Lords Sitting of 19 November 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 Chichester.

Lord Whitty
John Lawrence Whitty, Esquire, having been created Baron Whitty, of Camberwell in the London Borough of Southwark, for life—Was, in his robes, introduced between the Lord Murray of Epping Forest and the Baroness Gould of Potternewton.

Baroness Byford
Dame Hazel Byford, DBE, having been created Baroness Byford, of Rothley in the County of Leicestershire, for life—Was, in her robes, introduced between the Baroness Pike and the Baroness Miller of Hendon.
Viscount Hanworth Viscount Hanworth—Sat first in Parliament after the death of his father.

Airport Security Staff
3 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
Whether they are satisfied that there are adequate checks to discover whether security staff at airports have had connections with criminal or terrorist activities.
The Earl of Courtown: My Lords, following the passing of the Aviation and Maritime Security Act in 1990, a new and rigorous security programme was put in place in the UK. However, we are continually reviewing methods of improving security, and it was decided in August of this year that all security staff working at UK airports should be subject to formal counter-terrorist checks.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend for that very satisfactory reply. Have the Government had reason to suspect that convicted thieves, or friends of drug traffickers or of terrorists, have infiltrated these security services? Are not safety and reduction of crime more important than any supposed diminution of civil liberty arising from disclosure of police records or past convictions?
The Earl of Courtown: My Lords, of course my noble friend is quite right that safety of airports, aeroplanes and air transport is of prime importance. He also drew attention to the suspicions of infiltration of sensitive areas by known criminals. The new
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arrangements are being brought in as a means of improving aviation security generally and they have not stemmed from any specific incident. The Government remain committed to a long-term process of refining and developing security procedures.
Lord Clinton-Davis: My Lords, is the Minister aware that, as I understand it, amendments are being tabled in connection with the Police Bill to address some of these issues? They will come before the Committee quite shortly. As it appears that the situation in this country has much improved as a result of the changes outlined by the Minister concerned recently, it is extremely important to ensure that, so far as possible, we have a harmonised approach internationally on such matters. If there is any disparity in procedures at major airports throughout the world, we shall be or are likely to be affected in this country. Are the Government taking any initiatives in the International Civil Aviation Organisation or elsewhere?
The Earl of Courtown: My Lords, the noble Lord is quite right. The Police Bill will bring forward the issue of the criminal records agency. However, that has nothing to do with the counter-terrorist checks that will be made by the Department of Transport. They will involve checks on criminal records and also a security service terrorist database.
The noble Lord also asked whether we were acting on an international basis. Of course, the security of airports is paramount. This country is quite justifiably regarded as taking a lead in the matter. Following the disaster at Lockerbie, Her Majesty's Government pressed the international community, through the ICAO, to adopt an eight-point plan to improve aviation security. That involves items such as baggage-passenger reconciliation, all hold baggage to be screened and also the legislation required for that purpose. We are not complacent and we look forward to reducing the security risks further.
Lord Clinton-Davis: My Lords, further to that reply, will the Minister indicate what progress has been made following the post-Lockerbie initiative?
The Earl of Courtown: My Lords, I thought that I had answered that point. We have baggage-passenger reconciliation when boarding aeroplanes. There are plans for all hold baggage to be screened, and a great deal of money and research and development has gone into that. We also have the Transport Security Division, headed by a security professional with direct access to Ministers. In addition, staffing has quadrupled since Lockerbie.
Lord Geddes: My Lords, I declare an interest as a non-executive director of Regional Airports. Can my noble friend say, n the context of his first reply to my

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noble friend Lord Campbell of Croy, whether security staff at the smaller regional airports will also be put through the same security checks?
The Earl of Courtown: My Lords, my understanding is that that is correct. However, if I am wrong I shall let my noble friend know.
Lord Campbell of Croy: My Lords, can my noble friend confirm that the improvements which he indicated in his first reply will apply to existing security staff as well as to new applicants to the services?
The Earl of Courtown: My Lords, my noble friend raises an interesting point. Careful consideration has been given to whether we should make the new arrangements retrospective, but it was decided that they should apply only to new applicants.

Whitehall Buildings
3.5 p.m.
Lord Wallace of Saltaire Lord Wallace of Saltaire asked Her Majesty's Government:
What steps they are taking to consult Parliament and the wider public about the future of the Crown estate in Whitehall.
The Parliamentary Under-Secretary of State, Ministry of Defence (Earl Howe): My Lords, as my noble friend Lady Miller of Hendon explained to the House on 15th October, it is for individual departments to be responsible for the future of their Whitehall buildings. It is therefore for them to inform and consult, as appropriate, about any proposals they may put forward. Those would be subject to the normal planning procedures applying to Crown buildings, including requirements for local publicity.
Lord Wallace of Saltaire: My Lords, will the Minister accept that the future of the core Crown estate in Whitehall is rather different from the future of government buildings sold off in Newcastle, Southampton or Croydon and that they should not be treated in exactly the same way? Will the Minister give an undertaking that before further possible privatisation, either by freehold or leasehold, of Crown estate buildings in the Whitehall area proceeds further, this House and the other place should be consulted, preferably in written form?
Earl Howe: My Lords, I agree with the noble Lord that where listed buildings are involved there are sensitivities. As I am sure he is aware, all government buildings on Whitehall are listed either as Grade II, Grade II* or Grade I. There are, therefore, procedures to be adhered to which would not apply to unlisted buildings.
As to the second question, I believe that I can reassure the noble Lord that the public consultation that takes place on such proposals is exactly the same as it would
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be if the Crown were subject to statutory procedures. The procedures that the Crown has elected to go through do not differ in any respect from the statutory procedures. That entails consulting all formal consultees, including English Heritage. In the end, any proposals for government buildings are subject to endorsement by Ministers and Ministers are accountable to Parliament for their actions.
Lord Strabolgi: My Lords, may I ask the Minister what is to be the future of the Treasury building? Is it proposed to sell it off? Is he aware that the evasive answers given the last time the matter came up have given cause for great concern?
Earl Howe: My Lords, as the Treasury announced on 13th September, it has appointed Exchequer Partnership plc to redevelop its headquarters building in Whitehall. Following completion of the necessary clarification process, the Treasury aims to sign heads of terms with Exchequer Partnership shortly. A further announcement will be made then. Any public consultation will, after that point, be a matter for the local planning authority, as I explained.
Lord Wyatt of Weeford: My Lords, will the noble Earl say when the Government will stop touting around parts of our national heritage like some bucket shop estate agent, especially at a moment when our economy is booming with the unexpected extra tax revenue? Have the Government no shame at all in the matter?
Earl Howe: My Lords, I am sure that the noble Lord, Lord Wyatt, will accept that the Government have a duty to maintain their buildings and to occupy them in an efficient manner. Where it is necessary to spend substantial sums of money on a particular building, the Government have a duty to examine and assess those options which seem likely to provide good value for money for the taxpayer. That is all we are talking about here.
Baroness Park of Monmouth: My Lords, can my noble friend tell us how the Treasury's independent action in appointing Exchequer Partnership, or whatever it is called, squares with the work of the new Property Advisers to the Civil Estate who, according to the OPS report, are responsible for promoting best practice in the management of government property and for disposing of inherited vacant property at best value? That in itself is disconcerting and gives rise to concern. Will he explain why, if one has gone to the trouble of disposing of the PSA and appointing these splendid new agencies, it is then found necessary for independent Ministers to make their own independent arrangements?
Earl Howe: My Lords, I believe I can put my noble friend's mind at rest. PACE, the Property Advisers to the Civil Estate, is an executive agency of the Office of Public Service. Its primary role is to co-ordinate activity on the government civil estate where Exchequer savings can be demonstrated. It also has other functions, to some of which my noble friend alluded. But that role is rather

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different from the role of a private finance initiative partner. The PFI aims to promote efficiency, improve services and stimulate flows of investment. The private sector will bring to the table its management skills, entrepreneurial flair and capital. By working in partnership with it, we have the opportunity to maximise value for money for the taxpayer.
Lord Richard: My Lords, is the noble Earl aware that his last answer will give cause for even greater concern in this House? Is he further aware that there is deep suspicion about what the Government are up to in relation to Whitehall? I echo the for once very moderate words of the noble Lord, Lord Wyatt of Weeford. These are policies of the madhouse. This is the centre of British government; it has been the centre of British government for some considerable time. And, as I understand it, the Government are attempting to flog off part of it. That is not just pawning the silver; it is selling the dining room as well. Is it not absolutely crazy?
Earl Howe: My Lords, the noble Lord over-eggs his case. We are talking about the possibility of using private money in order to deliver better services at better value for money and making the best use of public assets. I should have thought that the noble Lord would have no quibble with that at all.
Lord Barnett: My Lords, if the Treasury building is sold off, will it be allowed an increased budget to pay for the rent?
Earl Howe: My Lords, clearly, any assessment of private finance must depend not only on the initial value for money assessment and the risk transfer assessment but also on whether the proposal is affordable in the long term. I do not know what arrangements will be reached in the end. That is subject to negotiation. But I can tell the noble Lord that there is no intention of selling the freehold of the Treasury building.
Lord Hylton: My Lords, can the Minister tell the House whether Horse Guards Road is still closed to traffic, as it was yesterday? If so, how long is it likely to remain shut?
Earl Howe: My Lords, with the greatest respect to the noble Lord, I believe that that is rather wide of the Question on the Order Paper.
Lord Gilmour of Craigmillar: My Lords, is my noble friend the Minister saying that it is the primary duty of departments to make money out of their buildings?
Earl Howe: My Lords, that is not what I said. I said that the Government have a duty to maintain their buildings properly and to occupy them efficiently. That is rather different from the proposition advanced by my noble friend.
Baroness Farrington of Ribbleton: My Lords, let me press the noble Earl further on his reply as to the accountability to Parliament. Will he say explicitly whether that ministerial accountability for decisions is an accountability to answer questions after decisions have been taken or whether it is an accountability to listen to, and consult, Parliament before decisions are taken?
Earl Howe: My Lords, no government department can touch a brick of its buildings until planning permission has been secured. Once planning permission has been secured, it is for Ministers to answer to Parliament in the normal way.
Lord Richard: My Lords, I do not want to press the Minister too hard on this matter, but planning permission is granted by the local authority. In other words, whether or not some of Whitehall is sold will depend on the decision of the planning committee of Westminster City Council. Is that the situation that the Government want to get into?
Earl Howe: My Lords, I am not talking about a sale but about development of a building, which is very different. Proposals for development of a building in Whitehall would be subject, if the Secretary of State at the department so decided, to a planning proposal to Westminster City Council. Westminster City Council would then have to go through all the normal procedures, as though it were a normal planning application; and the rest is as I have explained.
Lord Marlesford: My Lords, does my noble friend agree that the Government would be wise to reassure public opinion that while efficiency and value for money are very desirable, in the ultimate they have to be subordinate to environmental considerations when it comes to crucial elements of the national heritage, such as the buildings in Whitehall?
Earl Howe: My Lords, I am sure that my noble friend, with his concern for the national heritage, will be reassured to know that English Heritage has a role to play wherever it is proposed that Whitehall buildings should be developed. Whenever Westminster City Council is consulted about a proposal under the non-statutory procedures, English Heritage is automatically notified and sent a copy of it, and its comments are sent to the local authority who will act upon those comments.
Lord Wallace of Saltaire: My Lords, will the Minister accept that those of us in the Palace of Westminster have an active interest in what happens in the Palace of Whitehall, Dining Room, Banqueting Hall and all? Given the large number of reports in the press

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about other projects in the pipeline, can he give the House an assurance that we will be consulted before any further projects are proceeded with?
Earl Howe: My Lords, if there are further proposals which emerge, the processes and procedures that I have described will be adhered to.
Lord Williams of Elvel: My Lords, the noble Earl says that Westminster City Council has a large role to play in this matter. Given our suspicions of Westminster City Council, will he give the House an undertaking that any application relating to the matters we are discussing will be called in by the Secretary of State for the Environment for public inquiry?
Earl Howe: No, my Lords. If Westminster City Council gives consent to a proposal, it is up to the Secretary of State at the department concerned to take a decision as to whether or not he wishes to proceed. The Secretary of State for the Environment can call in an application if there is disagreement. Then, of course, it could be subject to a local public inquiry, if need be.
The Lord Privy Seal (Viscount Cranborne): My Lords, I know that this is a matter of great interest to your Lordships and I am sure that we shall come back to it. With your Lordships' permission, I wonder whether we ought to give a fair crack of the whip to the other two Questions.

Water Companies: Charging Methods
3.18 p.m.
Baroness David Baroness David asked Her Majesty's Government:
How many of the 28 water companies have produced firm proposals for new charging methods for their customers when they are no longer allowed to use rateable values on 1st April 2000.
The Minister of State, Department of the Environment (Earl Ferrers): My Lords, the Government announced their intention on 4th April 1995 to amend the legislation in order to enable water companies to continue to use rateable values as a basis of charging for water after 31st March in the year 2000. This amendment will be made as soon as a suitable legislative opportunity arises. Water companies are not, therefore, required to produce firm proposals for new charging methods by that date.
Baroness David: My Lords, I thank the Minister for his response. Will the matter of appeals and rebates be gone into at the same time?
Earl Ferrers: My Lords, I think that appeals and rebates are rather different from the question of whether these charging methods can continue after the year 2000.
Lord Williams of Elvel: My Lords, will the noble Earl say whether the Government will encourage water metering after the year 2000 and, if so, why?
Earl Ferrers: My Lords, the simple proposition is that 92 per cent. of domestic households pay water rates at the moment based on rateable value and 8 per cent. have meters. The Government favour selective metering. It should be voluntary and needs to be applied sensitively for large families and others with special needs who have a high use. But it is for the water companies to decide.
Lord Mottistone: My Lords, is my noble friend aware that as a result of being metered for the past five or six years, I pay around half the amount for my water than I did when it was rateable?
Earl Ferrers: My Lords, that is interesting. I suggest my noble friend applies the same technique to his whisky bottle.
Earl Russell: My Lords, if the noble Earl has finished his whisky bottle, can he say whether in any proposals to extend water metering there will be consultation with the Department of Social Security over the possible burden for those on social security benefits?
Earl Ferrers: My Lords, this is a matter for the water companies, and they do it at the moment. They decide whether or not they wish to go to metering. Usually what happens is that houses built after 1989 and any new houses are metered; it is only the old houses which are not metered. Of course, the water companies will take into account the position of people in a difficult financial position.
Lord Renton: My Lords, is my noble friend aware that most commodities are sold in accordance with the law of supply and demand? Would it not be reasonable therefore for water companies to charge rather more when there is a drought and less when there has been a lot of rain?
Earl Ferrers: My Lords, my noble friend makes a number of pertinent observations. However, the one he has just made would be enormously controversial. There has been enough difficulty over the past year in ensuring that everyone receives sufficient water. This year, when there really was a drought, everyone seems to have had plenty of water. But nobody is congratulating the water companies on what they have achieved this year; they are simply being lambasted for what everyone thought should happen last year.
Baroness David: My Lords, are the water companies satisfied that they know exactly what is going on in this area?
Earl Ferrers: My Lords, I have not asked each of the 10 water and sewerage companies and the 19 water companies whether or not they are satisfied. But I have no reason to believe that they are not.

ADAS: Privatisation
3.22 p.m.
Lord Mackie of Benshie Lord Mackie of Benshie asked Her Majesty's Government:
What advantages to farming will result from the privatisation of the Agricultural Development Advisory Service.
Lord Lucas: My Lords, after privatisation ADAS will be free to develop and improve its services to all its customers in response to market demand.
Lord Mackie of Benshie: My Lords, I hope that that does not mean that ADAS is not free to develop and improve its services at the present time. Is the Minister aware that there is great disquiet in the public about many farming practices? For example, there is enormous disquiet and consequent harm to the industry in relation to BSE. If the Agricultural Development Advisory Service is privatised there will be strong suspicion, especially bearing in mind the money the Government are asking for it, that it will go into the hands of chemical and other companies. They are not necessarily doing bad work—in fact they do good work—but the public need reassurance about many of the practices in farming which in themselves are excellent. That privatisation will cause immense disquiet.
Lord Lucas: My Lords, I am truly astonished by what the noble Lord says. Many times have I listened to complaints from these Benches relating to the non-independence of MAFF; about how functions and decisions should be removed from MAFF so that the public can have more confidence in them. The noble Lord is now complaining because something is being removed from MAFF, saying that the public will not have confidence in it. The noble Lord should be more consistent.
Baroness Nicol: My Lords, is it not the case that when ADAS started charging for its services a few years ago there was considerable anxiety about whether farmers would continue to use the services to the same extent? Can the Minister say whether there has been any reduction in the use of ADAS since charges were introduced? If so, is it not likely that if it is privatised that trend will continue?
Lord Lucas: My Lords, farmers are sensible, commercial people and will pay money for services that they find worth while. Many farmers find the services provided by ADAS to be excellent.
Baroness Nicol: My Lords, my question was whether there had been a reduction in the number of people using the service.
Lord Lucas: My Lords, I do not have the figures with me. I will write to the noble Baroness.
Lord Carter: My Lords, I should declare an interest in this Question as the President of the British Institute of Agricultural Consultants. Is the Minister aware that the original intention was to require ADAS to achieve 100 per cent. full cost recovery by 1st April 1997 and to offer it for sale during the summer of 1997? The target date was then brought back to 1st April and it is now to be rushed through early in the new year. What is the hurry? Does it relate to the second Starred Question about the future of Whitehall? Is this part of the Government's scorched earth policy to sell off or lease out every public asset they can before the general election?
Lord Lucas: My Lords, the procedure is going extremely well and running ahead of schedule. I see nothing wrong with that. Frankly, Pavlov must be pleased that the noble Lord was not one of his dogs. Year after year we have rung the bell for a new privatisation; year after year it has brought home the goods; and here again, faced with a new privatisation, is the noble Lord celebrating? No; he is dry-mouthed. Pavlov would not understand it and nor do I.
Lord Carter: My Lords, I find that to be an extremely insulting answer. Will the Minister answer my question? I did not ask about the merits of the sale; I asked about the timetable.
Lord Lucas: My Lords, I had hoped I had answered that in my initial sentence; that is to say, procedure and ADAS are running so well that the procedure is running ahead of schedule.
The Duke of Buccleuch and Queensberry: My Lords, does my noble friend agree that an organisation such as ADAS is only as good as the quality of its internal leadership and key personnel? Can the noble Earl give any indication that many of the excellent individuals in ADAS are willing to transfer to the new system? That would be a great comfort to many people in the agricultural industry.
Lord Lucas: My Lords, I can certainly give that assurance. The management and consultants of ADAS are very much in favour of privatisation.
Lord Richard: My Lords, I rise not to ask the noble Earl a question but merely to put a point forward that he might wish to consider. In the answer he gave to my noble friend Lord Carter, with great respect to him he went a bit too far. He went over the top. In my limited experience in this House it is not in accordance with the traditions of this House to launch such a personal attack, even if clothed in a mocking tone of voice. He would do well to consider apologising to my noble friend.
Lord Lucas: My Lords, if the noble friend of the noble Lord, Lord Richard, has taken what I said in that spirit, of course I apologise unreservedly. I was merely expressing myself in what I hoped was a bit

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of fun and if I misjudged it I am sorry. I am grateful to the noble Lord for pointing that out and for promoting me to an Earldom, which I do not deserve.
Lord Mackie of Benshie: My Lords, is the noble Lord aware that his answer was neither funny nor satisfactory? In fact, inside ADAS there is considerable dissatisfaction and fear of the change. Furthermore, the amount of advice given to farmers has gone down. Perhaps the noble Lord did not know that but suspected it.
Lord Lucas: My Lords, fears have been expressed before many privatisations. I remember the anxieties over rail privatisation. If one asked anybody who comes from my part of the world near Winchester what they thought of rail privatisation now, they would say it is the best thing that has happened to the railways that they can remember. When ADAS is privatised, I am sure that farmers will feel similarly about that privatisation.
The Countess of Mar: My Lords, the noble Lord, Lord Mackie of Benshie, expressed concern about the possibility that an organisation like a chemical company may take over ADAS. When the Government are tendering for people to buy ADAS, will they be prepared to consider management buy-outs as well as offers from other companies?
Lord Lucas: My Lords, very much so. The noble Baroness is quite right; a management buy-out would be an excellent idea. Indeed, the management informed us at an earlier stage that it would be interested in mounting a management buy-out.
As we have a minute left, perhaps I may say what are the principal objectives that we have set ourselves. First, we want to transfer the functions of ADAS and associated risk to the private sector on the best available terms; that is, terms which optimise the risk-adjusted net benefit. Secondly, we want to ensure that services provided to MAFF and the Welsh Office from the private sector can be delivered continuously, economically, efficiently and effectively. Thirdly, we wish to provide a clean break from the Government and minimise contingent liabilities. With that set of criteria, a takeover of ADAS by a chemical company which would threaten the future of its independent research is likely to be heavily discounted.
Lord Clark of Kempston: My Lords, does my noble friend agree that every act of privatisation by this Government has proved to be successful? Alas, the Opposition Benches have always been opposed to privatisation, which has increased the economic viability of this country.
Lord Lucas: Yes, my Lords.

Business
3.30 p.m.
Lord Strathclyde: My Lords, at a convenient moment after 3.30 p.m., my noble friend Lord Courtown will, with the leave of the House, repeat in the form of a Statement an Answer to a Private Notice Question in another place on the fire in the Channel Tunnel.

National Health Service (Primary Care) Bill [H.L.]
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, I beg to introduce a Bill to provide for new arrangements in relation to the provision within the National Health Service of medical, dental, ophthalmic, pharmaceutical and other services; to make provision about medical lists and vacancies and the sale of medical practices; to make provision about the expenditure of health authorities; and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.— (Baroness Cumberlege.)
On Question, Bill read a first time, and to be printed.

Human Fertilisation and Embryology (Amendment) Bill [H.L.]
Lord Winston: My Lords, I beg to introduce a Bill to amend Schedule 3 to the Human Fertilisation and Embryology Act 1990 to remove the need for written consent to provision or use of gametes in certain circumstances. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.— (Lord Winston.)
On Question, Bill read a first time, and to be printed.

Dignity at Work Bill [H.L.]
Lord Monkswell: My Lords, I beg to introduce a Bill to provide for a right of dignity at work for employees; and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.— (Lord Monkswell.)
On Question, Bill read a first time, and to be printed.

Social Security (Recovery of Benefits) Bill [H.L.]
3.31 p.m.
The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, I beg to move that this Bill be now read a second time.

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The Bill brings about a fundamental change in the benefit recovery process. Its central objective is to allow victims of accident, injury or disease to retain their compensation for pain and suffering. At the same time we will ensure that public funds do not subsidise the negligence of others. We anticipate that our reforms will save the taxpayer £50 million a year.
The compensation recovery scheme is not, I have to admit, a well known part of the social security system, although the principle behind it is plain. A person who suffers an accident, injury or disease may receive compensation from a third party for the loss he has sustained. He may also receive social security benefits following the same incident. Those benefits may replace lost income or contribute to the cost of care or mobility. That means that the victim could receive two payments to meet the same need. Benefit recovery prevents that by recouping benefits paid from public funds.
This policy is founded on the principle that an individual should not receive double provision to meet the same need. Although this long-standing common law principle pre-dates the modern welfare state, Sir William Beveridge articulated it clearly in his historic report Social Insurance and Allied Services, published in 1942. I quote:
"An injured person should not have the same need met twice over. He should get benefit at once without prejudice to any alternative remedy, but if the remedy proves in fact to be available he should not in the end get more from two sources together than he would have got from one alone."
Before the Government introduced the current scheme in 1990, compensation recovery was an inconsistent business. Compensation was reduced to recover benefits already paid, but the amount deducted differed from benefit to benefit. For some benefits, 50 per cent. was deductible. For others, the full amount paid was brought to account. Recovery of some benefits could reduce compensation up to five years from the date of the incident. For other benefits, there was no time limit. This inconsistent approach disadvantaged some accident victims. Furthermore, the compensator retained any deduction that he made on account of benefits paid. So although double compensation of victims was prevented, the taxpayer lost out and the negligent party was subsidised.
In a report produced in 1986 the National Audit Office concluded that it was wrong for public funds to be used to subsidise negligence. It recommended that the amounts deducted from compensation should be recovered for the taxpayer. Subsequently, the Public Accounts Committee urged the Government to set up such a scheme. The Government commissioned a review of the relationship between compensation and benefit payments. Following the review, they decided to act. The current compensation recovery scheme was introduced as part of the Social Security Act 1989.
The current scheme certainly delivers value for money. In the last financial year the compensation recovery unit recovered benefit in 45,000 cases—an average of £4,000 in each. A total of almost £140 million was recovered—more than £2 million of
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taxpayers' money recovered each week. With operating costs of only £3 million, the taxpayer is getting a very good deal. The Bill will deliver an even better one.
The Social Security Select Committee has played a part in focusing attention on the current scheme, and on ways by which it might be improved. At the beginning of 1995, the Select Committee decided to,
"inquire into the policy and practice of the compensation recovery unit, and the legislation on which it is based".
It took evidence from the department, and from a range of other interested parties, and reported in July 1995. In its unanimous report the Select Committee reached conclusions about the scheme that are of crucial importance. It concluded that,
"it was right for the Government to shift the advantage of recovery to the taxpayer who lost out to the insurer under the pre-1990 scheme".
It added that,
"the taxpayer should not be in the business of paying benefit for compensating individuals who have suffered injury or disease for which the courts would hold someone else responsible".
The Government welcome those conclusions. They provide confirmation that the Government were right to introduce a scheme which has the protection of the taxpayer at its heart.
I turn to an aspect of the current scheme to which the Select Committee drew particular attention. It is that the recoupment process can sometimes result in erosion of compensation for pain and suffering. The Bill will put that right. Under the current scheme, compensation is reduced by the amount of benefits paid following the accident regardless of what the compensation is for. It follows that in cases where the benefit paid is more than the compensation payable for reasons other than pain and suffering, erosion of this element may occur.
Under the reformed scheme, the parties will negotiate a settlement on the basis that compensation for pain and suffering is to be paid in full. This will apply regardless of the benefits which the compensator is to repay to the department. In this way, we will protect elements of compensation which have no direct parallels within the benefit system. A key advantage of the arrangement we propose is that it will not complicate negotiations in out-of-court settlements. We will not be placing a bureaucratic requirement on the compensator to specify the elements of compensation that are payable in each individual case. To do so would disturb the negotiating process and increase the risk of litigation since most cases agree a global settlement figure which does not identify component parts. Where the case is subject to the judgment of a court, the deductions from compensation that are to be made will be specified by the court.
I turn to another important feature of our proposals. The Select Committee recommended that the Government should recover all benefits whenever compensation is paid. Small claims that are settled at or below £2,500 are not currently recovered. The purpose of the limit is to remove the need for compensators and the department to process cases where the amount of benefit paid as a consequence of the accident is limited or non-existent. To recover all benefits would mean removing the small payments limit.

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In the course of preparing for the Bill independent consultants discovered that a disproportionate number of compensation settlements have been pitched at or around the small payments limit. They suggest that many victims have settled for compensation at less than true value. Furthermore, insurers and compensators have gained while the taxpayer lost through unrecovered benefits. We cannot allow this situation to continue. We have therefore decided to remove the small payments limit as part of our reforms. We are retaining the power to set a limit should this be needed in the future. Removal of the small payments limit would plainly involve an increase in the number of cases processed by the compensation recovery unit and by insurers. We believe that this is necessary to ensure that all benefits are recovered and the taxpayer is fully protected.
That brings me to the cost of our proposals. We recognise that this area of the department's work is a specialised one. For that reason we commissioned independent consultants to produce a compliance cost assessment. Fifteen major insurers were closely involved, and I would like to place on record our gratitude for their support and for the valuable assistance they provided. The compliance cost assessment estimated that insurers would face increased claims costing between £52 million and £72 million in each year following reform. The anticipated cost to insurers of implementing the new arrangements will be marginal. The cost of operating them is likely to be between £3 million and £7 million a year.
These increases in costs need to be viewed against a background of markets in which insurance premiums exceed £8 billion each year. If passed on to policyholders, the increase in costs is likely to produce only moderate increases in premium rates. The assessment concluded that employers' liability insurance premia could rise by around 5 per cent. and public liability premia by around 3 per cent. Motor insurance premia are expected to rise by no more than half of 1 per cent. We believe a rise in premia of this order will be seen as acceptable given the protection the Bill offers to victims, and to the taxpayer.
In developing our proposals we have listened carefully to the views of interested parties. My right honourable friend the Secretary of State mounted two consultation exercises before coming forward with our proposals. He consulted on the implications of reform along the lines proposed by the Select Committee and on the findings contained in the compliance costs assessment. The organisations consulted adopted a very constructive approach in responding to the issues raised. Both exercises revealed a broad measure of support for reform of the scheme. We have therefore decided to act. Reform of the scheme will take effect from October next year. It will affect all claims not determined before implementation and those arising subsequently. This means that the additional costs identified in the compliance cost assessment will accrue immediately rather than build up gradually over a period of years.
The Government do not impose burdens on business lightly. But it is important to consider the implications if the new arrangements were confined to claims arising
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after the point of change. For years we would face the situation where two accident victims, having sustained comparable injuries and losses, could receive markedly different compensation payments purely on the basis of the point at which their claim had been lodged. That would be rightly perceived as unfair. It is why we propose that the new scheme should benefit cases still in the pipeline at implementation as well as those arising afterwards.
The compensator will be liable to pay all recoverable benefits whether or not the contract of insurance was taken out before the point of change. To avoid any doubt, it may be necessary for us to put down amendments to ensure that the new liability applies in all such cases. In proposing these arrangements we have given careful thought to ways in which the burden on the insurance industry may be minimised. We have concluded that giving insurers a full year's notice of reform is the right approach. I know that some commentators would like to see the new arrangements implemented as quickly as possible. I suspect that during the passage of the Bill the Government will receive strong representations on the point, in particular from those who feel that the progress of claims that could benefit from the new rules will become stultified in the period before implementation.
I do not dismiss those concerns. However, I am convinced that in some cases a behavioural response by the parties to negotiations is inevitable in advance of implementation. The parties to negotiations will invariably take account of the proximity of reform when reaching a decision on whether or not to settle. In many cases both parties will reach the conclusion that reform will have no effect on the size of the settlement, and that there is nothing to be gained by slowing or .suspending negotiations. In some others, the knowledge that a delay in settlement will lead to an increase in the amount of recoverable benefit may lead to an improved offer being made and accepted in the period before implementation. Inevitably, there will be some claims which are delayed until the autumn of next year, but I believe that that is a price worth paying to secure a substantial improvement in the current arrangements.
I would like to mention another measure contained in the Bill. We plan to streamline the present appeal system for benefit recovery decisions, which is complex and has led to difficulties. I should make it plain that we have no intention of diminishing the rights to appeal which exist in this area; in fact, our reforms should make the process more intelligible and therefore more accessible. Our plans have the support of the independent tribunal service.
The change in the scheme that we are making is a relatively straightforward one but the Bill may appear long and somewhat complicated. Perhaps I can explain why. Rather than make piecemeal amendments to the existing statute, the parliamentary draftsman has restated the relevant part of the Social Security Administration Act in its entirety. This will make it easier for your Lordships to see the proposed new scheme in the round without constantly having to refer back to a previous Act. Furthermore, if enacted in this form, it should prove easier for practitioners to absorb the changes we are

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making. It should also help the scheme to run smoothly in the years following reform. Naturally, the Bill contains the necessary amendments to effect what is an important shift in responsibility for the repayment of benefit. But, as far as is possible, we have thought it right to disturb as little of the detail of the present scheme as possible. I believe that there is a widespread consensus that it works well, and we do not want to put that at risk.
I would like to mention in particular Clause 31 of the Bill, which allows the Secretary of State to make consequential and transitional provisions. The broad intention of Clause 31 is to enable compensation claims determined but not paid before the point of change to be dealt with under the current scheme but, in addition, to apply new rules to such cases where it is administratively sensible to do so. One example is the simplified appeals process. It would be logical to apply that process to all compensation claims outstanding at the point of change.
I look forward to debating the Bill. I am confident that we will agree that in all its essentials it is beneficial and worthwhile in every way. I may find it rather unusual to present a Bill which, I suspect, is going to meet with a good deal of support from all parts of the House. It will achieve three important objectives. First and foremost, it will protect compensation for pain and suffering from the benefit recovery process. Secondly, it will deliver full protection for the taxpayer. Thirdly, it will be fair to the compensator who will be empowered to reduce the settlement where a corresponding benefit is repaid to the department. As such, I believe that our proposals are fair to the victim, to the taxpayer and to business. I commend them to the House.
Moved, That the Bill be now read a second time.— (Lord Mackay of Ardbrecknish.)
3.48 p.m.
Baroness Hollis of Heigham: My Lords, I was not sure that I would ever be saying from these Benches that regard a social security Bill as a good one, but I do so. I say unambiguously that we welcome it. It is a good Bill because it will make a real difference to the lives of many injured people while at the same time benefiting the position of the taxpayer, as the Minister has explained. In this House and in the other place, we shall seek to help the Government in speeding this Bill through.
Four per cent. of the working population in the past year had an accident. Therefore, this Bill could potentially affect one in 25 of us. As the Minister says, the Bill seems technical but it is highly important. It rectifies a deep injustice of the 1989 Act because that Act clawed back benefits, for example, paid out for loss of earnings, not just against that element of compensation which was for loss of earnings, but also recovered it against damages for pain and suffering. That often meant that whether or not the victim went to court for damages ultimately made no difference to the money received.
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Perhaps I may cite just a couple of cases that were quoted in the fourth report last year of the Select Committee on Social Security. Some of the harshest cases involve asbestosis sufferers. The Select Committee was told by Clydeside Action on Asbestos, to which I am sure we would all like to pay tribute, that where there was a difficulty in establishing liability and where someone had been on benefit for a long time, an individual sufferer might be awarded £30,000 in compensation, every penny of which was clawed back for lost benefit by the compensation recovery unit. Another man, who suffered a severe back injury in an industrial accident, told the Select Committee:
"I have recently been offered £25,000 as full and final payment for my injuries, only to be informed by my solicitors that I owe the CRU £21,000 and after paying solicitors and medical bills, I will probably be left with nothing".
That is intolerable.
Rightly, the Bill proposes to ringfence general damages for pain and suffering from benefit recovery. The going rate for suffering is not particularly generous. It is £5,000 for a whiplash injury; only £20,000 for the loss of an eye; £40,000 for the loss of an arm or a leg; and £50,000 for sterility. One thinks by contrast of the damages awarded in some libel cases. However, we are pleased that at least that element of compensation will remain with the victim and we are delighted that the Government saw fit to respond to the fourth report of the Select Committee on Social Security, the Association of Personal Injury Lawyers, the TUC and the Law Society, all of which have worked with the Government to make the Bill feasible.
The original Act was passed in 1989. It is clear that 1988 and 1989 were bad years for social security legislation. It is striking that today we are debating two such measures. One is the Child Support Agency. The Government introduced the CSA to push the cost of child maintenance from the taxpayer to the father. At the same time they introduced CRU, the compensation recovery unit, to push the cost of supporting the victim from the taxpayer on to the insurer. Both measures were designed to save the taxpayer money. Both have had precisely the opposite effect. Because the Government were so grasping, the taxpayer has ended up worse off. Measures from the Child Support Agency, which we shall be debating later, were made retrospective, with no benefit disregard for mothers, and originally with no appeal procedures for fathers. As a result, there has been so little compliance that when the administration costs are removed, the CSA is revealed to have collected little more than the original liable relative scheme. Had the Government worked with families instead of merely seeking to claw back benefit from them, the taxpayer would have been better off.
The same is true of compensation recovery. Because the scheme was designed to recover money for the taxpayer rather than for the victim—just like the CSA, which sought money for the taxpayer rather than for the mother and child—it was often not in the interest of the victim to go to court and to pursue the claim against the insurer. Therefore, because the Government were grasping, the taxpayer ended up with nothing at all. All organisations, including the Labour Party, the insurers

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and the Confederation of British Industry, warned the Government at the time that that 1989 Act was not only unfair but ineffective, but the Government would not listen. As the Minister rightly said, the consequence has been that the victims have too often settled for the tiny ringfenced sum of £2,500 even when their injuries would have entitled them to claim much more. They did so because they knew that any sums won by going to court were likely to be rechurned back to the Government. So why bother? Why take the risk? Why face the strain? As a result, the insurers of defaulting companies were let off the hook and did not pay what they should; the Government got little or nothing and the taxpayer got absolutely nothing at all. It was a mistake. Given that the Government transferred all the risk and the cost to the victim while, through compensation recovery, taking all the benefit to themselves, it is not surprising that victims opted out and that the taxpayer lost out.
We are delighted that this Bill is an opportunity to rectify that situation and to act fairly to victims and sensibly towards the taxpayer. How many people stand to gain? As I understand it, there are about 2 million accidents a year leading to about 300,000 claims and 100,000 court proceedings, of which about 90 per cent. are successful. Most are for industrial or motoring injuries. Some involve public liability, such as when somebody slips in a restaurant and breaks a leg. The average length of time that it takes to settle a case is about two-and-a-half years, although one in 10 takes longer than six years. Someone with a minor injury, such as a whiplash injury from a motor accident, may be back at work within a month or two and will not be dependent on benefit. However, if the accident generates a chronic disabling condition, the victim may not be able to return to work and will instead depend on benefit. That is why there is benefit recovery in 30 to 40 per cent. of cases. As the Minister said, at the moment the CRU claws back about £140 million.
As I have tried to suggest, the problem with the 1989 Act was that there was an inbuilt incentive not to sue, but to settle too cheaply, and that let the taxpayer take the strain of the benefit bill. As the Minister rightly said, we hope that these proposals will bring about greater equity for the victim and the taxpayer alike. Having said that, I hope that the Minister will be able to help us on the following issues. He addressed one or two of our concerns in his opening remarks, but in terms of thinking of amendments it would help us to know the Government's views on some other points.
First, we welcome Clause 2 which provides full retrospectivity for cases currently under discussion. However, Clause 31 relates to Clause 2 and may allow that clause to be disregarded. Under what circumstances may the provisions of Clause 2 be set aside by the Government?
Secondly, how do the Government propose to deal with the difficult question of contributory negligence and litigation risk? Will there be a proportional recovery of benefits for proportional contributory negligence? The Minister seemed to suggest—I may have misheard him; I hope that I did—that the victim will not get a
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breakdown of heads of damages from the compensator. If that is the case, I ask the Minister seriously to think again because it is important that the claimant has full information on that point.
Thirdly, the Minister referred to the small payments limit and suggested—I do not disagree—that the figure of £2,500 is no longer relevant and that it serves to depress claims, letting defaulting companies off the hook. Nonetheless, as the Minister also accepted, there is a case for a de minimis in order to get rid of small claims which cost more and clog up the system. Do the Government have a de minimis figure of, say, £500 in mind? What is the Government's thinking on that? A small payments limit would surely be sensible.
What happens when loss of earnings is awarded in court for only two years out of the four years that someone is away from work due to injury but the DSS seeks to recover benefit for all four years? What happens when a medical advisory tribunal is at odds with a court on that issue? I should be grateful if the Minister could write to me to give me a steer on such issues.
What about the continuing problem of interim payments? A case was cited to the Select Committee on Social Security involving an operation to a damaged knee. There was a very long NHS waiting list, so the victim suggested that he should have treatment privately so that he could get back to work quickly. He therefore sought £3,500 to pay for that, plus modest loss of earnings. He received an interim payment of £5,000 and the DSS clawed back £2,000 or £3,000-worth of benefits. As a result, the man was not left with enough money to pay for the operation; he did not have that operation and remains out of work and on benefit. Can we have a steer from the Government about what they propose to do over the issue of interim payments, particularly in such circumstances?
We are also worried about the number of exclusions and exemptions under Part I of Schedule 1. Too many conditions appear to be excluded, such as fatal accidents and criminal injuries. Will the Government assure the House that they will be open to consensual amendment on that point?
I turn now to a wider issue. I realise that because this Bill deals with recovery it cannot address all of the injustices and difficulties inherent in compensation for personal injuries through the courts. For example, there may continue to be problems where the state of medical knowledge develops beyond the date of settlement and therefore the victim is left in an unfair situation through no one's fault. I have in mind medical knowledge associated with organophosphates. Those problems are much more serious than might have been anticipated when the original settlement was made. Obviously this Bill cannot address that problem, but it remains an injustice.
An injustice also remains where a victim is unable to identify a defendant against whom to sue for damages. Whether a defendant exists or not and whether or not compensation can be achieved over and beyond benefit recovery are very often random matters.

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There is also a particular DSS concern, which the Minister will recognise, about the interlocking of this Bill with the capital rules for means tested benefits. Although under this Bill an individual will have his damages for suffering ringfenced from recovery for benefits already paid out by the DSS—clearly and unambiguously we welcome that—if he subsequently finds himself on non-means tested benefit such as incapacity benefit, damages for suffering will continue to be ringfenced and retained by him as an award for his pain. But is it not the case that a victim who does not receive incapacity benefit because he achieves only 11 or 12 and not 15 points, and who while disabled is not sufficiently disabled to get incapacity benefit, will find himself on means tested JSA but his damages for suffering will no longer be ringfenced but will be used under the capital rules to reduce the benefits that he would otherwise have received? Will they not be eaten away unless either he spends them quickly or puts them into a trust?
I do not ask the Government in this Bill to open up the question of capital rules for means tested benefits. That would have far-reaching implications, financial and otherwise. But I believe it is right to recognise that, as the Government move from non-means tested contributory benefit to means tested benefit, as they have with JSA, it creates new injustices in its trail. We may be seeing one such in this Bill today.
I conclude by saying that we greatly welcome this Bill. We hope that as a result victims will properly retain those damages due to pain and suffering, thus rightfully relieving those unquantifiable burdens of distress and hardship that fall upon them and their families. We hope that the taxpayer will recover from the compensator the benefits paid out to the victim in full because there will no longer be any temptation for the victim to avoid a court case and settle for £2,500, leaving the taxpayer to pick up the benefits bill. We also hope that the Bill will encourage insurers to settle speedily, rather than drag out cases, knowing that they face benefit recoupment. Further, we hope that insurers, who I suspect will have to pass on higher premiums to companies, will now be pressing those organisations to improve their health and safety practices and secure a better working environment; and that at least on this measure the Government will be on the side of the good employer and on the side of the victim. We welcome that.
4.3 p.m.
Earl Russell: My Lords, it falls to me to complete the hat trick and join in the general welcome around this Chamber for the Bill. I welcome the principles on which it is based and the intention behind it. I even welcome a large part of the drafting. I am glad to see it and wish it a fair wind. I will do the best I can to assist it to reach the statute book.
I slightly regret that in introducing a Bill which puts right an injustice caused by Section 22 of the Social Security Act 1989 the Minister nevertheless feels the need to defend the 1989 principle which he seeks to reverse. In 1989 a number of noble Lords were involved in the issue: the noble Lord, Lord Skelmersdale, who was in charge of the Bill and who taught me how, with
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much courtesy and skill, bad legislation could be managed; the noble Lord, Lord Campbell of Alloway; the noble Baroness, Lady Turner of Camden, whose speech I look forward to hearing in a few minutes; the noble Lord, Lord Allen of Abbeydale; and the noble and learned Lord, Lord Griffiths. In particular, I remember the incandescent anger of the noble Lord, Lord Allen of Abbeydale, at discovering that damages for pain and suffering were to be clawed back by the DSS in order to recoup benefit. We were assured many times that it was absolutely impossible to distinguish between damages for loss of earnings and damages for pain and suffering. I am delighted that the Government now understand that this is not the case.
The Minister is entitled to congratulate himself on having listened, before preparing the Bill, to all interested parties. The department has done so with great care and to good purpose. One recognises that this is one of those cases in which the costs must fall somewhere. One is dealing with the costs of benefit paid to those who have suffered illness or injury for which someone else is subsequently found liable. Those damages may fall in one of three places: on the taxpayer, the victim or the compensator. If we consider it as a matter of equity, it should be clear that the victim is the least suitable place on which the damages should fall. It is probable that the victim will have the least resources and is least to blame for the fact that the damages have arisen. When one considers the question as between the taxpayer and the compensator, clearly the compensator is, like Belloc's George, in part to blame. Therefore, there is an equitable case for saying that the compensator ought to pay. In both cases—the compensator or the taxpayer—the costs will spread out with a ripple effect. The ripple will spread either to the taxpayer if it is the DSS or the insurance payer if it is the compensator. It means that in one way or another you and I end up paying. I am still not absolutely persuaded that insurance premiums rather than taxes are the fairest way to proceed but that is not a point of great importance. I do not intend now to make an issue of it.
I am interested in improving a few small points in the Bill. Even though they are somewhat technical, I mention them now in the hope that it will save time later. I was extremely interested to hear from the noble Baroness about the person who did not quite qualify for incapacity benefit but nevertheless was not fit for regular work. I shall listen to what she says on that point later in the Bill. I do not immediately see the appropriate remedy but I shall be happy to discuss it.
In Clause 3 I wonder about the different treatment of illness and injury. Obviously, there is a very grey area as between the two. I am reminded of my father's first diplomatic assignment during which he argued at great length with the French about whether or not a lobster was a fish. I can imagine a similar argument taking place about whether radiation sickness is an illness or

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an injury. It may be of great profit to lawyers, but it makes me wonder whether the distinction between the two treatments is really justifiable. I should like to back up the point made by the noble Baroness, Lady Hollis, about mesothelioma. That is a matter to which we shall have to pay further attention.
Clauses 4 and 5 deal with the certificate of compensation recovery and the situation where there is an error in the original certificate. The Bill provides that in that case the Minister may issue a fresh certificate. I believe that that is too permissive drafting and that in that clause and perhaps also in Clause 10 "shall" is rather more appropriate than "may".
In Clause 16 there is a fearsome-sounding Henry VIII provision that modifies the Bill in any case in which a payment into court is made. I believe I understand why the Government word it as they have done. There are a number of reasons, one of which is a sub judice case which will impede our debating of the principles involved. Nevertheless, I hope that the Minister can give me a clear exposition of why he thinks the Henry VIII power is needed. I hope too that he can define its purposes slightly more tightly than is achieved in the Bill. I shall listen to his answers with interest before considering any next steps.
The Bill contains an extremely open-ended commencement clause. The measure may be brought into effect at practically any time whatever. I accept the point made by Sir William Wade, in a memorandum to the first report of the Delegated Powers Scrutiny Committee, that these entirely open-ended commencement clauses may be risky. I was pleased to hear what the Minister had to say about October next, but I would be even more pleased if he could put into the clause a terminus ante quem because I want to see the Bill come into effect.
Clause 10 deals with supplying misleading information so that a new compensation recovery certificate is needed. That deals only with the compensator, but of course the insurer may be the one supplying the information. A wider-embracing clause might be useful. In Schedule 1 paragraph 8 there is a reference to "any prescribed payment" as something which may be excluded. I should like to know what the Minister has in mind. Again, I shall consider the further situation after listening to his answer.
The small payments limit we shall obviously have to discuss a great deal. The retaining of the power while abolishing the limit argues a certain hesitation in the mind of the Government. As we go through the Bill I should like, if I may, to probe what is behind that hesitation and again listen to the answers and make up my mind as to what I think when I have heard them.
I am on the whole happy with what the Minister said about treatment of cases in the pipeline, but again that is something we shall have to discuss further. I hope to be helpful in raising points upon which I believe agreement may very well be reached. I do not wish to delay the Bill. I wish the Bill a fair wind.

Channel Tunnel: Fire
4.13 p.m.
The Earl of Courtown: My Lords, with the leave of the House I shall now repeat in the form of a Statement an answer to a Private Notice Question which has been asked in another place on the fire in the Channel Tunnel. The Statement is as follows:
"At approximately 8.45 p.m. GMT yesterday, a fire broke out in a lorry on board a Eurotunnel freight shuttle inside the Channel Tunnel between Calais and Folkestone. The shuttle was carrying 29 heavy goods vehicles with 31 drivers and companions plus three crew members. The shuttle, on its way from France, had a French driver and crew. It stopped 12 miles through its journey on the French side of the tunnel.
"Emergency services, fire-fighters and ambulances, arrived at the scene within 20 minutes, and helped evacuate everyone on board the shuttle. Twenty-eight were taken back to France by a tourist shuttle travelling in the untouched northern tunnel; six were evacuated by the service tunnel transport system. Eight people were taken to hospital; two were detained, including the driver of the shuttle. Their condition is reported to be serious but not life threatening. I understand that they will be discharged today.
"French and British fire brigades worked through the night to bring the fire under control. The emergency is now over. I am sure that the House will want to join me in congratulating the emergency services on the way they coped with this incident and in expressing relief that there were no fatalities.
"The French authorities have already begun a formal inquiry. This is for them since the incident happened in the French part of the tunnel. Eurotunnel's own investigation is under way. In addition, the Channel Tunnel Safety Authority, which is comprised of representatives from this country and France, will be making its own inquiry into the incident and studying the reports from the operators and the French authorities. The safety authority's findings will be made public. I shall be urging my French counterpart, M. Pons, to ensure that the French authorities publish their findings as soon as they properly can, so that the lessons of this incident can be learnt by all concerned.
"Until the investigations have been completed, it would be wrong of me to speculate on the causes of the fire. I can assure the House, however, that representatives of the Channel Tunnel Safety Authority are on site and will not allow either passenger or freight operations to recommence until Eurotunnel can prove that this can be done safely".
My Lords, that concludes the Statement.
4.15 p.m.
Lord Clinton-Davis: My Lords, first, I thank the noble Earl for repeating the answer given by the Secretary of State in another place. I associate these Benches with the tribute that he has paid to the courage

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and efficiency of the emergency services (British and French) whose work undoubtedly mitigated the situation and avoided an even worse occurrence. I also express our sympathy to those who suffered injury in this accident.
Perhaps I may now ask the noble Earl some questions which, hopefully, will be pursued in the various inquiries which are to take place. Before I do that, I express the hope that there will be considerable co-operation so far as concerns the inquiries to avoid unnecessary duplication. Can the noble Earl indicate when the first warning of fire was given, by whom, and to whom? Can he ensure that the shuttle design which was approved before the service began to operate will be looked at afresh, the paramount concern being the safety of the passengers even above the cost to the operator?
Will the noble Earl confirm that the normal procedure to be followed in the event of fire is for the train to continue on its route, if possible, into the open air since it is easier to deal with an incident if that is done? Will he also confirm that if the train does have to stop the part of the train which is on fire can be uncoupled and the part with the passengers on board able to proceed on its way? Presumably the inquiry will focus upon why the train stopped when it did. Can the Minister confirm that if the passengers have to be evacuated they should be directed to the walkway and into the service tunnel, because that is a separately ventilated area? Again, presumably the inquiry will focus upon why that was not done in this case.
Were the emergency fans, which are capable of blowing air in either direction in the tunnel to ensure that smoke is blown away from the passenger car before the passengers are evacuated, switched on? Again, will the inquiries look into that matter?
The House will be gratified that the noble Earl said that the reports following the inquiries to be carried on in the UK will be published, and that he will use his best endeavours to ensure that the French also publish the results of their inquiry. Will the evidence as well as the conclusions be published? I am sure that all of the inquiries will be very full and that confidence, which is extremely important, will be re-established at the earliest possible opportunity.
Lord Methuen: My Lords, from these Benches I should like to thank the Minister for the Statement that he has just made, and express our sympathy for those involved in this incident. I, too, should like to express my appreciation of the admirable way in which the French and British emergency services coped with the emergency.
We are pleased to know that, in general, the safety measures and practices designed into the Channel Tunnel and its operating regime worked as planned. We can also be thankful that at this stage there would appear to be no very serious injuries among those involved. However, a number of points need to be answered. I understand that there was a significant delay in the summoning of the Kent Fire Brigade, and that that amounted to about an hour after the French were
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informed. Will the Minister confirm whether that is true? Do extra precautions need to be taken with regard to the carriage of hazardous cargoes on vehicles using the tunnel? Furthermore, should the lorry shuttle vehicles be redesigned on a basis similar to those used for car shuttles, which are totally enclosed and fire resistant? Such vehicles would have minimised the possibility of the fire breaking out and contamination of the tunnel. They would also have enabled the shuttle vehicles to be withdrawn by a locomotive rather than stopping where they did.
Can the Minister say whether, as regards such an incident, there will be any read across to the ferries, in which vehicles are more closely packed? I can imagine that a more disastrous situation would have arisen as there would have been more passengers. Finally, what action has been taken about the growing concerns over the level of security checks on passenger trains on either side of the tunnel?
We welcome the fact that the results of the inquiry and, we hope, the evidence are to be published and made public.
The Earl of Courtown: My Lords, I too join in the praise of the rescue services and extend my sympathy to those injured in the incident last night. The noble Lords, Lord Clinton-Davis and Lord Methuen, raised several issues which, I am sure they realise, are totally the concern of the inquiry. When the results are made public we shall be able to learn from the incident. It occurred on French soil and it is for the French authorities to decide whether to hold a public inquiry. My right honourable friend the Secretary of State is urging his French counterpart, M. Pons, to ensure that the French authorities publish their findings as soon as they properly can in order that lessons can be learnt by all concerned.
The freight shuttle was mentioned by both noble Lords. It was approved by the safety authority and the inter-governmental commission. Obviously, the inquiry will look at that again and the safety authority will doubtless revisit the issue. I shall ensure that the concerns expressed by both noble Lords are brought to the attention of those carrying out the investigations.
4.22 p.m.
Lord Boyd-Carpenter: My Lords, at this stage, are the Government satisfied that the fire was wholly accidental in origin or is there even now a possibility that there was sabotage of some kind?
The Earl of Courtown: My Lords, it would be foolish of me to speculate on that matter. My noble friend will be aware that those details will be considered by the French authorities and no doubt by Eurotunnel and the Channel Tunnel Safety Authority.
Lord Campbell of Alloway: My Lords, without hint of speculation as to the cause of the fire or criticism of anyone, can my noble friend confirm that there were two engines on the train—one at the front and one at the back—each with one driver, and that there was one

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guard? Can he also confirm whether, if the drill of uncoupling had been implemented, the train could have been driven back to France within nine to 10 minutes? Furthermore, is my noble friend able to say whether the train was about 200 metres away from the service tunnel whose air pressure kept it free from smoke and which could have been reached from the train?
I too wish to express sympathy for the injured and admiration for the courage and expertise of the fire-fighters.
The Earl of Courtown: My Lords, my noble friend has made a number of points concerning the options available in what could have been a serious incident and was for those injured. Of course, various options are available and the crew must make a judgment at the time. The points about ventilation and so forth are matters for the inquiry.
Lord Grenfell: My Lords, as security and passenger services have been mentioned, I wish to ask the Minister whether he is aware that the system of passenger checking at the Paris end of the service—which I use once a week—is most haphazard. Can it not be co-ordinated at both ends? For example, on passing through the security check at the Gare du Nord, one passes an officer of the law who will decide by looking at you whether you are the kind of person whose baggage should be more closely inspected. However, at this end of the tunnel one goes through a proper security check. As a good European, I have not objected when on several occasions I have been selected for special investigation of my baggage, but I believe that there should be some co-ordination and similarity of treatment at both ends.
The Earl of Courtown: My Lords, the noble Lord makes a valid point concerning security. At Question Time today I answered a Question relating to aviation and we touched on areas relating to railways. Our checking is among the finest in the world. Indeed, representatives of other countries come here in order to ascertain how to improve their own security. Of course, I shall make the noble Lord's queries available to my right honourable friend.

Social Security (Recovery of Benefits) Bill [H.L.]
4.27 p.m.
Debate on Second Reading resumed.
Viscount Chelmsford: My Lords, it falls to me to try to pick up the threads of the Bill relating to compensation and recovery. We have had broad agreement on the Government's proposals from all sides of the House. Noble Lords may be relieved to hear that the broad thrust of the proposals is fully agreed by the insurance industry. Perhaps I should add that I have been briefed by the Association of British Insurers.
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The need to protect awards for pain, suffering and loss of amenity is also fully agreed by the industry. The additional cost of the Bill to the industry, which is put by the Government at some £50 million and by the industry at between £51 million and £71 million, is accepted. Of course, some increase in the premiums is to be expected.
I wish to discuss two points of contention. First, Clause 2 makes the Bill retrospective. That damages insurers, who cannot charge extra premium for those claims which are currently in the pipeline; that is, between the occurrence and the award. Many precedents exist for a law becoming effective in respect of events occurring after legislation, the latest of which was the Damages Act 1996. That was amended by my noble and learned friend the Lord Chancellor after representation. On behalf of insurers, I wish to ask the Government to reconsider our proposal here and to do the same. I suggest to my noble friend the Minister that it does not follow that after today a new claim will have a shorter life in the pipeline than will an old claim currently going through and awaiting an award.
The second point that I should like to raise is more complex. The changes in the Bill not only ringfence the agreed compensation for pain and suffering and loss of amenity, but also take powers and apparently intend to abolish the small payments limit. It is the industry's contention that not only is the latter unnecessary in order to achieve the Bill's aim but that, rather than assisting the Government to claw back more money, it may actually add overall cost to all parties, including the Government.
Here I believe I should add some more details to explain why the industry takes that view. Although the Government commissioned a compliance cost assessment, its terms of reference were to look at each of the issues separately. If it had had terms of reference which included the need to look at the assessment of the overall result, it might have come to some different conclusions. For a start, the terms of reference did not address the impact of ringfencing those cases of pain and suffering which are currently settled below the £2,500 small claims limit but which will now be paid. The difficulty that arises from that now needs to be reviewed. We believe that the cost of doing so will actually damage the Government's financial recovery. For example—and this has happened since the discussions which the Government had with the industry—there has been a recent sample survey of past claims by a major employers' liability insurer. Looking at past claims, it found that, had they included the present ringfencing for all claims for pain and suffering, including claims under the £2,500 limit, the initial clawback that the Government could have achieved would have been 90 per cent. of all the additional clawback which they currently expect.
There is also the point that claims that are currently settled for the limit of £2,500 may well be suspect as to the actual injury or illness. The noble Baroness, Lady Hollis of Heigham, suggested that many claims are being settled too cheaply. However, the insurance industry suggests that some are settled too expensively because it is not worth the cost of sitting down to argue

1217
the case. If we remove the small claims limit, review in many cases would be inevitable. There is also the point that a number of claims under £2,500 consist of statutory sick pay only where no clawback exists.
Therefore, we have a situation where the compliance cost assessment has already stated that the removal of the small claims limit will add a 50 per cent. increase to the workload of the Compensation Recovery Unit and another 60 per cent. to its costs. We suggest that it will also add to the insurers' costs, as they will then become involved in some of the reviews. Finally, where those findings of below £2,500 are reviewed and then disputed, that will also add to court time and costs.
In our view, the better solution is to ringfence only for pain and suffering and to retain the existing small payments limit. We believe that that will add very little extra administration to the Compensation Recovery Unit; it will avoid extra court costs; and it will also leave insurers with less administration. But, most importantly, it is the pain and suffering ringfencing which will significantly enhance claimant recovery. As the Bill provides only for powers to be taken to remove the limit, insurers ask the Government to seek extra evidence of its effect before considering any implementation. Finally, they ask the Government to reconsider Clause 2 and to amend it in the way recently agreed under the Damages Bill.
4.33 p.m.
Baroness Turner of Camden: My Lords, I, too, welcome the Bill, as has my noble friend from this Front Bench and, indeed, other speakers in the debate. I remember very well the discussions that we had in your Lordships' House when debating the Social Security Act 1989. At the time it seemed to me, and to a number of noble Lords on all sides of the House, that it was quite iniquitous to claw back from compensation, which had been awarded because injuries had occurred through negligence—often the employer in the case of industrial injury—the amount paid by way of social benefits.
The Government's argument then was that unless the entire amount of social benefits was recovered people would get double compensation. In fact, as we said then, the benefit being paid was one which had already been paid for via national insurance contributions—in the case of industrial injury back benefit—or by way of taxation. Moreover, it was a no-fault system. Damages paid at common law, however, were paid only if there had been negligence, if the injury had occurred through the fault of another person.
We said that if the Government persisted—as, indeed, they did—situations would arise where an injured person would end up with nothing at all, for if the case took some time to settle, the amount deducted from common law damages would be so much as to nullify the award, even though that award had arisen because negligence had been proven as the cause of the injuries. Indeed, as we have heard, that actually happened. My noble friend Lady Hollis has already cited a number of cases and I also have details of some cases sent to me by the Trades Union Congress. I shall give your
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Lordships an example. One individual had been exposed to ammonia gas and was unable to work for the last 22 months before his retirement. His case was settled for £13,000, but his benefit claim of £129 a week began to eat into the claim. Eventually the benefit income caught up with the value of his claim and all the damages were paid to the DSS. That may be rather an extreme case, but it is clear from the information supplied by the TUC that compensation has been cut dramatically in many cases, so that individuals who had quite serious injuries have not received lump sum compensation anywhere near compensating them for the pain, suffering and continuing disability that they may suffer.
It is true, as we have heard, that the 1989 legislation made provision for a threshold. Reclamation of benefits was possible only in legal cases settled above £2,500. But this itself has had a negative effect, and the Minister referred to it as the reason why the threshold does not appear in the present Bill. There is an incentive to settle at a lower rate than the claim may be worth in order to avoid reclamation. Indeed, as we heard, insurance companies often offer payments at the £2,500 level, with the rider that if the settlement is higher, reclamation will erode its value.
On the other hand, the Bill makes provision for a threshold of some sort to be introduced some time in the future. If there is to be a threshold, I believe that we should look most carefully at the £2,500. As I understand it, the view of the TUC is that the figure was set in 1989 and is now rather out of date. It ought to be higher if we are to have a threshold figure at all.
However, as I said earlier, I am disposed to give a welcome to the Bill before the House. At last it is acknowledged that pain and suffering is an element for which there must be compensation and that a common law settlement should not be eroded in regard to any part of it meant to compensate for this. I can well recall that in 1989 we strongly argued that an injured individual was at least entitled to be compensated for the pain and suffering involved in the injury. I am extremely glad that the Government have now seen the strength of that argument.
There is another aspect that I believe to be important and it is one that I am not sure is covered in the Bill. I am talking about prospective loss of earnings arising from an injury. I can well understand, without necessarily supporting entirely, the view that social benefits will already have compensated to some degree for loss of earnings already sustained. But possible future loss, which is not always quantifiable, arising from disability contingent upon the accident is a rather different matter. I hope that the Government will be prepared to consider it.
One of the problems about common law claims for industrial injury is that, generally speaking, the awards tend to be too low. Here I disagree with the comments made by the noble Viscount, Lord Chelmsford, who gave the views of the ABI. Perhaps this is not the place to raise the matter, but I understand that the TUC is already taking it up in connection with other possible legislation. When I was a union official involved with

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industrial injury cases, I can well recall that every so often there would be a case with a very large amount of compensation. Of course we made a lot of fuss about it because we were very proud that we had managed to achieve a very high settlement for an injured member. But very often the injuries in such cases tend to be quite horrific; for example, in some cases the individual concerned would not be able to work again. The general level of compensation payments for industrial injuries tend, I believe, to be rather on the low side. The low level of award means that, in general, accident victims could hardly be regarded as being over-compensated, even if no deductions were made for social benefits. Indeed, before we had the 1989 Act, judges had to take into account the amount paid for social security benefits when awarding lump sum compensation. Of course if an individual has private accident insurance, the benefits deriving from that are not considered when assessing common law damages for negligence.
When we discuss the Bill in Committee we shall be able, as my noble friend Lady Hollis has said, to explore a number of possible improvements. As I believe the noble Viscount, Lord Chelmsford, has confirmed this afternoon, it is possible that insurance premiums will increase as additional amounts will now fall to be paid by employers and their insurers. However, that may assist in keeping down the number of industrial accidents, and if that is so, that would be another benefit. Moreover, I remind the Government that when insurance premiums rise they also benefit because they impose insurance premium tax on the industry at the rate of 2.5 per cent., and there will be a corresponding increase to the taxpayer from such revenues.
I am grateful for the explanation that the Minister has given this afternoon on the appeals procedure. I am glad that there is to be an appeals procedure set out in the legislation. Generally speaking, I welcome the new Bill. I hope that we shall soon get it on to the statute book and that during the course of discussion in Committee we shall be able to advance some arguments which could improve it still further for individuals who suffer accidents at work.
4.41 p.m.
Lord Mackay of Ardbrecknish: My Lords, as I indicated at the beginning, I thought I was going to be in the unusual situation of introducing a Bill which received a wide welcome throughout the House. At the end of the debate I find that welcome even more surprising. I am particularly glad to see the noble Baroness, Lady Turner, in the Chamber. We have taken part in a number of debates together and I am pleased that the events of the summer have not prevented her from taking part in these proceedings. I look forward to hearing her contribution in the Committee because I know that she has considerable knowledge of these matters gained in her previous career in the trade union movement. The noble Baroness referred to damages for future loss of earnings. They, of course, will be paid in full. The recovery of benefit takes place only up to the point of settlement. The benefit is recovered only between the incident and the point of settlement. Any
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money thereafter is not recovered in the way that the noble Baroness mentioned. I hope that I have reassured her on that point.
Some of the points made in the debate are much more suited to the Committee stage of the Bill, as your Lordships will appreciate. If I do not refer to them all, it is because I anticipate we shall discuss them in Committee. The noble Baroness, Lady Hollis, said that the taxpayer had lost out in respect of the current scheme which we introduced in the 1989 Act. Before the 1989 Act the taxpayer did not receive anything at all. Last year the taxpayer received £140 million, and since the Act came into force he has received something like £500 million. That suggests the taxpayer has got at least something out of the 1989 Act which he or she would not have received before. However, as I mentioned, we think that a further sum of about £50 million will also reach the taxpayer as a result of the Bill before us.
The noble Baroness also asked about interim payments. We would seek to recover the benefits paid up to the point of the interim payment. That means that when an interim payment is being discussed or decided the court or the parties have to take account of the fact that recovery will be sought up to that point. I believe the noble Baroness gave an example of a person who needed £3,000 for an operation. Consideration would have to be given to the £3,000 for the operation, plus the benefit recovery up to that point.
I was also asked about contributory negligence and what effect that might have on benefit recovery. We have no plans to take into account contributory negligence. That is a complex issue and we shall no doubt return to it in Committee. We believe that as the Bill is constructed at the moment it will not be a relevant factor in the recovery of benefit.
The noble Baroness, Lady Turner, and my noble friend Lord Chelmsford referred to the small payments limit. We are willing to consider a de minimis small payments limit in future if a good case can be made for one. That is why we have retained the power to set one. However, as I say, we shall have to be persuaded that we ought to introduce some small payments limit to replace the figure of £2,500. I would say to my noble friend Lord Chelmsford that I do not think the ABI has provided any convincing evidence that the compliance cost assessment estimates are likely to prove incorrect as regards revenue because the document addressed the issues of ringfencing and the removal of the small payments limit. It has given the best estimate available for the loss to the industry looking at the whole package and not just at the various parts of it. However, we may return to that matter later. Because of the removal of the small payments limit the Compensation Recovery Unit costs are likely to increase by only £2 million per annum. If one considers the savings I have already mentioned that we believe will accrue to the taxpayer of £50 million from the new scheme, that seems to me to be a reasonable leverage as regards the interests of the taxpayer.
The noble Baroness, Lady Hollis of Heigham, asked me about Clause 31 and its interaction with Clause 2. I said in my opening speech—the noble Baroness can

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check this later in Hansard—that the broad intention of Clause 31 is to enable compensation claims determined but not paid before the point of change to be dealt with under the current scheme but in addition to apply new rules to such cases where it is administratively sensible to do so. We may well return to that point in Committee.
The noble Baroness asked me, as regards income related benefits, what happens to a lump sum which is paid in compensation for pain and suffering and for loss of future earnings. She asked whether these amounts of money would be treated as capital and added to any other capital the injured party may have when it is decided whether the individual qualifies for income related benefits. The situation will not change. These amounts of money have always been taken into consideration as regards income related benefits. Compensation awarded for any personal injury, either by the courts or in an out-of-court settlement, can always be placed in a trust for the injured person. The trust can either be set up by the victim or by someone acting on his or her behalf. Placing the payment on trust enables long-term provision to be made for the disabled person's future without the capital affecting his or her benefit. The way round the capital rules is to set up a trust. That is the current position and it will remain the position after this Bill becomes an Act.
The noble Earl, Lord Russell, asked me why the word "may" is used in Clauses 4 and 10 rather than "shall". As I recall from my time in another place, that is one of those questions that occupied committees for many happy hours. Every time "may" was included, Members of another place suggested including "shall" and asked the Government why "may" was used. Every time "shall" was included, they suggested including "may" and asked the Government why "shall" was used. I believe the noble Earl was making a rather more serious point than I am suggesting is often made in such discussions. I am willing to consider the point he has made. No doubt we shall return to it, or we will return to it in Committee.
The noble Earl also asked me—as I expected he would—about any Henry VIII clauses in the Bill. Although I have had the interesting experience this afternoon of discovering that everyone agreed with me as regards the merits of this Bill, I am not being left totally bemused by that in that the noble Earl is chivvying me about Henry VIII clauses. The Bill contains some provisions which would allow modification of the effect of the Bill by secondary legislation, and we have reported that to the Delegated Powers Scrutiny Committee. I look forward to reading what it says.
The powers not just under Clause 16 but under Clauses 14, 16, 18, 19, 20 and 31 allow for modification of an Act of Parliament by secondary legislation. They will be used for only very limited purposes which will be to make special provision for particular
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circumstances covered by those clauses. Nevertheless, it is possible that regulations under those clauses may not be able to make sufficient provision for those circumstances without making technical changes to the Bill. I have no doubt that we shall discuss those matters when we have the benefit of the advice of the scrutiny committee.
On the same theme, the noble Earl asked me about the commencement clause and suggested that it is open-ended which might mean that the Bill could wither on the vine. As I said, it is our intention, subject to parliamentary approval, that the Bill should be commenced in October 1997. I see no good reason for delay beyond that point once the Bill is passed. I hope that that assurance from the Dispatch Box helps to persuade the noble Earl that I have no underhand intentions with regard to not delaying the Bill after this House and the other place have passed it.
My noble friend Lord Chelmsford asked me about the provisions in Clause 2 and the retrospective nature of that clause. He asked me to reconsider the matter. I explained in opening that we sought to catch cases in existence as well as new cases at the time of change. If we did not do that, people with similar injuries and similar compensation could walk away from the claims with quite different levels of benefit because of the workings of the two provisions. For that reason, I suggest that we should take the unusual step of making the changes retrospective so that they will catch existing cases going through the pipeline as well as new cases. Therefore, while I understand my noble friend's concern, I hope that he will accept that it is perhaps the only way in which to prevent serious unfairness occurring in the years after October 1987.
It is clear that all noble Lords who have spoken agree with us that we should reform the compensation recovery scheme. The reasons that I gave in my initial speech are the reasons referred to in every contribution that has been made. The first is that in the present scheme, compensation payable for pain and suffering can be eroded, which means that the victim can lose out. All noble Lords agree with me that that is wrong. Secondly, manipulation of the present scheme is taking place around the £2,500 limit which means that the taxpayer is losing out. Therefore, I believe that the case is strong and your Lordships have agreed that the new system will be fairer to the victim; it will enable compensation for pain and suffering to be paid in full; and it will be fairer to the taxpayer by recovering all social security benefits in the cases where compensation is payable. I believe also that it will be fair to business, allowing compensation to be reduced where a corresponding benefit has been paid. I commend the Bill to your Lordships and look forward to the Committee Stage.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Child Support Departure Direction and Consequential Amendments Regulations 1996
4.53 p.m.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish rose to move, That the draft regulations laid before the House on 15th October be approved [1st Report from the Joint Committee].
The noble Lord said: My Lords, these regulations pave the way for the full introduction of the new departures system. They follow regulations made earlier this year that enabled the provisions to be piloted in a small number of areas. Departures will allow for the maintenance assessment made under the child support formula to be varied in a small number of exceptional cases where that assessment is not seen to produce a fair result. This new system will benefit both absent parents and parents with care.
The central element of the 1991 Child Support Act was that child support would be assessed under a fixed formula. This would ensure that parents in similar circumstances would receive similar assessments, and avoid the problems of the old system, where awards were inconsistent, often of low amounts and where maintenance was all too frequently given a low priority.
The formula does, of course, contain a number of safeguards to ensure that absent parents are not required to pay unreasonably high levels of maintenance. The protected income provisions ensure that he will always retain more income after payment of maintenance than if he were in receipt of income support. A further provision, introduced in April 1995, ensures that maintenance is capped at 30 per cent. of net income.
But we recognise that in exceptional cases the inflexibility of these provisions can cause difficulties. The departures system will for the first time introduce an element of discretion. It will enable the formula assessment to be varied to allow greater recognition of expenses and commitments not covered by that formula.
Since we have only a short time to debate these regulations, I shall not discuss each one in detail. However, I hope it will be helpful if I outline the main provisions. There are three categories under which a parent can make an application for a departure. The first is for special expenses relating to: high travel-to-work costs; high travel costs in maintaining contact with the children of the assessment; costs arising from illness or disability; debts incurred while the family were still together; financial commitments entered into before April 1993; and the costs of supporting stepchildren, where responsibility was taken before April 1993.
The second category is where a property or capital settlement in lieu of child maintenance and made before April 1993 is not properly reflected in formula.
The third category is for additional cases including: assets capable of producing income; diversion of income; and lifestyle inconsistent with income declared for the child support assessment. This category is open to either parent but is likely to be particularly helpful to parents with care. One of the criticisms of the child
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support formula is that it has not been able to deal as flexibly as the courts with cases where absent parents seek to conceal or divert large parts of their income in order to reduce their child support liability.
The regulations we are debating today carry forward the provisions in the Departure Direction Anticipatory Application Regulations, introduced in April, and which enabled the departure provisions to be piloted. The pilot has been of enormous value to the Child Support Agency in the testing of procedures prior to the full introduction of the departures system. It highlighted a number of areas where improvements could be made. These include operational procedures; the computer system; and letters and forms sent to parents. Appropriate amendments have now been made and this will be of great help when the system is introduced fully, helping to ensure that the procedures work smoothly and efficiently and that parents receive a good standard of service.
During the pilot, some 2,000 cases were considered. Of these we believe that around 10 to 15 per cent. are likely to be successful. We have always been keen to ensure that the departure system is seen to benefit parents with care and not be just for absent parents looking to reduce their maintenance liability. It is therefore pleasing that there was an almost even split of applications between parents with care and absent parents. No evidence has emerged to suggest that the provisions in the pilot regulations do not deal appropriately with exceptional cases. These regulations, therefore, carry forward those provisions. But we will, as always, continue to keep both the overall child support scheme and the departures system under close review.
In addition to setting out the basis for departure applications, the regulations also contain a number of provisions relating to the handling of applications. These include provisions for cases with existing assessments and provisions for appeals.
One issue the regulations do not cover is the order in which the Child Support Agency will take on cases. Clearly it will be impractical for it to deal with all cases, both new and those with existing assessments, from day one. I can confirm that the agency will take on new cases—that is, where an assessment is made on or after 2nd December—as they arise. It will also take on first those cases which took part in the pilot exercise. So those who took part in the pilot exercise will have their cases considered immediately.
Other cases with an existing assessment will be taken on in phases. First will be those cases where the youngest child is aged 15 or over, since liability for maintenance may well cease soon. Then cases will be dealt with according to the age of the assessment, with the oldest cases being dealt with first.
All cases with an existing assessment will be sent a notification about the new system and invited to make an application if they wish. We will be aiming for this exercise to be completed by April 1997. However, if applications are high this may be extended to September 1997.
No parents will lose out as a result of this phased take-on. The regulations ensure that those with an existing assessment who make their departure application by 1st December 1997 will have any departure award backdated to 2nd December 1996, provided the conditions for the departure were met at that date.
The final aspect of the regulations which I shall mention briefly is the provision for appeals. As with assessments made under the formula, there will be a right of appeal to an independent child support appeal tribunal against departure decisions. In addition, some cases may be referred by the Child Support Agency to a child support appeal tribunal for a decision. It is intended that these will be cases which raise novel or contentious issues, and will include cases where the application is made on the grounds of a lifestyle inconsistent with declared income or diversion of income.
One area where the appeal provisions for departures differ from other child support appeals is the provision for tribunal chairmen to sit alone to deal with certain appeals. This will be cases where the appeal is against a decision to reject an application at the preliminary sift stage; and cases involving property and capital transfers. However, it will still be open to chairmen to decide that the case should be dealt with by a full tribunal.
These regulations will allow for the full implementation of the departures system. This is an important reform of the child support provisions which builds on a range of other measures already brought in. The formula assessment remains the right and fair way of assessing maintenance in the majority of cases. But an element of discretion will now enable the small number of exceptional cases to be dealt with more appropriately. I commend the regulations to the House.
Moved, That the draft regulations laid before the House on 15th October be approved [1st Report from the Joint Committee].—(Lord Mackay of Ardbrecknish.)
5.2 p.m.
Baroness Hollis of Heigham: My Lords, we on these Benches have always supported the principle that although a husband and a wife may divorce they cannot divorce their children. He—and it is usually "he"—must retain a continuing responsibility for maintenance. We also believe that the old court system which determined each case on its merits was not particularly meritorious. Barely a quarter of lone parents received maintenance, too few men contributed, their contributions were too low and there was little sustained effort to chase up defaulters.
However, replacing that with a formula established by regulation and operated by agency has, as we have seen, substituted one set of problems for the original set of problems. It has undoubtedly been unfair to many partners; it has been harsh to many absent parents. It has proved unreliable for many parents with care. It should never have been made retrospective, disturbing the settlements on which people had built their financial lives. It should have allowed parents with care to keep
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a modest element of the maintenance before it was clawed back by the Treasury. It is analogous to the decision which we discussed earlier today under the Bill relating to the Compensation Recovery Unit.
All those issues were identified during the passage of the Bill. They were all subject to amendments moved by the Opposition Benches. They were all rebuffed by the Government and in all cases the Government were wrong. In so far as they have not adopted them, they remain wrong. How much hardship and pain would have been avoided, how much administrative chaos would have been made unnecessary if the Government had only listened to us and taken the Bill forward in a non-provocative way. In all the subsequent amendments and changes to the regulations that have been brought by the Government since the CSA was first established, one amendment apart—the increased benefit penalty for refusing to divulge information—they were all pressed by this side and the Government originally resisted but they have now belatedly had to concede it.
Departures are very much a case in point. We argued in this House and the other place time and again that the assessment system must include, as the Minister said today, some element of discretion, some element of flexibility, if the formula is to be fair as well as universal. Time and again, the Minister, the noble Lord, Lord Mackay, refused. Usually, but not invariably, the words he uttered were: "floodgates, floodgates, floodgates". It was as though by repeating the word he somehow made it true.
Then, early last summer, we had the Child Support Bill, which embodied some of our concerns, and some of the affirmative regulations today flow from it. As the Minister said, it was based on a pilot scheme of 25,000 cases. It seems surprising that so few—only 6 per cent.—applied for formal review. I understand that the Australian experience is rather nearer 12 per cent. although it is possible that when the exercise is for real and real money may result from it the response rate may be higher. As in Australia, apparently the pilot scheme suggests that almost equal numbers of women and men apply for review. However again, unlike the Australian scheme, the pilot scheme has thrown up only a low proportion of success, from 10 per cent. to 15 per cent. I do not know whether the Minister has any views as to why that should be so.
The Minister helpfully explained the direction of the departures. In the first cluster to which he referred, special expenses relating to travel to work, the cost of stepchildren and disability are obviously sensible. We also recognise and welcome the belated acceptance by the Government that property settlements were unfairly treated in the original CSA formula.
However, we have worries and it would be helpful if the Minister could say more about the Government's thinking on them. They concern the third set of regulations, numbers 23 to 29, which reflect the problem where there is an obvious disparity between the declared income of the absent parent and his actual lifestyle. There is the stereotypical case of the man in the pale grey Jaguar declaring that he is self-employed and

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unable to make anything other than the most modest contributions. We believe that he is shielding his income from fair maintenance payments.
Our worry is that the regulations as phrased require the parent with care to prove that the absent father is capable of making higher maintenance payments. As the citizens advice bureaux have said, it is a difficult burden to place on the parent with care. Are the Government satisfied that it is an acceptable way forward? What is the parent with care supposed to do? Produce a private detective?
That leads me to ask to what degree the Government are willing to countenance the Child Support Agency interfacing and liaising with other benefit agencies in regard to records. In particular, given that the fraud Bill is currently going through the other place, are the Government considering—and I do not say whether or not we support it—that there should be any interface with Inland Revenue records, which might be one of the ways of tracking down the real income of fathers or absent parents who fail to disclose it to the CSA? What do the Government have in mind on the issue as they start the fraud Bill in another place?
What worries me throughout is that the Child Support Agency does not take the responsibility that it should for ensuring that maintenance is paid. While the Government are harsh on women who fail to divulge the required information by ratcheting up the benefit penalties they now employ, it seems that yet again, men who evade full disclosure of information may get away with it.
While we welcome the Government's belated recognition that discretion, flexibility, departures and appeals must be embedded in the system, and while we believe that most departures listed are to be welcomed, we have a real fear as to the satisfactory nature of the methods that may be employed in order to persuade the absent parent to give full disclosure of the income on which fair and reliable maintenance may be based. That alone may float the parent with care and her children off poverty.
Earl Russell: My Lords, I must congratulate the Minister on having been here long enough to have acquired an element of discretion. But the element of discretion is, I feel, still rather a small one. This morning I received advice on the regulations from the Law Society. It says that there is no real discretion as was in the past exercised by the court having regard to the circumstances of individuals. I could not have put it better myself. That sums up the heart of my objections.
I heard what the noble Baroness, Lady Hollis, had to say about the courts. I recommend to her a work that I know she knows and respects as I do; namely, the 20-country study by Professor Jonathan Bradshaw and others. The study pointed out that in all the countries dealt with, the amount that single parents were getting from maintenance was rather small, simply because in many cases the money was not there to be had. So there is a possibility that the trouble we have run into with
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the Act is that the expectations of the DSS as to how much it could get in the first place were a little unrealistic.
The noble Baroness also raised the interesting question of why the take-up is so much higher for a pilot scheme in Australia than it is here. There is a perfectly rational reason for that. It is because the Australian scheme is arranged on fundamentally different principles. The point of the Australian scheme is to encourage the parties concerned to agree between themselves on a private settlement. They know the circumstances in a way that the DSS and the CSA never will. The fact that that system might work rather better than the one we have only goes to show that very often people are the best judges of their own joint interests, even in the highly charged circumstances of a broken marriage.
The 6 per cent. take-up is disappointing. In the course of correspondence I have tried to encourage people to take part in pilot schemes. Of the 6 per cent., 90 per cent. were for inconsistent lifestyle and 90 per cent. of those were unsuccessful.
I feel that we all still have a problem on inconsistent lifestyle. Obviously, it is something which happens. There is a case in my papers of someone who, before the Act, was paying £340 a month maintenance and is now self-employed, says he has no income, and is paying nothing. I cannot believe that that is right. On the other hand, it is equally true that inconsistent lifestyle in the supercharged atmosphere of a broken marriage is sometimes alleged when it is not true. We must do better at trying to prove the facts. I believe that we are all united in wishing to do so and that all of us are united in seeing very real, practical difficulties that we have not yet overcome. I once wrote to an irate correspondent who was alleging inconsistent lifestyle, "Don't shoot Mr. Lilley; he's doing his best". The Minister knows that I do not say that very often. So if, by consultation, we can find better ways of proceeding—I am interested in the noble Baroness's suggestion about the Inland Revenue—I should like to see what we can do.
I am reminded of an observation that Miss Chant made, in reply to the ombudsman, to the effect that much of the CSA's problem is that it encounters people at a stage of their lives when they are in an adversarial situation and when an administrative procedure is not the right way to tackle their problems.
Granted that so many of the appeals concerned inconsistent lifestyle, there were not very many under the other grounds. Of them all, in Mr. Mitchell's figures, 10 per cent. to 15 per cent. were successful. That is in line with what the Minister said when he introduced the Act in 1995; namely, that the system had been designed so that it was expected that very few departures would be awarded. Precisely. That is our objection. The Minister said that the regulations dealt appropriately with the situation. They have dealt with it in the way the Minister believes to be appropriate, not in the way we on these Benches believe to be appropriate.
I believe that the departures given are in many cases not large enough. According to the pilot evaluation, the average departure is £25, which means that the average

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benefit to an absent parent—there is no figure given for the parent with care in the evaluation, though I wish there were—is £10. With the case, on which I have dwelt in the past, of somebody trying to afford a season ticket from Newbury or Eastleigh in order to remain in work, £10 will not take him very far along that journey. If this is to be an effective system, it will have to recognise rather larger departures.
The rules for capital transfer also suffer from the fact that they require people to have records showing the proportion of a transfer coming under different headings which were not required when the transfer was made. Therefore the records are unlikely to have been made. The department will perhaps be prepared to look at that matter under its monitoring process.
There is a problem with contact. We do not know how much contact will be allowed—if the Minister has anything to say on the subject, I shall be interested to hear it—and we do not know how contact will be monitored. The point has been made and, in relation to boarding schools in particular it is clearly true, that a contact is not always known to the parent with care. I do not think that we should go too deeply into the question of whether that should or should not be so. It is not a problem into which we should stick our noses.
The Minister knows my views on cars. I regret that he did not choose to apply the Inland Revenue rules for car use, which allow for a percentage of repairs, road fund licence and insurance. Those are perfectly workable rules. If, regrettably, people need to go to work by car and if they are to continue to work, they ought to be able to have such rules. Of course, if they cannot continue to work, they will not be paying maintenance, so the object of the exercise will be defeated.
In Regulation 15(1) disability costs are listed. I should like to know—this is a technical question to which I hope it is possible to give an answer—whether those costs are a total enumeration of the disability costs allowed or whether they are covered (I hope that the noble and learned Lord, Lord Simon of Glaisdale, will forgive my Latin) under the eiusdem generis rule. For example, for someone whose speech is very severely impaired, would or would not the use of an interpreter be an allowable cost under that regulation? I am sure there are many more such examples which might be eiusdem generis, and I hope that they might be allowed.
In Regulation 9 it is a matter of very great regret to me that no departures are allowed in favour of anybody who is on income support. The Minister knows my views about levying maintenance from people on income support. But it should be an object of policy to encourage people on income support to take work, even if that work is only part time and even if only for a very few hours. By not allowing the expenses arising from any such work, the regulation creates another poverty trap. We have too many already, and creating another is a move in the wrong direction.
I am also rather distressed by Regulation 18(2) which states that no allowance shall be made for the costs of stepchildren if those stepchildren were acquired after 5th April 1993. I could predict in my sleep the
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Minister's reply: the costs of the stepchildren should fall on their natural parents. But by now the Minister ought equally to be able to predict in his sleep what my reply to that will be. What is to happen if the natural parent of the stepchildren is dead, is out of the country, has gone away and got lost or is physically or mentally incapable of earning money? How then are those children to be maintained? That seems to me a real injustice. I cannot understand how the Minister can justify it. I hope to hear an answer.
Lord Mackay of Ardbrecknish: My Lords, perhaps I may try to answer the various points made by the noble Baroness and the noble Earl in our short debate on these regulations. In relation to the pilot scheme, it is true that the number of applications returned was 8.5 per cent. That was pretty evenly divided: in fact 53 per cent. of the total in favour of the parent with care and 47 per cent. in favour of the absent parent. That is a pretty even division on those numbers.
Our projection of about 10 to 15 per cent. of departure awards being successful is based, as the noble Baroness suggested it might be, on the fact that when the system is running for real and there is real money at stake more people may apply. Even those who do apply may apply more seriously when they think that there is real money involved. That is why we made the estimate we did. We believe that there will probably be a slightly higher take-up than there appeared to be in the pilot.
Baroness Hollis of Heigham: My Lords, does the Minister think that there are any other reasons for the low take-up? In other words, did the pilot suggest that there is an opacity in the system or a complexity of forms which deters, debars or gives rise to fears about confidential information? What did the Minister learn from the pilot which could ensure that when it is more widespread it will encourage people who have a justified reason for believing that they have an inappropriate settlement on which to appeal or to seek a departure from?
Lord Mackay of Ardbrecknish: My Lords, we looked carefully at the cases returned and how they responded. As I said in my opening remarks, we have made certain changes to try to make the process as simple as possible.
We believe that the departure will be used only in a minority of cases. In the great majority of cases the formula with the protections in it will work perfectly well. I should have thought therefore that 10 to 15 per cent. is not a significantly small number when it comes to looking at the number of successful applicants for the departures. Of course, we have kept our eye carefully on the way in which people have responded and have tried to ensure that, if there are problems in the way the system has been devised, we can iron them out before we go to live running.
I hope that is helpful. We will continue to watch the situation. If we receive any feedback to suggest that the forms are too complicated or whatever, we shall do our best to make them as simple as we can. That is not always the easiest task in the Department of Social

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Security. Given the complexity of issues and the vast range of human conditions, forms are not always the best way to try to encapsulate the condition. But it is the best system we have.
The noble Baroness and the noble Earl raised a point in relation to inconsistent lifestyle. All the documents—the written and verbal statements—from the applicant (the parent with care in this case) will constitute evidence for the purpose of the departures. The agency accepts that it is unlikely that the applicants will be able to provide conclusive documentary and written evidence to prove their case. Provided the applicant presents a prima facie case that a departure direction may be appropriate, the application will be referred to the independent tribunal service for determination. The legally qualified chairman of the tribunal will be able to question the parties and may direct any party to produce further particulars or documents. The absent parent may be directed to produce documents in order to establish what the real position is. That will enable the chairman of the tribunal to penetrate the outward appearances in order to establish the true realities of the parties' circumstances.
Baroness Hollis of Heigham: My Lords, I am grateful to the Minister for giving way. When he says that the chairman of the tribunal may require the absent parent to produce documents, what sort of documents will they include? To put it another way, what documents will the tribunal chairman not be able to require to be produced; for example, tax returns?
Lord Mackay of Ardbrecknish: My Lords, I am not sure about tax returns to the Inland Revenue. I shall come to the Inland Revenue point in a moment. I do not want to fetter the independent tribunal chairman in what he should ask for; otherwise your Lordships may say that he was no longer independent. Perhaps I may look into the specific point about income tax returns in a moment.
The tribunal will weigh the evidence and reach a balanced judgment. The Child Support Agency will be able, via the Secretary of State, to draw on information which is in the possession of the department elsewhere in the system; for example, from benefit applications. It can do that under the existing powers in the Child Support Act.
We have no plans at this stage to interface directly with the Inland Revenue. It is a little different from the absent parent actually producing his tax returns, but we have no plans to allow the Child Support Agency to gain access to Inland Revenue information. When we discussed this matter during the passage of the Child Support Bill, it was agreed that the information which an absent parent or anyone else provides to the Inland Revenue should remain confidential. We would be moving a long way away from the normal procedures of the Inland Revenue if we were to go down that road, though I fully understand that it would perhaps provide information which the tribunal chairman may find useful.
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The noble Earl returned to a number of points I have heard him make before; for example, on the travel-to-work costs and whether or not the applicant should be able to offset all the costs of his motor car against his maintenance—hire purchase, MOT and garage bills—whereas only the fuel costs will be considered. That is indeed the position. There will be no allowance for those other costs—tax disc, MOT, certificate of insurance and so forth. We do not accept that somebody uses a car solely for working purposes and therefore that all the running costs should be laid against the support of the child.
Earl Russell: My Lords, I am grateful to the Minister for giving way, but I believe he has misunderstood the Inland Revenue rules. The Inland Revenue rules do not say that all the costs of the car should be attributed to work. A mileage percentage has to be justified to the Inland Revenue and anything paid is in proportion to that mileage percentage. I do not see what is wrong with that procedure.
Lord Mackay of Ardbrecknish: My Lords, I know that the noble Earl and I will not agree on this issue. We believe that when it comes to the costs of travel to work which are to be set against maintenance, the fuel-cost-only way is the fair way.
I was about to say that the still-married couple looking after their own children are not able to offset the costs of going to work. The taxpayer does not pick up the tab for their car costs, and we must take account of those who are not divorced and are not absent parents or a parent with care. They have to deal with many of those problems within their income and look after their children within their income.
I believe that we have gone a long way in allowing travel-to-work costs based on fuel only. The still-married couple will not receive such preferential treatment against the taxpayer or anybody else when it comes to the costs that they have to carry in getting the husband or wife to and from their place of work. We must be fair to everybody in the country and not look at absent parents in isolation as people who ought to be treated in a special way and to an extent be relieved of the obligation of looking at their income in the round when it comes to looking after the interests of their children, absent or present. That is the point I should like to make about the travel-to-work issue.
On the question the noble Earl raised in relation to the average reduction for absent parents, which is around £10, he said that there are no figures for the parent with care. Indeed, there is no figure for the parent with care because the majority of those cases which arise from lifestyle-inconsistent cases will be decided by the independent tribunal service. It was very difficult for us to run a pilot on that side of the equation, whereas we could run the pilot on the other side over which we have control.
The noble Earl asked about contact costs and he has done so before. The contact costs will be calculated on the actual costs incurred by the absent parent. The frequency of contact is not a matter for the Child Support Agency; it is for a combination of the parents

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themselves or indeed of the courts if the parents cannot agree. The noble Earl also asked about stepchildren and why the provisions apply to pre-1993 families only. Where financial responsibility for supporting stepchildren was taken on before the agency existed, it is reasonable to make allowances for the costs involved. Anyone taking on a step-family after 1992 did so in the full knowledge that the child support scheme would make no concessions for the additional costs. The departure system does nothing to alter that position. As your Lordships have heard me say before, the first responsibility is to one's own children, even where stepchildren have no one to provide for them. Where paying the standard formula assessment causes difficulty, the protected income calculation will ensure sufficient disposable income left after paying child support to meet the needs of all the members of the household and has always done so.
The noble Earl also asked about the poverty trap created by not allowing income support clients to apply for departures. I am not sure whether I understood that because, once the parent moves into work, he can immediately apply for a departure if he has the appropriate expenses. I cannot see how someone on income support, and therefore, I assume, not working, can have travel-to-work costs and so on.
Earl Russell: My Lords, I was referring to people doing part-time jobs for a short number of hours, which I think is better than doing no work at all.
Lord Mackay of Ardbrecknish: My Lords, I agree that it is better than doing no work at all. However, I do not see where a poverty trap comes in there. If they are doing a few hours' work, they are allowed to do so within the rules of income support. If they do more than that, they start having their income support reduced.
The point remains—it is a point on which the noble Earl and I disagree—that a person on income support who is happily married and is looking after his own children has to face up to all these problems and costs. I do not think we can say that, because someone is divorced, the acting parent can somehow have all the other factors taken into consideration when it comes to trying to reduce the financial obligations he has to his child or children. I know that the Liberal Democrat Party takes an entirely different view of this. It is opposed to the child support system and would like to go back to the old system. The interesting point is that the old system run by the courts was not nearly as successful as the rose-coloured spectacles of some people make out. I am not surprised that the Law Society prefers a court-based system. Of course it would say that, wouldn't it? It would always say that it preferred a court-based system. But while the liable relative scheme was very successful in identifying absent parents, only 20 per cent. of those absent parents made an arrangement to pay maintenance. The payments themselves were on average 50 per cent. lower than under the Child Support Agency.
One of the biggest difficulties of the agency is that many people out there do not want to fulfil their obligations to their children. One understands that. But
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I—and, I know, the noble Baroness, Lady Hollis—do not approve of that. We believe that those men—it is largely men—ought to be made to face up to their responsibilities. They had a small part to play in the creation of those children. The responsibility does not end when they walk away from the marriage, no matter how clean the break may have been.
Earl Russell: My Lords, I beg the Minister's pardon, but last time he accused our Benches of saying that men could walk away from their responsibilities, he ended up offering an apology. I should be very grateful if he would do it again.
Lord Mackay of Ardbrecknish: My Lords, I read a document put out by a group of fathers who run fairly virulent campaigns against the Child Support Agency and I read some material from the Liberal Democrat Party. Perhaps I misread it, but the Liberal Democrats do not seem to be even vaguely in favour of a Child Support Agency which will ensure that absent parents pay a fair contribution towards their children and do not depend on other taxpayers, many of whom are busy in their marriages looking after their own children and do not have money to spare to help to look after their neighbours when their neighbours ought to be looking after their own. I am perfectly clear on that. I am glad to hear that the noble Earl agrees with me. The next time I read the newsletter, I look forward to seeing some more moderate remarks from the Liberal Democrat Party about the system we have devised to try to ensure that the absent parent pays the parent with care and does not leave her and her child or children entirely at the mercy of the state and other taxpayers.
I hope I have answered the points made by the noble Earl and the noble Baroness. I commend the regulations to the House.
On Question, Motion agreed to.

Social Security (Adjudication) Regulations Child Support (Amendment) (No. 2) Regulations 1996
5.35 p.m.
Earl Russell Earl Russell rose to move to resolve, That this House calls on Her Majesty's Government to withdraw the Social Security (Adjudication) Regulations and Child Support (Amendment) (No. 2) Regulations 1996 (No. 2450) and then to lay amended regulations which are clearly in conformity with the principles of natural justice.
The noble Earl said: My Lords, I beg leave to move an amended version of the Motion standing in my name on the Order Paper. In order to explain that, I must begin by giving my thanks to the Minister, who notified me late on Friday afternoon that the form referred to in my original Motion has now been made available. I am most grateful to him for that. I am most grateful to him also for the advance notice of it. It is clearly inappropriate to call on the Minister to provide a form which he has now provided.
The original Motion was as follows:
"That this House calls on Her Majesty's Government to withdraw the Social Security (Adjudication) Regulations and Child Support (Amendment) (No. 2) Regulations 1996 (No. 2450) until the form approved by the Secretary of State, on which all appeals must be lodged, can be made available and then to lay amended regulations which are clearly in conformity with the principles of natural justice".
In the new Motion I am moving we leave out everything from "until" in line 3 to "available" in line 4. I am extremely grateful that those words are now unnecessary.
The principles of natural justice were once described by the noble and learned Lord, Lord Ackner, as the judicial way of saying "fair play". I do not wish, by wording the Motion as I have done, to suggest that legislation must conform with the principles of natural justice but I wish to suggest that it is on the whole desirable that it should do so. It tends to work rather better if it does. Those principles are not derived from statute. They are actually older than Parliament and therefore cannot depend on statute. They have evolved into a series of fairly clear specific principles. The ones with which I am concerned here are that we should hear both sides, that there should be an orderly and fair procedure and that reasons should be given for decisions.
In these regulations we are dealing with appeals from people who are or have been on benefits. So, on the one hand, we have people of very limited financial resources, sometimes of very limited ability, sometimes suffering from mental impairment of one kind or another and sometimes suffering from difficulties of language. On the other side, we have a department with very considerable resources—a filing system, a computer system and methods of transferring information from one place to another. It is not exactly an equal contest with someone keeping his records in a cardboard box in "cardboard city". One cannot always keep regulations in perfect order in that situation. So any desire to get an orderly and fair procedure must take some account of this inequality between the parties in contention.
The National Association of Citizens Advice Bureaux told me as recently as last Friday afternoon that the regulations are creating a more intense level of concern among its local bureaux than anything else it can remember for a very long time. Looking at them and thinking about them, I am beginning to understand why that is so.
I shall deal first with Regulation 14(2), which is a very clear provision that notice must always be given of an appeal in writing. We do not always stop to think enough about the rights of illiterates. I was brought to think about them very abruptly when I was nine years of age. My father put in an application for a ration book and being a Peer he signed it "Russell". He was told that that was not a correct signature and that he was illiterate; and that being illiterate he was not entitled to a ration book. I have been concerned about the rights of illiterates ever since, because I thought then, what if he had really been an illiterate and what would have happened? I would like to know what the Minister can say in reply to that.
Regulation 4(5) gives a long list of required particulars which must be put in in exactly the right form. The time of the appeal cannot begin to run until they are put in. Manchester Trinity Citizens Advice Bureau found that the appeal was held to be valid only if all these reasons were given. Some of them, such as medical information from the Benefit Agency's doctor in an incapacity benefit case, could not be put in on an appeal because the doctor's reasons did not come in until just before the hearing. So if that is going to be applied throughout, appeals against the Benefit Agency's doctor in incapacity benefit cases could not be lodged.
There is another point about that. There has been at least one ruling already that an appeal on incapacity benefit cannot be lodged until reasons are given for disagreeing with the scoring system of the Benefit Agency's doctor. In the mental health provisions no scoring system operates, so how is an appeal to be made in a mental health matter? I do not see the answer to that under the wording of these regulations.
They have been put through in considerable haste. The consultation period ended on 1st October, but the regulations were laid on 27th September. That is the sort of consultation which the Department of Education and Science, as it then was, used to do at its very worst. It is not worthy of the Department of Social Security, which usually does better than that. I hope that the Minister can explain the reasons for this great and unseemly haste.
It is important to realise that in order to conduct a proper appeal it is necessary to understand what is really the point at issue, because until one understands that one cannot put in any evidence that goes against it. I remember listening to the noble and learned Lord, Lord Taylor of Gosforth, talking about the difficulties of litigants in person. He said that because it takes time to explain to them exactly what is at issue, the case takes a great deal longer. What they are entitled to is equally the entitlement of social security claimants. Regulation 9, which restricts oral hearings to those who have made a specific demand for one or when in the opinion of the chairman it would manifestly do injustice if there was not one, is too restrictive. Such a thing cannot be manifest until a hearing has taken place.
I am not sure that people on benefit will know whether they need to request an oral hearing in writing. How many people know that they need to register to vote? Certainly among my pupils a very large majority do not at the material time. I discover six months later that they are not registered and they cannot vote—and very surprised they are, too. If that happens to people who, by definition, are of some ability, what are we to expect among people on benefit? In many cases as regards habitual residence appeals and voluntary unemployment appeals it is difficult to see how a proper decision can be reached without questioning the applicant, because one simply does not elicit the evidence which is necessary to review the decision.
To put it no higher, I am taken aback by Regulation 5, which limits the notice of a hearing to seven calendar days. There is no exception for the week between Christmas and the New Year. If I were given notice on

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24th December, or by a posting on 24th December, of a hearing on 29th December, it is highly unlikely I would even receive that notice, let alone respond to it. There are special difficulties about the dates of a hearing—for which there is no provision in these regulations that I can see—for those who because of disability have difficulty in movement, especially in remote rural areas.
A case arose in North Cornwall in the constituency of my honourable friend Mr. Tyler. It concerned somebody who had to have an incapacity benefit hearing and who was confined to a wheelchair. The hearing took place in a town 35 miles away. The bus ran one day a week. The day fixed for the hearing was not the day on which the bus ran. So he asked whether they could change the date of the hearing to the day on which the bus ran, but they could not. He asked whether they could meet the expenses for a taxi to attend the hearing, but they could not. So in the end he did not attend the hearing. That amounts to a denial of justice.
To cope with difficulties of that sort, when one has to rely on the help of other people who are not necessarily available 24 hours every day of the week, seven days' notice is an unrealistic amount of time. If it has to be seven days, could not the department at least alter it to seven working days? I would not say that that would be satisfactory, but it would be a great deal less unsatisfactory than what we have now.
In Regulation 11 there are considerable cutbacks on the giving of reasons for decisions. There are quite extraordinary things that come under this heading. There was a case of a person who applied for a funeral payment under the Social Fund and was told, "Your appeal is refused. The reason is that we cannot pay you". That is not the sort of reason which gives rise to grounds for appeal.
The point about reasons for decisions is that they have to he something that is theoretically capable of being rebutted by further evidence. Decisions can be given in such form,
"as shall have been approved by the President",
of the tribunal. Can we be given any indication at all of what sort of form that might be? At present it might meet the requirement if the decisions were delivered in Chinese script. I am sure that that is not the department's intention, but some further definition might have been welcome. Decisions may be given not at the hearing but,
"at such later date as the chairman may determine".
There is no terminus ante quem in that at all. I would not say that the decision could wait until the Millennium because, after all, that is quite speedy decision-making. But it could perfectly well wait until the century after that without infringing the words of the regulation. We need tighter wording.
Finally, I recommend to the Minister that he reads the judgment of the noble and learned Lord, Lord Woolf, in the case of the Al Fayeds and the Home Secretary. It is an extremely interesting judgment delivered on the grounds of natural justice and concentrating on the requirement to give reasons. I understand that that case is sub judice and I shall discuss it only in a way appropriate to the situation. That case is on its way to
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your Lordships' House. This case is not on all fours with that, but there are points of resemblance. It seems to me that it would be perfectly reasonable to ask the Minister to revoke the regulations until such time as the opinion of the Appellate Committee of your Lordships' House on that case is known and until the reasons for its decision are also known because until we know the reasons we cannot know whether they are likely to apply to these regulations. But the possibility is one that the department would be wise to consider.
Hitherto, for a good many centuries, both Ministers and the courts have shown a laudable lack of curiosity about what happens when a statute and the principles of natural justice clash. I approve that lack of curiosity, but now that the judgment is available and can be read, the Minister seems to be approaching the matter with a curiosity which is positively feline. And the Minister knows where that leads.
Moved to resolve, That this House calls on Her Majesty's Government to withdraw the Social Security (Adjudication) Regulations and Child Support (Amendment) (No. 2) Regulations 1996 (No. 2450) and then to lay amended regulations which are clearly in conformity with the principles of natural justice.—(Earl Russell.)
5.50 p.m.
Baroness Hollis of Heigham: My Lords, the House should be grateful to the noble Earl, Lord Russell, for drawing attention to a serious and real problem. Because of the conventions of this House we shall not be voting with him if he decides to test the opinion of the House. Nonetheless, we join him in hoping that the Government will take these points seriously and see whether they can reconsider the implication of some of the regulations.
Our criticisms are twofold. They relate, first, to the timing of the regulations and, secondly, to their substance. The Government's White Paper was published on 23rd July. The orders were laid in late September, three weeks before the consultation ended on 18th October and three days after they were implemented. The White Paper was therefore effectively published, consulted on, and the orders were made, laid and implemented all while Parliament was in recess. That is a cynical way to behave and is utterly disrespectful of parliamentary conventions. In other words, it was a consultation paper about which everybody was consulted, except Parliament, including your Lordships' House.
Our second body of criticism relates to the substance of the regulations. These so-called "improvements" to efficiency are efficient only in the sense that they effectively deter, discourage and finally debar people from making DSS and CSA appeals to tribunals. That suggests that what the department is interested in is an uncluttered, untroubled life and that appellants (especially if they are not well educated, are not represented by a lawyer or are elderly, confused, sick or disabled) who clutter up the system should be deterred from appealing if possible and, if not, should be discouraged from seeking an oral hearing. I mean every word when I say that these changes by regulation are a

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serious assault on the access and the right of ordinary people, especially disadvantaged people, to use tribunals for appeal.
However, our criticisms are even more detailed than that. First, the new application forms were not available until four weeks after the new procedure was in place. Applicants were thus expected to handle a new system without the relevant forms. Secondly, many applicants are being discouraged from seeking even a paper appeal, let alone an oral appeal. It is clear that the department is anxious to discourage oral hearings. An applicant has only 10 days in which to request such a hearing and has to do so formally, by application. In other words, applicants are channelled into a paper review, yet we know that if applicants attend in person they have a 46 per cent. success rate at tribunal. If applicants attend and are accompanied, they have a 67 per cent. success rate at tribunal. However, according to the Minister's latest quarterly figures on the all work test appeals, if applicants neither attend, let alone are accompanied, and have only a paper hearing, the success rate is barely 7 per cent.—compared to 67 per cent. if accompanied and appealing in person.
As the noble Earl said, oral hearings are essential, especially for those who are not literate, for whom English is not their first language, and who are not skilled at handling and managing paper. Will the Minister at the very least agree that the new forms state clearly that an applicant may have an oral hearing if he wishes and the timescale for that? The procedure for oral hearings should be transparent, even to those who are most disadvantaged when dealing with bureaucracy.
Another point well made by the noble Earl is that the period of notice has been reduced to seven calendar days when the Council on Tribunals argues that it should be at least 21 days. One calendar week is not sufficient for those who are carers or who are in work and who have to re-arrange their responsibilities, especially when complicated by the problems of access which the noble Earl documented.
I also understand that under the new "improved" changes claimants will be given only the most abbreviated explanation of why the appeal failed. At the moment an advisory tribunal has to complete only one A4 double-sided sheet, of which only the last four inches are devoted to space in which the tribunal can set out the reasons for the decision. That does not seem unduly burdensome, but it ensures that the decision is in writing and that the claimant can take it away, consider it and, if necessary, seek advice. Will the Government reconsider and give claimants an automatic right to a written reason for the rejection of an appeal rather than the claimant having to request it, especially as the request may not be dealt with until some three or four weeks later when the cutting edge of the argument has no doubt vanished from the tribunal's mind?
I understand that where an appeal is decided on the papers and not by personal attendance, only the tribunal chairman has those papers in advance. The other two tribunal members see the papers for the first time when they sit down at the bench. That means either that if the tribunal is to do a thorough job it will take longer than
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at present and thus delay the system or—and more likely—that the tribunal will be asked to rubber stamp the chairman's decision, making it essentially a tribunal of one, thus involving real injustice for the claimant. Can we have an assurance from the Minister that all tribunal members will have the full set of papers in advance so that claimants who do not have an oral hearing (and who are already disadvantaged by having the hearing on paper) can at least have the confidence that all tribunal members will have full access to their papers?
As was said in another place, the Minister and the regulations are making it difficult—deliberately so, in my view—for people to get a form; making it difficult for them to fill in the form; making it difficult for them to find arguments to submit to the department; and making it difficult for claimants to submit the form and to ask for an oral hearing before their time to appeal has elapsed, thereby jeopardising their probability of success. The right way to improve the tribunal system is to have sound and clear laws, not ambiguous formularies which have to be continually tested and re-tested on appeal. The Minister has no right to try to make good bad laws by cutting corners on the appeals system, which is what these regulations do.
5.58 p.m.
Lord Mackay of Ardbrecknish: My Lords, perhaps I may respond to the Motion tabled by the noble Earl and answer some of the points raised by him and by the noble Baroness, Lady Hollis.
I would like to start by briefly outlining the background to the changes introduced by the Social Security (Adjudication) Regulations and Child Support Amendment (No. 2) Regulations 1996. Last February my right honourable friend the Secretary of State announced a review of the administration of social security. Ministers had been concerned for some time about the appeals system. The average clearance time on appeals to social security appeal tribunals is currently 26 weeks, and this is the shortest time. On medical appeal tribunals the average clearance time is 36 weeks. I am sure your Lordships will agree that, as people who have been refused benefit generally have to wait for disputes to be settled without benefit, any reduction to the clearance times that can be made should be done as quickly as possible. I am quite surprised that the Government do not have the support of the noble Earl and the noble Baroness in their determination to try to cut down the time. At one stage I believed that the noble Earl, Lord Russell, agreed with the need to deal with these cases as quickly as possible. If one is to do that one must look seriously at the procedures one uses and see how they can be improved.
The number of appeals outstanding is also rising. Since April 1995 the number has risen by over 25,000, and all this despite the fact that the Independent Tribunal Service is running more sessions and clearing more appeals than before. We therefore discussed with the people who operate the tribunal system what could be done to assist them to make improvements. It was clear that some of the rules in legislation were contributing to the delays and that some improvements

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were dependent on changes to those rules. My right honourable friend the Secretary of State issued a consultation document in the summer entitled Improving Decision Making and Appeals in Social Security. That document outlined a number of radical changes which needed primary legislation and on which he sought views. We are currently considering the views that we have received in response to that document. However, the Green Paper also announced changes to secondary legislation to be implemented in the autumn subject to consultation with the Council on Tribunals. My right honourable friend the Secretary of State answered a parliamentary Question in the other place on 23rd July when he announced the publication of the Green Paper and consultation with the Council on Tribunals. A copy of the consultation letter to the Council on Tribunals was placed in the Library.
The president of the Independent Tribunal Service, His Honour Judge Bassingthwaighte, was formally asked for his comments. Most of the changes were supported by the president, not surprisingly since a number of them were suggested by his administrative and judicial staff. The Council on Tribunals was also generally content with the proposals, though I shall return to that later.
I turn now to the changes introduced by the regulations referred to in the Motion before us. These changes cover a number of different areas in the appeals system and will, we believe, speed up processes. They will not take away any existing appeal rights but they will place some responsibility on appellants to support the process.
Parties will be asked to opt for an oral hearing. Appellants will be approached early in the process, but their option is not irrevocable. They can change their minds at any time before the decision is actually issued. If no oral hearing is requested the appeal papers will be sent out and the parties will have the opportunity to comment and submit additional evidence if they wish. Only after that process will the appeal be heard on the papers. There is no change to the appellant's absolute right to an oral hearing, and we shall continue to inform appellants that they have a better chance of winning if they attend. The noble Baroness, Lady Hollis, waxed very indignant about this matter. She demanded to know what was on the form. I am sure that even she will agree that the new form is an improvement on the old one, in that the position as to paper or oral hearings is made perfectly clear.
Baroness Hollis of Heigham: My Lords, I ask the Minister to give way. If the forms had been produced before the regulations were introduced we might all have had a chance to see them.
Lord Mackay of Ardbrecknish: My Lords, I suggest that the noble Baroness should not attack something that she has not already had the chance to see. She could perhaps have said that it was a pity that she had not seen it, as she has just done, but if she had contained herself with a little patience she would have heard me read out the one and only paragraph that I intended to read. In bold print standing out clearly
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from the rest of the page is one paragraph at the end of the section that deals with oral hearings. It is not the only paragraph that deals with oral hearings. The paragraph states quite clearly:
"Please note that claimants who attend the hearing of their appeal usually do better than those who do not".
The suggestion that the noble Baroness makes that somehow the Government are attempting to slip something in without telling people that they have a better chance if they go to an oral appeal is simply not true. We make it very clear in the form that that is the situation.
As far as concerns the 10 days' notice in which to decide whether or not an oral hearing is required, the first letter from the Independent Tribunal Service to appellants asks whether they want an oral hearing. The appellant has only to answer yes or no. It is not a formal application. The appellant has only to tick a box if he wants an oral hearing. This clear decision-making about oral hearings or not oral hearings should make for the more efficient handling of cases where the appellant chooses not to attend the hearing. Your Lordships might have been excused for thinking that almost nobody allowed his case to go to a paper hearing and that everybody already attended oral hearings. That is not the case. This year some 29 per cent. of cases are handled on paper because appellants have decided that they do not want to appear in person. I believe that all cases will benefit. Non-attended cases can be slotted into vacancies in any part of the country, making much better use of tribunal time and clearing more appeals more quickly.
As to social security appeal tribunals, it currently takes an average of three weeks to get the decision out to the parties. Our changes to the way a decision is promulgated allows for a more flexible approach, offering the right information at the right time, and will reduce the amount of time before the appellant knows the result of his appeal. There will be the option to give a full decision orally on the day, recording it for issue if required. Where a full oral decision is inappropriate, a summary decision may be announced and issued on the day of the hearing. The summary decision will still tell the appellant why he has won or lost his case. It will be easier for appellants to understand because it will not be subsumed in a large amount of other, more technical information.
The form on which the decision will be set out is one approved by the president. I believe that the noble Earl is a little unkind in suggesting that the president of the tribunal may decide to give an order that the form ought to be issued in Chinese or made incomprehensible in some other way. I shall be happy to provide the noble Earl with the standard forms that the president has approved. I believe that he will agree that they are very simple and easy to understand. A full decision will be given if requested within 21 days of the summary decision being issued. The tribunal chairmen may issue these full decisions in appropriate cases without request. Most full decisions are only required where the appellant is contemplating taking the appeal further on a point of law to the social security commissioners. Only 2 per cent. of appeal decisions are taken further, so

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98 per cent. of appellants will receive an improved service by getting the decision in a brief way on the day of the hearing.
We have always supplied a form to be used when appealing which was attached to the leaflet How to Appeal. Although the form was little used, it offered guidance on the information needed for the appeal to be processed. Much time has been spent in the past contacting appellants who had failed to say, for example, what benefit the disputed decision referred to. A few did not even supply their full name and address. For that reason we have now specified that the form has to be used to appeal although a letter which contains all the information needed will, as before, also be acceptable. The leaflet with the form attached has been revised and reprinted. Distribution started yesterday and will be completed by the end of this week. A copy has been placed in the Library. Any appeals made on the old form will be acceptable.
The noble Earl, Lord Russell, asked me how illiterates would cope. They will cope in the way that they do currently. Nothing changes. Appeals have always been required in writing. The ITS will accept, as it always has done, X as a signature. That has never been a problem and it will not be a problem. Those people who do not understand the form or cannot read or write can get help from the agency. If necessary, the Independent Tribunal Service will also explain what is needed.
More specific information is required from appellants when they make their appeal, especially to explain their reasons for disputing the decision. Guidance is in the leaflet and on the form on what is required. Where essential information is omitted, staff of the Independent Tribunal Service will contact the appellant and explain exactly what information is needed. If appellants can be more explicit right at the start on what it is about the decision they object to, the agencies can better identify cases that can be corrected without the appellant waiting for six months to go to a hearing. It may be that all the appellant wants is an explanation, and that can be given. I should have thought that most noble Lords would welcome progress in that regard.
With regard to the noble Earl's concern about incapacity benefit appeals, he was worried about mental incapacity descriptors. I do not believe that his concerns are justified. A person may submit medical evidence in the form, for example, of a letter from his or her doctor. Such people do not need to argue about the descriptors. That is not a problem that will impinge on people with mental difficulties.
The proposal to reduce the notice period of a hearing from 10 to five days was not supported by the Council on Tribunals. It is 10 days at the moment. After further consideration, we decided that seven days was sufficient as a minimum—I stress a minimum—period for all jurisdictions except child support. Appellants are informed by the ITS early in the process of the time they expect to receive papers from the agency and can use that time to prepare their case. They do not start preparing their case when they are told they are about to go to the hearing. They can start preparing the case much earlier. The papers themselves are generally
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issued 14 days before the hearing. Appellants' rights are protected by the fact that, if a given date is not manageable, they can request a postponement.
If your Lordships listened carefully to the noble Baroness and the noble Earl, you might have been forgiven for thinking that there was no option for postponement: if the appellant did not turn up, then that was that. That is not true. He or she can request a postponement. Someone in the circumstances of the case mentioned by the noble Earl can have a domiciliary hearing—they can have a home visit for the hearing—or they can have the taxi fare paid. If the noble Earl wants to give me the details of the case I shall look into it, but so far as concerns the general rules, I do not believe that there should have been a problem in that case if it was as the noble Earl has presented.
We have made some other minor changes. For example, we have allowed clerks to make straightforward decisions on postponement and change-of-venue requests, thus freeing up the time of the chairmen to sit more often and hear more appeals. Other changes include making withdrawals more simple, strengthening the chairmen's powers of direction, giving the chairmen the option of expediting a hearing and not requiring a particular notice to be sent to an appellant whose whereabouts are not known.
The reason for making those changes was to enable the ITS to offer appellants a better, quicker service. We are confident that they offer more flexibility, removing some unhelpful procedures from the system. The impact of the changes will of course be monitored. We hope that they will allow for a reduction in the time appellants have to wait to have their dispute resolved without in any way affecting an appellant's rights.
I am surprised that the noble Baroness and the noble Earl can disagree with that objective. The proposals will help the ITS to work for the benefit of those people who appeal. It will mean that their appeals will be held more quickly, and therefore, if they win their appeal, they will receive their benefit sooner. The noble Earl normally approves of that. Having heard my case, I hope that he will approve of it this evening.
Baroness Hollis of Heigham: My Lords, before the Minister sits down, will he answer, perhaps in writing, the point I raised about only the chairmen having the full papers in advance and the two tribunal members not seeing the papers literally until they turn up? Can he give me an assurance to that effect or write to me about it?
Lord Mackay of Ardbrecknish: My Lords, perhaps I may write to the noble Baroness about that.
6.15 p.m.
Earl Russell: My Lords, I thank the Minister warmly for his reply on illiterates, but I am afraid that that is all that is left of the harmony with which we so happily began the day. I am afraid that we are now resuming business as usual. I heard what the Minister said about there being no need to argue about the descriptors in an incapacity benefit test. I wonder whether he could

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convey that opinion around the country to the Benefits Agency, because what he says is not what is happening on the ground.
I am also aware that it is possible to put in a request for a postponement of a hearing. I do not know whether the Minister is aware that the CABs are reporting that such requests are being routinely refused point blank without any reason. What the Minister says is true, but it is not sufficient.
The Minister also argues—I must admit that I found this a little cool—that we should speed up the procedure because people suffer hardship because they wait without benefit pending appeal. The Minister knows my views and those of the noble Baroness on people being made to wait without benefit pending appeal. If he had listened to us in the first place, his argument would have no force.
Of course I understand the need to speed up proceedings whenever it is possible, but I have listened to lawyers and to judges arguing about the need to speed up proceedings. What one hears there is a heartbreakingly difficult see-saw balancing operation between the need for speed and the need for justice. It is only if one understands both those needs that one can even attempt to balance them at all. Mr. Roger Evans, introducing these regulations in another place is not as careful over his choice of language as is the Minister here. Mr. Evans said:
"These reforms are directed to reducing inefficiencies; they have no bearing on whether justice is being done, but are designed to ensure that the system operates properly".—[Official Report, Commons, Sixth Standing Committee on Delegated Legislation, 7/11/96; col. 5.]
I should have thought that whether the system operates properly had something to do with whether it was just, but we are here back with our old ministerial friend "efficiency". I have been complaining for years that government departments are far more interested in efficiency than in effectiveness. This is yet another example of that fact, and a very sad one. There is no use speeding things up by getting them wrong, because that is when you get to the point when efficiency is not efficient.
I was of course aware of the Green Paper. I have read it in full, and been extremely interested in it. I had some misgivings about it at the time. Those misgivings have substantially increased during today's debate. I agree with the Minister when he says that there continues to be an absolute right to an oral hearing, but some rights are easier to exercise than others. This one is rather harder than it was before. If that is not the purpose of the regulation on oral hearings, then what on earth is its purpose? If it is not designed to discourage oral hearings, surely it is totally redundant. It can serve no other useful purpose.
Of course I understand that the president of the tribunal is not likely to send out reasons in Chinese characters, but the Minister should now be familiar with the word "vires". He is being given powers so that he could if he wanted to. I do not believe that that is good legislation. In general, that was a reply which was worthy of British Gas. I am not going to press this Motion to a Division now. It would not control that
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exercise of power. I am afraid that we must accept that the control of executive power, because it is not being done here, must be left to the courts. If the Government do not like that, they will have to alter the operation of Parliament. I beg leave to withdraw the Motion.
Motion, by leave, withdrawn.

Family Health Clubs
6.20 p.m.
Lord Donaldson of Kingsbridge Lord Donaldson of Kingsbridge rose to ask Her Majesty's Government whether they have any plans to respond to the growing interest in the provision of family health clubs, along the lines of the pioneer Peckham Health Centre.
The noble Lord said: My Lords, it was two and a half years ago that I spoke on this subject to a House which was even emptier than it is tonight. However, I was consoled by the fact that Hansard for that day sold very well and I believe that it will do so again today. Many people are seriously interested in the problem, although this is not a good time of night to discuss it.
I shall not repeat what I said on the last occasion, beyond reminding your Lordships that for two years before the war I worked at the old Peckham health centre and I have been a trustee of the existing company ever since. I wish to begin by quoting from a letter which I received last week from a lady who was a member of the old centre. She writes:
"I was so thrilled to hear the programme on Radio 4 about the Centre and to know that its spirit still lives on. The Centre had such a tremendous influence on my life. Our Family was among the first to join in 1935, when I was 10 years old. My mother learned to swim at 51 and went on to dive off the top diving boards until well into her 70s. My brothers and sisters all met their future partners at the Centre. At 71 now I am still diving and keep-fitting twice a week".
That experience is a tribute of which we can be proud, and it was shared by a large number of people.
After nearly 50 years of quiescence, the ideas of the old centre are bobbing up all over the place and I thought it right to ask the Government whether they are aware of the growing interest of more and more people in the idea of a family health centre. Now that both Tory and Labour parties, and of course the Lib Dems, are stressing the importance of arresting the observable decline in family values, it is encouraging that more and more people should be turning to the old Peckham principles. So I thought that it was time to make sure that the Government and their successor will pay attention to the growing desire to restore the happy family life which is the true basis for a happy and effective nation. And nothing is more likely to do so than the establishment of family health centres.
First, perhaps I may tell your Lordships of several developments which are on the way already. Southwark Council, which inherited the splendid old Peckham building, which was used first as an education centre and is now for sale, has planned and begun to build a fine new building next door. It is to be called the Peckham Pulse. For this it has got a large grant from the Sports Council and another from the Lambeth,

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Southwark and Lewisham Health Authorities, and building is already under way. The centre, like its original though much larger, will have a range of facilities surrounding the existing medical centre and including a 25 metre swimming pool, a fitness suite, an exercise development area, a children's soft-play area and a cafeteria. This is one of the first, and so far the most advanced and largest, new versions of the centre. It does not yet accept all our precepts, but that may come later.
Perhaps I may give the House a list of other centres which are on the way. I shall not give details tonight because I do not want to bore your Lordships more than is absolutely necessary. There are two centres at Sheffield, one backed by the health authority and one by an individual. There is one at Newcastle, which was recently and gloriously opened by Tony Blair. There is one at Castle Vale in Birmingham. There is one at Berwick Hill in Middlesbrough, which is in the Tees Health Authority area. There is a centre at the Chalkhill Estate in Brent, whose group is chaired by Mr. McFadyen. There is another at Beaconsfield, which is backed by the town centre and the health authority. There is one at Bruce Road in Bromley by Bow, and the chief executive is the Reverend Andrew Mawson. There are three at Epsom and Ewell: at Bourne Hall, a more or less exact copy called the Lifestyle Centre, and another called the Chris Lane Centre.
All those centres are in existence. One or two are functioning; the others are looking for money and making plans. I hope that increasingly they will turn out to be proper versions of our old centre. I am confident that they will succeed and will be used by families, old and young together, who will each be proud of their own centre.
The position is widening and growing. The success of the first few examples of the application of the Peckham principles, if they achieve success, each in their own way aiming to improve the quality of life and the stability of the family, will quite certainly lead to more and more efforts to do likewise. I want to be sure that the Government are ready for this. Local areas take time to decide that they want full attention concentrated on family health and opportunity, but once they have made up their minds to move in that direction it should be made easy for them. But success breeds success and there is no doubt in my mind that the efforts to which I have referred are only the beginning and will spread rapidly. Are the Government ready to back this movement to the hilt, as they certainly should? The noble Baroness has already shown her interest and given invaluable help but I am asking for more strength for her elbow.
Your Lordships will see that I am confident that the idea will spread in areas which can afford it. However, the inner cities, which are in the worst trouble, will not be able to afford such centres. Therefore, they must receive special treatment, and I want the Government to realise that in inner city areas only such centres will produce a solution. Nothing else will do so because
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families break up and disperse. If one can once bring the families together there is hope. I had intended to say more about that but I shall not do so.
Families need other families and somewhere to meet one another. The old need to meet the old, the young need to meet the young, and all ages need to mix and to have facilities for healthy exercise and amusement. In a short time the effect of young children insisting on going to a gymnasium is that their parents then join. First the older children go, then the younger children and then the parents are brought in. They then begin to take exercise and, if necessary, to pay for that. The setting up of such centres would be cheaper than allowing things to go wrong and trying to put them right afterwards. It would cost infinitely less than trying to deal with the unhappiness and misery that follows from the present gradual disintegration.
We in PHC Limited sold our building and had a small capital sum which we used to keep the community going. We have engaged a skilled and energetic young man—he is 37, which is my idea of young—to answer inquiries and spread information to all who need it. Experience suggests that if proper plans are made many of the endeavours will raise the necessary money, helped no doubt sometimes by money from the lottery, and will gradually spread all over the country. If anyone wishes to ask questions, please ring our secretary, Pam Elven, who is herself a product of Peckham. Her number is 01483 893266—and that will appear in Hansard!
I am speaking of the future, of tomorrow, not of today. I shall not be here to see it, but I visualise a Great Britain with a better quality of life, with happier families and happier children than we have today. I believe that the way will be hastened and helped by the spread of the family health centres that we have been discussing. It has begun, and it must go on. I now call upon the noble Lord, Lord Carter, to tell your Lordships about his work with Loughborough University. He spoke in our last debate and made sufficient impression upon us that we bullied him into becoming our president.
6.30 p.m.
Lord Carter: My Lords, the House is extremely grateful to the noble Lord, Lord Donaldson, for tabling this Question and for allowing us to have this short debate. I am not sure what the Companion to the Standing Orders says about the quoting of telephone numbers during one's speech, but I am sure that that number will appear in Hansard.
As the noble Lord said, today's debate follows a similar Question which was tabled by the noble Lord on 11th April 1994. I must say that the noble Lord has been highly successful in promoting the ideas, ideals and principles of the Peckham centre as kept alive by the pioneer health centre. Moreover, as the noble Lord said, it has been kind enough to make me its president. There has also been an excellent programme on Radio 4 within the past 12 months on the subject.
When we had the debate in 1994 I must admit that, before I saw the Question on the Order Paper, I had never heard of the Peckham centre, despite the fact that

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I was born at the Elephant and Castle and spent the first seven years of my life living only a mile or two from the place. Therefore, I have gone from ignorance to president in 12 months.
However, when researching for that debate I became quite fascinated by the concept of the Peckham approach as it related exactly to another interest that I should declare; namely, that I am chairman of the United Kingdom Co-operative Council. It seemed to me that the Peckham centre was an early "community health co-operative". With the increased interest that we have now in finding new structures to deliver good health, it seemed to me that the Peckham ideas might be worth investigating to test their relevance against today's requirements.
Here I must pay a warm tribute to the noble Baroness, Lady Cumberlege. I believe that the noble Baroness was as intrigued as I was when, following the debate in 1994, I approached her in my capacity as chairman of the United Kingdom Co-operative Council and suggested that the Department of Health should sponsor a report on the subject. The Minister gave the idea very enthusiastic backing and, indeed, the Department of Health duly sponsored the report prepared by the Centre for Research in Social Policy at Loughborough University entitled, The Potential Contribution of the Co-operative Movement and Community Well-Being Centres to Health of the Nation Activities.
I should perhaps point out that the term "community well-being centres" was coined by the Minister herself. We were all anxious to avoid the term "health centre", with its overtones of medical care, conjuring up pictures of X-ray machines, electro cardiograms and the like and, as I am sure the Minister will remember, she actually said at one of our meetings, "Why not call them community well-being centres?" So the name was born.
The debate today is particularly appropriate. I believe that the date is not accidental; indeed, the noble Lord, Lord Donaldson, is not as innocent as that. However, as I said, today's debate is particularly appropriate as the Minister has kindly agreed to address the annual forum of the United Kingdom Co-operative Council on the subject in Manchester on Friday. There is a major conference at the Co-operative College at Stanford Hall in Loughborough next Tuesday to discuss the CRSP report. I have heard this afternoon that the uptake of that conference is extremely good.
Time does not allow me to analyse the report in detail, but it is likely to be the first of many incentives in the area. The emphasis in the report is on a holistic approach to good health which is built on the core Peckham principles, as set out in the report, which are:
"An orientation towards health, interpreted in a broad, holistic way; member participation and self-determination; multi-generational membership"—
that is jargon for family membership—
"and a range of opportunities and integrated activities. Co-operative approaches in health and welfare, as elsewhere, are characterised by democratic organisation and ownership, with open and voluntary membership and a fair division of investment and distribution. They provide the expression of and the means to member participation and empowerment".
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The report identifies nearly 300 initiatives, a number of which were mentioned by the noble Lord. It is clear, as I said earlier, that this whole area of health care will receive increasing attention. Perhaps I may give your Lordships just one more quotation from the report. In its summary it also says:
"Participation and ownership are seen as the key, strategic objectives. Success is associated with holistic approaches which encourage, enhance or maintain a high degree of user and community involvement, and engage and empower members. Success is related to the willingness of agencies to make a more or less equal commitment and to develop appropriate organisational supports to working in alliance. The source and security of financial support are crucial".
We should also recognise that the area in which these centres will be working—and, indeed, the background—is very different from the Peckham phase. I have in mind the idea of the nuclear family and, for example, the problems with single-parent families, ethnic minorities, and so. I suggest that these are areas which the Health of the Nation has still to reach properly. I know that the Government are concerned in that respect and we support them in their attempts to try to get over the argument contained in the Health of the Nation to the population generally.
When the Minister replies, I am sure that she will say that the Government are not yet satisfied—nor, indeed, are any of us—with the way in which we have been able to get over the message contained in the Health of the Nation to those communities which most need it, especially those in inner cities. As I said, the concept of the Peckham centre still applies, but we must realise that it must be approached in a different way.
The report emphasises the way in which there are plans, initiatives and centres actually in being or being planned all over the country which attempt to deal with the problem. Indeed, on a lighter note I shall repeat a point which I made in the debate of April 1994: things have changed. An excellent video has been made by the pioneer health centre which describes the history of Peckham. It is extremely interesting. While watching that video I was most amused, as I know was the Minister, who has also seen the video, to see the family together—that is, the mother, father and two children—having their annual consultation with the doctor at the Peckham centre during which session the father was smoking a cigarette. I do not believe that that would happen now.
As I said, there has been a change. The noble Lord, Lord Donaldson, has made a real contribution to this. He was one of the pioneers who was actually at the centre. Indeed, we have had someone listening to the debate who is a member of the centre. I believe that the pioneer health centre should be congratulated on the way in which it has kept the idea alive. The report shows that there is much to be done, but the initiative of the noble Lord both today and in 1994 in raising the subject has been instrumental in ensuring that such an important subject remains firmly on the health agenda.
6.37 p.m.
Baroness Cumberlege: My Lords, I, too, am grateful to the noble Lord, Lord Donaldson of Kingsbridge, for introducing the debate again this evening. I thought that it was very fitting that, as a former trustee of the original pioneer health centre, he should have raised the subject as he did in your Lordships' House in April 1994. On that evening we not only had an interesting and constructive debate, but the debate actually stimulated a whole range of activities, not least the report by Loughborough University referred to by the noble Lord, Lord Carter. In the intervening period I have noticed with enormous interest a whole range of new initiatives that have been developing, many of which are referred to in the report.
But, thankfully, we are a much healthier nation than we were when the pioneer health centre was built in 1926. At the beginning of the 1920s, average life expectancy for men was only 56 and for women 60. Today, we are living around 20 years longer. Fifty years ago, on average, for every 100,000 births, 400 women died in pregnancy or childbirth—a shocking figure, a huge toll on marital and family life. Today, that 400 has been reduced to six. Today the number of babies dying in their first year of life is at the lowest level ever recorded. Death rates from coronary heart disease, stroke, cancers and accidents are falling steadily.
Our children are an inch and a half taller than their counterparts of even 30 years ago, and with effective vaccination and immunisation programmes some childhood diseases have almost disappeared. Last year there were only 57 confirmed cases of measles and in 1992 we introduced a new vaccine which has almost completely eliminated Hib meningitis in young children.
Those are health statistics. I appreciate that the noble Lord has been talking about social health as well as medical health, if I can put it like that. One has to take into account how radically the world has changed since those early visionaries set up the Peckham experiment, as the noble Lord, Lord Carter, said. Certainly if we look just at health, it has changed for the better. But of course your Lordships are right to say that we cannot be complacent. There is still a great deal of avoidable ill health and too many premature deaths. There are stubborn variations in health between men and women, regions of the country, different ethnic groups and different social groups. Those are issues that the Government and others need to address.
This evening's debate has drawn attention to a great deal of interest in the way that the Peckham experiment approached the aim of improving health, and a feeling among many people that some of its lessons are still relevant today. Stimulated by the interest, enthusiasm, persistence and determination of the noble Lord, Lord Carter, the department has, as he said, recently funded research looking at exactly this issue. The research examined how the concept of community well-being centres—the Peckham model—was being put into practice in the 1990s and how such activities could contribute to the Health of the Nation, the Government's strategy for improving health across the population.
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The result of what is a fascinating report, produced by the Centre for Research in Social Policy at Loughborough University, needs to be widely disseminated. I have placed copies in the Library for all your Lordships who might be interested in reading it. If any Members of your Lordships' House are feeling in need of a tonic, or a pre-winter pick-me-up, I strongly recommend reading it because it is full of interest, innovation, achievement and hope.
The majority of the report is devoted to a review of existing activities, broadly described as community well-being centres, which draw on the principles underpinning the Peckham experiment. These are an holistic and positive view of health, rather than a focus on disease; an attempt to influence the wider determinants of health; to involve interests outside health services and health professionals; and to involve individuals and communities in taking responsibility for their own health.
Many of the projects mentioned emphasise the active involvement of local people in setting priorities and in finding their own solutions for local problems. I have visited and been impressed by several of the projects which are described within the report. The Life Project in the Wirral was a national winner of the Health Alliance Awards in both years the awards have been held. The judges were impressed not only by its comprehensive range of services and the populations covered, but by its thorough evaluation. Set up in 1993 because of concern about high rates of coronary heart disease, the Metropolitan Borough of Wirral, Wirral Health Authority and the University of Liverpool worked in support of local people, and with a wide range of partners in a programme of six projects. These included a GP exercise referral scheme, health checks in pubs and shopping centres, healthy schools, exercise training, and rehabilitation following heart attacks and strokes. Some 42 per cent. of people registered on the GP exercise referral scheme have been able safely to reduce their medication.
Another example which mirrors much of the original Peckham experiment is the Blackthorne Medical Centre in Kent. Urged by my very good noble friend Lady Faithfull to visit the centre, I found a place full of inspiration, dynamically led by Dr. David McGavin and his partners. The centre has not only the full range of skills and expertise patients would hope to find in any top rate primary health care team, but it promotes art, music, eurhythmics, massage and counselling for patients with any condition. The market garden, cafe and bakery provide essential employment for those suffering from long-term mental illness. It is one of the most inspiring places I have ever visited and talking to the patients, and the local community, including an army of volunteers, I have no doubt whatsoever that they value its therapeutic properties.
I hope that the Loughborough report will be of interest to a wide range of people and organisations, not only health and local authorities but also voluntary organisations, manufacturing and commercial interests, police, probation, the business community, universities, schools, colleges and others. We are taking active steps to disseminate it widely, as I have said. We have paid

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for the production of a short summary of the report which is available free to anybody who may he interested. Both the report and the summary have been widely publicised in our newsletters, which have a huge circulation across the NHS and other organisations. The researchers themselves are looking for opportunities to place articles in newspapers and journals.
As the noble Lord, Lord Carter, said, we are also funding a conference to be held on 26th November which is being organised by the researchers and at which the noble Lord will give, I have no doubt, an arresting keynote speech. The aim of the conference is to give people working in the field the opportunity to share experiences and debate lessons learnt from community well-being activities. It will be an excellent opportunity to harness the growing interest and to apply it to today's circumstances.
Finally, on the subject of follow-up to the research project, on 22nd November, at the invitation of the noble Lord who is chairman of the United Kingdom Co-operative Council, I am to take part in the national forum on the theme Co-operating for Health. This, I hope, will provide me with an excellent opportunity to introduce to a wider audience this important subject.
The thrust of the research highlights the fact that community well-being activities and the Government's Health of the Nation strategy are not in conflict, or even distinct from each other—far from it. To a great extent, the Health of the Nation strategy is supportive of and in tune with the growing interest in these innovative approaches.
Like the pioneers of the Peckham experiment, the Health of the Nation aims to prevent ill health and promote good health. The World Health Organisation has described it as a model for other countries to follow. Led by a Cabinet sub-committee chaired by the Lord President of the Council, the success of the strategy depends not only on leadership from the top but on the commitment and involvement of anyone who can have a positive effect on health.
One of the key themes in the Health of the Nation and one which is particularly relevant to the principles underlying the pioneer health centre is that of partnerships or alliances. Alliances are based on the age old principle that organisations and groups working together can achieve so much more than by working in isolation. Many of the projects quoted in the research report are based on health alliances and a number of them have had their excellence recognised through the national alliance awards scheme.
The concept of joint working is not easy for it demands respect for the values, views and traditions of others. However, when knowledge and resources are pooled, health alliances are a highly effective means of tackling specific problems. They can be especially effective when they work within a defined geographical area—in cities, neighbourhoods, schools, places of work and so on. They can also help target the difficult to reach groups which have been highlighted in tonight's debate and which include some of those most at risk such as elderly people or those whose lifestyles are problematical or those who have no wish to contact
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traditional health and social services. Again, there are parallels with the Peckham experiment which focused on a community with many material disadvantages and placed great emphasis on involving people of all ages.
The research demonstrates that there is ample opportunity within the Health of the Nation strategy to build on the growing interest in community well-being activities. At the same time we need to recognise that measures to improve health in the 1990s and beyond may not look quite the same as what was felt to be the answer in the 1920s, 1930s and 1940s. But there are common threads between then and now. They include the need actively to involve individuals and communities in approaches to improve health and a belief that the promotion of good health is not the sole preserve of health professionals.
Your Lordships will be aware that this afternoon the National Health Service Primary Care Bill was given its First Reading in your Lordships' House. This piece of legislation is designed to give members of the primary health care team the opportunity to work in new ways if they so wish. We recognise that the quality of service for some groups of people is not always of the best and that the rewards and incentives of a single national contract can inhibit doctors and dentists in their wish to introduce new and flexible services.
The Bill, if enacted, will allow new approaches to general practice to be piloted and evaluated. It is intended to encourage local people to develop and put forward their own ideas for improving services.
Finally, while supporting and encouraging local activities on the lines of those outlined in the research report, we need also to have a broader vision still. The Health of the Nation strategy calls upon us to work together with all those who have an impact on health. We have worked with industry and major employers to develop a strategy for improving health in the workplace. We are working with food producers, manufacturers, retailers and caterers to help promote healthy and enjoyable eating. Clothing manufacturers are interested in producing clothes which help protect against the sun. A national cycling strategy can help reduce the volume of motor traffic and increase peoples' level of physical activity. We are consulting widely on the introduction of a sixth key area in our Health of the Nation strategy, focusing on the environment.
So while we recognise the importance of local imagination, determination, motivation and the ability to improve health, we also recognise that government too have a role to play. As Sir George Young once said:
"For many of today's medical problems, the answer may not be cure by incision at the operating table - but prevention by decision at the Cabinet table".
I would add to that, not only at the Cabinet table but also the dining table, for health cannot be divorced from the rest of life. It is part and parcel of it, as the Peckham Experiment all those years ago showed us so clearly.
House adjourned at nine minutes before seven o'clock.