruction applies and I shall deal with each in turn. The first is in respect of offences under Section 1(2). This relates to pit bull terriers that may well have satisfied all the requirements of the exemption scheme, but in respect of whom other offences are subsequently
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committed—for example, being allowed in a public place unmuzzled or off the lead. The committee has argued that allowing the court discretion in these cases would not materially affect the deterrent effect of the provisions, because owners would be reluctant to take the risk of a destruction order still being imposed. The committee suggests that the question whether or not to order destruction of the dog would be decided by reference to other factors, including the behaviour of the dog, and the risk of future harm to the public.
The Government accept that amendment of the Act as proposed by Lord Houghton's Bill might mean that it still had a deterrent effect in some instances. But it is impossible to be confident that this would be so in all cases. Even under the present law, some owners have disregarded the provisions, despite mandatory destruction. The Government are concerned that the message that the Dangerous Dogs Act had been weakened (which is how the change would inevitably be perceived) would risk a general relaxation in standards of observation of the provisions. Such a change would mean, moreover, that an owner who had ignored vital provisions of the Act—for example, that pit bulls should be muzzled, not be abandoned or not allowed to stray—could regain ownership of his animals. The Government do not believe that this is a risk which should be taken.
In regard to the second situation in which mandatory destruction applies—that is, in respect of unregistered and unlawfully held pit bull terriers—the Government cannot accept the committee's argument that allowing discretion in regard to this category would not work against Parliament's intention of eliminating pit bull terriers. They recognise that the committee has confined its recommendation (for late entry onto the Index of Exempted Dogs) to cases covered by the amendment Bill and that it has not recommended a general amnesty for non-registered dogs. Nevertheless, allowing the court to direct late entry onto the register after a conviction for ownership of a non-registered dog would mean the possibility of some new dogs being bred or brought into the country. At present anyone contemplating the importation or illicit breeding of new pit bull terriers knows that there is no way that the dogs in question may be held lawfully (that is, be entered onto the index): conviction for owning such a dog must lead inevitably to the dog's destruction. The proposals in the amendment Bill would create a chance of the position of such new dogs being legitimised.
The committee has suggested that a general amnesty would be unfair to those owners who chose to have their dogs destroyed or to comply with the exemption provisions of the Act. In the Government's view, a selective re-opening of the index, as now suggested, would be no less unfair to such owners.
Mandatory destruction applies in a third area, under Section 3 of the Act, in relation to a dog of any type which is dangerously out of control and causes injury—what the Act terms an "aggravated offence". The committee has argued that it should be left to the court to decide whether a dog should be destroyed following conviction even for these very serious types of dog incidents—on the basis that it is the court which is best

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placed to decide whether mitigating circumstances might apply. The committee suggested that Section 3 would still act as an incentive to responsible dog ownership because, unlike proceedings under the 1871 Act, it carries the threat of a criminal conviction. I should add that there are also significant financial and/or custodial penalties.
The Government have considered these arguments carefully. But they believe that it is likely to be as much the fact of mandatory destruction as the risk of criminal conviction that is the real deterrent in these cases. The Government do not believe that Section 3 is used lightly, given the evidence of continuing wide use of earlier statutory provisions. And they believe that the prosecuting authorities pay due regard to possible extenuating factors both in determining the provisions under which to proceed and in the course of trials if new considerations emerge. Section 3 provides that a dog which attacks while dangerously out of control should not be allowed the chance of doing so a second time. The Government believe that this principle is the correct one, and that this was the appropriate signal to send to dog owners. They do not believe it would be right to weaken the message in any way.
It will be clear from what I have said that the Government consider that the mandatory destruction order and the one-off nature of the registration scheme are matters which are integral to the provisions of the 1991 Act and to the objectives which Parliament agreed.
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We are grateful to the Select Committee for its thoughtful review of these provisions, and have reflected very carefully on what it has proposed. But we are not persuaded that the Act should be modified. The Act remains relevant and necessary, and the Government cannot support moves to amend it.
I want to assure the noble Lord, Lord Houghton, the noble and learned Lord, Lord Templeman, and the noble Baroness, Lady Mallalieu, that the Government have given the most careful consideration to the objectives of this Bill, in particular in the light of the recommendations made by the Select Committee which looked into this Bill. However, this is a complex matter and not one on which the Government feel they can give ground. The death of any dog is a matter of sadness. However, the safety of children and adults is of paramount concern, and the first duty of government is to protect the public.
Clause 1 agreed to.
Remaining clauses agreed to.
House resumed: Bill reported without amendment; Report received.

City of Westminster Bill [H.L.]
Presented, read a first time, passed through all its remaining stages pro forma and sent to the Commons.
House adjourned at a quarter-past eleven o'clock.