Lords Sitting of 9 July 1997

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

Violent and Sexual Offences: Sentencing
Baroness Anelay of St. Johnsasked Her Majesty's Government:
What plans they have to prevent the automatic release of criminals who are guilty of repeated sexual or violent offences and who are known by the prison and probation services to present a risk to the public.
The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn): My Lords, my right honourable friend the Home Secretary has made it clear that the Government support the provisions in the Crime (Sentences) Act 1997 which require the courts to impose a life sentence on an offender convicted for the second time of a serious violent or sexual offence, unless there are exceptional circumstances. Such life sentence prisoners will not be released at the end of the relevant part set by the judge for the purposes of retribution and deterrence unless the Parole Board considers it safe to do so. We intend to implement these provisions as soon as possible.
Baroness Anelay of St. Johns: My Lords, can the Minister please give us some information about the kind of monitoring that will be available with regard to people who will be released upon licence? Is he aware that public concern on the matter will have been intensified as a result of the report last week that a person serving a five-year sentence for kidnapping, drugging and indecently assaulting a 14 year-old boy was released after serving just two-and-a-half years on the basis that he would be living in a bail hostel on licence, yet he failed to register there? Will the Government be using the probation services alone or will they be innovative and make use of the private and voluntary sectors?
Lord Williams of Mostyn: My Lords, as the noble Baroness rightly pointed out, this is a matter of great public concern. It does not relate to an offender who would be subject to the new regime. It seems to us that every possible effort must be made to ensure public safety, in particular the safety of those sections of the public who are most vulnerable. In respect of the mandatory sentence to which the Question refers, the Parole Board will have the ultimate say on release and it would, of course, make the usual full and appropriate inquiries.
Lord Avebury: My Lords, what does the Minister intend to do about the practice which was followed by
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the former Home Secretary of increasing the tariff recommended by the trial judge and the Lord Chief Justice for life sentence prisoners? Does he believe that that is a matter for the judiciary rather than the executive?
Lord Williams of Mostyn: My Lords, the noble Lord's question relates to the decision of the judicial committee of your Lordships' House in the case of Venables and Thompson, in which Venables and Thompson had murdered the small, innocent child, James Bulger. The Home Secretary has powers to review sentence tariffs. In the case of Venables and Thompson, the trial judge gave one indication, the then Lord Chief Justice, Lord Taylor of Gosforth, gave another and the Home Secretary had the statutory power to review, which was subsequently found to have been inappropriately exercised. But the House of Lords' judicial committee did not begin to suggest that that power could not have been properly exercised within the statutory regime.
Lord Ackner: My Lords, why do not the Government consider implementing the recommendation of the Butler Committee with regard to reviewable sentences? Does the Minister agree that the reviewable sentence suggestion made by Lord Butler has the following advantages over what is proposed: it is not limited to repeat offenders; it is not restricted to the narrow range of offences as is Section 2; it requires medical evidence before it can be imposed; it does not run the risk of the criminal deciding to do in his victim to avoid a life sentence; and, finally, it does not carry the false label of imprisonment for life, which is never intended to be effective.
Lord Williams of Mostyn: My Lords, the noble and learned Lord sets out the claimed advantages of the Butler Report regime. There is certainly virtue in some of them. The Government are determined to ensure a coherent and strategically focused approach to sentencing. We need to consider the whole of the wider context, which is what my right honourable friend the Home Secretary is presently about.
The Earl of Longford: My Lords, in view of the fact that the Minister recently denounced "Howardism" in scathing terms, will he return to the philosophy of the noble Lord, Lord Hurd, who recently joined this House?
Lord Williams of Mostyn: My Lords, I have never used the term, "Howardism", although I know that my noble friend frequently has done so. I understand what he means by it as a compendious term of contempt. What the present Government wish to do, if possible on the basis of cross-party agreement, is to attend to the serious problem of prisoners being released and being a perceived and actual menace to members of the public.
Lord Mason of Barnsley: My Lords, in view of the importance of the Parole Board report, can my noble friend say who is entitled to see the report apart from the prisoner and how the prisoner can challenge it?
Lord Williams of Mostyn: My Lords, the Parole Board report is seen by officials in the Home Office; it

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would be seen by the Home Secretary; it is shown to the prisoner, and it is capable of having representations made about it by the prisoner. Those last two aspects would be what a system of civilised justice, not least natural justice, would require.

Self-chilling Cans
2.44 p.m.
Lord Cocks of Hartcliffe: My Lords, on behalf of, and at the request of, the noble Lord, Lord Dean of Beswick, I beg leave to ask the Question standing in his name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in accordance with the latest reports on global warming, they are prepared to ban the manufacture and sale of chillcans.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman): My Lords, the Government were concerned to learn of plans to develop self-chilling drinks cans which would emit powerful climate-changing greenhouse gases. That is why my right honourable friend the Minister of State for the Environment raised the issue recently with fellow European Union environment Ministers. They agreed to invite the European Commission to investigate the situation as a matter of urgency and to bring forward proposals for appropriate action which could include the possibility of a ban.
Lord Cocks of Hartcliffe: My Lords, I thank the Minister for that Answer. Can she comment on the claim by the inventors that self-chilling cans will help to fight global warming by reducing the need for refrigerators?
Baroness Hayman: My Lords, that is a claim on which I am glad to be able to comment because it is highly disingenuous. It is not the case. Even on the most generous assumptions, the contribution to global warming from emissions from the cans would far exceed any savings in carbon dioxide emissions from reduced refrigeration. Even moderate sales of the cans would seriously undermine international efforts to reduce greenhouse gas emissions because of the high global-warming potential of HFC 134A—the gas used to chill the drink. To give a sense of the scale of the problem, the gas is 1,300 times more powerful than carbon dioxide.
Lord Bruce of Donington: My Lords, can my noble friend inform the House why, in these circumstances and after due and proper investigation by the Government, it is necessary to go to the European Commission on this matter? If it is deemed by the Minister, after all proper inquiries—I assume they were
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expensive—that there are bad effects upon health and other possible consequences, why cannot she act on her own in the interests of the country?
Baroness Hayman: My Lords, we certainly could act on our own under the Environmental Protection Act. And we certainly would, if that was the most effective way of protecting the interests of this country. If, however, because of the single market implications, it would be more effective to act through the European Union and other international efforts, then that is the correct course to pursue.
Lord Burnham: My Lords, is the Minister aware that all this is quite unnecessary? Long before the right honourable gentleman jumped on this bandwagon the soft drinks manufacturers and the brewers had decided that chilled cans were quite wrong and were not effective on either environmental or economic grounds. Further, the British Oxygen Company, within the next two months or so, is expected to announce another widget—whatever that may be—which does not contribute to global warming or ozone depletion.
Baroness Hayman: My Lords, I am interested in the comments of the noble Lord. I know that the international organisation representing the manufacturers of the gases—in this country ICI—has stated clearly that it does not consider chilled cans to be a proper use of a potentially highly dangerous gas. However, the cans were presented using the gas at a trade event in Singapore and the Joseph Company in the United States said that it was putting forward plans for them.
Lord Monkswell: My Lords, I welcome the action the Government have taken, as explained by my noble friend on the Front Bench. Can she advise the House whether representations have been made to other advanced industrial areas of the world, particularly the United States and Japan?
Baroness Hayman: Yes, my Lords. My right honourable friend Mr. Meacher has been in touch with his counterpart in the United States to express our concerns and we hope for the possibility of joint action in this area.

Quarantine
2.49 p.m.
Baroness Sharplesasked Her Majesty's Government:
When they expect to reduce or eliminate the present six-month quarantine for domestic pets entering this country.
The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Lord Donoughue): My Lords, in the light of our commitment to do so, we are actively considering whether alternatives to quarantine may give equal or better protection against

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the importation of rabies. Because of the wide and legitimate interest in this subject, we would expect to consult at some point on the matter. Decisions on when and how to do so have yet to be taken.
Baroness Sharples: My Lords, I thank the Minister for that reply. Are her Majesty's Government in contact with the Swedish Government which, three years ago, abolished quarantine since when there have been no cases of rabies and no increase in bringing dogs into the country illegally? Also, can the noble Lord say how many years it is since a case of rabies occurred within the quarantine kennels?
Lord Donoughue: My Lords, we are in contact with Sweden. The year after it introduced the new system we sent officials there to see how it was working. We have remained in contact since. The Swedish system is one that we will look at closely and take into account when we come to our own conclusions. On rabies in quarantine in this country, the last probable case was in 1983 when a dog imported from the United States died. The scientist who investigated concluded that it was rabies, although only one of the three normal tests was able to be made.
Lord Strabolgi: My Lords, is my noble friend aware that conditions in some of the quarantine kennels are very much below standard and that government inspectors have apparently no right to enter them, although the RSPCA can? Are the Government doing something to improve the previous legislation?
Lord Donoughue: My Lords, it is true that the Animal Health Act 1981, which covers licensing, covers disease control and physical security but it has been our legal advice that it does not cover the welfare and physical comfort of the animals there. As a result, the department has introduced a voluntary code to apply to the kennels. Our inspectors are currently inspecting all kennels and have nearly completed that process. Where they meet the code that information is given to all people who intend to put animals into kennels.
Lord Hooson: My Lords, does the noble Lord agree that the ambit of this Question should possibly be enlarged to include not only domestic pets but all animals—farm animals, horses and so on? Does he further agree that with modern scientific developments and our increased knowledge of this disease it is quite unnecessary to have quarantine to safeguard the health of this country?
Lord Donoughue: My Lords, the noble Lord is correct. On a previous occasion an impression was conveyed that quarantine is fairly narrowly confined to pets. But those animals subject to it are carnivores, bats, rabbits, marsupials, primates and even rodents, although I believe journalists are exempt. It is believed that farm animals are not a danger because they are an end-host recipient and do not pass it on. In terms of bringing the
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system to an end, we shall have to be convinced that any other system ensures that the UK is, as now, rabies free and that any such system is enforceable.
Lord Montagu of Beaulieu: My Lords, how many animals have died as a result of stress and other reasons in the past 10 or 20 years?
Lord Donoughue: Died where, my Lords? I do not have the answer to that question—nor about human beings either.
Lord Molloy: My Lords, what are the numbers involved? Is contact maintained with the British Veterinary Association when this problem either increases or decreases? The British Veterinary Association is surely a valuable help to the Minister and should be kept constantly informed. Will he let me have his views on that possibility?
Lord Donoughue: My Lords, I can assure my noble friend that British vets are closely involved and of course are deeply involved in advising the ministry.
Lord Soulsby of Swaffham Prior: My Lords, I welcome the Minister's comments that any alternative arrangements would safeguard this country against the importation of rabies. The majority of the conditions for lifting quarantine have been met—an adequate vaccination policy, identification, certification and the freedom of the European Union from dog rabies and a virtual absence of fox rabies. Can he assure the House that he will speed the consideration of lifting quarantine in view of the fact that many bodies agree that it is timely to lift the quarantine regulations and requirements?
Lord Donoughue: My Lords, the noble Lord is one of the most distinguished experts in this field. We are aware of his views. I can assure him that we shall proceed on this matter with all speed commensurate with not subjecting the United Kingdom to risk.
Lord St. John of Bletso: My Lords, is the Minister aware that the United Kingdom and Hawaii are the only two countries that retain these draconian six-month quarantine rules? Is it not the case that unless the Government take on board the recommendations of the Agriculture Select Committee of another place some two years ago there will be a heightened risk of smuggling, which could indirectly bring rabies into Britain?
Lord Donoughue: My Lords, the noble Lord is right. The danger of smuggling is one of the main factors we have under consideration. I do not share the noble Lord's knowledge of Hawaii, but if I can find a way of investigating local conditions I will.
Lord Geddes: My Lords, in his original Answer I think I heard the Minister use the word "consult" in the context of alternatives to quarantine. Can he help the House by saying what other bodies, apart from the

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British Veterinary Association which was mentioned by his noble friend Lord Molloy, the Government will be consulting?
Lord Donoughue: My Lords, it is our intention to produce a discussion paper. That paper would be open to all and we would wish to listen to the views of all bodies and all members of the public.
Earl Ferrers: My Lords, can the noble Lord give an assurance that he and the Government will not be trammelled too far into giving up quarantine for rabies? Does he agree that rabies in human beings is a most terrible disease? Whenever the matter has been considered in the past it has always been thought prudent to retain our quarantine arrangements. Will he therefore not get rid of the quarantine arrangements without ensuring that any substitute is just as good?
Lord Donoughue: My Lords, I can give the noble Earl that assurance.
Lord Berkeley: My Lords, while I agree that my noble friend should take into consideration the comments of the noble Earl, Lord Ferrers, is he aware that only four human beings have died in western Europe since the last war from rabies contracted in western Europe? Will he take into consideration not only the effect it has on human beings but also the effects on dogs and other animals of being incarcerated for six months?
Lord Donoughue: My Lords, I am aware of those figures. That is one of the reasons why we are actively reconsidering the position. No doubt the noble Earl, Lord Ferrers, would say that one of the reasons why the figures in this country are so good is that we have the present controls.
Baroness Sharples: My Lords, is it not true that people who might contract rabies do not have to have the awful injections in the stomach which used to be given in the past but in fact have three injections in the shoulder and that they suffer no ill effects?
Lord Donoughue: My Lords, I believe that the position in relation to such protection is much improved in the way the noble Baroness has described.
Lord Lucas: My Lords, will the noble Lord accept my congratulations on his first Answer to my noble friend Lady Sharples? It seemed enormously helpful but gave no commitments whatever on the actual timescale of the process. Does he accept that we share the concern that this matter should be addressed speedily? Whatever the conclusion may be, there is no longer any excuse for delay. The noble Lord should be able to give us a greater commitment as to when the White Paper or the discussion paper will be produced and when he would anticipate we might expect legislation if that is to be the case.
Lord Donoughue: My Lords, I thank the noble Lord for his gracious remarks. I can assure him that we shall
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have less delay than prevailed previously. We propose to commission scientific assessments of quarantine and the alternatives. It will depend how long that takes, but we propose to publish a discussion paper and subsequently to follow that up. I am reluctant to give a date because in life that tends to be embarrassing. I can assure the noble Lord that measures will be taken as rapidly as possible.

HIV/AIDS Patients: Numbers
3 p.m.
Baroness Gardner of Parkesasked Her Majesty's Government:
What are the latest figures for the number of patients treated as HIV/AIDS in-patients and out-patients in each major London treatment centre and what is the amount of central funding for each of these centres.
The Minister of State, Department of Health (Baroness Jay of Paddington): My Lords, the Department of Health allocates funds for AIDS treatment and care to health authorities and not to treatment centres. In the main, information on numbers treated is also collected by the health authority. The latest information from the National Survey of Diagnosed Prevalent HIV infections shows that 8,158 individuals with AIDS or HIV infection were treated in the centres situated within the seven inner-London health authorities.
Data taken from these authorities show that the number of in-patient and day-case episodes for the seven health authorities was 19,345. I am afraid that the comparable data on out-patients are not collected. The funds for AIDS treatment and care are allocated to health authorities on the basis of AIDS case reports made to the Public Health Laboratory Service. The total amount allocated to the seven inner-London health authorities in 1997–98 for AIDS treatment and care is £132 million. As it will take some minutes to repeat the detailed information on each of the seven health authorities, I have already written to the noble Baroness with the information for each of those authorities in inner London. A copy of that letter will be placed in the Library.
Baroness Gardner of Parkes: My Lords, I thank the Minister for her reply and for the detailed report she sent me. Unfortunately, it is not current because the figures are a little behind time. Even the report that the noble Baroness has sent shows a great discrepancy between the funding and the number of patients treated within each district health authority.
I declare an interest as a trust chairman. Has the Minister seen the recent report entitled Meeting the Cost of Combination Therapy, which makes clear that the cost per patient of combination therapy varies widely, ranging from £7,000 per patient to £5,500 per patient between major treatment centres in London? In view of the fact that HIV/AIDS patients can choose to be treated

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at any centre, the actual numbers and cost can only be known after the treatment. Therefore, will the noble Baroness confirm to me the commitment of the previous government to review retrospectively the distribution of treatment and care funding for HIV/AIDS patients in order to see that the two are directly related?
Baroness Jay of Paddington: My Lords, I thank the noble Baroness for her detailed and helpful commentary on the way this money is distributed. She will be aware that, although the figures I gave were for 1995–96—unfortunately, the current figures are not yet available—there was a rise of 7 per cent. in payments to all inner-London health authorities for combination therapy for 1997–98. There appear to be discrepancies in these costs between the different authorities. I believe that those questions relate to different clinical practices, but they are being looked at by both the health authorities concerned and by the London health regions. We shall consider whether patients should have their charges based on their district of residence rather than where they accept treatment. That will raise questions about confidentiality and open access to the service, which is one of the reasons why our AIDS services have been so successful.
Earl Baldwin of Bewdley: My Lords, given the noble Baroness's Answer to my Question on 19th June to the effect that HIV/AIDS patients are believed to be doing very well on complementary medicine, can she say what funding has been made available in this area?
Baroness Jay of Paddington: My Lords, no specific funding is made available for complementary medicine. I hope I reassured the noble Earl on the earlier Question that he asked that several of the health authorities are making complementary medicine available to their patients who have HIV and AIDS. In addition, there are a number of voluntary organisations—for example, the London Lighthouse— which offer complementary therapies to the people who come to them and which are funded under Section 64 grants from the Department of Health.
Baroness Gardner of Parkes: My Lords, I refer to the reply which the noble Earl received on 19th June. I believe that on that occasion the noble Baroness said that complementary medicine combined with other combination therapies was the practice that she supported on that day. I do not believe that it was 100 per cent. complementary medicine only. Can she confirm that and also my point about looking retrospectively at the balance of money in relation to patients treated while retaining their anonymity?
Baroness Jay of Paddington: My Lords, I can confirm that I still support the position that I took in response the Question from the noble Earl. I believe that on that occasion the noble Baroness and I were at one in believing that a combination of complementary therapies and what may be described as more
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conventional drug therapies seemed to produced the best results for people with HIV. As regards the retrospective look at patients and their place of residence and where they are treated, that would be difficult because, as I said before, there is the question of anonymity. However, I shall check with those in the department who may have been working on this matter before. I shall see what the situation is and let the noble Baroness know.
The Earl of Clanwilliam: My Lords, will the Minister accept that there may be some controversy over the relationship between HIV and AIDS? Will she tell the House whether the HIV virus has been isolated and, if so, what is the report of the Medical Research Council to which we can refer to find that information? No doubt the noble Baroness will write to me if she does not have the information to hand.
Baroness Jay of Paddington: My Lords, I am not a micro-biologist or scientifically qualified in this field. My understanding is that the HIV virus was isolated some 12 to 15 years ago. Personally, I have never accepted the theory that the HIV virus was not connected with HIV infection and AIDS, but, as I say, I speak as a non-scientist.
Baroness Miller of Hendon: My Lords, will the Minister consider reviewing the allocation of HIV/AIDS funds so that they better match the distribution of the patients at the various centres?
Baroness Jay of Paddington: My Lords, that is certainly something worth looking at. But, as I said in response to the noble Baroness, Lady Gardner of Parkes, money is not directly given to particular centres. However, we hope that funding allocated to particular inner-London health authorities will be picked up by those centres which are clustered in those inner-London authorities.

Business
3.7 p.m.
Lord Carter: My Lords, at a convenient moment after 4.30 p.m., my noble friend the Leader of the House will, with the leave of the House, repeat a Statement that is to be made in another place on the NATO Summit.

Employment Rights (Dispute Resolution) Bill [H.L.]
Lord Archer of Sandwell: My Lords, I beg to introduce a Bill to rename industrial tribunals and amend the law relating to those tribunals; to amend the law relating to dismissal procedures agreements and other alternative methods of resolving disputes about employment rights; to provide for the adjustment of awards of compensation for unfair dismissal in cases where no use is made of internal

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procedures for appealing against dismissal; to make provision avoiding double recovery in cases involving both unfair dismissal and disability discrimination; 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 Archer of Sandwell.)
On Question, Bill read a first time, and to be printed.

Local Government (Contracts) Bill
Brought from the Commons; read a first time, and to be printed.
Local Government Finance (Supplementary Credit Approvals) Bill
Brought from the Commons; read a first time, and to be printed.

Business of the House: Debates this Day
The Lord Privy Seal (Lord Richard): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debate on the Motion in the name of the Lord Bishop of Oxford set down for today shall be limited to three hours and that in the name of the Lord Annan to two hours.—(Lord Richard.)
On Question, Motion agreed to.

Jubilee 2000 Scheme
3.9 p.m.
The Lord Bishop of Oxfordrose to call attention to Jubilee 2000 which seeks to remit the backlog of unpayable debt of the poorest countries by the year 2000, with particular reference to the economic development of sub-Saharan Africa; and to move for Papers.
The right reverend Prelate said: My Lords, third world debt is an issue of crucial importance and I am grateful to the House for allowing time to debate it. I much look forward to hearing from the good number of distinguished noble Lords who have put down their names to speak, especially the noble Baroness, Lady Lestor of Eccles, who is to make her maiden speech.
The wording of the Motion refers to one of the great insights of the Bible. In ancient Israel, according to the law of Moses, every seventh year was celebrated as a sabbatical year during which the earth was left fallow and slaves were set free. The law also provided for the cancellation of all debts. What was true for the sabbatical year was true also for the jubilee year which fell every
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50 years. Understandably, this was to be celebrated with even greater solemnity. As is written in Leviticus, at chapter 25, verse 10:
"You shall hallow the 50th year, and proclaim liberty throughout the land to all its inhabitants; it shall be a jubilee for you, when each of you shall return to his property and each of you shall return to his family".
One of the most significant consequences of the jubilee was that every Israelite regained possession of his own ancestral land if he happened to have sold it or lost it by falling into slavery. He could never be completely deprived of the land because it belonged to God. In short, the jubilee was meant to restore the original order of creation in which the goods of the earth, which belong ultimately to God, were shared fairly between all human beings. The jubilee year was meant to right the injustices which might have arisen in the previous 50 years, restoring equality and in particular supporting the weak and those who had lost out. It was probably this to which Jesus referred in his famous sermon in the synagogue at Nazareth at the beginning of his ministry, recorded in the fourth chapter of St. Luke's Gospel.
His Holiness the Pope, in his important encyclical Tertio Millennio Adveniente, called for the millennium to be associated with this biblical concept of "jubilee" and now jubilee remission of debt for the poorest countries in the world is the major theme of the millennium for all the Christian churches and aid agencies.
The urgency of the matter was brought home to me in 1987 when I was meeting in Singapore with the Anglican Peace and Justice Network. At the end of the consultation we discussed when we might meet again. The representatives of the more advanced nations, who had quite enough meetings, were looking for the next meeting three or four years ahead. At that point a Brazilian bishop friend of mine literally exploded in wrath. He knew in his own experience that people, particularly children, were suffering and dying daily because of the enormous debt repayments that his country and others were having to make at that time. He knew it was literally a matter of life and death. As William Blake put it:
"The tigers of wrath are wiser than the horses of instruction".
All of us here begin with the assumption that under normal circumstances debts should be repaid. Equally, we would not be taking part in this discussion unless we knew that the circumstances under which third world debt was built up were highly abnormal. As a result of huge pressure to lend the surpluses built up by oil revenues, the massive corruption of rulers like Mobutu, with money often going on prestigious but inappropriate projects, huge debts were built up while the money very rarely benefited the poor. Now, as a result of structural readjustment programmes resulting in severe cuts in health and education programmes in order that the economy can be brought into line and the debts serviced, it is the poor who continue to suffer.
The Jubilee 2000 campaign is not concerned with all debt; it is concerned with the debt of the poorest countries in the world, debt which is in fact

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unsustainable anyway. It seeks to lift this huge burden which is crushing some of the most vulnerable people on earth.
The presumption is that under normal circumstances debts should be paid. But all civilized societies recognise that businesses go bankrupt. The limited liability company was a way of ensuring that children were not starved in order that debts should be paid. It imposed a barrier between debt incurred through lack of success in an economic venture and the daily lives of people caught up in such failure. The discharging of bankrupts does the same. In the first two months of 1992 alone, for example, 280,000 personal debtors in the United Kingdom applied to be made bankrupt. The point is that although the process of being recognised as bankrupt is certainly painful, it is also a release whereby debts are written off within a fairly short length of time and a new unencumbered life becomes possible. Such mechanisms are an essential part of civilised society as we know it. It is the complete failure of the world economic system to put in place comparable mechanisms at the international level which has brought about the present crisis and terrible suffering.
Rescheduling debt is a perfectly proper mechanism within advanced societies; for example, the massive debt of Eurotunnel can be contained and renegotiated because its existence in no way affects the bread and butter being fed to the children of its employees. On the contrary, it is actually protecting them. But rescheduling the debt of a desperately poor country merely enhances the long-term burden of people who remain unlikely to be able to pay it in the future, in a still larger form, any more than they can at present. As Julius Nyerere asked,
"Must we starve our children to pay our debts?"
Sadly, they are starving to do just that. Between 1990 and 1993, according to the World Bank, the countries of sub-Saharan Africa transferred 13.4 billion dollars annually to their external creditors, more than their combined spending on health and education. Nevertheless, the stock of unpaid interest in principle owed to official creditors still stood at something approaching 38 billion dollars in 1993, more than double the level in 1990. Two-thirds of the increase in debts stock is now due to the accumulation of interest on arrears. Indebtedness to the West has become the decisive factor into pushing the poor into ever greater poverty.
I emphasise that the scheme I am discussing does not belong to Cloud-cuckoo-land. It is, in fact, achievable. And there is a real sign of hope that it can be achieved. At a meeting of the World Bank and the IMF in 1996, the president of the World Bank and the managing director of the IMF proposed an initiative, the highly indebted poor country initiative (HIPC), for comprehensive treatment of all the debts of the poorest countries. There is a new spirit abroad, and that initiative is much to be welcomed.
It may help the House if I explain briefly what the scheme involves. It is made up of several stages: the first stage; the decision point; the second stage; and the completion point. During the first stage the country participating in the HIPC initiative could expect up to
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67 per cent. relief on debt service to Paris Club government to government creditors and comparable treatment from other bilateral and private services. During this period the country is expected to establish a three-year track record of good performance in implementing IMF and World Bank structural reforms. At decision point the creditors and participating countries decide whether or not the country should carry on and participate in the HIPC initiative. A country could opt to have 67 per cent. relief on its stock of debt if that is sufficient to achieve debt sustainability. Another option would be for the country to act as a borderline case and wait another three years before deciding which course to take.
A country participating in the HIPC initiative moves on to the second stage when it should receive up to 80 per cent. relief from eligible Paris Club debt service and other bilateral and private debt flow. In this period the country must establish another three-year track record of good performance in implementing structural adjustment reforms. At completion point the Paris Club provides relief of up to 80 per cent. on eligible debt stock and other creditors participate in the same way.
The HIPC initiative is an indication that where there is a political will, something can be done. Sadly, however, I have to say that in the judgment of experienced observers the initiative is failing badly and by itself will by no means be enough to lift the crushing burden on the poor.
One flaw is the use of projections of commodity prices, which are likely to be substantially over-optimistic, and this could be disastrous if commodity prices are falling. More fundamental is the fact that the financial institutions have made it clear from the beginning that only countries severely in need of debt relief, which are performing well by implementing structural adjustment policies, will be eligible to relief under the HIPC initiative. As the last Chancellor of the Exchequer put it, it would apply only to those countries that were,
"highly impoverished, highly indebted and performing well".
But, as has been written,
"Very few countries are both the economic equivalent [of being] at death's door while maintaining the equivalent financial fitness of an athlete".
There is also the problem of delaying the point at which a country is eligible for relief of its debt stock. Under the HIPC initiative structural adjustment programmes can be imposed for up to six years. It has been made clear by officials that it could extend beyond that period. But the need is dire and urgent. Delays of this kind simply mean more debts. Other points have been made. They include the fact that when conditions are laid down agreements upon them are conducted in great secrecy. Much more transparency is needed. Furthermore, negotiations surrounding the HIPC initiative are meant to be tripartite and to involve the debtor government, the IMF and the World Bank. But in some cases, for example that of Guyana, debt sustainability analysis—the key document for determining eligibility for assistance under the initiative—was prepared without the participation of the

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Government of Guyana. There are also other criticisms which at the moment result in the initiative failing to meet the need.
I should like to consider just one country: Mozambique. Mozambique is defined by the World Bank as the poorest country in the world. It has just emerged from a prolonged civil war that killed 1 million people. Life expectancy is 47 years and the rate of infant mortality is 145 per 1,000 live births. In 1995 Mozambique's total debt stock was 323 dollars per capita. At the same time its GNP per capita was only 80 dollars. From 1996 to the year 2000 it is scheduled to pay in the order of 400 million US dollars in debt service every year. That is way beyond its capabilities. For example, if Mozambique had paid its debts scheduled for 1994 it would have taken over nine-tenths of its export earnings. There is, however, some good news even in Mozambique. At the previous meeting in 1996 some kind of provision was to be made for that country. In other words, if the will is there something can be done.
The figures for other countries are comparable. I will not refer to the example of Zimbabwe because the right reverend Prelate the Bishop of Leicester will say something about that. UNICEF has estimated that £49 million of debt relief for Uganda, for example, could save 398,000 children under five and 13,000 women who would have died in childbirth, in addition to providing primary education for 2 million more children. It is the poorest of the poor who are literally starving and dying because money that should be spent on health and education has to service debts for which the poor are in no way responsible.
The Churches regard this issue as comparable with the campaign to abolish slavery in the early 19th century. The injustice to be righted and the suffering to be relieved are of similar proportions. The goal set by Jubilee 2000 is achievable and the HIPC initiative much to be welcomed, but as it stands the initiative is too little and too late. There must be the political will to reduce debt at a much faster rate with conditions that do not impinge so heavily upon the poorest of the poor. My Lords, I beg to move for Papers.
3.23 p.m.
Lord Callaghan of Cardiff: My Lords, the House is in the debt of the right reverend Prelate the Bishop of Oxford for bringing this important matter to our notice once again. Development aid does not have a loud political voice but in the person of the right reverend Prelate and many others in the Churches it has a resonant voice which I am sure will be heard in due course. I thank him warmly for giving us this opportunity to discuss it. I also look forward very much to the maiden speech of my former political colleague in the Foreign Office who tended my conscience every day with her approach. She has devoted much of her political life to the cause of developing countries. Indeed, in her personal life she has expressed that conviction which she holds so deeply.
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I also congratulate my right honourable friend Clare Short. I believe that she is a square peg in a square hole. We all know of her human warmth and depth of human feelings. Perhaps she is on the outskirts of British politics but she has a much more important task: to rally the support of all those countries and people who share the views that she holds very deeply. I look forward to her success in her tenure of office.
Developing countries vary a great deal. It is not all gloom. It has been most noticeable how the countries of the Southern African Development Community have progressed over the past two or three years. The growth rate of that group, at least among eight of those countries, was more than 5 per cent. per annum, and that is a most encouraging factor. But because they vary a great deal it means that some are at the bottom.
The right reverend Prelate has drawn our attention particularly to the countries of the sub-Sahara. Those countries are in a situation from which I do not see how, on any examination, it will be possible for them to hoist themselves up by their bootstraps. As far as can be foreseen, they are likely to remain in their present position for a long time. But is this inevitable? No, my Lords. One has seen how much East Asia has progressed—faster than Africa as a whole and certainly to a much greater extent than sub-Saharan Africa. I believe that the same can be achieved in sub-Saharan Africa. It is a special case, but it is not a basket case.
The right reverend Prelate focused particularly on the crushing burden of debt carried by those countries, but he also recognises that remission of debt will not cure the problem. I know his opinion on this matter. It is a necessary step but much more must be done before these countries can face the world and be in the situation in which they should be. Like him, I welcome the initiative of the World Bank in the Heavily Indebted Poor Country project for which it has set aside a considerable sum of money. The right reverend Prelate has kindly explained that to us. Like him, I have reservations about it. If as I understand it Uganda is the only country that is likely to secure some benefit from it by the year 2000, it does not appear to demonstrate the degree of urgency that is necessary. I am informed that two others may qualify, Côte d'Ivoire and Togo, but even that is very small beer in comparison with what is necessary.
It is right to establish criteria, and they seem to me to be sensible criteria. To relate the level of sustainable debt to the gross national product of a country makes obvious sense; to relate it to the export level of a country makes sense, because it is absurd that so much of the export earnings of these countries should be spent on servicing their debt. That is the case in Mozambique where, if my information is correct, 33 per cent. of the total government budget is spent on servicing debt. Just think what the position would be in this country if we had to do something similar. It would be quite intolerable. As to the criteria, I question both their timescale and conditionality. It seems to me that both are too heavy.
I do not know whether it is likely that a country in the condition described by the right reverend Prelate and Mr. Kenneth Clarke can expect to sustain a debt

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servicing burden of 20 per cent. of GNP a year. That should be looked at much more carefully, as should the period of time. That being said, we have an opportunity to push them on that. The Churches are playing their full part.
Perhaps I may do a little name dropping. The Prime Minister sent me a copy of the Denver communiqué which I of course read carefully. They spent a long time on the problem of Africa. I do not think that I have ever seen in a communiqué so much time spent on the problem of the developing countries. It is clear, as is said here, that the problem is that the sub-Saharan countries face unusually severe challenges.
This is the point that I hope will encourage the right reverend Prelate:
"This year, we aim to translate the principles of that Partnership into new concrete action to support the efforts of African countries to participate fully in the expansion of global prosperity and to spread the benefits throughout their societies".
What our leaders have done is to call upon the international financial institutions to produce reports on the progress that they are making by the annual meeting of the World Bank and the IMF. I urge the Churches to redouble their efforts in that direction to ensure that a proper review is carried out, as is suggested in other parts of the communiqué, to see whether the criteria are just and the timescale is appropriate. If we do that, we may well find that we can get some improvement.
Although when I read the communiqué I agree with it and think how splendid it is and absolutely right, having taken part in some of these things I must say that when one examines the language in detail it has a certain amount of conditionality. It is rather cloudy. We have to pin governments down on those issues before they forget what they have said. This important progress report is called for.
I want to emphasise that the communiqué also points out the important part played by private investment. That is indeed so. The IMF and the World Bank are no longer giants in that field. Ten years ago private investment in those countries was a half of the funds put in by the World Bank and the IMF in any one year. Now private investment is at least four, if not five, times as great as funds put in from official sources.
What is needed, as the Denver communiqué says, is debt relief. It calls upon bilateral countries who have debts owing to them to release them. It talks about the marginalisation that some of those countries may have to endure, and calls, above all, for growth. In the changing policies of the IMF and the World Bank over a number of years, they have now returned to the idea that growth is the way in which one can begin to relieve the poverty that undoubtedly exists, and the better it will be.
We need to have a partnership with sub-Sahara. There is a long list of what needs doing—I shall not go into it—from sound financial policies, honest governments, health research and attitudes towards women's education. The list is immense. I have hope. I am not despairing. The world's attention is being focused increasingly on the problem. There is a realisation by our leaders. What is more, there is a different frame of
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mind in Africa. Many of the leaders there now recognise that their own effort is necessary as well as efforts by ourselves—we in the rich industrial West. We should not neglect the role of the NGOs. They can play an important part in what needs to be done to overcome the problem. We are not talking about charity in this debate; we are talking about a partnership and a constructive relationship. I look forward greatly to hearing the Government's reply.
3.35 p.m.
Viscount Torrington: My Lords, I echo the words of the noble Lord, Lord Callaghan, in welcoming the forthcoming maiden speech of the noble Baroness, Lady Lestor.
I do not profess to have any special expertise which equips me to speak in this debate, other, perhaps, than a lifetime of travelling up and down Africa, and seeing at first hand the economic collapse that has affected most African countries at one time or another.
The right reverend Prelate has given us an excellent opportunity today to examine one of the several underlying causes of that collapse. I say one, but it is a very fundamental one since the availability of debt generates spending power, and it is the misuse of spending power over years, caused by the East-West rivalry which increased the pool of debt during the 1960s and 1970s which has largely brought about the problem.
The other principal contributory factors were, of course, ill-conceived and grandiose plans for modernisation—the Nkrumah palaces—military ambitions, muddleheaded economic theories, and plain bad management—by gosh management has been frightened out of Africa over the past 30 years—and endemic corruption. Even in the least corrupt countries, one or other of those factors was always present. I remember thinking—I was a fairly junior business executive at the time—when President Kaunda was persuaded to purchase 51 per cent. of the Zambian copper mines, by issuing fixed interest US dollar bonds, that tears would follow. Companies in the mining business financed by equity can raise or lower dividends as commodity prices affect profits. By contrast Zambia's copper nationalisation bonds cost the same to service when copper prices finally fell as they had cost in the heyday of the copper boom. Zambia's economy has been in a sorry state ever since, as we know.
Arms sales to Africa are another matter. The continent has at times been a dumping ground for military hardware of all types, most of it redundant, sold often at outrageous prices to countries which had no real need of it and no ability to pay. All over Africa, one comes across airports where the vines are growing over the carcases of fighters, military helicopters and transport aircraft. Virtually none of that kit ever served a desirable objective. Most of it was used for pretty undesirable objectives.
But if we turn to debt forgiveness, there is a seeming anomaly here. One school of thought I have heard recently says that we should forgive, as a starter, the military debt, but it seems a strange idea to say that

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military debt should be forgiven where genuine trade debt should not. Such a policy would seem to say that we should let countries off in respect of debt incurred for profligate unproductive purposes such as armaments, but hold them to debt incurred for agricultural and transport equipment and sound investment. Of course, sound investment can repay debt where armaments can never do so, but such a policy would send all the wrong signals.
I am sure that we have to recognise that the Cold War-inspired debt burden was a one-off situation, largely of our own creation, "we", in this context, being Britain, the United States, France, the former Soviet Union and the other purveyors of arms. The borrowers, that is the politicians of those newly independent countries who accepted and squandered the debt are mostly long gone and out of office, hopefully for ever—the evil Amins and Obotes, the Nkrumahs, the benign but misguided Nyreres and Kaundas, and now even Mobutu. Many of the profligate borrower countries are now seriously attempting the painful path of convertible currencies and fiscal rectitude. We must do what we can to help them and to repair the damage for which we are greatly to blame.
There is, as I understand it, a considerable developed market in defaulted government debt. It is possible with a simple telephone call to find out the price of Angolan debt, or Mozambique debt, or Tanzanian debt. Such debt fluctuates in value on a daily basis, depending on the market's assessment of the likelihood of repayment. Ten to 15 cents in the dollar is not uncommon and, of course, the sad fact is that the more profligate the borrower the lower the value of his debt, which gives rise to an interesting anomaly. A country which wanted to buy in its own debt should appear to be a basket case so that it can quietly soak up its debt in the market. I fear that that is a strategy too subtle for most.
The most satisfactory method of reducing debt is the debt equity swop, where a country's debt is accepted by its government in exchange for the shares of businesses being privatised for agricultural and urban development land and other non-cash—and hence non-inflationary— assets owned by hitherto overcentralised and overbearing state sectors. In effect, it would be the reverse of what I referred to in Zambia a moment ago. Incidentally, I understand that quite a bit of debt-swop activity has taken place in Mozambique to privatise formerly confiscated sugar estates and so forth.
I worry that too much debt forgiveness will not encourage thrift or sound government policies. Careful debt reduction is undoubtedly helpful, but the best of all is likely to be a combination where some of the impossible overhang is forgiven and the rest is converted into foreign investment. Thus, interest payments on state debt can become dividends from sound investments, the state can get its share of profits through the tax system without in theory having any investment, and the cost of servicing foreign investment can rise and fall in line with economic performance and commodity prices. Sound management can be seen to enhance that economic performance.
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All countries have debts, and debts are part of economic life. Ceaucescu had to run Romania without foreign debt. The result was that he had no debt, but he generated precious few assets either and left a very poor country when they finally got rid of him. Africa's debts undoubtedly need to be reduced to what Africa can reasonably carry, but a little continuing pain for past profligacy will help to instil discipline for the future. The cry should be reduction and conversion; conversion in the economic sense to foreign equity investment and conversion in the biblical sense, if the right reverend Prelate will forgive me, to the principles of good government.
3.42 p.m.
Lord Hunt of Tanworth: My Lords, I am happy to support the Motion moved by the right reverend Prelate the Bishop of Oxford. It is also a great privilege to precede the noble Baroness, Lady Lestor of Eccles, whose maiden speech we are greatly looking forward to. I can assure her that I do not intend to keep her waiting long.
It is possible to argue about the causes and responsibility for the massive debt overhang in some of the world's poorest countries; for instance, the financing of foolish white elephant projects with no hope of any economic return and bad or even corrupt management on the part of some of the borrowing countries. On the part of the lending countries, there was anxiety in the 1970s to recycle petro-dollars at the very low interest rates then prevailing, with no thought that they were likely to rise much higher, and also to maintain the export industries of the lending countries.
If guilt there is for the present situation, I suspect that it is collective guilt of both the borrowers and the lenders. But if there is doubt about the causes, there can be no doubt about the effect in the highly indebted poor countries of the crazy merry-go-round where aid is not used for development but is received and then returned to the donors in debt service. It is debt which is not repayable. It continues to be rescheduled and aid money is used for the interest payments.
Many figures have already been given in the debate and no doubt there will be many more to illustrate the situation. The debt service in sub-Saharan Africa amounts to 6 billion dollars per annum. One-quarter of all bilateral aid goes to refinance debt payments. In countries such as Nicaragua and Zambia, debt payments absorb one dollar out of every two that could be available for development aid. Of course, all that diverts aid from poverty reduction and development.
There is of course a moral case to be made about the disparity of living standards in this world. That goes much wider and is the case for aid, fair trade, technical assistance and so forth. The question of the debt overhang is a different one. It is a snowballing situation of debt which cannot be repaid and which prevents the HIPC countries from dealing with their own problems and, incidentally, deters private investors from the developed world from coming in. In many cases the problem now is one of solvency and not just liquidity.

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It was therefore a sign of great hope when last autumn the World Bank and the IMF reached agreement on a package to help the world's poorest countries in relation to their debt. It is true that some progress has since been made, but anyone who revisits what was envisaged last autumn must say that the progress has been less than what was expected or hoped for. There have been genuine technical problems, but, regrettably, there have also been signs of footdragging by certain countries, notably Germany and Japan, and I am afraid more recently by the United States.
In my view, it is therefore essential to keep up the pressure to do something about the debt overhang. As the right reverend Prelate said, it is necessary to accelerate the timetable of the HIPC initiative and to improve its terms. It is necessary also to encourage the non-Paris Club donors to match what the Paris Club countries are committed to. It is fair comment from the Cross Benches that Her Majesty's Government have a good record in these arguments. That applies to both the previous and the present Government. The Churches, the NGOs and bodies such as Jubilee 2000 can help a lot by highlighting the need for action.
In all this, however, we must be realistic. Many would like to see the cancellation of international debt. But that is totally unrealistic and, in any case, borrowing is a perfectly reasonable way of financing economic development. Others would like to link it with reform of the international monetary institutions. There is a case for that too, but it will not happen in the short term. If too much is swept into the argument and the package, it will only delay the crucial action which is necessary as regards the world's poorest countries.
The immediate need, on which progress is possible, is to deal with the debt overhang of the poorest countries in sub-Saharan Africa. That is why I particularly welcome the emphasis which the right reverend Prelate put on that in introducing his Motion. It is possible to do something about the target. The United Kingdom Government have had a good record in the argument, but the Government, the NGOs, the Churches and all of us must keep up the pressure to get something done.
3.49 p.m.
Baroness Lestor of Eccles: My Lords, I, too, am delighted that the right reverend Prelate has chosen this subject today partly because it is important, partly because interest in it has grown over the years, but in particular because it enables me to make my maiden speech on a subject in which I have had a long interest. It is an interest which I hope to sustain.
In opposition, I was twice my party's spokesperson on aid and development, as we called it then—a task now so ably carried out by my right honourable friend Clare Short. My noble friend Lord Callaghan reminded me, although I did not need reminding, that more than 20 years ago, in the Foreign Office with him, I had responsibility for many of the countries we are discussing today. In fact, it was very much under his eagle eye—I have had the same feeling today actually— that I travelled extensively to see for myself, as many here have done, the poverty in many developing
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countries and what is needed there. No one who has seen it can help but be moved and worried about countries which are hit by the burden of debt and which have been unable to raise themselves out of it.
One recalls the Brandt Report. There is growing interest in those matters today, particularly among the young. We must try to sustain that interest. In many instances, we are talking about the poorest countries. I have visited Mozambique, Tanzania, Zambia, Zimbabwe, Uganda and others. Some are poorer than others, but all suffer from economies which have not flourished. Indeed, in many instances, they have been strangled or at least hampered by the burden of debt in recent years.
My noble friend Lord Callaghan says quite rightly that it is not all gloom. And it is not. We should not present Africa as all gloom because much progress has been made. But the burden of debt is a rope tightening around the neck of countries which are striving to break free. It is never ending because, as we have heard, the poorest countries will not be able to meet their obligations.
I was very pleased when the Prime Minister said:
"International debt reduction will be a top priority. We want the benefits of debt reduction to be invested directly in reducing poverty".
That is very important. The tragedy has been that in many of the adjustment programmes which have taken place to reschedule debts, poverty has been enhanced, not reduced.
Later today, my right honourable friend Clare Short will hold a party to celebrate the launch of the new Department for International Development. In her document she notes that debt is a barrier to the international development which she and so many of us want to see. When a country gets into debt, it must go to one of the financial institutions or to sources of private means which offer further loans on stiff conditions which are often known as structural adjustment programmes. In recent years, some of those programmes have been told to adopt a human face. So attempts have been made, when economies are being restructured, not to rob a country of its seed corn. Often, a country has been robbed of the very thing which the loan is given for in the first place. Unfortunately, the human face has not always been present.
If further loans are sought from a financial institution, that institution interferes in the management of the economy of the country, which undermines sovereignty. Many figures have been given today and I do not wish to add to them. But no one can be content with a situation in which, in 1996, for example, developing countries paid 1.8 billion dollars more in debt service to the IMF than they received in new loans. That is according to the World Bank. It is a tremendous figure with which to come to terms. Since 1987, the IMF has received 2.4 billion dollars more from Africa than it has given in new loans. At the beginning no one anticipated that that would happen. But it did.
About 20 per cent. of the gross national product of sub-Saharan Africa is currently being used for debt repayment. Four times more is spent on debt repayment

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than on health. Today at Question Time, we discussed the issue of HIV and AIDS. One terrible thing in parts of Africa is that there has been progress in dealing with five major childhood diseases—for example, there has been much progress in relation to measles—and yet that progress is now being replaced by children born HIV positive. Noble Lords will be aware that HIV and AIDS is a major killer in Africa. If health and education programmes are cut in structural adjustment, we deny people access to the very thing which could educate them and help to lift them out of vulnerability. In Tanzania I saw education cut as a result of structural adjustment programmes. Everything is undermined as a result, and that is not the way forward.
Mention has been made of the highly indebted poorest countries. We were all pleased when, in 1996, the financial institutions took a big step forward by agreeing a comprehensive remit and reschedule of the debts of up to 40 countries, the really poor countries which cannot pay and are not in a position to pay. But, as we have heard, to date no country has gained relief.
Uganda will gain some relief next year. But few will be helped by the year 2000, which is what we are talking about today. It is a very worrying situation. Uganda is due to pay 200 million dollars in debt service in 1998. She will be offered 20 million dollars as relief from that burden by the initiative we are discussing. That is not enough if we hope to lift Uganda out of poverty and misery.
I believe that this debate is very timely. We have a new government, new initiatives and much more knowledge of what is taking place in relation to developing countries. There is a recognition that it is not all gloom. However, for some countries, unless debt relief takes place and unless more help is forthcoming and an appraisal is made of what is happening as regards the financial institutions, many countries and many people will continue to suffer.
Children in developing countries have the right, first, to live. Many die without ever having had the opportunity to live. They have a right to be educated so that they can be part of a new attitude and new changes. Of course, they have a right to a future. Sadly, the way in which we have dealt with some debt in the past means that they have been robbed of that. We must look again and ensure that those children are given their chance.
3.58 p.m.
The Lord Bishop of Leicester: My Lords, on behalf of the whole House, I have the privilege to congratulate the noble Baroness, Lady Lestor of Eccles, on her maiden speech. Making speeches in Parliament is not, of course, a new activity for her as she held ministerial office and she has also been her party's Front Bench spokesman on several matters, including overseas development. Given that background, it is not at all surprising that we benefited this afternoon from the noble Baroness's, wise, informed and powerful speech. I thank her for it.
My contribution to the debate is more modest. I should like to focus on a single country—Zambia, in central Africa—where I worked in the 1970s. Those
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were good times. Copper prices were high. I was teaching at the local university and money was not too much of a problem there. It was more difficult for some missionaries; for example, Father Denis, his wife and his family. They lived at the local rate. They supplemented their meagre income with home-grown food. They loved Zambia so much that they took out Zambian nationality and they are still there.
Life became more of a struggle in the 1980s as the country went through harder times. Father Denis and his family tightened their belts. Father Denis then reached his 65th birthday and a miracle happened. Unknown to him, the Mission Society back here in Britain had been paying National Insurance contributions for him. So, at the age of 65, he qualified for a UK pension. Indeed, from being the poorest man in town he became the richest. Why? That happened because he had a regular supply of foreign exchange. Something quite dramatic had happened to the kwacha, the local currency; it had totally collapsed. When I was there in the 1970s, £1 sterling would buy two kwacha but today £1 sterling will buy around 2,000 kwacha—a dramatic collapse.
Through his UK pension, Father Denis had a modest number of pounds to spend every month. With that exchange rate he had kwachas galore. I am sure that he is spending them on behalf of the many people in his community. However, while that collapsing exchange rate was perhaps good news for Father Denis, it was bad news for other Zambians. They do not have pounds or dollars to spend, but they need them to buy vital spare parts for their machinery, fuel for their transport, specialised raw materials, or medicine for their children. Without the latter, business and the country fall apart.
It is not just inflation that has crippled a country such as Zambia; so has its debt burden. Zambia now owes £4.5 billion in unpaid debt—that is, £565 per head for every man, woman and child and more than three times what a person can earn in Zambia in a year. Being realistic, there is no way that that debt could ever be repaid. Out of every £10 that Zambia receives in aid, £7 goes in trying to repay the debt burden. They are walking quite slowly up an escalator that is racing down and taking them down with it.
Of course, Zambia is not alone in its predicament; indeed, Africa as a whole spends four times as much on debt repayments as it does on healthcare. For every £1 of aid given by the developed countries, Africa pays £3 in debt servicing. Meanwhile, even though African nations have achieved a 50 per cent. increase in the volume of their exports since 1985, the cumulative loss of the purchasing power from those exports, due to price changes on global markets, amounts to over £50 billion. So the end result is individual despair and social breakdown. A country in such a state has really had only one choice: to turn to the IMF and the World Bank and ask for help to service their debts.
Those organisations will help, provided that the countries take their structural economic medicine, which means forcing open local markets to wide competition, massively devaluing local currency—as happened in Zambia—raising local interest rates, privatising state assets and cutting government spending on health,

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education and other services. In return, inducements are offered in the form of hard cash and external finance to help repay the debts. But the end result is that a debtor government loses all ability to manage their own affairs. The question is: does this medicine ultimately benefit the country or does it further weaken it, leading it further into debt and dependency?
Your Lordships will have heard of a medical report produced after a piece of experimental surgery which read that the operation had been a great success but that, unfortunately, the patient had died. Sadly, it seems that that might be the prognosis for countries such as Zambia taking the IMF/World Bank medicine. Therefore, it might just be helpful to try the complementary medicine that Jubilee 2000 suggests; namely, the creation of debt reduction packages and, in particular, the remission of the unpayable backlog of the inert debt of the poorest countries.
Commercial creditors in nations such as ours have generally already made provision against the non-payment of debts—debts which they partly brought upon themselves by over-lending in the 1980s. Indeed, some have already received tax relief on those provisions for bad debts. Then also, as part of the debt reduction packages, there will need to be hard-headed arrangements to prevent future over-borrowing along the lines described by the right reverend Prelate the Bishop of Oxford. No one pretends that this will be easy, but it can be done and it could be the medicine which might keep us all alive. Certainly the Bible says that it is rather good.
4.6 p.m.
Lord Judd: My Lords, the right reverend Prelate the Bishop of Oxford has done the House a service by providing us with the opportunity to debate this vital issue. His courage and leadership in bringing his Christian conviction to bear on the humanitarian challenges of our time is invariably challenging. I must add a word of appreciation for the outstanding maiden speech of my noble friend Lady Lestor. I can say with all honesty, both in and out of Westminster, that I have had no closer personal or political friend throughout my life than my noble friend. It has always been challenging to witness not just her intellectual and political commitment but also the principles of integrity and consistency, mentioned by my noble friend Lord Callaghan, which she has made central, without seeking any publicity, to her personal life. In our family, the fact that my noble friend is godmother to my youngest daughter is something that we have all come to appreciate and love.
When I completed my service as director of Oxfam, I was angry about the feebleness of political leadership in the world. It seemed to me to be utter madness that the poorest countries should be compelled to make debt servicing their highest priority—often at the cost of environmental responsibility—rather than building sustainable economic and social systems which would obviate their need to seek loans in the future. Worse, it seemed to me criminal that the poorest people of the world, who suffer appallingly inadequate health, education, housing, sanitation and water provision,
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should have to carry the burden of settling irresponsible debt too often accumulated by cynical rulers in the past—rulers frequently helped to, and sustained in, office by the great powers of the world, sometimes as pawns in the Cold War; indeed, rulers who had quite literally looted their own countries. It seemed to me that the big economic players in the world could not exonerate themselves from responsibility for what had happened and now they were doubling their guilt by punishing the innocent victims.
A particularly depressing paradox was that those very multilateral financial institutions which had been set up at the end of the Second World War as part of a strategy to ensure a better world should themselves be grinding the poor of the world by their insensitive and counter-productive debt policies. That is why the advocacy of organisations like Christian Aid, the Catholic Fund for Overseas Development and Oxfam is so essential. Speaking with the authority of their experience in frontline engagement they seek to cure the illness, not just to ease the pain, and to right the wrong, not just to hide some of the most obscene and unpalatable evidence of what has happened, thereby becoming accomplices to perpetuating the injustice.
Debt of the kind we are debating today is not just a matter of macro-economic policy: it is central to immediate acute human suffering and a direct cause of malnutrition, sickness, infant mortality, short life expectancy, and of mere miserable existence rather than living fully. It is therefore refreshing to hear our new Secretary of State for International Development, Clare Short, with all her status as a Cabinet Minister, repeatedly state that her department is about the elimination of poverty. A key chapter in her forthcoming White Paper must be one establishing how the Government propose to deal with debt, just as another must deal with the closely interlinked issue of environment. In writing the debt chapter she will be able to draw on the groundwork done by Kenneth Clarke as Chancellor of the Exchequer in the previous government who consistently recognised the significance of debt in the fight for a more decent world and repeatedly tried to set the pace in international deliberations. It is clear that on this issue there is no slackening of commitment by Gordon Brown. All who have had the opportunity to talk about debt with our new Chancellor bear witness to his self-evident moral and intellectual concern. I attempt the current style: Clare and Gordon; in Cabinet; a strong combination; Prime Minister supportive; results.
The facts requiring urgent action speak for themselves. In Mozambique, where one in four children dies before the age of five, debt servicing in 1996 absorbed double the amount allocated to current expenditure on health and education. In Zambia, with infant mortality rates rising, more than four times as much is spent on debt servicing as on health. In Ethiopia, where more than 100,000 children die annually from easily preventable diseases and fewer than 40 per cent. of the population has access to the most basic health facilities, debt repayments are again four times as great as public spending on health. In Niger, at the bottom of the human development index, life expectancy averages only 47 years—we should

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think of that—and only 14 per cent. of the nation is literate. Nevertheless, debt servicing takes more than the combined budgets of health and education. In Nicaragua, where 75 per cent. of the population live below the poverty line, debt repayments exceed the total social sector expenditure. In Bolivia, where over 90 per cent. of the rural population exist in poverty, debt repayments this year are three times greater than the spending allocated for the fight against rural poverty. All this is not to quantify the economic short-sightedness of putting debt servicing above sound, environmentally friendly economic investment for the future.
Against that background it was encouraging when last September at the annual IMF/World Bank meeting agreement was reached on the highly indebted poor countries initiative. Many applauded when the Bank's president, Jim Wolfensohn, proclaimed the initiative to be,
"good news for the world's poor".
It was welcomed as introducing a new type of so-called "exit strategy" based on reducing debt stocks to sustainable levels through a one-off operation. As my noble friend Lord Callaghan indicated, many had reservations that the time-frame for implementation was unnecessarily long; that the eligibility criteria were unduly stringent; and that the finance provisions were at best unclear and at worst disappointingly inadequate. However, there was a widespread disposition to see the developments as highly encouraging.
However, as the right reverend Prelate the Bishop of Oxford said, nine months later the mood has changed. Sadly—because I believe him to be genuine— Wolfensohn's words begin to look hollow. He appears to have difficulty in driving his commitment forward. The indications are that, shamefully and nonsensically, his board does not see debt relief as a priority issue. The initiative seems to be being implemented more with a view to minimising the costs to creditors than to maximising the benefits for debtors. Poverty reduction remains of marginal concern. Some of the most powerful in the Group of Seven, Germany, Japan and Italy, of course, opposed the initiative from the outset. Now, lamentably, as the noble Lord, Lord Hunt, pointed out, they have been joined by the United States, previously a strong supporter, using its influence on the boards of the IMF and the World Bank to delay implementation and minimise the level of debt relief provided.
Uganda, usually recognised as exemplary in its record of economic reform, has seen its debt relief delayed from 1997 to 1998 at what the Ugandan Government calculate as a cost of 193 million US dollars over the next year; in other words, six times the national health budget. In Bolivia, the combination of a delayed completion date for debt reduction and the IMF/World Bank's decision to set debt sustainability thresholds at unrealistically high levels will cost the country around 241 million US dollars. For creditors, that is peanuts; for Bolivia the sum is twice the national health budget and 17 times the projected spending on rural clean water and sanitation. At this rate there is little prospect of the
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global debt crisis being resolved until well into the next decade. Some heavily indebted and impoverished countries such as Guyana, Honduras, Benin, Mali and Chad may well be excluded from debt relief on the basis of the narrow financial criteria.
The initiative so warmly welcomed only last autumn may already have lost credibility with governments in the south. Countries which are expected to undertake painful economic reforms need incentives for good behaviour rather than more obstacles to climb. It is therefore essential that the Department for International Development's White Paper, supported by the Chancellor, should be designed to regenerate the highly indebted poor countries initiative and to give it real momentum. I hope it identifies new mechanisms, including some sale of IMF gold stocks, to finance earlier and more far-reaching debt reduction for eligible countries.
The White Paper should above all spell out the relationship between debt relief and poverty reduction. Debt relief is not an end in itself. Indeed, financial discipline is critically important to sustain economic performance, and inadvertently to undermine it would not be helpful. What debt relief should be about is a part in a coherent strategy for poverty elimination. Debt relief should be negotiated in such a way that it always has a direct impact on poverty. Uganda has already indicated a willingness to enter into an agreement with her creditors ensuring that debt relief is translated into investment in the country's action plan for poverty eradication. Instead of putting all the emphasis in debt relief on strict technical compliance with IMF priorities alone, equal significance should be given to convincing commitment to measurable targets for poverty reduction. Governments seeking debt relief should have to demonstrate beyond doubt how they will use the released resources for poverty reduction and should be required to enter into binding agreements to give this effect.
Whatever the pros and cons of all the detail in what Jubilee 2000 argues, those involved deserve unstinted admiration for having helped us so well to highlight such a crucial issue. Christian responsibility requires action; social justice demands action; and future world stability will be undermined without action. The Prime Minister favours action. Now all that we require from government is action. There is every reason to be confident that, with the present combination of Ministers in Cabinet, we shall get it.
4.17 p.m.
Lord Prys-Davies: My Lords, the right reverend Prelate the Bishop of Oxford has done a great service to the House, to the country and to a billion people living in the poorest countries in the world in opening a debate which focuses on the problem which we have been discussing for the past hour and a quarter.
For my part I am also grateful to the charity Christian Aid which represents the British and Irish Churches not only for the background information which it has sent about the problem but also for its campaign in support of the initiative which is embodied in the Motion before

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the House. I look at the expertise of the Members of your Lordships' House who have spoken and who are to speak in this debate. I have no expert knowledge and therefore I shall not detain the House with a long speech. However, I should like to think that in a modest way I am voicing the opinion of those thousands of people who contribute financially in a small way to Christian Aid.
The right reverend Prelate the Bishop of Oxford has spoken in clear terms about the moral issue; namely, the injustice of the poorest countries in the world, particularly in the sub-Saharan area, being required to pay huge interest and capital repayments to wealthy, mainly G7 countries. He then called for urgent and radical steps speedily to remove that injustice. I use the word "radical" because in his speech there was a radical suggestion to which I shall come.
It has been said, rightly, that the prevailing burden of debt may have been the fault of uninformed politicians in the newly independent countries, doing their very best, who received the loans, or it may be due to the corruption of local presidents, Ministers and dictators who borrowed more than was wanted, or squandered what they had borrowed on the purchase of arms or other prestige projects which were not needed by their people. But we cannot deny that a measure of responsibility rests on the terms on which the loans were made by western countries and the international agencies, and on the advice which the western countries and the international agencies offered to the new and uninformed governments of those countries as to whether or not those loans were appropriate to the needs of their countries.
By today a vicious circle has been created. Contractual repayments of interest and capital mean that less money is available to diminish the poverty of the people who had no say in those agreements. Less money is available to spend on health, education and industrial investment which are so badly needed. That in turn makes it more difficult to lay the foundation for a better future. That is the vicious circle that I see.
It is a sad commentary that this is not in a sense a new problem. I recall listening in your Lordships' House in the early 1980s to the late Lord Seebohm drawing our attention to the debt crisis affecting poor countries of the world. But it is a problem which has become much bigger, affecting more countries. In April last when my noble friend Lord Judd, who is by my side and who has borne some of the heat and burden of relief work, asked what progress had been made in reducing the multilateral debt burden of developing countries, the then Minister, the noble Lord, Lord Mackay of Ardbrecknish, said that the Government agreed that there was a problem to be addressed. I have no doubt that that was so. The Minister then said that the IMF and the World Bank would be putting forward proposals at the April 1996 meeting of the Development Commission. That was 15 months ago. It is a matter of concern—it has been expressed on all sides of the House today—that the HIPC initiative which emerged, welcome as it was, is inadequate. It is inadequate for the detailed reasons which the right reverend Prelate the Bishop of Oxford gave to the House.
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Perhaps I may draw the attention of the House to a few statistics about Uganda. In Uganda one in five children dies before the age of five from preventable diseases. That means that 398,000 children under five die per annum. Thirteen thousand women die in childbirth every year. I wonder how many centuries we have to go back in the history of Britain before we have comparable figures. Those statistics reflect a disturbing state of affairs. I believe that that state of affairs carries dangerous risks for the countries. Moreover, that an undernourished child under five with an undernourished mother should die is an affront to human dignity.
Uganda has received a promise of HIPC minimal relief next year. It is welcome of course, but it means no more than that instead of repaying 200 million dollars in 1998 she will repay 180 million dollars. The evidence from Mozambique, Tanzania and Ethiopia is broadly similar to the sombre experience of Uganda.
What is now to be done? The Motion indicates the components of a solution along the Marshall Aid lines of 50 years ago. That, at least, is how I understand the Motion. As my noble friend Lord Callaghan told the House, the remission of the debt would not bring immediate prosperity. But it can probably do more than anything else to help destitute nations build their economies. And if relief is not to hand, we fear that poverty will grow upon itself with consequences which we cannot foresee.
What is new and novel in the speech of the right reverend Prelate the Bishop of Oxford is that there should be in international law a procedure, a mechanism, comparable to or based on the principle of bankruptcy law in the domestic setting which has proved to be so workable in coping with debt. That is new. As a solicitor in the valleys of South Wales, I know that bankruptcy law makes it possible for the individual bankrupt to draw a line below his debts, and, as the right reverend Prelate the Bishop of Oxford said, to begin a new, unencumbered life. I found that concept particularly attractive.
The statistics from Uganda in effect signify that many of the countries of sub-Saharan Africa saddled with huge debts of unpaid interest on principals are bankrupt, but international law, unlike domestic law, provides no procedure to enable a debtor country to draw a line below its debts. Neither is there a receiver in international law who can look objectively at the debtor's position. The IMF is both a creditor and a receiver; and I suggest that that cannot be right.
The direction must be towards eliminating poverty of the poorest countries rather than alleviating their poverty—a distinction of which I believe the Secretary of State, Clare Short, is fully aware. If the Government desire help from the public to enable them to move forward in the desired direction, I hope that this debate, with the encouraging detailed comments of my noble friend Lord Callaghan, will have been a contribution. I hope that my noble friend on the Front Bench has been instructed by his right honourable friend Clare Short to be sympathetic to this Motion.
4.28 p.m.
Lord Rea: My Lords, I, too, thank the right reverend Prelate the Bishop of Oxford for initiating such an important debate. I thank and congratulate my noble friend Lady Lestor for her spot-on maiden speech. I also welcome my noble friend Lord McIntosh to the world of international development. He is becoming our all-singing, all-dancing spokesman. Perhaps that is appropriate since he answers Questions on heritage, I think, more than any other subject. I know that he will have been listening, and will continue to listen, to all noble Lords and will respond as well as time and the data available to him will allow.
This debate is also useful to the Government since it provides them with an opportunity to flesh out before the autumn White Paper on international development how their thinking is developing. My right honourable friend Clare Short has stated that our poverty-focused view of international development is not merely a question of overseas aid but will incorporate to an important extent the crucial role of world trade and the issue of international debt.
As many noble Lords said, the previous Government recognised the importance of debt in international development and took a few very useful initiatives, starting with Trinidad about seven years ago; and more recently, as my noble friend Lord Judd and others said, Kenneth Clarke proposed the use of gold reserves to reduce multilateral debt. I hope that we can take over that baton and gather more allies around us in taking the approach further forward than the previous Government succeeded in doing.
The HIPC initiative, discussed by nearly all speakers and described clearly by the right reverend Prelate, was, to give it its due, the first time that the international financial institutions relented a little on the principle that no debts to them could ever be written off or even reduced (written down). As pointed out in the right reverend Prelate's analysis, this initiative is proving too little, too late.
One of the early (though perhaps not early enough) benefactors of the HIPC is to be Uganda. As if anticipating this debate (Uganda seems to be the country in the news, as it were, in this debate), the Guardian today has a special section on Uganda. It is quite upbeat in its tone, with the underlying aim of encouraging investment and tourism. Reading between the lines, which describe Uganda's undoubted success in economic recovery, there are some less happy stories. Universal primary education (UPE) was one of President Museveni's electoral pledges. That laudable aim has led to a near doubling of school enrolment in one year, from 2.6 to 5.1 million. I should like to quote from an article in today's Guardian by Andrew Meldrum entitled, "Class is for everyone". The article states:
"The flood of students has filled Uganda's primary schools to bursting point, as evidenced by the students spilling out of Kyalusowe's first grade classroom.
'We are very happy with our new students and they are welcome', says Joseph Muyaja, deputy headmaster of the school … 'Last year we had 540 students and now we have 850. But we don't have
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enough teachers. For a teacher to teach more than 100 students, that's practically impossible' … some classes must be held outside under the trees.
'It doesn't work on rainy days', says Mr Muyaja … Then we must crowd all the students inside.'
The overcrowded, under-equipped situation at Kyalusowe School is matched at virtually all of Uganda's 8,500 primary schools".
What can be said for education can also be said for primary healthcare.
That is the reality of a situation in which seven times as much is being spent on debt servicing as on primary education (and 10 times as much as on primary healthcare). As my noble friend pointed out, simple measures save lives in a country with a very high child mortality rate. Oral treatment of diarrhoea and immunisation can make an enormous difference and are very cheap. There are many other countries, mentioned by noble Lords, where debt servicing costs are higher than the proportion of the national budget that can be devoted to social purposes.
Obviously the United Kingdom cannot by itself dictate the policy decisions of the international financial institutions. However, we can state the case and build alliances for widening the eligibility criteria for entry to the HIPC. One of those criteria is the need to follow the structural adjustment programmes of the IMF for two periods of three years—a situation which, as the right reverend Prelate showed, is impossible for many of the poorest countries to achieve.
We should also argue the case for deepening as well as widening the HIPC scheme, so that countries cannot merely achieve sustainability (the ability to go on servicing a slightly reduced debt) but have the burden lifted to such an extent that they can divert (or devote) the resources used to service debt to essential development which may possibly lift them right out of their historically acquired debt. (That may be a Utopian prospect when we consider that the United States has a debt of something over 1 trillion dollars. On the other hand, it has assets to balance that debt.)
The IMF has always imposed economic conditions and now speaks also of social sector conditionality—a laudable change but, as other noble Lords said, possibly "a bit rich" coming from the same source as structural adjustment programmes, which, as my noble friend Lady Lestor pointed out, have led to a decline in social spending and a reduction in the standard of life.
However, as my noble friend Lord Judd said, there is a need to ensure that debt relief measures do result in social sector expansion—or at least protection, and preferably great improvement. That has been called for for nearly 10 years by many economists and writers such as Susan George in 1989, in her book A fate worse than Debt. She called for a "3D" solution—debt, development and democracy—whereby indebted countries were allowed to pay back interest and principal over a long period of time in local currency and credit that to national development funds controlled by "authentic" representatives of the people working with the state. That was too Utopian to be accepted widely, but some "debt for development" swaps have

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been carried out, and some "debt for equity" swaps, as mentioned by the noble Viscount, Lord Torrington, over the years, mainly with commercial debt.
Oxfam has incorporated some of Susan George's ideas of over a decade ago into the fifth part of its Agenda for Reform, upon which my noble friend Lord Judd expanded; namely, to integrate poverty reduction incentives into debt reduction schemes. It states:
"Countries willing to engage in a dialogue aimed at converting debt relief into poverty reduction initiatives should be rewarded with an accelerated time-frame for debt relief".
To increase the finances for heavily indebted poor countries initiatives from 5 billion dollars over an eight-year period—which is what is proposed—to a 10 billion dollar sum by, for instance, the sale of gold reserves would largely enable the HIPCs to break free of the stranglehold in which debt holds them today.

NATO Summit
4.40 p.m.
The Lord Privy Seal (Lord Richard): My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Prime Minister on the NATO Summit in Madrid on 8th July. Copies of the Declaration which was agreed, of the separate statement on Bosnia, and of the NATO/Ukraine Charter, which was signed this morning, are being placed in the Library of the House. The Statement is as follows:
"The main outcome of the summit was an invitation to Poland, the Czech Republic and Hungary to begin accession talks with NATO with the aim of joining the alliance by the 50th anniversary of the Washington Treaty in April 1999. This is a historic decision, and a step of huge importance, which I am confident will be widely welcomed in this House and indeed across Europe and the alliance. We aim to negotiate a protocol of accession by the end of this year. This will need ratification by all NATO members, as well as by the prospective new members. We shall of course ensure that there is a full debate in this House before British ratification.
"Successful NATO enlargement has been a key objective of both the previous government and this Government. If we can get this right, it will make a major contribution to security and stability in Europe by bringing in countries of central and eastern Europe to one of our key institutions. Our priority was a manageable and limited enlargement, involving credible candidates with reliable democratic credentials and a real ability to contribute to collective security. As I said in yesterday's discussions, NATO is a military alliance, not a political club, and its collective defence obligations have to be taken with the utmost seriousness.
"We were, of course, conscious of the sensitivities of candidates who might not be asked to begin negotiations this time, and of others, like Russia, who might fear the consequences of enlargement for them. We also wanted to ensure that the NATO door would
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remain open for future enlargements. We therefore strongly favoured an enlargement of three countries at this stage.
"I should say a particular word about Romania and Slovenia, whose applications were especially closely considered, even though there was no consensus to invite them on this occasion. Both countries have indeed made remarkable progress. Romania's new government deserves particular congratulation on the steps taken since they took office last November. A number of allies would have liked to see Romania and Slovenia included among those invited at Madrid. All, including ourselves, saw them as strong candidates for any future enlargement. But we felt that Poland, the Czech Republic and Hungary were the limit for current enlargement. I warmly congratulate them.
"There will of course be a financial price to be paid, mostly by the new members but also by existing members of the alliance. We believe this cost will be manageable. For example, there is no reason why Britain's contribution to NATO budgets, currently some £155 million per year, should rise significantly in real terms.
"There were, of course, other disappointed applicants. We recognised, for example, the progress achieved towards greater stability by the states in the Baltic region. NATO leaders agreed that they expected in the years ahead to extend further invitations to nations willing to take on the responsibilities of membership and whose inclusion would serve the interests of the alliance and enhance overall European security. We made clear our intention to intensify dialogue with aspiring members.
"NATO's relationship with all its partner countries also took on a new dimension with the establishment of the Euro-Atlantic Partnership Council in May. Today's meeting with the heads of partner countries has been taking place under the aegis of the Partnership Council.
"Relations with two partners deserve particular mention. NATO leaders underlined the historic achievement represented by the Founding Act between NATO and Russia, signed in May in Paris. Good future co-operation with Russia is vital for Europe's security.
"In Madrid, we took a further important new step by signing with President Kuchma the NATO/Ukraine Charter, which provides for intensified consultation between the alliance and Ukraine. Ukraine's independence and sovereignty are vital to European stability and the agreement with her is a further move to consolidate her key role in Europe.
"We also looked at progress on the alliance's internal adaptation, in particular the development of a new command structure. The aim is to reach final agreement by the time of the December ministerial meetings. Against this background, we warmly welcomed Spain's readiness to participate fully in the alliance once agreement on the new command structure has been reached. I should underline that,

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while we want to see Spain contributing fully to alliance security, we are determined to ensure that the interests of Gibraltar are fully safeguarded in this process.
"We also discussed Bosnia, and expressed particular concern about the political crisis in the Republika Srpska. We called on those responsible to resolve their differences peacefully and demanded that the police in Republika Srpska comply fully with all provisions of the Dayton Agreement. We also again urged the leaders of the region to deliver those indicted for war crimes for trial at the International Tribunal in The Hague. This issue must not and will not be put on one side.
"Finally, we agreed on a further NATO Summit in April 1999 to mark the 50th anniversary of the Washington Treaty. That treaty has proved its enduring value in keeping the peace in Europe. But NATO has also shown its continuing relevance and its ability to adapt to changed circumstances. NATO must continue to evolve and change as the security situation in Europe changes. The agreement on enlargement at the Madrid summit is a further important step in that process. It is an agreement which meets all of the objectives we sought to secure. I commend it to the House."
My Lords, that concludes the Statement.
4.46 p.m.
Viscount Cranborne: My Lords, the House will, as usual, be grateful to the noble Lord the Lord Privy Seal for repeating the Statement. Arising out of what the Prime Minister said in another place, perhaps I may ask the noble Lord whether he will be able to assure the House that he too will arrange for a full debate before the UK ratifies the protocol of accession. As the Prime Minister—and the noble Lord—said, it is an extremely important element which I am sure this House would like to discuss.
The extension of the NATO alliance to the east was an important objective for the past Government, as it is for this one, as the Prime Minister acknowledged in his Statement. We therefore particularly congratulate the Government on their role in bringing that objective to fruition. After all, the NATO alliance constitutes a raft of security in an unstable world. I believe that European security is still the key to world stability.
So, we certainly welcome the agreement, which enables Poland, the Czech Republic and Hungary to join the alliance, and we congratulate them, just as the Government do, on their imminent accession. It is equally important that the door is held open for other countries, notably Slovenia and Romania. We welcome the sentiments expressed in that regard also in the Statement.
I am sorry that the success of NATO expansion was not matched by success in expanding the European Union in the same year. After all, the two matters are intimately linked, as I am sure the noble Lord, the Lord Privy Seal, would agree. Does he agree that the Partnership for Peace initiative played an important part
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in the process that led to this step in the expansion of the alliance and that the Partnership for Peace initiative should continue to play a role in other countries which are not yet members or who may never become members?
Meanwhile, we welcome the noble Lord's confirmation that NATO is an organisation with a hard edged purpose and in particular that Article 5 of the original treaty provides that an attack on one member should be regarded as an attack on all. I wonder, therefore, whether he could expand a little on paragraph 7 of the Declaration which states:
"Admitting new members will entail resource implications for the Alliance. It will involve the Alliance providing the resources which enlargement will necessarily require".
I wonder whether the noble Lord could tell the House what will be the real cost to the three successful candidates themselves? Equally important, can he expand a little on the assurance given in the Statement about the costs to our own defence budget?
The Statement says that there is no reason why our contribution to NATO budgets should rise significantly. Perhaps the Minister can explain why the Government are able to take that view and give us some reassurance, particularly in the light of the defence review that they are undertaking. Can he also advise the House whether our increased contribution—significant or otherwise—will reduce our capabilities elsewhere? If so, is that trade-off worth having? It may well be.
I noticed that paragraph 2 of the declaration refers to,
"building a European Security and Defence Identity within NATO".
As the Lord Privy Seal is aware, we support that aspiration. However, can he explain to the House how that clear use of the word "within" squares with that part of the draft Amsterdam treaty which refers to possible plans to integrate the WEU into the European Union? I thought I detected a clear reluctance on the part of the Government to accept that aspiration during the course of the report to both Houses of Parliament on the negotiations at Amsterdam. However, since it is clearly possible that at some time the Government may have to choose between two incompatible objectives, can the Lord Privy Seal assure the House that, if presented with such an uncomfortable choice, it is the Amsterdam aspiration that they will reject? If he can give the House that assurance, can he explain to the House how, once the Government have signed the treaty, they will go about rejecting that aspiration rather than what is contained in the Madrid conclusions?
I am glad too about what was said in relation to Gibraltar. We fully support any efforts the Government make to bring Spain and France back into the integrated structure of NATO, but not at any price. I hope that the Lord Privy Seal will be able to assure the House in rather more specific terms than the generalities contained in the Statement about the interests of Gibraltar, that there will be no weakening of the constitutional guarantees to Gibraltar which this country has already given.
In relation to Russia, clearly we agree with the sentiments of the Statement that the relationship with Russia is an important one and it is clearly right that it

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played an important part in the deliberations in Madrid. Does the Lord Privy Seal agree that this is an extremely delicate path for NATO and the allies to tread? Russia must of course be seen not to have a veto over the activities of independent nations; but we must welcome Russia's emergence as a free nation and, increasingly, as a partner for the West. We must not discourage that process and must only hope that the Madrid participants have judged correctly what is clearly an extraordinarily difficult balance.
I particularly welcome what the Prime Minister said in relation to the Ukraine—a country whose geopolitical importance is becoming increasingly apparent. We welcome the special declaration in relation to Bosnia and, most notably, once again it gives me pleasure to take this opportunity to pay tribute to the role of British troops in Bosnia—a role about which I was able to learn at least a little when I was privileged to be a junior defence Minister and an occasional visitor to that unhappy country.
I wonder whether the Lord Privy Seal can tell us in particular whether there was any discussion in plenary session or marginally in the Madrid conference as to whether the United States is prepared to extend the deadline for withdrawal of its troops from the middle of next year. Quite apart from anything else, Bosnia has shown that NATO's European members can only proceed in conjunction with the United States of America if NATO is to be an effective alliance. Some of us may feel that Bosnia has been the most difficult test that NATO has faced so far in military terms.
Finally, we welcome what has been achieved at Madrid. However, as the Lord Privy Seal will be aware—I suspect none more so than he—the nature of threats to security is fast changing. The questions of the Russian Far East, for instance, and of central Asia go far wider than NATO's immediate geographical limits; they concern Russia and many of the south European and central Asian parts of the former Soviet Union. Equally, the risk of proliferation of weapons of mass destruction is becoming increasingly serious. Can the Lord Privy Seal tell the House whether such matters will form an integral part of NATO's agenda between now and the next summit in 1999 and, indeed, at that summit itself? It is important that NATO continues to show that it can adapt to changing circumstances in good time.
From this side of the House we will do whatever we can to support what is self-evidently a good cause in an uncertain world.
Lord Wallace of Saltaire: My Lords, we on these Benches welcome the Statement as a further step in the transformation of NATO from the Cold War alliance towards the European security organisation. I regret that NATO slid towards that enlargement by a series of steps in the course of which we have granted Russia half membership of the organisation. We have followed the United States' lead and many of our European governments, including our own, have so far failed to explain to their public or their parliament the rationale for NATO enlargement as such.
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Our always excellent Library obtained for me yesterday from the Internet one publication issued this year which actually sets out the rationale for enlargement. It is a US government report to Congress on the enlargement of NATO. So far the British Government have not provided anything similar to their Parliament or public and I very much hope that they will. We do not simply want a debate in both Houses of Parliament; we want an explanation of the overall approach to enlargement, as the noble Viscount, Lord Cranborne, said, both of NATO and the European Union as to how those two linked processes contribute towards the construction of a stable European international order after the Cold War.
In that context we need to know the answer to a number of questions. What, if anything, is the role of the Organisation for Security and Co-operation in Europe? Does NATO begin with Russia as a half member to replace the OSCE? What is the future of the treaty on conventional forces in Europe, which will have to be amended? How far, as the noble Viscount, Lord Cranborne, suggested, do we see NATO in the future as a global alliance under US leadership or, alternatively, as a security organisation for this region?
I was in the NATO headquarters last Monday and was struck by the extent to which the alliance is already changing. They were talking about constructing extra wings to the building; about where they will fit in the Russian and Ukraine delegations and the others who will come. The Belgians, ever keen to make sure that they stay, are talking of offering a different site altogether within Brussels. That is fundamental change.
I am reluctant to accept, without comment, the suggestions in the declaration that it was our priority as the British Government that Poland, the Czech Republic and Hungary should be the limit of the current enlargement. It is clear that that was an American priority and the British followed uncritically the American demand that there should be only three new members on this occasion because, they argued, only three would get through the Senate in terms of ratification.
I should like to express some unease with the idea that NATO operates by consensus. That is less and less clear. NATO operates by American leadership and by the Europeans accepting that they should follow. I express also a little unease in relation to the press comment about the Madrid European Summit; it related to the extent to which the British Government have appeared to be the main cheerleader for following the Americans whatever they say and criticising the French in public for the position in which they currently find themselves. That is partly their own fault, but it is in our interests that France should, following Spain, also be integrated into the alliance.
Like the noble Viscount, I should like to ask a little more about cost and burden sharing, in particular how far the cost will fall upon the new members. After all, it is not ideal in terms of their adaptation to democracy and economic growth that they should now be spending large additional sums on defence, let alone that they should be spending large additional sums on purchasing

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new major weapons systems. There is a good deal in the American press about how major American companies are currently doing their utmost to sell to the Poles, the Czechs, the Hungarians and others F-16s, F-22s and so on. That does not seem to be in their best interests.
Future enlargement is now clearly on the agenda. As the Statement suggests, we are talking about enlargement perhaps within the next two, three or four years; possibly by current members of the European Union, Austria, Sweden or Finland; certainly now that we have made half promises to Romania and Slovenia that they will be in the next round; and then, in the long run, there is the whole question of what we do about the Baltic States and the other south-eastern European states.
I hope that within the next few months the Government will provide us with their view of the future overall strategy which they will be pursuing not only under American leadership but also with their European partners towards the construction of a stable, new European international order and of how NATO enlargement as one of the aspects of that will contribute.
Lord Richard: My Lords, I am grateful to the noble Viscount, Lord Cranborne, and the noble Lord, Lord Wallace, speaking on behalf of their parties, for the welcome they have given to the outcome of the summit. I cannot forbear from making the point to the noble Lord, Lord Wallace, that occasionally he might concede that the Americans are right. It is also conceivable that we have arrived at an independent conclusion that the Americans might be right and that therefore it is in our interests, just as much as in everyone else's interests, that we and the Americans should pursue a common policy in relation to a given issue. On this issue, to use the kind of language that he used about the way in which our decision was arrived at and the way in which it was presented in Madrid is putting it much too high. The noble Lord had his debate yesterday on this point and indeed these views were expressed vigorously from different quarters of the House. I can only say on behalf of the Government that we do not recognise them and we reject the implications behind them.
I was asked a number of detailed questions, some of which I can answer. I was asked about costs. Precise details of the costs will be worked out now that we have a decision as to which countries should or should not join. I can tell the House that preliminary NATO work gives us confidence that the costs will be manageable, but we now have to confirm that. There will of course be costs for new members but it is very much in their interests for their economies not to be distorted by excessive defence spending. Enlargement will not require that. Our forces are already well suited to the alliance's strategy of reinforcement so we do not expect enlargement to mean significant extra costs for the United Kingdom. I cannot go further than that at this stage.
The noble Lord asked about the relationship between NATO and the European Union. The two organisations are totally separate. NATO will decide, on the basis of what it considers its common interests to be, which
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countries should be asked or invited to become members of it. The same is true of the European Union. The noble Lord asked about the relationship between NATO and the Amsterdam summit, particularly that part of it which related to EU-WEU integration. One of the important points the Prime Minister made when he returned from the IGC was that we preserved the primacy of NATO in European defence. That was the object of the exercise and that we succeeded in doing. We rejected moves towards a European Union common defence. We successfully rejected the integration of the WEU into the European Union unless and until we all decided otherwise. We ensured that common defence policy would be carried out by WEU and that it should respect NATO obligations.
I do not see the difficulty that the noble Viscount, Lord Cranborne, was sketching out. The two organisations—the European Union and NATO—will no doubt develop. When they develop, it would be very foolish if one organisation paid no attention to what the other organisation was doing. But the idea that somehow we shall be forced, at some unspecified date in unspecified circumstances in the future, to take an as yet unspecified decision as between one and the other is one I would reject.
The noble Viscount asked for reassurances on Gibraltar. I give those reassurances gladly. The British policy on Gibraltar remains precisely the same.
The noble Lord, Lord Wallace, said that we had not taken the opportunity to explain to people why NATO required enlargement. Perhaps I may read one paragraph of the communiqué:
"The Alliance recognises the need to build greater stability, security and regional cooperation in the countries of southeast Europe, and in promoting their increasing integration into the Euro-Atlantic community. At the same time, we recognise the progress achieved towards greater stability and cooperation by the states in the Baltic region which are also aspiring members. As we look to the future of the Alliance, progress towards these objectives will be important for our overall goal of a free, prosperous and undivided Europe at peace".
Perhaps I may condense that into a sentence. The Government and NATO as a whole saw enlargement into eastern Europe as a potent force for attempting to ensure stability in that part of our continent. We took the view—and NATO as a whole took the view—that at this stage three was probably about right. We said that the doors may well remain open in future, particularly as far as concerns Romania and Slovenia, and we paid tribute to the progress that they had made and also to the progress that the Baltic states had made. It seems to me that that was a reasonable, sensible and balanced approach to the problems of enlargement and the problems posed by enlargement.
Noble Lords asked about a debate. Without consulting the business managers, I am sure I can commit the Government to having a debate in this House before integration. I am sure that would be right.
5.7 p.m.
Lord Wright of Richmond: My Lords, I wish to ask the Lord Privy Seal about one aspect of relations with Russia. Can the Government give any assessment, in the

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light of the Madrid Summit and in the light of the agreement with the Ukraine, whether they see any early progress in strategic arms reduction and limitation?
Lord Richard: My Lords, in the NATO communiqué there are one or two sentences in which we urge the Russians to ratify START II and commence negotiations on START III. The Russian response to that is not one I have yet seen. However, now that this enlargement decision has been taken, I hope that things may settle down a little and that it may fall on fruitful ground.
Lord Taylor of Gryfe: My Lords, the noble Lord, Lord Wallace, raised an important point in connection with costs and the implications for rearmament in Europe. My noble friend has already dealt with the question of anticipated costs of membership, but it is generally agreed that the defences of the new members are not modern and in defence terms not adequate. Do I assume that in addition to the burden of paying for membership of the club, the new members will incur as an obligation substantial expenditure in equipping themselves with new and modern arms? If that is so, it would represent a burden on the part of those countries which, with their other obligations in terms of rebuilding their economies, could be very serious.
Lord Richard: My Lords, I recognise the point that my noble friend makes. These are essentially matters for decision by the countries concerned. It is not for us to tell the Poles, the Hungarians or the Czechs that it is not in their interests to do something which they clearly decided was very much in their interests and which they have been anxious to do for some time.
I cannot go further on costs than I did in my response to the noble Viscount, Lord Cranborne, which is that we do not expect them to be crippling to the economies of those three countries. I believe I also said that we realistically hope that they will not amount to a great deal of increased defence expenditure on their part. There will obviously be some costs. They will have to adapt to the military structures of the alliance: they will have to accept a common command structure. There are a number of issues here which clearly have to be dealt with. If those countries are in favour of membership it would be very bold of us to say nay.
Lord Boyd-Carpenter: My Lords, I do not know whether the noble Lord gave an undertaking that this House will have an opportunity to debate the Statement. The question was put to him, but I was not clear as to his answer. I very much hope that there will be an opportunity for full debate on this extremely important matter.
Lord Richard: My Lords, I hoped that I was clear. I believe I was so bold as to say that I was prepared to give an assurance, without even consulting the business managers, that there would be a debate on the ratification of the Protocol of Accession. So there will be a debate and everybody will have a full opportunity to have their say.
Lord Judd: My Lords, clearly security and stability in Europe are about more than just military alliances. In
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view of the need to reassure those in Russia who see or choose to interpret the expansion of NATO as a threat, and in view of the need to have good, constructive and helpful relationships with the majority of those in the former communist empire who are unable to join NATO at this stage, was any time given in Madrid to discussing the role of the OSCE and how it can play a constructive part in overcoming these anxieties, even if they are only imagined, and promoting economic and social stability in the wider community?
Lord Richard: My Lords, the short answer is that I do not know. I shall try to find out and when I do I shall write to my noble friend with the information. The concerns that he expressed are perfectly valid and I believe they are shared by a large number of people, not excluding this Government.
Lord Rea: My Lords, can my noble friend say what the effect of this new agreement will be on the treaty for the reduction of conventional forces in Europe both on our side and the Russian side?
Lord Richard: My Lords, I think I can—when I find it. NATO tabled proposals on 20th February for the adaptation of the CFE treaty to the new circumstances in Europe. The NATO proposals tabled are compatible with the joint approach to CFE adaptation negotiations agreed by NATO and Russia and included in the founding Act. The NATO proposals are really two main objectives: one reducing the amount of arms in Europe as a whole; secondly, abolishing the old bloc-to-bloc structure of the treaty and moving to a system of national limits to reflect the new Europe. We believe that adaptation of the CFE treaty in this way will be a very important element indeed in the wider transformation of Europe's security architecture and in particular the evolving relationship between NATO and Russia. Negotiations on CFE treaty adaptation are indeed continuing in Vienna.

Jubilee 2000 Scheme
5.15 p.m.
Debate resumed.
The Earl of Sandwich: My Lords, we return to the very important issue of international debt. It is a pleasure to support the right reverend Prelate the Bishop of Oxford as one who has shared part of his experience of international development, and having myself served with Christian Aid, Save the Children, CARE and others working with Africa's poorest over the past 20 years. It is also encouraging to hear that there is so much consensus on this issue, not only in this Chamber, but also in another place. It was very encouraging also to hear the maiden speech and the sincerity of the noble Baroness, Lady Lestor.
It is said that there is always something new from Africa, but that does not necessarily mean something good. Optimism and faith in new solutions will not sustain any economy, and many areas of Africa are still

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under the shadow of civil war—the "darkness" so mercilessly described by Conrad—and the distorted nationhood so bitterly and lucidly attacked by the Nigerian writer, Wole Soyinka.
And yet with that caveat I believe that important political changes are taking place and it is time that European politicians came out again to talk positively about African economic development. The French Foreign Minister, M. Hubert Védrine, said a fortnight ago,
"We have totally to rethink our policy; the whole of Africa is on the move … France must be supportive of the movement in Africa towards emergent economies and democracies".
I am sure that the Government have taken heart from that statement by the new French Government.
The Economist recently described Africa as a "potentially emerging market" for the West. As we have heard, Africa's economy enjoyed a 5 per cent. growth rate last year compared with 3 per cent. in 1995. The African Export Import Bank has crudely put this down to,
"the strength of adjustment policies"
and "good weather conditions". I believe that we can add "human endeavour".
However, as we have heard, these broad statistics can often conceal the truth. They do not say, for example, that the poorest and most indebted countries, for whom we are holding this debate, are dependent on volatile commodities like coffee, cotton and sugar to earn their foreign currency and not on metals and petroleum which do comparatively better. They do not say that, according to the Overseas Development Institute, 60 per cent.—and we have heard a lot of figures—of the aid which flows into national earnings in the poorest developing countries, so desperately needed, is being taken out to service international debt. As has been said, the problem was again identified at the Denver G8 Summit, which focused on Africa and produced Britain's welcome new aid initiative.
Conditional aid and trade under such positive schemes as the 20:20 compact, the post-Lomé negotiations and structural adjustment programmes, are almost irrelevant without debt relief, which incidentally is not the same as an aid programme—not in the UK at any rate. I hope the Minister will confirm that it has been, and will remain, additional to the aid budget bearing in mind that 95 per cent. of debt in this country is ECGD-related. Unless something more is done soon by ourselves, the moneylenders, we are condemning the poor in these societies to gradual starvation.
The Debt Crisis Network and the World Development Movement remind us how urgent all this is. I take just two most indebted countries as an example. Mozambique—which I once visited in the midst of a civil war from which it is still earnestly trying to recover—was being asked for nine-tenths of its export earnings to pay for its debt servicing until it obtained 67 per cent. relief on its Paris Club debt under the Naples terms, as we have heard. It is now hoping for 80 per cent. relief on that debt if it meets the conditions. Tanzania, which has enormous potential for
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economic recovery, has also received 67 per cent. relief on Paris Club debt but is not likely to receive any more. In the case of countries like Uganda and Mozambique this relief only applies, I am told, to debt up to the cut-off dates of 1981 and 1984 respectively.
The ability to pay is obviously linked to the wider African economy and to political and economic reform. There have been a lot of moves lately to encourage outside investors. The change of government in Kinshasa has offered some hope of democratisation in the Congo. There is new leadership in the Horn of Africa. There have been gradual improvements in Southern Africa.
South Africa has acted as mediator in various African conflicts and is cautiously taking its pan-African responsibilities seriously. This is one reason why Washington has shown so much interest in Africa of late and has launched a major new Africa initiative. Another is that South African investors have been moving rapidly into central and east Africa.
There has been a mood of democratisation and Africanisation. President Mandela's address to the Zimbabwe Parliament on 19th May offered a challenge to our perception of Africa. "The time has come," he said,
"for Africa to take full responsibility for her woes, use the immense collective wisdom it possesses to make a reality of the ideal of African renaissance …
"It is a renaissance that must mean that Africa refuses to be a passive onlooker in a changing world, hapless victim to modern machinations of the forces historically responsible for her woes.
"Only in this way can Africa assert her right to be an equal partner in world affairs. Indeed, we have the right to claim and the obligation to ensure that Africa occupies her rightful place in the new world order in the making".
It is easy to dismiss President Mandela's words as an old warrior's rhetorical stirring of African feeling. Of course, we recognise he has a job keeping alive the ANC's aspirations in bringing home solutions. But look at his record. He has not only triumphed over one of the world's foremost evils, the apartheid state—without much help—but he has renewed in all of us a sense of moral obligation and a desire to continue the essential process of eradicating poverty, increasing security and providing leadership in that great continent. His recent forays into the Congo and other internal disputes make clear that he is determined, in the years left, to succeed where others have fallen.
We can understand what he is saying to Africa, but what is he saying to us? Let us look at the basic thesis that Africa should help itself. This, of course, reinforces the need for the OAU, ECOWAS, SADCC and other regional or international bodies to take more of the initiative, but at the same time it suggests that Europe should move away from the great power game towards this Africanising process, strengthening local African institutions instead of camping in its safe areas of mineral wealth, motorways, city elites and tourism. Is this not the real point of the African renaissance, that Europe has always pandered to dictators and hideous regimes if they suit its own purposes?
Surely that strengthens the case for good governance, democratisation and the liberal economy. Mandela and Mbeki, like Museveni, Kabila and others, seem to

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embrace pluralism and the new African realism of structural adjustment and free enterprise, but they see it also as an awakening of the skills and initiative that exist among the unemployed and in the townships. Of course, they need foreign investment, like every other state, but they must release the energy of the people too—people who have been waiting for their chance to join in the economy. That can be done through a variety of non-governmental channels—there is no time to rehearse them here—as well as through large enterprises. I believe that the Commonwealth is vital in assisting with that process.
In conclusion, I have two questions for the Minister. Now that we have heard what France says—but perhaps we have not heard it in full—does the Minister believe that the European Union is genuinely doing enough to support the process of democratisation in Africa by strengthening civil society and promoting democratic institutions outside, as well as inside, the centres of power? I am not talking here of human rights, which I regard as a separate, parallel exercise. Secondly, can the Minister guarantee that supporting those severely indebted countries in Africa through trade and investment as well as aid and debt relief will be a priority in the much-heralded new White Paper since there is a human as well as an economic imperative to help them?
5.24 p.m.
Lord Taylor of Gryfe: My Lords, this has been a splendid debate. These Benches have pricked our moral conscience on an important matter. We have had some excellent advice also from the Conservative Benches. The noble Viscount, Lord Torrington, speaks with expertise gained from dealing with international financial adjustments. However, I regret that there has been only one speaker from the Conservative Benches. I hope that that does not represent any lack of concern about the very important issue before the House. Those who have spoken have revealed a range of experience and knowledge. We have heard from people who have exercised power and authority in government as well as from those who have been involved with non-governmental organisations and in related activities.
Yesterday, the noble Lord, Lord Elton, asked a Question about the Christian content of the millennium celebrations. It occurred to me that this issue should be the highlight of our Christian commitment to dealing with the major problems in our society. This should be our celebration because the aims of Jubilee 2000 are important. But they do not concentrate on the whole question of debt which is a very complicated matter. Jubilee 2000 seeks to make a particular gesture at this time by saying that we are concerned by the issue of debt and recognise that we have to do something immediately.
Jubilee 2000 proposes,
"a one-off cancellation of the backlog of unpayable debt for the world's poorest countries—which either cannot be paid, or can be paid only with enormous human suffering. This wouldn't set a precedent for cancelling all debts repeatedly. Rather, it would be a once-only gesture to mark the millennium, a gesture showing that creditors and debtors alike have made mistakes and that the slate
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needs to be wiped clean. This would change millions of lives, without taking away the responsibility of debtors to pay their future debts".
The complications involved in sorting out world debt and the question of the World Bank initiative will require careful consideration and are important, but all we are discussing today is whether this nation should commit itself to supporting the Jubilee 2000 objective.
There are moments in history when you have to make a stand—and that stand can change the course of history. I was involved in relief work after the war and in the rebuilding and reconstruction of Europe. The great gesture at that time which changed the whole course of European history was the Marshall Plan, the 50th anniversary of which we celebrated the other day. That gesture was made at a time when Europe had been devastated, countries had been destroyed and the whole structure of the continent was in the melting pot. The impact of the Marshall Plan changed the course of history. I suggest that we have now reached such a situation.
Many noble Lords have spoken with intimate knowledge of the debt situation in Africa. They have indicated that there is a crisis. Not only does the debt situation affect millions of lives but massive social problems flow from it. There is insecurity in the world. One cannot possibly have any security or stability in a world that is so unevenly divided. There will always be a danger of war. One cannot solve the massive problem of refugees without relating it to poverty and instability in debt-ridden countries. We face a crisis that requires a major gesture, and it is good that we should make that major gesture. At the end of the Second World War when I was involved in relief and reconstruction work, this country devoted 1 per cent. of its GNP to the relief of suffering in other countries that it felt were worse off. We have never hit anything like the 1 per cent. target since. That was what we did and we all felt better for it. We were a better, more moral and less selfish nation. I hope that with new politics, new Labour, and the changes that have taken place in the political atmosphere after 1st May, we are ripe to take a new direction and to make generous gestures.
I wish to say one word about a related matter: the arms trade. The instability of the world creates a demand for arms. The excellent briefing note from Jubilee 2000 quotes the ex-president of the World Bank:
"Arms are often a prime source of external debt—military aid accounts for a third or more of total debt service in several large developing countries".
We are very active in the provision of arms. Britain uses the Export Credits Guarantee Department to subsidise arms sales in the south. In 1993–94, 50 per cent. of all export credits provided by this country to exporters related to arms sales. We cannot stand by and say that debt is a problem when at the same time arms sales are a consequence of it. So long as there is instability in the world, arms manufacturers will ply their trade. I suggest that in making this commitment to Jubilee 2000 we should recognise that we have committed sin as well as others. For example, if one compares arms purchases with

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expenditure on health services, The Economist, which has already been quoted today, has stated:
"Worldwide public-health spending on a malaria vaccine, for example, has been estimated at just $60 million in 1996. That for a disease which kills around one million people, and affects between 200 million and 400 million others, every year. Of those deaths, 90 per cent. are in sub-Saharan Africa".
Private spending is making little contribution in this area. We cannot regard ourselves as a caring Christian world unless we get our priorities right. In this case our priorities are to do several things: first, to popularise and support Jubilee 2000 and give it effect; secondly, to examine our responsibilities in arms sales; and, thirdly, in the long term to take a continuing interest in the situation in Africa by following the advice of my noble friend Lord Callaghan of Cardiff and to regard this matter not solely as a matter of debt but to make it possible for the people of Africa to help themselves. That will be done by creating trade and providing markets for their goods as well as dealing with the immediate problem of debt.
5.36 p.m.
Lord Cocks of Hartcliffe: My Lords, I thank the right reverend Prelate the Bishop of Oxford for introducing this debate. I very much appreciate the activities of the Bishops in arousing interest in the problems of our fellow creatures in other parts of the world.
Twice I have been present in your Lordships' House when your Lordships have adopted a Procedure Committee report which states that noble Lords must severely curtail the compliments and congratulations conveyed to maiden speakers in the interests of saving time. No one takes a blind bit of notice of this decision, and nor will I. It is a great pleasure to congratulate my noble friend Lady Lestor. She is an old colleague of mine. I am pleased to pay great tribute to her integrity and steadfastness. Such is her sensitivity that when we were in government preparing a questionnaire and one or two of the questions were quite sensitive, although the matter did not fall within her remit I insisted that she see the matter herself and approve it before it was published. I said that if it satisfied my noble friend it would be all right for everybody else.
I have been interested in the subject of world poverty for over 40 years. During the first famous constitutional by-election of the right honourable Anthony Wedgwood Benn in Bristol he tried to conduct the meeting as a series of seminars. I was one of the so-called specialist speakers and I spoke on this topic. That occurred nearly 40 years ago. It was one of the first acts in a very long and fruitful political relationship that I have had with the right honourable gentleman the Member for Chesterfield.
When I first spoke on this topic these countries were referred to as backward nations. It was realised that this was virtually insulting, and they were then referred to as "underdeveloped". That was also unsatisfactory and was regarded as patronising, and they became "newly-developing". However, that greater appreciation of the respect and consideration that are due to those countries has not been mirrored in the same way in the economic field.
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My noble friend Lord Taylor referred to the percentage of GNP spent on overseas aid following the war. Noble Lords who like myself grew up during the war will recall that all kinds of commodities were in short supply and were rationed. The one item that was never rationed was bread. However, the post-war Labour Government introduced bread rationing because people in other parts of the world were starving. I find it difficult to imagine such an idea being proposed today, yet it was done at that time and some of the grain went to our former enemies. I wish that we could get back to that kind of spirit now.
One of the reasons why I opposed the Common Market was that in my view it was wrong to establish a rich man's club of industrialised nations at a time when world poverty was such a problem. I do not believe that that point was fully appreciated at the time. If that burgeoning of the Common Market were accompanied by an increased distribution of resources from abroad it would not be so bad, but I am afraid that that is not happening. There is something else overlaid on that, because apart from the two previous speakers, the debate has been rather compartmentalised.
One of the great problems we now have is the protection of the environment. We are asking those countries which are not well off to restrict their consumption of fossil fuels; to take care of the environment. They say, "Well, you have had 200 years of doing all that. You have done most of the damage which exists. Now you are lecturing us and saying that we cannot do this, that or the other". There is a danger of being cast into a neo-colonial phase which will make our efforts in other fields difficult.
The statistics from Christian Aid and other sources have been useful. I shall not weary the House with a further discourse on them. But a fact which has hardly been touched on is that the provision of relief cannot be separated from the observance of human rights. I have in the past spoken in your Lordships' House about human rights in sub-Saharan Africa, particularly in relation to Sudan. The most reverend Primate made an extremely powerful visit to Sudan which encouraged everyone who is struggling with the problems there.
The human rights situation in Sudan, as noble Lords will know, is desperate. Like other countries, Sudan has an enormous debt. Some estimates put it at 16 billion dollars. Yet Sudan is being removed from the IMF. Of course grounds for removal are its poor human rights standards.
Because of the intransigence of the Sudanese Government, the people are suffering economically as well as in all sorts of other respects. That has been drawn to your Lordships' attention on many occasions, particularly by the noble Baroness, Lady Cox. On 18th January 1994 she referred to reports of detention and torture in ghost houses and the enforced Islamisation of people so that the distribution of relief and food was made almost conditional upon a conversion. In the same debate, the noble Lord, Lord Avebury, spoke about how the militant Islamists had destroyed all the institutional structures which

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underpinned the democratic system. The most reverend Primate spoke about the lack of fundamental human rights.
It is important to consider that issue in the round because there is a package here which does not apply just to economic matters. Human rights occupy a great deal of our time, and are dealt with in one or two of our newspapers. However, it is a limited form of human rights. It is limited to the UK basically. I sometimes wonder what people think of us. Like many noble Lords, I knew people who were killed in the war. I sometimes wonder what they would think now of the descriptions applied by some people to the country for which they fought and died. To listen to some people talking one would think that we live in a police state. I wish that some of the intellectual energy of highly gifted people who talk about human rights could be diverted abroad, because that would be an enormous transfusion of encouragement and effort to people who are trying to address the problems which we have here today presented.
It would be a catharsis in a way if we could combine all those issues which relate to the world, its population, its resources and its problems in one great thrust. I congratulate the aid agencies on what they are doing, in particular the voluntary work that is going on. If we could open our vision a bit and think about human rights abroad and the responsibility to try to do something about them, and the way in which lack of human rights cramps the chances of improving people's standards of living, and all that together with economic aid, that would be a great advantage. I thank again the right reverend Prelate for giving us the opportunity to debate the subject. I hope that some more thought can be given to widening the whole issue.
5.45 p.m.
Lord Redesdale: My Lords, I thank the right reverend Prelate for initiating the debate. I recognise the work that the Churches are undertaking in spreading worldwide the message that debt is becoming unsustainable. At the same time, I welcome the work of Jubilee 2000 and the debt crisis network, both of which have campaigned hard to raise public awareness of the debt crisis that the developing world faces. I take the lead of the noble Lord, Lord Cocks, and welcome the noble Baroness, Lady Lestor, and congratulate her on her maiden speech. It is heartening to welcome her to the small, happy band of Peers who regularly take part in debates on development issues.
As many noble Lords have pointed out, if unsustainable debt is allowed to continue to accumulate in the way that it has over the past decade, then there is little hope that any of the most highly indebted countries will ever be able to escape the poverty trap that spiralling debt creates and sustains.
Poverty in the most highly indebted countries will never be addressed as long as the richer countries believe that it is more important for debt commitments to be met than that there should be provision for even the most basic health care or even primary education in developing countries.
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Until recently, the multilateral institutions failed even to admit that the debt burden was unsustainable. The best that most countries can achieve is to attempt to pay the interest charges with little or no provision to pay off the capital sum. Most foreign aid is now supplied so that the existing debt burden can be serviced rather than contributing to the basic social provision which is so desperately needed.
The increase of 427 billion dollars in the long term debt of countries between 1985 and 1992 is accounted for by 220 billion dollars paid as interest, with a further 205 billion dollars added to the debt as unpaid interest. It is clear that much of the debt which should be remitted is the product of interest rather than of new principal disbursements to the debtor countries.
There is a commonly held misconception in this country that aid to developing countries is a charitable contribution. Few voters realise that a large proportion of foreign aid is provided so that developing countries can service their debt commitment. An indication of that—I mean this with no disrespect to the noble Lord, Lord McIntosh, who is sitting on the Front Bench with his Treasury hat on rather than his Department for International Development hat, if he has one—is that the cause of the debt crisis was initially based on the ill-considered borrowing that took place in the 1970s. It was borrowing based naïvely on the assumption of permanently stable interest rates of below 10 per cent. but also fuelled by the banks which needed to lend petrodollars and were lax about the criteria under which they would lend their money. The noble Lord, Lord Hunt, covered that issue.
There is an argument which suggests that if the developing world had been unable to borrow that money there would have been a severe financial crisis in the West. That point relates to the issue raised by the noble Earl, Lord Sandwich, who linked the lending of large sums of money to African dictators for political rather than for financial reasons.
Another reason why the scale of debt was ignored was the view that a country could not go bankrupt. Financial mismanagement by the poorest countries and political instability mean that the 41 countries on the HIPC list are, to all intents and purposes, bankrupt. The blame for that bankruptcy may rest with those countries. However, to a large extent, it must be extended also to those who lent the money. One of the questions that can be asked is to what extent borrowing countries are responsible for debt taken out by predecessor governments.
The noble Viscount, Lord Torrington, raised the issue of military debt and said that perhaps it should not be forgiven. An ironic situation arose in Zimbabwe when it was forced to pay to South Africa the debt of the Rhodesian Government for the military hardware used against the Zimbabweans in their struggle for independence.
The World Bank and the IMF are by far the largest creditors and should be the first rather than the last to act. The HIPC is the first attempt at addressing the problem. "We have adopted a very important initiative … we are ready to start immediately and ministers have

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urged us to do so." Those were the words of the IMF managing director Michel Camadessus speaking on the adoption of the highly indebted poor country initiative last September. They echo the sentiments put forward by the World Bank president, Mr. Jim Wolfensohn.
The HIPC was to target 41 of the most indebted countries. The draft agreement was given the optimistic title, The Solutions Paper. That is ironic because seven months on, the HIPC has achieved almost nothing. Instead of attempting to inject any urgency, the IMF, Germany, Japan, Italy and the US, seem to be actively delaying any form of implementation. Indeed, the US is pushing for an even harsher agreement on structural adjustment programmes, the pain of which the right reverend prelate the Bishop of Leicester pointed out. The US is pushing for the implementation of further structural adjustment programmes because it believes that they worked well in Poland. However, there is little correlation between the situation in Poland and that in many of the sub-Saharan African countries. It is also ironic that Japan and Germany, which were beneficiaries of the Marshall Plan after the Second World War, should be dragging their feet. As they were so greatly advantaged by debt relief it is ironic that they are not at the forefront in pushing for it.
The criteria under which any government can apply to benefit under HIPC are so stringent that even Uganda, which has adhered to structural adjustment programmes for the past 10 years and would be a prime candidate for immediate consideration, will now have to wait until April 1998 to be considered, with a completion date of not earlier than 1999. The noble Lord, Lord Judd, pointed out that the delay to Uganda will cost 193 million dollars, more than double the projected spending on education.
As the noble Lord, Lord Callaghan, pointed out, Uganda is a best-case example. Most countries deemed eligible for debt reduction will see no benefits until after the year 2000 because of the requirement that candidates undertake six years of economic reform under the IMF auspices. The experience of Uganda suggests that flexibility will be applied by creditors principally to extend the period of eligibility.
Assuming the earliest likely dates for debt-stock reduction by the Paris Club, Ethiopia will not qualify for HIPC debt reduction until the end of the year 2000; Nicaragua, the world's most heavily indebted country, will not qualify until 2001; Mozambique, Tanzania, Niger and Zambia will not qualify until 2002 and 2003; and Rwanda may not qualify at all and, if it does, it will not be until after 2003.
If the HIPC were to solve the problem of unsustainable debt these delays could be accepted. However, the scale of remission is far too limited; 8 billion dollars over 10 years with as few as 10 countries even being eligible for the programme within the next three to six years. The noble Lord, Lord Prys-Davis, pointed out that 1 billion people are suffering due to international debt. That can be seen perhaps as an unacceptably small solution to their problems.
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I realise that in one respect, in speaking to the Government I am preaching to the converted. As Clare Short, the Secretary of State, said, the Government are giving their full support to the heavily indebted poor countries debt initiative. The aim is to give the poorest, most indebted countries a once and for all exit from their debt problem. I urge her to push as strongly as we did under the previous Government and to take a lead role in pushing other countries for debt remission.
The debt problem has a very human face. Several noble Lords mentioned Mozambique. I went to Mozambique during the civil war and was lucky enough to be one of the observers of the elections after the war. It is incredible that in a country in which hardly a building stands, having been shattered by the war, and hardly a bridge is in existence, we counted between two polling stations 15 miles apart 36 people who had obviously stood on landmines and had only one leg. It is astonishing that in a country so desperately poor so much money should be sucked out by international institutions.
I have three questions for the Government. To what extent will they be pushing in the international fora for debt relief? Will there be any specific action at the G7 meeting in Birmingham next year? Are they proposing to put any debt-related issues on the agenda in Edinburgh later this year?
The right reverend Prelate the Bishop of Oxford pointed out that it is not only financially prudent that the debt crisis should be solved; it is morally unacceptable that it is not already solved.
5.56 p.m.
Earl Attlee: My Lords, I, too, am grateful to the right reverend Prelate the Bishop of Oxford for introducing the subject for debate. He explained the problem and the HIPC initiative particularly clearly.
Before saying anything substantial, I cannot resist the opportunity of congratulating our maiden speaker, the noble Baroness, Lady Lestor of Eccles. She brings her wide experience of these matters to your Lordships' House. I hope that she will be active and that we will hear from her often. She made many good points and they were well delivered. In particular, she mentioned the difficulty of the SAP—the structural adjustment programme—and how it adversely affects education and health. Education is clearly vital to future prosperity. One of the problems I experienced in Rwanda was the availability, or rather the non-availability, of skilled technicians. Education is the foundation stone for future technical training.
It seems to me that the phrase "heavily indebted poor country" is a bit of a euphemism. Perhaps in many cases it should be called "hopelessly indebted poor country". It is quite clear that some countries have no chance whatever of clearing their debts. Superficially, a policy of simply writing off the debts appears to be attractive. Of course, steps would have to be taken to avoid the problem repeating itself but some noble Lords have recognised that severe difficulties are associated with uncontrolled debt write-off. It would not encourage the affected countries to adopt sensible or sustainable

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economic policies or convince them of the need to push through market reforms. Several noble Lords have accepted that.
A problem relates to countries with severe human rights difficulties. They could receive entirely the wrong message if those problems were ignored. On the other hand, we must break the link between poverty and political instability. Completely unsustainable debt and poverty may be making matters worse.
Another disadvantage with a simple debt write-off scheme is that some countries—and Uganda springs to mind—have made strenuous efforts to overcome their problems. Many noble Lords have noted today Uganda's relative success in getting near to meeting the criteria. What message will those countries which have tried hard receive if they see other countries having their debt written off, despite having made little or no economic progress?
In order to tackle the problem of third world debt, we need to proceed on two fronts. First, we need to encourage international action to help HIPCs service and reduce their debts. My noble friend Lady Chalker led the way in the previous government by cancelling £1,000 million of debts of the poorest countries. I believe it was the noble Lord, Lord Judd, who very kindly mentioned the positive contribution which my right honourable friend Mr. Kenneth Clarke made while in government.
The Minister will be aware that some G7 countries—and some noble Lords have singled out Germany and Japan—are rather hostile to debt reduction for HIPCs. In addition, as has been pointed out by the noble Lord, Lord Callaghan of Cardiff, the US sees a golden opportunity, if that is the right term, to impose heavy conditionality. It seems that the Minister's right honourable friend, Clare Short, will have some real challenges ahead.
I should like to take a few moments of your Lordships' time in order to recognise the achievements of my noble friend Lady Chalker and the ODA, which she led with such distinction. Many noble Lords have far more experience and interest in international aid than I do. It is almost embarrassing. My friend, the noble Lord, Lord Redesdale, is one and another is my noble friend Lady Cox. However, in the two aid missions which I undertook, the ODA was pre-eminent, particularly in the field of logistics. That is fortunate, as it is my own field.
When I talked to ODA expatriate workers on the job, as it were, it was "Lady Chalker this" and "Lady Chalker that". Of course, when I talked to people at a high level, it was exactly the same story. I hope that the Minister's right honourable friend can also acquire such a high reputation because if she can she will ensure that the UK remains one of the most responsible and compassionate members of the international community.
The noble Lord, Lord Taylor of Gryfe, made the point that not many noble Lords are speaking from these Benches. I too am rather disappointed about that and I am disappointed in particular that we did not hear from my noble friends Lady Chalker and Lady Cox. However, these Benches are reasonably well populated
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this afternoon and I expect that the two noble Baronesses are actively engaged in aid work as we speak.
One real problem that I see with the HIPC initiative is the long timescale required to demonstrate economic progress. That point was picked up by many noble Lords. I do not envy the Minister's task of replying to the debate as the case for debt remission has been so well made by many noble Lords. Noble Lords have spoken with great experience of those matters. However, the Minister and his right honourable friend will also have to consider the difficulties associated with uncontrolled debt remission which I have mentioned already. In addition, they will have much to achieve in order to persuade our international partners of the need to make progress.
6.5 p.m.
Lord McIntosh of Haringey: My Lords, it gives me great pleasure to echo the thanks that have been expressed to the right reverend Prelate the Bishop of Oxford for introducing this important debate. There are a number of reasons for doing so: first, his own excellent introduction with its clear exposition of the problems and some of the solutions; secondly, the quality of the contributions, and they are literally from all sides of the House, but I have a bias towards my own side; and thirdly, the marvellous maiden speech of my noble friend Lady Lestor, who combined, as I knew she would and as she always has, moral integrity with complete intellectual conviction and coherence. It was a remarkable speech.
The thrust of the debate has been very much about the moral issues and about idealism. Indeed, that is as it should be. It is necessary perhaps to introduce the Government's position on this by referring back to the tribute which my noble friend Lord Callaghan paid to Clare Short, the Secretary of State for International Development. I want to make the theme of what I am going to say a Written Answer which she gave in another place on 26th June of this year.
As your Lordships know, Written Answers tend to be cool and cautious and probably heavily edited. But even so, what she said echoes many of the concerns expressed this afternoon. She was asked what is the Government's policy towards the proposals of Jubilee 2000 and she said:
"The Government shares many of the objectives of the Jubilee 2000 campaign, including the fundamental one of the eradication of poverty in developing countries. We believe that debt relief should accompany a wider commitment by debtors to create the conditions necessary for sustainable economic growth and lasting poverty reduction. The Chancellor of the Exchequer and I are pushing for full and rapid implementation of the Heavily Indebted Poor Countries (HIPC) initiative. We believe that much remains to be done and are pressing with urgency for the international community to provide further debt relief".—[Official Report, 26/6/97; col. WA 605.]
I suppose that I could sit down at that stage and say that the Government's views have been expressed, but no such luck because there are important issues arising from this debate which deserve fuller comment.
I am sorry to disappoint my noble friend Lord Rea and to confirm what the noble Lord, Lord Redesdale, said—that that comment will be from a Treasury point

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of view rather than an international development point of view. My noble friend Lord Judd said that it is not just a matter of macro-economic policy. Of course, he is quite right, but it is also a matter of macro-economic policy and it is one to which I am obliged to refer because there are economic and financial interests in this. There are economic costs for us all in world poverty as well as the political costs of instability to which reference has been made.
I shall not take your Lordships back at length to Ricardo's theory of comparative advantage, but you will recall that the principle is that even if other countries grow faster as a result of international trade or benefit more, we still benefit. Britain will still benefit from trade with countries which are less efficient at producing many of the things which we can produce, perhaps more efficiently.
Of course, that means that we benefit from successful development, especially in the emerging countries. There are opportunities arising for exports from this country and investment by this country. But we benefit also from successful development of the poorest countries because, after all, they are the emerging countries of the future.
Conversely, we feel the bad effects of a high level of indebtedness, not as much and not as fiercely as the poorest countries do, but we feel them as well because of the deterrence that that brings to inward investment in those countries which could come from this country. Those countries feel it because of the extent to which resources which would otherwise be devoted to investment, and above all to the relief of poverty and to social spending and development, are taken away by the need to service high debts. In the end, that has been the theme of this debate. Virtually every noble Lord who has spoken has done so with deep concern and very often with personal knowledge of conditions in the poorest countries of the world. I think I can say that about every single noble Lord, but I merely pick out a few.
The right reverend Prelate the Bishop of Leicester told us of his experiences in Zambia in the 1970s. A number of noble Lords have experience of Mozambique. The noble Earl, Lord Sandwich, has experience of South Africa. The noble Viscount, Lord Torrington, told us of his travels in a number of African countries. I have referred already to Mozambique, of which the noble Lord, Lord Redesdale, has experience, and most recently, the noble Earl, Lord Attlee, told us of his experience in Rwanda. Indeed, there are many others.
We have had many effective and, indeed, moving statistics mentioned about the degree of poverty in those countries and the degree to which poverty is entrenched and enhanced by the need to service external debt. I am not sure that I follow the complaint of my noble friend Lord Cocks about the compartmentalisation of the debate. I believe it entirely proper that noble Lords should. as they have done, concentrate on our responsibilities, as, indeed, did my noble friend. His speech was also a moving testimony to a lifetime of concern over such matters.
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I turn now to the solution, or I should say the range of solutions, which we have to consider if anything effective is to be done. I believe that it would be common ground for all of us to acknowledge that we need to ensure that when we tackle such problems we do so in a way that they do not recur. We need to be sure that anything we do contributes positively to increasing prosperity in the poorest countries and that the poorest people in those countries have a share in that prosperity. I believe that there is common ground in that respect.
However, I do not believe that we can avoid caring about policies in the countries and we cannot give aid regardless of what happens in such countries. It is a difficult distinction: it is a distinction between the deserving poor and the undeserving poor. Indeed, it is most readily typified by Alfred Doolittle, who, your Lordships will remember, featured in Bernard Shaw's "Pygmalion" as the father of Eliza. He said:
"I am one of the undeserving poor, that's what I am. Think about what that means to a man; it means that he's up against middle class morality all the time. If there is anything going and I put in for a bit of it, it is always the same story: 'You are undeserving, so you can't have it'. But my needs are as great as the most deserving widow that ever got money out of six different charities in one week for the death of the same husband. I don't need less than a deserving man, I need more. I don't eat less hearty than him and I drink a lot more. I want a bit of amusement because I'm a thinking man. I want cheerfulness and a song and a band when I feel low. Well, they charge me just the same for everything as they charge the deserving. What is middle class morality but an excuse for never giving me anything?".
There is the danger of a Treasury position being rather like that. But, all the same, if we ignore the social and economic policies in the countries which we seek to help, we will then deal with debt overhang—yes, that has been a theme of today's debate—but we will not deal with the further build up of debt or with the problem of how the money saved will actually be used for productive policies.
We must be sure that anything we do creates a climate for investment; that it makes certain that there will be primary healthcare and education; and that there will be, as I said, benefit to the poorest people and not to a wealthy elite. That is what we mean by good economic policies. We do not mean to raise the stakes or to complicate the conditions under which we give multilateral help, but we do mean to ensure that they are effectively used for investment, for health and for education. We need to ensure that there are open markets and open trade; that there is low inflation; that there are efficient honest public services; and, as my noble friend Lord Cocks said, that there is respect for human rights; and, finally, that there should not be wasteful military expenditure, as mentioned by my noble friend Lord Taylor and the noble Viscount, Lord Torrington. Those considerations must be taken into account in the way in which we allocate resources.
We must, therefore, be looking to a range of measures to help, and of course debt relief is one of them. But, in addition, there are the other classic development objectives: well-targeted aid, opening our own markets to the exports of the poor countries and encouraging private investment. Perhaps I may also refer to the Export Credits Guarantee Department and remind your Lordships that my right honourable friend Clare Short

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reminded us in a debate in the other place on 1st July that so much of investment goes to the wrong countries, and that the 50 poorest countries in the world attract very little private investment unless there is positive action taken, especially by multilateral institutions, to ensure that such investment goes where it is most needed. So debt reduction—and that is what the debate is largely about—is of course necessary but it is not sufficient. We need to ensure that it forms part of balanced, economic reform programmes.
I move on now to the other great theme of today's debate; namely, the Heavily Indebted Poor Countries Initiative, initiated last year, as noble Lords have said, by the IMF and the World Bank. I should like to emphasise that the initiative is in addition to existing debt rescheduling and sometimes relief programmes both by individual countries for bilateral debt and by the international financial institutions; and, indeed, collectively by creditor countries as members of the Paris Club and other subsequent and previous clubs. The initiative is a long stop rather than the only initiative available to us. As noble Lords have reminded us, it is concentrated mainly on unsustainable debt. The noble Earl, Lord Sandwich, who clearly knows more about such matters than I do, referred to the criterion of the debt to export ratio. I can confirm that his interpretation of it is correct.
However, we cannot—and I believe Jubilee 2000 recognises this fact—talk about the elimination of debt; we need to talk about the reduction of debt to affordable levels. Indeed, Jubilee 2000 talks about a limited number of countries—namely, those with a gross national product of below 2,000 dollars per head per year—and inert debt from the oil decade of 1973 to 1983. I am afraid that all those limitations are necessary. The important point about the HIPC is not that it is the only initiative but that it is the only one in which all the major organisations are participating, the IMF, the World Bank and the Paris Club.
Perhaps I may take the World Bank as an example. After all, it is putting 2 billion dollars into the HIPC, although it is responsible for only 7 per cent. of the outstanding debt. I should like also to mention the Paris Club. There, the prospect of the addition of Russia to the club is very welcome, but we have insisted that the Russians should only join the club on the basis that they recognise and implement their participation in the work of the HIPC.
I acknowledge that there are criticisms to be made of the slowness of some of the procedures and also that criticisms have been made as regards the secrecy of the procedures. However, the getting together of all the major creditors so that help is concentrated on the poorest rather than assisting other creditors—which might otherwise be the case—is the critical feature of the HIPC. Indeed, that is why it was endorsed at Denver by the G8 within the past month.
The right reverend Prelate the Bishop of Oxford reminded us of the millennium aspect of the problem. He told us about the Book of Leviticus and the importance of debt relief every 50 years; and, indeed, that applies even more so with the millennium. But we
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are talking here not about the relief of all debt, which might have been possible in Biblical times, but the relief of debt of exceptional years. The work of Jubilee 2000 and of Christian Aid has been enormously valuable in raising awareness in the United Kingdom of this problem. I humbly suggest to those who have been responsible for this most valuable work that the best thing to do in the next couple of years until the millennium is to exert pressure internationally. This is an international problem. I do not believe that Britain is the worst offender in all of this. I am not a devotee of the concept of sin, but I recognise the fault that exists in all of us as regards the way in which debts have been encouraged.
As has been indicated, the Government will publish a White Paper in the autumn setting out how they will promote sustainable economic development and tackle global poverty. This will be the first White Paper in the development field in over 20 years. The strategy will cover all aspects of our relationships with developing countries. I confirm to the noble Earl, Lord Sandwich, that it will cover trade and investment as well as debt. I do not suggest for a moment that we should just wait for that paper and I do not suggest that the White Paper will be a solution to all the concerns which have been properly expressed. However, the activities that we are undertaking and the views which we have expressed show a recognition of those concerns and a great deal of sympathy with them.
6.21 p.m.
The Lord Bishop of Oxford: My Lords, it remains only for me to thank all noble Lords who have contributed to this valuable debate. I especially thank the Minister, the noble Lord, Lord McIntosh. I am particularly grateful that a number of noble Lords have spoken this afternoon from their long political experience and that others have spoken from their first hand experience of the developing world. It was particularly gratifying to hear such strong support expressed this afternoon from all around the House.
It would be tempting to highlight one valuable point made by every speaker this afternoon. However, there will at any rate be one form of relief this afternoon in that I shall resist that temptation. I simply sum up the mood of your Lordships' House this afternoon by saying that there is clearly widespread concern about this issue. There is a real welcome for the HIPC initiative. The fact that all the major international instruments are collaborating in this way is a new phenomenon. As a number of noble Lords have said, there is disappointment about slow progress, conditionality and the lack of success so far. We must register that.
An important Labour Party document was issued before the present Government came to power. It is entitled A Fresh Start for Britain. It states,
"Labour welcomes discussions within the World Bank and the IMF aimed at reducing the burden of multilateral debt. But we believe that further action is needed if we are to reach a lasting solution to this problem. Labour will press, as a matter of urgency, for international agreement on further write-off of official bilateral debt owed by the poorest countries and more decisive steps to deal with the growing problem of multilateral debt".

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One cannot help noticing the words "matter of urgency", "further write-off" and "more decisive steps". We look to Her Majesty's Government to take a lead on this crucial issue in the years ahead. I am sure that Jubilee 2000, Christian Aid and the other aid agencies will take seriously what has been said about trying to exert pressure on the whole international community. However, they and we very much hope that Her Majesty's Government will take a decisive lead on this issue. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Machinery of Government
6.24 p.m.
Lord Annanrose to call attention to the case for co-ordinating relations between Ministers, political advisers, the Civil Service and Cabinet committees; and to move for Papers.
The noble Lord said: My Lords, ever since the First World War when Lord Hankey set up the Cabinet Secretariat and Lord Haldane laid down the principles governing the accountability of civil servants, British governance has been praised for its efficiency. That is very different from what happens in Washington. There each agency goes its own way in the hope that the President will come down on its side. Lord Halifax once compared American administration to a disorderly afternoon's rabbit shooting: nothing comes out where you expect—and then something emerges from the far end of the field.
In Britain, of course, traditionally policy was made by individual Ministers. They would discuss their ideas with their civil servants who would then consult their colleagues in the Treasury. A paper would then go to the appropriate Cabinet committee. After they had chewed it over, it would then go to Cabinet. So long as there was no change in the law it was up to the Minister and his civil servants to tell their colleagues if policy was being changed.
That was the pattern for making policy before 1979. Mr. Gerald Kaufman accurately described that in the book that he wrote in 1980. Unfortunately, in the 1997 edition of his book, he seems to imagine that it still holds good, but it does not.
The old system had two failings. Few Ministers had the experience of managing a large organisation, and the Permanent Secretary in effect was responsible for the efficient management of his department. But Permanent Secretaries were more interested in enlarging rather than contracting their departments. In the 'eighties fiscal crises forced the Government to insist that government departments should aim to be as efficient as private enterprises in which profit ruled. So internal markets were set up and areas of business were hived off to executive agencies or to quangos.
The second failing was personified by Sir Humphrey. My old colleague from the days of the future of broadcasting committee, Sir Tony Jay, put his finger, in his immortal television series, on a problem that
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sometimes faced Secretaries of State. The noble Lord, Lord Jenkins of Hillhead, relates in his memoirs that when he became Home Secretary he found that the Permanent Secretary would recommend a single course of action. When he asked for the file to see whether any other options had been considered, the Permanent Secretary was outraged. That was why—in part—the Home Office had become the graveyard of several political reputations.
Ministries develop a philosophy of their own. If some outside adviser was infiltrated to put a different slant on policy, he could find himself marginalised; departmental papers mysteriously failed to come his way so that he appeared in conference ignorant and idle. Even more unwelcome was a challenge from inside to the prevailing philosophy because it was very properly laid down that the department must have a single view. In other words, Permanent Secretaries claimed to have a monopoly of advice instead of a claim to co-ordinate advice.
How did Ministers defeat Sir Humphrey? Ever since 1964 (indeed before that) they brought their own political advisers into their departments, or they set up a private office, or their party financed a private think-tank. In the 'eighties special advisers in No. 10 second-guessed the policies individual Ministers put forward. Policy began to be made in No. 10 and departments were told to carry out that policy. Indeed, it became common to announce new policies to the media or to a party meeting before Cabinet had considered the matter.
But perhaps the most notable change was in Cabinet itself. In the old days papers were remitted to official Cabinet committees. It now became customary to remit business to ad hoc committees which the Prime Minister appointed. The official committees no longer met. Oral reports by Ministers replaced the minutes of Cabinet committees. Indeed at one time the Cabinet itself seems not to have discussed policy.
This lack of Cabinet papers drew comment at the Scott Inquiry. The judge said that he could not discover what government policy on arms sales was. Apparently government policy was whatever the Minister said it was. Again, in the row over the Prison Service, Mr. Derek Lewis said that the Home Secretary did not consult him before making or altering Prison Service policy.
That leads to another constitutional malaise. The House well knows what happens if a noble Lord complains about a BBC programme. He will be told smartly that that is a matter for the governors. They were set up precisely to protect the BBC from political interference in its day-to-day affairs. But what happens if there is a break-out from prison? Can the Prison Service be exempt from ministerial responsibility? If the Child Support Agency is alleged to be unfair, can the Minister say that that is no concern of his?
Whole sectors that used to be in departments have been transferred to quangos. Moreover, in the interests of reducing public expenditure, units in ministries have been disbanded, including several in the Treasury itself.

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As a result relations between Ministers and civil servants have deteriorated. Civil servants were once partners to all decisions that Ministers made. It was the duty of civil servants to listen in to their chief's telephone calls. They could save a Minister's time in taking the vast number of decisions he has to take because they came to know his mind. What is more, they were there to protect him from pressure groups, lobbies and crooks. They could also warn him if they thought that he was about to make a decision that could be challenged and lead to a judicial review. A Permanent Secretary would say, "If you do X, Minister, then in all probability Y and Z will follow. Is that what you want?"
Yet one hears of civil servants complaining that they were not called in to discuss the briefs that they had given Ministers. One hears of Ministers giving a paper to Cabinet which his civil servants had never seen. Perfectly reasonably, it seems to me, a Minister may choose to have meetings with his junior Ministers and his parliamentary private secretary without civil servants being present. But to take policy decisions in such a meeting without consulting them is another matter. One hears of Back-Benchers being brought into such meetings who, perfectly reasonably, have a particular axe to grind. That is dangerous because the power of the lobbies grows stronger every year and if a lobbyist can get an amendment to a clause in a Bill his organisation will consider that money has been well spent.
The other problem is consultation. People dislike change in their own bailiwick, even the most remarkable performers. I think in particular of the profession of law. People dislike change, and the offer of consultation is often rewarded by a blank refusal to accept the need for change. But never to consult is equally foolish. The little world in which I have some experience was amazed when the polytechnics and certain colleges were upgraded to universities without any consultation with the universities although that step had immense repercussions on funding, research and the curricula. It was contrary to the organisation of higher education in all advanced countries where distinctions are very properly made between different types of institution.
What has happened? The influence of the Civil Service has declined. Fiascos and cock-ups in governance have increased. The most recent was the BSE affair. It seems that the Civil Service brief was around for months before Ministers considered it. When the crisis broke, Ministers did not have time to review the evidence. They called in various people to give evidence unsystematically, and I thought that they were stampeded by public opinion. Not until far too late were European relations considered. And that disaster is still with us, and costing millions of pounds.
The most spectacular disaster was the poll tax. I do not wish to go over that ground again. But I think that one thing should be said. It is clear that if one does not consult local authorities—they were never consulted during the whole process—one will be in great difficulties. It is clear that the checks and balances in our unwritten constitution were insufficient to avoid the calamity which cost the taxpayer £2.2 billion.
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There is one particularly difficult problem in public administration. How can one have proposed legislation properly considered when more than one department is concerned? For instance, the item "reducing unemployment" requires an input from the DfEE, the Treasury and the DTI. There are others that noble Lords can easily bring to mind.
Considering this matter, Sir Christopher Foster suggested in a recent paper that a new kind of Cabinet committee, a task force, should be set up. Each department would be represented by a Minister and the chair should be taken by a non-departmental Cabinet Minister. He should act not as an independent, impartial chairman but as a broker between the departments. Whereas other committees respond to papers put to them by Ministers, task forces should take the initiative and put forward papers and solutions themselves and work to deadlines.
From what I hear the present Government are addressing themselves to some of those problems. Official Cabinet committees were reinstated by Mr. Major, but I hear that now on each of them sits a member of the Policy Unit at No. 10. When the Minister winds up, I wonder whether he could tell us how this Policy Unit at No. 10, under the chairmanship of the Minister without Portfolio, works? Is it there to put questions to departments? Is it there to consider the evidence resulting from consultation and then to ensure that a Bill is drafted that is logical and acceptable—in other words, to judge what the public will wear? Is it for departments rather than the Policy Unit now to put up policies and draft White Papers? Who now sets the Government's timetable and establishes deadlines for legislation? Will the Policy Unit supervise the work of departments? Will it assess their efficiency?
Are the advisers in No. 10 primarily concerned with policy, or—since many have had careers in the media—are they more concerned with ensuring that Bills and White Papers are acceptable to the electorate? In fact, are they superior public relations advisers studying polls and other devices to discover what Rousseau called the General Will?
Finally, will the Minister without Portfolio act as the presidential chief of staff does in the White House? That is to say, will he act as a gatekeeper to the Prime Minister?
I am not asking these questions with hostile intent. Nor am I blaming previous Administrations for all the diseconomies of the past 20 years. When the noble Baroness, Lady Thatcher, was Prime Minister, she had good reasons for making some of the changes in the country's governance. All I want to do this evening is set the stage for others who are far better informed than I. The House is awash with noble Lords who have first-hand experience as former Ministers or distinguished public servants; or, like the noble Lord, Lord Beloff, have pondered on these matters for years. I am a historian; and, as we all know, historians are wise only after the event—and sometimes not even then.
My Lords, I beg to move for Papers.
6.40 p.m.
Lord Beloff: My Lords, we should thank the noble Lord, Lord Annan, for initiating a debate on the important topic that is before us but we should regret that the hopes expressed in the final paragraph of his remarks have clearly not been fulfilled, for although the House comprises many people with long experience in the public service, they have not seen fit to speak in the debate. That is much to be regretted. It reminds the House once again of the great loss sustained in the premature death of Lord Bancroft.
I find it even more difficult since it means that there are no Members here who can assist me in trying to penetrate the mixture of dogmatism and insinuation that marked the treatment by the noble Lord, Lord Annan, of recent history. Some of it was very familiar; some of it was new to me. I find it difficult to know how far it was intended as an indictment of previous administrations and how far as a note of warning to the recently elected one. To begin with, 1979 shows a foreshortening of perspective which does not altogether assist in solving a very real problem. The problem arose when the position arrived at through the Northcote-Trevelyan reforms of the 19th century came up against the vastly expanded responsibilities of the modern state, bringing, as the noble Lord, Lord Annan, reminded us, considerable executive tasks on top of policy making.
During the two world wars the problem was addressed by bringing into government service, both at ministerial and official level, people from other walks of life, notably industry and commerce. However, wartime expedients have rightly not been thought altogether satisfactory in peace time. There is a great deal to be said for the original idea, which I have defended in previous debates in this House, of a core element of professional and professionally trained civil servants.
That approach has, as the noble Lord reminded us, some dangers. Within departments there are likely to be views—what may be termed departmental lore—which might impede an incoming Minister with radical and reforming intentions, although one must be careful about choosing examples. To take a point on which I agree with the noble Lord, Lord Annan, in his analysis of the recent past—namely the headlong rush into university expansion and the way in which it took place—I have no evidence whatever that civil servants in the Department for Education were hostile to the move. In some respects they may indeed have encouraged it in the hope that they would thereby acquire a power over the higher education sector that they had not hitherto managed to establish. That is a matter for historical argument. Again, the difficulty for both the noble Lord, Lord Annan, and myself is that we do not have the documents. There is an occasional shaft of light, as for instance through the Scott Inquiry—an episode important in itself but which can hardly, by extension, be used to illuminate what happens in government generally.
As the noble Lord, Lord Annan, said, there have been various attempts to bring in advisers of one kind or another from outside the Civil Service in order either to
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bolster a Minister's own opinions or to give him access to those sections of the active community whose opinions he desires to know. It was an element given some consideration by the Labour Party in its earlier years as an alternative party of government. There were members of that party who believed that the Civil Service was so much a part of the Oxbridge-educated establishment that it would be necessary for Labour governments to recruit from outside. That never acquired the status of a doctrine but may have influenced action. The first government to do so on any scale in recent years, as the noble Lord, Lord Annan, will know, was the Wilson government of 1964. The recently published diaries of Sir Alec Cairncross, a senior Treasury figure at the time, reveal the awkwardness created in the Treasury by an inability to know whose advice Ministers were taking and what was the position of such advisers in relation to the permanent Civil Service.
It is always likely that an incoming government will feel the need to bring in people from outside. The question is how they then relate to the official advisers to a Minister and whether they may sour his relations with them. An article in the current edition of the Economist suggests that the present Chancellor of the Exchequer goes around the Treasury accompanied by, I believe the phrase is, his "band of trusties" and that means that he does not receive the full support of civil servants who would otherwise have been anxious to co-operate with him. Whether or not journalism is a suitable source for our information, I merely say that this kind of thing echoes from time to time in all governments.
What worries me far more is the matter referred to by the noble Lord, Lord Annan, and mentioned in our debates in recent years; namely, the confusion that exists between the type of people and the incentive shown at its best in private industry and commerce and the type of people and the incentive most appropriate to government service. There has been a blurring of that distinction.
Many noble Lords argued, when the recruiting side of the Civil Service was privatised, that it would have deleterious results. The activities of the new body since it was established already show a pattern of applying to would-be public servants measures of performance, measures of ability and measures of personality which would be suitable if one were looking for people to enter private industry but which may not be suitable for those who are supposed to enter upon a life of public service. The qualities that make a good salesman of lingerie are not necessarily the same qualities that make a good permanent secretary or the ambassador to a friendly country.
The confusion has perhaps been accentuated by the exaggerated attention paid to the handbooks and the gurus of the business school world who appear to have developed both techniques and a jargon which, even for industry, may not be quite so appropriate as they believe. I have known some notable entrepreneurs, including the late Lord Nuffield. I do not believe that

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Lord Nuffield would have been any more successful if he had had an MBA. There are others who come to mind, whose names I shall not repeat.
That seems to me to be a serious problem. It is true that governments deal with a great number of issues which are highly specialised and which demand a knowledge of many matters which people in happier and simpler ages did not require. The problem seems to be a permanent one. Every government will solve it in a different way. Whether they solve it with the correct balance, only the future historian will be able to determine. Even now our views of some major departments in the relatively remote past, such as the 1920s and the 1930s, are being revised by successive generations of historians, as more and more archives come to light.
What is obviously important—the question was not put in the form in which I would have framed it, but I understand the thrust of it—is whether there is also a shifting balance between the Prime Minister's office and the other departments and whether in the current situation we may be moving too much towards a prime ministerial—or, as Dick Crossman used to think of it, a presidential—form of government. Again, it is far too early for those who are not involved in the arcana of Whitehall to answer that question. But some statement from the Minister about that balance would be acceptable, since some pronouncements raise questions about the shape of the new Cabinet committees and the degree to which they are more than offshoots of policy-making at the centre.
Most important of all, I repeat, is that, whatever the system—we cannot expect the system to remain unchanged—we should be able at all times to rely on government service being an attraction to the most energetic portion of the most able and ambitious young people. If that should cease to be the case—because they believe that by going into a party machine, the media or a think-tank they can get to the top by means other than hard slog and promotion within an existing service—the country would be poorly served.
6.55 p.m.
The Earl of Northesk: My Lords, like my noble friend, I thank the noble Lord, Lord Annan, most warmly for affording us the opportunity to discuss this matter. To start with, so far as I am concerned, I must disavow the praise contained in the noble Lord's final paragraph. I speak very simply out of keen interest. To my mind, the noble Lord quite rightly identifies in his Motion that good governance is in direct proportion to the quality, health and robustness of co-ordinated relationships within government.
I was very struck, in the aftermath of 1st May, by an observation from the honourable Member for Great Grimsby, who commented:
"New Labour took the politics out of politics in opposition. Now we are taking the governing out of government".
That is a snappy turn of phrase, to be sure, but then many a true word is spoken in jest. Mr. Mitchell does make a serious and very valid point about the nature of the relationship between the executive and the various
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arms of the administrative machine. It is a point of particular relevance in the context of the Motion before us today—but more of that later.
As we all know, much of the British constitution is predicated not upon laws written in statute but upon parliamentary and ministerial conventions. One of the less well acknowledged inheritances from previous administrations, the benefit of which the Government are now enjoying, is the sense in which such conventions have been eroded over recent years. The noble Lord, Lord Annan, referred to that. Indeed, notwithstanding the platform of very considerable and far-reaching constitutional change upon which the Government won their mandate, we should be conscious that, in the words of Sir Christopher Foster in the paper to which the noble Lord, Lord Annan, referred:
"the decline in the influence of civil servants … is arguably the most important constitutional development of the last 17 years".
By way of example, your Lordships will, of course, be conversant with the Haldane principle defining the relationship between Ministers and their civil servants. In passing, I ask the Minister, when he comes to wind up the debate, whether he can give us some indication of the Government's attitude towards that and whether there is any intention on the Government's part to reinvigorate it. Sir Christopher Foster expresses it thus:
"British practice has judged that efficiency and effectiveness is best based, not on a remote subordination, but on a two way relationship between the two".
He goes on:
"This relationship has been deteriorating recently—especially in home departments—with strongly adverse effects … The main causes have been the increasing number of Ministers and their tendency to deliberate and decide much more with their parliamentary private secretaries, their political advisers and often other political cronies".
While accepting that it is a matter of interpretation, I suggest that the net effect of this and other erosions has been to create an executive that is, at best, over-mighty. As it were, the inter-relationships, of which the noble Lord's Motion speaks, are out of balance. In that context, noble Lords opposite may care to reflect (as we on this side now have to do) that the rather sour fruits of opposition—that sense of impotence in the face of the might of government—have to be endured rather than enjoyed.
In that sense at least, all of us should have some sympathy with the Government's analysis of the ways in which this problem impacts upon ordinary people. Their manifesto expressed it thus:
"People are cynical about politics and distrustful of political promises".
That said, I have some difficulty in accepting that the many and varied constitutional changes that the Government espouse as the means to resolve that problem will in fact do so. The simple truth will remain; namely, that a political elite, whatever its party complexion and wherever it has its seat of administration, remains a political elite. More pertinently, none of what is proposed will address the quintessential problem of the executive's relative supremacy within the administrative machine. Indeed, it could justifiably be argued that the programme of

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constitutional change will entrench the power of the executive even more immovably into its fabric. Bluntly, that is a deeply worrying prospect.
However, that said, it pays to attempt to assess, in so far as we can, what style of administration the Government intend in that regard. My impression is that the signs are not good. It is a matter of record that there are already many more political advisers within Whitehall than has ever been the case before. I could be persuaded to accept that there is nothing wrong with that per se. However, bearing in mind that they are all unelected, unaccountable officials with, so far as anyone can tell, direct influence over the interpretation and substance of policy, I wonder whether the Minister might be prepared to make available to Parliament a specimen contract of employment broadly defining the areas of responsibility and job profile of such individuals. To do so would go a considerable way towards setting minds at rest, especially—and beneficially—with respect to the Civil Service and future recruitment to it. Or perhaps the Government have in mind a strategy of developing the principle of political secondment into an art form?
As I say, it may be that a case can be made for the use of political advisers. Notwithstanding the style and nature of the Government's programme of constitutional change, it may be that the same could be said of Mr. Christopher Foster's reference to "other political cronies". In that context, I read with considerable interest an article from Alf Young in the Herald entitled "A Britain under boardroom control". He writes:
"The real threat to the Civil Service under New Labour comes not from Millbank Tower or Walworth Road, but from the growing stream of leading British businessmen who will now preside over everything from setting the national minimum wage to the practical nuts and bolts of delivering the new administration's promised welfare-to-work programme".
Of course there is merit in any government seeking non-partisan input and advice. That gels with the insistence in New Labour's manifesto that:
"Government and industry must work together to achieve key objectives".
But it is less easy to find its relevance with the Government's stated desire to push back the frontiers of the unelected state and the statement in the manifesto that:
"Over-centralisation of government and lack of accountability was a problem in governments of both left and right".
Moreover, as Alf Young illustrates in his article, there are worrying and very considerable inconsistencies in some of the appointments. He writes:
"Even the Scottish Office is not immune from this New Labour love affair with the potentates of corporate Britain. Who can put some fresh economic impetus into the Prestwick area now that production of the Jetstream 41 aircraft is to cease with the loss of 380 highly skilled engineering jobs? Easy. Sign up Sir Richard Evans, the executive at the helm of British Aerospace, for your new Prestwick Airport task force. Isn't he the same Dick Evans who has just decided to scrap Jetstream production? Indeed he is. But who could he closer to the problem?".
I repeat that, whatever the merits of the government of the day tapping a pool of experience and talent outside the conventional political world, a political elite
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remains a political elite. And any such elite is, of necessity, antipathetic to the creation of the sort of co-ordinated relationships that we are discussing today.
There is a further aspect to the matter. Sir Christopher Foster recognises that one cause for the breakdown in relationships within Whitehall is the role of the media. In recent years a great deal of politics, particularly in the province of expression and development of policy, has been driven by the insatiable demand of the media— PR, sound-bites, spin-doctoring have all become the norm.
My own interpretation is that that is a particularly relevant consideration to this administration. I would therefore ask the Minister and his colleagues to pay especial attention to the solution to this problem that Sir Christopher advances; namely that,
"It would advance public understanding if there were a return to the convention that the first authoritative statement of a new or changed policy is made to Parliament".
The Budget and the Government's White Paper on education with their respective "leaks" are cases in point.
Moreover, as an addendum to that, I would also respectfully suggest to noble Lords opposite that a populist mandate is a very different creature from a popular one. Pursuit of policy on the basis of some kind of PR turf war between the political parties is deeply objectionable. Again the Budget is a case in point. Andrew Grice, writing in last Sunday's Sunday Times comments that:
"Brown's allies insisted that news management had been a big success",
and cites one of the Prime Minister's aides as saying that,
"Before every budget, expectations are lowered. It's just that we are better at it than the Tories".
The point is this: the substitution of policy driven by public interest with that driven by public opinion intrinsically and necessarily will ultimately lead to weak and inferior government.
In the circumstances, can we infer that there is something of a crisis at work in the relationships within Whitehall? Moreover, on the basis of the style so far manifest in the current administration, is it credible that this crisis is set to deepen rather than ease? I believe that the answer to both those questions is yes. That can only serve to damage the health and effectiveness of our democracy. Accordingly, the Government should pay due heed to the recommendations of Sir Christopher Foster that:
"for the sake of good government the Civil Service must be returned to its role in the co-ordination of advice, the implementation of policy and the drafting of government papers and bills".
For my part, I make this point to the noble Lord. If the Government are truly sincere in their worthy aspirations to re- engage the people in politics and to return governance to them, there is no alternative but to address the fundamental imbalance within government of which I have spoken. I am sure the noble Lord would allow that, without this, without addressing the core problem of the supremacy of the Executive, the consequences to our democracy will be dire.
7.7 p.m.
Baroness Park of Monmouth: My Lords, with your Lordships' permission I intend to speak briefly in the gap. I wish I had been able to take a proper part in the debate, but unfortunately I was not.
My main point is that I am extremely concerned about the dilution of the Civil Service caused, partly, through the creation of the agencies. I hope that there will be no more of them. The difference between the attitude of public service and, for instance, the idea of performance-related pay is one of the examples one has to offer. The Minister of Defence genuinely thought that performance-related pay for the Army was a reasonable suggestion. Fortunately, that was rejected.
As for the issue of the status of the Civil Service, as far back as the mid-1980s undergraduates were saying to me that they did not intend to try for the senior Civil Service; it had become like Marks and Spencers. That was not meant as a compliment.
There are too many accountants involved in the agencies; there are perhaps too many advisers and, as noble Lords have said, those advisers are not accountable. Not only are they not accountable but, by the very nature of Whitehall, it is difficult for them to have the information on which to base good advice. There is an enormous complexity and quantity of information in Whitehall. The Scott Report showed how difficult it was to ensure that any report reached everybody who ought to know about it. In the nature of things, advisers will find it even more difficult to be aware of all factors, particularly since many subjects do not concern only one Ministry. One needs only to look at the organophosphate issue to see that several ministries had been peddling along in parallel until recently.
Another point I should like to make is that the more cynical, rightly or wrongly, the public become about politicians, the more necessary it is for them to believe in something and that something must be the Civil Service, its impartiality, its wisdom and its loyalty. It is extremely important that no more should be done to reduce its standing and its value. We have seen too much overweaning power exercised, I am sorry to say in my own previous government, from the Cabinet Office. I deeply hope that that will not continue because it has very real dangers in terms of lack of accountability. It is also a procedure that will sap the belief of civil servants themselves in the value of what they do. That is an extremely important point to consider.
Lastly, there are, and have been in the past, advisers whose influence has been disproportionately great and whose right to that influence has not been sufficiently well known. I can think of at least one example in the Ministry of Defence. That is another serious danger.
7.10 p.m.
Lord Gillmore of Thamesfield: My Lords, perhaps I may take this opportunity to speak in the gap. I had not thought to intervene in the debate, but in the light of the comments of the noble Lord, Lord Beloff, and as a former "Sir Humphrey", perhaps I may be permitted a few moments.
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The noble Lord, Lord Annan, is correct to say that during the latter part of the 1980s the process by which government co-ordinated opinions and views and looked at the options underwent a change. That change stemmed from a greater reluctance at the time to use the traditional machinery of Cabinet committees. In previous times Cabinet committees had fallen into two categories: those composed of Ministers and those, often understudying the ministerial committee, composed of officials. In the late 1970s I remember taking part, as a relatively junior official, in a Cabinet committee established ad hoc. Its title was, I think, Misc.200, which indicates that there were up to 200 miscellaneous committees considering one matter or another in the course of that government. Our advice was given to Ministers from a variety of departments. Ministers on the ministerial level committee passed that on to Cabinet. The process of co-ordination between departments in Whitehall was thus established. The breakdown or the disuse of those committees seems to me a pity and can be held to blame, I believe, for some of the mistakes that were made. I hope very much that the Minister will be able to reassure the House that the re-establishment of those committees will help to ensure co-ordination between departments in Whitehall.
My second point concerns agencies. Here I am in some difficulty because, as a member of your Lordships' Committee on the Public Service, it is precisely one of the areas which we have been researching and studying. Many of us, including those who have been in the public service, have learnt a great deal which was previously unknown to us.
The issue the Government have to address is that of accountability. There is no doubt in my mind that in many respects the creation of agencies has had a beneficial effect on the conduct of public business. The delivery of simple services, whether passports or vehicle licences, has been done more effectively and efficiently and the public have benefited. But there are agencies whose tasks step very close to the politically sensitive. There, I think, the question arises of who is answerable to whom and whether the Minister or Secretary of State in charge can, to quote Aneurin Bevan's comment, be responsible for bedpans in hospitals. Who answers to whom? Can a civil servant be called upon to give evidence to a Select Committee; and, if so, when he does give evidence, is he speaking on behalf of his Minister? That question needs careful consideration. If, as Sir Christopher Foster recommends, and as the noble and learned Lord, Lord Nolan, is now suggesting, a civil servant should speak independently of his Minister, that changes the relationship between the civil servant and the Minister. That, in turn, will produce a significant shift in the role of the Civil Service and the relationship with Ministers.
In my personal experience, which is limited and somewhat specialised, the role of political advisers has been helpful provided the political adviser in a department is part of the machine. It is essential that he should be brought in together with civil servants. My experience is that civil servants rather relish and enjoy the breath of outside air and the questioning which an

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external adviser can bring. This, if properly conducted, can be a virtuous process and not one which leads necessarily to disruption within the department.
I ask the House to forgive me for intervening. I believe the matters I have mentioned are worthy of considerable thought, particularly the questions of responsibility and accountability and of co-ordination within government. For many years that was conducted through a series of Cabinet committees which, on the whole, by and large, ensured that the government were provided with advice from across Whitehall horizontally and from which, in my submission, they benefited.
7.17 p.m.
Lord Lester of Herne Hill: My Lords, we are all grateful to the noble Lord, Lord Annan, for initiating a debate on a matter of real importance—the provision of efficient and good government in the public interest. For my part, I am particularly glad that two noble Lords have spoken in the gap. Each of them has had particular practical experience. Indeed, they were exactly the kind of speakers that the noble Lord, Lord Annan, was hoping would participate in the debate. I agree with everything both have said and will not repeat any of it. I am only sorry that they were curtailed by time from giving us the benefit of their experience in more detail.
The best thing I can do is to speak very much from modest, practical experience. I had the pleasure and privilege of serving as one of those special advisers—a special policy adviser—between 1974 and 1976. I served my noble friend Lord Jenkins of Hillhead and my noble friend Lord Harris of Greenwich, who is sitting next to me, whose presence here this evening might have a slight chilling effect on what I would otherwise reveal about those days more than 20 years ago.
I do not altogether share the pessimism of some speakers about the state to which the present Civil Service has come. I shall leave it to the noble Baroness, Lady Miller of Hendon, another person with practical experience, to defend her Government's record on that when she speaks in a few minutes' time.
One aspect has not been mentioned at all. The healthiest department of government during the Thatcher and Major years, the one which renewed itself best and the one which is now in the best condition of the three branches of government, was the judicial department. It was the judicial department of government which managed to evolve some constitutional principles and began to call Ministers and civil servants to account and act as a counterweight to the domination of Parliament by the executive branch of government. But that is not the central issue raised by the debate today; and nor are judges civil servants.
I should like to deal with one or two problems which the Motion indicates. The first is the problem of securing co-operation between government
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departments. That is a perennial problem and not one created by the previous government. I am sure that it is with us now.
Professor Peter Hennessy and his colleagues published an interesting Fabian pamphlet in April. They wrote,
"One of the trickiest areas of any government is to get ministers and government departments to cooperate. Many policy objectives require the cooperation of a number of Whitehall departments, and securing this can be a problem. Whitehall is well geared to working vertically, with both ministers and civil servants representing departmental interests and defending their turf, but bad at dealing with issues that cut across departmental lines".
That was certainly my experience when I was a special policy adviser in the Home Office. I remember the problems that we had in seeking to tackle serious problems of racial disadvantage, cutting across government departments dealing with housing, education, employment, family policy, social security, policing and criminal justice. It was like rowing in treacle: cumbersome, laborious and in the end wholly ineffectual. It certainly has left enduring scars in that area.
I agree with Professor Hennessy and his colleagues that cross-departmental problems must be seen as a high priority of the Prime Minister and of the Government if they are to get the attention of high calibre Ministers and officials who can push through a solution. I agree with them that political will is the key to success.
There is a second matter I wish to refer to briefly. It is one that has arisen several times; namely, the role of political advisers and their relationship to Ministers and civil servants. Special advisers are appointed by the Secretary of State and they are his or her creatures. I was one such creature, as I have said. Although they are paid by the Civil Service they are outside its formal structure. As your Lordships know, there are two main kinds of special adviser. There is the political adviser whose job it is to stick to the Minister, manage his interests and explain the Minister to his department. In Professor Hennessy's happy phrase, those special advisers are,
"guardian angels of the political agenda which the Minister came to office with".
Then there is the other kind, the special policy adviser appointed to provide expertise and direction on specific areas of policy. That was my task in seeking to develop policy for legislation on sex and race discrimination in particular.
I am sorry to say—and I have said it before—that in my personal experience there was real obstruction at official level to agreed policy, especially on sex discrimination legislation. That obstruction was not always done as skilfully as one sees on television in "Yes, Minister" or "Yes, Prime Minister". It did not result in better government; it was sometimes downright unethical and it should not have happened. It led, among other things—if one reads the noble Lord's memoirs— to the noble Lord, Lord Jenkins of Hillhead, sending me home to write a White Paper on equality for women for want of co-operation in a minority Labour Government

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which the civil servants did not regard as having a proper mandate and probably thought would be booted out shortly at the second general election.
It was of course vital to have our ideas tested by civil servants. It was vital not to steamroller policy through. But it was counterproductive to have separate politics of the bureaucracy being pursued in the way it happened in that brief period. It was not typical; it did not happen for very long, but it was quite deplorable.
I believe that the use of outside special advisers, as the noble Lord, Lord Gillmore of Thamesfield, indicated, with appropriate qualifications and experience, in an adequately staffed ministerial policy unit—in his word "integrated" as part of the machine— should make it easier for governments to implement their policies without that kind of obstruction or other problems. I agree with the noble Lord, Lord Beloff, that everything depends on the personality, expertise, strength and integrity of the special adviser and developing a healthy, honest, professional relationship with permanent officials and Ministers.
When I was a special adviser I always made it a rule, when discussing any matter of importance with Ministers, only to do so in the presence of a private secretary. That was to avoid any impression of backstairs intrigue or improper influence. I am not sure that the reverse compliment was always paid. I suggest that that is a vital and sensible rule of practice.
It is healthy for Whitehall to be exposed to outsiders and for outsiders to learn how Whitehall works. That flourished under the previous government and I do not criticise it. There needs also to be a sufficient core or critical mass of special advisers in an effective ministerial policy unit in the Prime Minister's office and in some government departments. But the ground rules need to be appropriate and workable.
However, on the other side of the coin, which needs to be emphasised, there is a compelling need to avoid undue reliance on outside experts sympathetic to the policies of the government of the day. If they were given too much influence they would demoralise the permanent career service. If they were given too much power they would undermine the relationship between Ministers and civil servants. If they became too numerous, powerful and influential, then the Civil Service would become dangerously politicised. But we have not, with all respect to the noble Earl, remotely reached that point or anything like it in this country under the present Government or before.
I believe that it is in the public interest that the Civil Service itself should be a main source of innovation, able to command the confidence of Ministers and able to execute their policies intelligently and sympathetically. Ministers are entitled to take a close interest in the choice of their senior Civil Service advisers. Equally, I believe that civil servants are entitled to be strongly protected against being punished by transfer, non-promotion or otherwise for not pleasing their political masters. I believe that civil servants are fairly well protected against the introduction of a political spoils system, but I shall suggest one or two changes that might improve matters.
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The next point I would like to mention briefly is the need for a constitutional Civil Service. We need to ensure that the functions of the public service can be carried out within the framework of a constitutional set of values based on the principles of freedom. I believe that great progress was made in that direction by the previous government in developing a Civil Service code, largely under the leadership of Mr. Giles Radice and the Select Committee in another place, by the noble Baroness, Lady Symons of Vernham Dean, in another capacity as head of the Association of First Division Civil Servants, and by Sir Robin Butler, the Cabinet Secretary. That was a great step forward in my view. When the present Government incorporate the European Convention on Human Rights into domestic law, that again will provide a constitutional code of values and duties for Ministers and public officials. It will combat the vice of ethical aimlessness which has afflicted some parts of the public service.
I am also convinced of the need to replace what I call the East India Company (John Company) model of the Civil Service that we now have under the Royal Prerogative—based on a model that was appropriate for a chartered company in ruling India before the Mutiny— by a proper statutory system. I was lucky to participate in the joint committee of the Labour and Liberal Democrat Parties on constitutional reform a few months ago. There was common ground that there should be a Civil Service Act to give legal force to the code of conduct for the Civil Service, emphasising its political neutrality and making clearer the lines of Civil Service accountability. I am encouraged by the recent statement made by the Chancellor of the Duchy of Lancaster, Dr. David Clarke, the Cabinet Minister in charge of the Office of Public Service, who said that he was considering putting the Civil Service code on a statutory basis.
I very much hope that the Government will find the parliamentary time to introduce a short non-controversial civil service Bill, meaning that the Civil Service would no longer be regulated by Orders in Council made under the Royal Prerogative, but by orders made by statutory authority. The code could be given statutory recognition in a schedule so that it can be easily amended by secondary legislation. Civil servants would no longer be Crown servants, but would have the same employment rights and duties as all other employees, plus a few others because of their particular employment. Appeals by them against improper pressure would no longer be to the First Civil Service Commissioner, but to an independent ombudsman, as happens with the Armed Forces, or to a staff councillor, as happens with the security services. The code of conduct would need to be tidied up as well, as would the rules for appearing before parliamentary committees.
I very much welcome the fact that the Government are committed to a White Paper and to legislation on freedom of information to tackle another vice of the English bureaucracy, unnecessary secrecy. That will do a great deal to produce more accountable government. I was heartened to hear the Lord Chancellor say at last Friday's seminar that that was a high priority.

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All of those ideas, and others mentioned by your Lordships, have been stimulated by the Motion tabled by the noble Lord, Lord Annan. I very much hope that what seems to be a dry and arid subject has to some extent been given life by this evening's debate. I do not altogether share the pessimism of the noble Lord, Lord Annan, about the current condition of the Civil Service. Indeed, some of the fruits of its work have already become evident under the new Government. However, I agree with the noble Lord that there are always dangerous pressures which need to be resisted if the Civil Service is to maintain its independence, impartiality and deserved reputation for excellence.
7.31 p.m.
Baroness Miller of Hendon: My Lords, perhaps I may join the other noble Lords by thanking the noble Lord, Lord Annan, for having initiated this timely debate from the Cross-Benches. I stress the noble Lord's position as a Cross-Bencher because that indicates that the subject is a matter of important principle, and not of party political point-scoring.
The debate is timely because within hours of this Government taking power on 2nd May political appointments were being made to the Prime Minister's Office ahead even of the completion of the appointment of his team of Ministers. Indeed, on Saturday 3rd May—I repeat, on a Saturday—even though there was no national crisis of any sort, about a mere 36 hours after the polls had closed, a special meeting of the Privy Council was held at Buckingham Palace. That was so that the Civil Service Order in Council of 1995 could be amended to allow, among other things, the creation of an extra appointment in the Prime Minister's Office.
I should say at the outset that I do not see any objection in the appointment of "special advisers" from outside the Civil Service. Indeed, I agree with those, like the noble Lord, Lord McIntosh of Haringey, who say that such appointments mean that Ministers can receive the political advice and assistance that they need without in any way impugning the impartiality of the Civil Service of which we are justly proud and of which other countries are envious.
In my own all too short time on the Government Front Bench I discovered how rigidly and jealously departments guarded themselves from political involvement. Indeed, in the case of one clearly political question which the noble Lord, Lord Dubs, asked me on 5th July 1995, there was the distinct impression that no department wanted to take it on. My own colleagues also regarded it as such a hot potato that as the most junior person in the whole of the government hierarchy I was told that I had been unanimously volunteered to deal with it.
The concern to which I referred is not only occasioned by the timing of some of those appointments, but by the reluctance of the Government to make public any details of those appointments. It is difficult to understand the reasons for that evasiveness, which continues to this very day. I hope that the Minister will take the opportunity of this debate to
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answer some of the outstanding questions. If he cannot do so today, I hope that he will at least undertake to ensure that an unequivocal answer is forthcoming by 19th July at the latest.
It is a tradition of Parliament that individual civil servants should not normally be publicly criticised because they are not in a position to defend themselves. I should like to make it clear that I am not voicing any criticism of any of the 53 political advisers although by the very nature of their jobs they place themselves in the firing line and cannot expect the same exemption as a career civil servant.
The problem lies in three directions. I refer first to the haste with which some of the appointments were made and the nature of two of those appointments. I refer here to the appointment of the Prime Minister's press secretary, Mr. Alastair Campbell. No one can doubt that gentleman's abilities, but when on 10th June I asked the noble Lord, Lord McIntosh, what made Mr. Campbell better qualified for the post than a long-established civil servant, the noble Lord replied:
"I do not wish to comment on Mr.…Campbell's specific qualifications".—[Official Report, 10/6/97; col. 831.]
The noble Lord pointed out that outsiders have been appointed to the Press Office in the past—indeed, they have—but it has been customary since the departure of Mr. Joe Haines as Harold Wilson's press secretary some 20 years ago—and even before that time—for the press secretary to be a career civil servant. There is a very good reason for that. Modern communications, particularly the instancy and persistency of television news broadcasts, mean that the media should be able to distinguish between the communication of factual news and political propaganda. The proper place for the latter is not 10 Downing Street; it is Millbank Tower.
The other appointment to which I should like to refer is that of Mr. Jonathan Powell, another gentleman with undoubted talents. It is not the fact that he was appointed that raised eyebrows; it was what he was appointed as. The kite was flown that he was to be the Prime Minister's Principal Private Secretary, probably the second most senior position in the Civil Service. However, Sir Robin Butler, the head of the Civil Service, let it be known that the idea made him, and I quote, "seriously unrelaxed". That is a masterpiece of Civil Service understatement. I suppose that, translated, it means something like "seething with anger". The kite was hastily hauled down from the roof of Millbank Tower. The noble Lord, Lord McIntosh, told me in that same answer that,
"there has never been any question of his taking over the role of a permanent civil servant".
He was merely the chief of staff to the Prime Minister. I wonder what it was then that "seriously unrelaxed" Sir Robin. In his reply to my question, the noble Lord told us what Mr. Powell would not be doing, but we have yet to learn which of the duties formerly performed by the Principal Private Secretary Mr. Powell now carries out.

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The second problem is the sheer number of such political appointments—53 in all, so far. The Secretary of State for Health seems to be able to rub along with just—
Lord Lester of Herne Hill: My Lords, I am grateful to the noble Baroness, but I wonder whether in the light of what she has just said she will clarify something for me. I refer to what exactly was the role of Sir Bernard Ingham under the previous Government if it was not to produce what the noble Baroness has called "propaganda" on behalf of the then Prime Minister and her Government. Secondly, is it really appropriate to quote in this House statements attributed to the Cabinet Secretary by a newspaper when that civil servant does not have the opportunity himself to give any official explanation and when we are relying on what is really nothing more than gossip?
Baroness Miller of Hendon: My Lords, with regard to the noble Lord's first comment, my understanding is that Bernard Ingham was a factual press secretary—
Noble Lords: Oh!
Baroness Miller of Hendon: My Lords, with regard to the noble Lord's second question, from my own experience I do not know whether it is improper to quote something that Sir Robin Butler has said. If it was improper for me so to have quoted him, I apologise, but I really do not know. I am afraid that I am not experienced enough to know whether that was correct—
Lord Lester of Herne Hill: My Lords, it is not at all improper; it is simply that a newspaper attributed those words to Sir Robin. We do not know whether those were his words or what the context was. As the noble Baroness has rightly said that it is not customary to criticise civil servants by name, it seems equally inappropriate for us to rely upon what was in a newspaper when the Minister has given a very clear account of the position in the past.
Baroness Miller of Hendon: My Lords, I do not believe that the Minister commented on the particular point that I have made, but I note what the noble Lord has said.
I note that the Minister without portfolio does not have an adviser but, as the fountainhead of all political advice to the Government, obviously he would not need one. One can only hope that, in the interests of the public purse, when Ministers become more used to their jobs they may not need so many advisers.
When one talks about the public purse, there is another problem. Questions to the Prime Minister on 2nd June by two of my honourable friends and again on the 15th June elicited no information about the salary bill involved, except that five of the special advisers—we do not know which—were being paid a total of £163,000 and that the salaries of the remainder were still being negotiated. On 13th June the noble Lord, Lord McIntosh, informed my noble friend Lord Northesk in a Written Answer that information on the
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total salary bill would be provided when agreement had been reached with each individual on his employment terms.
During the election campaign the Prime Minster asked people to trust him. I am glad to see that all of these special advisers are following that exhortation by leaving their previous employment without knowing the terms of their new employment. I draw the attention of the Minister to the Employment Rights Act 1996 which requires every employee to be given a written statement of the terms of his employment not more than two months after the commencement of the employment. That is the significance of my earlier reference to 19th July. As it is clear from the small amount of information provided in the other place that the appointments had been made prior to 19th May, perhaps the Minister can tell the House when the Government will be able to overcome their coyness and publish the details. I remind the noble Lord that the Prime Minister also promised open government.
With all of these additional special advisers taking away the powers and duties of an impartial Civil Service we do not want to have the same situation as in the United States of America where whenever there is a change of administration there is a total upheaval in the machinery of government instead of the smooth overnight transition that we traditionally have. We are beginning to see attempts by this Administration to marginalise Parliament: the curtailment of Prime Minister's Questions; an attempt that was thwarted by the Speaker to move a constitutional Bill off the Floor of the other place and into Committee; the plan to set up separate parliaments and regional assemblies; and the attempt to gag a Member of another place. We also do not want to see the establishment of a system in which decisions are taken in a secret conclave where unelected advisers play a key role from which senior civil servants are excluded.
Accountability is very important. I agree with the noble Lord, Lord Annan. He said that civil servants were not just there to say "Yes, Minister" but to ensure that all of the pros and cons were carefully considered. I believe that policy decisions are to be taken by Ministers based on both political considerations and the advice that they receive from whatever quarter, including their special advisers. We do not want to see the introduction by government of cronyism. The experience of established civil servants accumulated over many years is no less valuable than the advice of the most astute politician that the Government can hire.
In supporting the noble Lord, Lord Annan, in introducing this debate, I agree with the earlier comments of my noble friend Lord Beloff that it is a pity that some of the experienced Members of this House have not spoken in this debate. However, I very much agree with the noble Lord, Lord Lester, that that deficiency was very well made up for in the gap. I urge the Government to learn at this early stage of their Administration that the Civil Service is well aware that it is its duty to carry out the Government's decisions loyally and effectively. That is what it has always traditionally done.
7.45 p.m.
Lord McIntosh of Haringey: My Lords, in preparing as far as I could for this debate I recognised that possibly three kinds of issues might be raised—on the relationship between special advisers, Ministers, civil servants and Cabinet Committees. I also recognised that those could be issues of propriety, efficiency and where power lay. This has been a remarkable debate in which serious and thoughtful contributions have been made on issues of efficiency and power. I propose to answer those aspects of the debate with the seriousness that they deserve. We have had a single speech from the Opposition Front Bench which is no more than a series of abusive comments about propriety.
Baroness Miller of Hendon: My Lords, I certainly did not say anything about propriety that was abusive. I asked the Minister some questions.
Lord McIntosh of Haringey: My Lords, I shall seek to justify what I have just said.
Lord Burnham: And to answer the questions?
Lord McIntosh of Haringey: My Lords, I shall answer those questions, too. However, those questions were put to me in such a way that they involved allegations that deserve to be treated perhaps not with contempt but without the degree of seriousness that I propose to adopt in my response to the remainder of the debate. The noble Baroness who has spoken from the Opposition Front Bench claims that there is a whole series of outstanding questions which the Government, due to coyness or evasiveness—she has used both words—failed to answer when challenged. I repudiate that charge. In no case has there been either coyness or evasiveness in the answering of outstanding questions.
The noble Baroness began by speaking about the haste of the appointments on Saturday 3rd May of Mr. Jonathan Powell and Mr. Alastair Campbell. She complained that I had refused to comment on their qualifications for the job. Indeed I did—and I shall do so again. I shall refuse to comment on the qualifications of any special advisers for their individual jobs, just as in the past Ministers would have refused to comment on the qualifications of Sarah Hogg, Norman Blackwell or any others. I do not believe that when in opposition we would have presumed to ask such questions.
The noble Baroness said that the kite had been flown and that Mr. Jonathan Powell was to be the Principal Private Secretary to the Prime Minister. She then claimed that the kite had been hauled down from Millbank Tower when I made it clear—I repeat it—that there was never any intention of appointing Mr. Jonathan Powell as the Prime Minister's Principal Private Secretary. The allegation that Millbank Tower made that claim has been specifically repudiated by me. I repudiate it again. It is an unworthy allegation. The noble Baroness chose to use press comments, which she could never verify, that the Cabinet Secretary was seriously unrelaxed about any such appointment. Since there was never any intention to make such an appointment, although I acknowledge that the phrase is
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one that Sir Robin Butler, as a witty man, might well have made in other circumstances, there is no truth to the claim that he expressed any objection to the appointment of Mr. Jonathan Powell to the post that he holds. There is no truth in any suggestion that he was to be appointed to any other post.
The noble Baroness asked me about the number of political appointments. That has been made clear on many occasions. There has never been any question of trying to conceal the number of political appointments. If one wants to make a comparison with the previous administration, it is true that there are more special advisers to the Government than in the past, but the noble Baroness forgets that the previous government also had a considerable number of expert advisers. Some political appointees to the previous government were paid at Permanent Secretary level rather than at the lower levels which are within the range for special advisers at the present time.
The noble Baroness seems to think that there is something sinister about the salary bill. I have said, and we have all said, that as soon as negotiations on salaries for all special advisers have been concluded then the total salary bill will be published. There will be no concealment of any kind. There is no special significance in two months, because of course special advisers were appointed at different times.
The noble Baroness claimed that we are seeking to marginalise Parliament, but she produced very little evidence for that claim. The number of Statements and announcements of policy that have been made to Parliament make it clear that the Government take Parliament extremely seriously. In the serious part of my speech I shall refer to the efforts that we wish to make to improve the efficiency of parliamentary scrutiny of government activities.
I move on to the rest of the debate. The noble Lord, Lord Annan, gave us some historical analysis. That was deepened by the noble Lord, Lord Beloff. The noble Lord, Lord Annan, suggested that the debate could take the form of an historical analysis or act as a note of warning. I prefer to take it as a note of warning. I prefer to think of it as being an admonition in the sense of warning rather than of reproof at this stage, because I do not believe that we have quite reached that stage.
A number of concerns have been raised about the component groups which provide advice to Ministers— civil servants, special advisers, the policy unit, and Cabinet Committees. It is proper to question, from the point of view of efficiency and the locus of power, how that works. I take first the Civil Service. I am delighted to have the opportunity to put on record the Government's total commitment to retaining a politically impartial Civil Service. The Civil Service plays a vital part in underpinning the constitution, and in sustaining good government.
The noble Baroness, Lady Park, expressed concern about devolution to agencies. I know that she has been doughty in defence of the Recruitment and Assessment Service in the private sector. I pay tribute to her for that. I was interested that the noble Lord, Lord Gillmore, thought that the agencies were beneficial. I tend to agree

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with that from my experience, in that agencies, although they are to a certain extent more remote from parliamentary control, nevertheless can be assigned specific and clear objectives. They can be held to account if they do not achieve those objectives. That was very much more difficult with the previous departmental systems.
The noble Lord, Lord Beloff, rightly drew attention to the need for the Civil Service to attract the most able. The noble Lord, Lord Lester, made the same point. I can confirm not only that we are considering bringing forward legislation to give legal force to the Civil Service code but that we are committed to do so. There is no question of us retreating from that.
The noble Earl, Lord Northesk, referred to the Haldane principles. Those principles are critical to our consideration of efficiency, because they refer to the requirement that advice given to Ministers should be based on the full evidence available from whatever source. I can confirm that we adhere to the Haldane principles. Indeed, some aspects of them are enshrined in the present Civil Service code which is to be made statutory.
The noble Earl, Lord Northesk, was concerned that special advisers might be diluting the role of the Civil Service, if I understood him aright. There is a continuing role for the provision of honest and impartial advice to Ministers. The Government benefit enormously from the Civil Service's commitment to provide that impartial policy advice. The noble Lord, Lord Annan, confirmed the necessity for that.
Special advisers provide an additional source of advice to their Minister in the development of government policy in a party political context. That has always been the role of special advisers, and there is no particular change in that. I was glad again to have the confirmation of the noble Lord, Lord Gillmore, that he had found that helpful. The noble Baroness, Lady Park, wondered why special advisers should not be accountable. I am not clear as to what she means by accountable unless she means publicly accountable. Privately, they are accountable to their employer. Publicly, surely, they are no more accountable than any others giving advice to Ministers. When we come to the freedom of information legislation I shall be interested to see whether she takes the view that advice to Ministers by civil servants or special advisers should be made public. I rather think that she will not.
We have set out clearly and openly the role that special advisers or civil servants must play. In answer to the particular point made by the noble Lord, Lord Northesk, the Prime Minister set out a copy of the terms and conditions for the employment of special advisers in the Library of the House. That is publicly available. I am not sure whether that has ever been done in the past. It includes a comprehensive description of their roles and responsibilities, which are complementary to the role of career civil servants.
An additional strand of advice which has been referred to is the policy unit at No. 10 Downing Street. There may be questions as how that relates to the old Central Policy Review Staff. It dealt with metapolicy
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above departmental level, whereas the No. 10 policy unit is set up to work closely with departments at all levels to determine longer term policy. In case there is any doubt, Cabinet Committee policy advisers may well attend when it is appropriate, but special advisers do not attend.
There appeared to be differing views about outside advice from business people and others. I take seriously the view expressed by the noble Lord, Lord Annan, although it was a historical view, that Ministers lack managerial experience and that Permanent Secretaries tended to take advantage by filling that gap. I was puzzled by the fact that the noble Earl, Lord Northesk, seemed to think that bringing outside business people into government and into contact with government, and using their services, was somehow a diminution of the efficiency of government. I do not believe that to be the case. The presence of people such as Mr. Martin Taylor of Barclays Bank, to name but one, and business people such as my noble friend Lord Simon of Highbury, to name someone in a different position, is enormously valuable to government.
One of the problems of government has always been that we do not have the movement between the private sector and the public sector which is a feature of government in the US, with all its other defects which have been referred to.
Cabinet Committees provide a framework for collective consideration of major policy issues. Let me make it clear again that in the interests of open government we have continued the proper policy introduced by Mr. John Major in 1992 of publishing the names, terms of reference and membership of Cabinet Committees.
I do not have a great deal to add to what was said by the noble Lord, Lord Annan, who referred to the growth of ad hoc committees. I believe that he was referring to ad hoc committees in the Thatcher years. My impression is that the openness of Cabinet Committees described the real situation and that those committees are as they appear to be in public. Cabinet Committees perform an essential function because they have the benefit of consideration by career civil servants, by special advisers where appropriate in main departments, by the No. 10 policy unit and by the Minister responsible for the issues discussed.
It is too early to say whether during the two-and-a-half months since the Government were elected there has been any significant change in the efficiency of government. I accept that the proof of the pudding will be evident over the next five or 10 years. I am sure that, during that period, Ministers, whoever they are, will always be willing to answer debates of this kind. At the same time, I am confident that the ability of your Lordships' House to provide expert critiques of the way in which government do their business will always be welcomed by the Government, as we have welcomed this debate.
8.1 p.m.
Lord Annan: My Lords, like the noble Lord, Lord Beloff, I was a little disturbed at being unable to rally some noble Lords who have great experience of these matters. I wrote or spoke to some 25 noble Lords and received replies much like those in the parable in the gospel of St. Luke, where the host sent his servants to bid many to come to a feast and with one consent they all began to make excuse. Indeed, one noble Lord made the reply that is in the parable; that he was taking to himself a wife! Therefore, I was most disappointed.
However, having listened to the debate, I can say that it was absolutely splendid. I was grateful in particular to the noble Baroness, Lady Park of Monmouth, and the noble Lord, Lord Gillmore, who spoke in the gap and materially enhanced our deliberations. I conclude by thanking all noble Lords who took part, and in particular the noble Minister, who has earned his salary in no less than two debates today. I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

Chronically Sick and Disabled Persons (Amendment) Bill [H.L.]
8.3 p.m.
Lord Ashley of Stoke: My Lords, I beg to move that the Bill be now read a second time. The Bill seeks to reverse a recent decision of the Law Lords which will have a devastating effect on the lives of disabled people. It is a decision as perverse as it is damaging; a decision which undermines the law as we have all known and understood it for 27 years. It is a decision which will force many disabled people to surrender their cherished independence at home and spend their days in institutions of residential care, in some cases at greater expense to the local authority.
The word "devastating" is not mine—although I agree with it—but that of the Royal Association of Disability and Rehabilitation. Its deep concern is shared by some 30 voluntary organisations in a consortium called "Needs Must". It has undertaken splendid work on this issue. Its concern reflects that of millions of disabled people who now face a life of disappointment, doubt and anxiety.
I have met disabled people who are deeply distressed at the withdrawal or reduction of services. The voluntary organisations are sending me many examples. The extent of the damage already caused, and even more the damage to be caused, by the ruling is not yet generally understood by the public or, indeed, by Ministers.
The ruling creates an Alice in Wonderland world where, with resources affecting assessment of need, it becomes theoretically possible for a paraplegic to have no needs—and you cannot get more bizarre than that! If a local authority states that it has no money—and some have done so—when it is assessing a person's needs it can conclude that there are no needs. That is the logic of it.
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The ruling also means that unmet need is suddenly obliterated. It has been magicked away by redefining "need". The only words which the Law Lords in their infinite wisdom forgot were—and, according to my grandchildren, they are used for magicking anything— "abracadabra" or, alternatively, "izzy whizzy, let's get busy". One way or another they magicked away an unmet need. I believe that that is scandalous because it means that if the need is unmet and unknown no one knows the extent of the unmet need and no one knows whose needs are not being met. That hiding and masking of the problem is a terrible consequence of the ruling.
There is a serious risk of the unhealthy situation of no one knowing the real needs of disabled people and the extent to which those needs are met. The ruling takes us back 30 years to the days when the problems of disabled people were hidden behind net curtains. I cannot believe that in 1997 that is progress of any kind, even by a stretch of the Law Lords' imagination.
This saga began in 1970 when, skilfully piloted by Alf Morris, the Chronically Sick and Disabled Persons Act went on the statute book. Among other things it aimed to end the scandalous lottery that meant that disabled people received help in the home, not according to their needs, but according to where they lived. That was the lottery in 1969 and previously.
Those of us who sponsored the Bill and worked on it with great intensity knew what we wanted because we knew what disabled people needed. We were in touch with those disabled people—in fact, they visited the House of Commons and the House of Lords. In Section 2 of the Act we provided that local authorities should provide such things as practical assistance in the home, alterations and adaptions, special equipment, and meals on wheels. Once a local authority had assessed the needs of a disabled person it had to make arrangements to provide the services required. Those objectives were endorsed by Parliament. The great legislative step forward was widely welcomed throughout Britain and envied in other countries. It has been accepted without demur for all these years and has enriched the lives of countless disabled people.
Although we know that some local authorities were careless in carrying out the law and did not do their duty by disabled people, the Act was a potent force benefiting disabled people. However, in a distressing turn of events, which has become known as the "Gloucestershire judgment", the whole basis of the law has been seriously undermined. Mr. Michael Barry is 82 years old. He had a stroke and several heart attacks, he is visually impaired and he uses a zimmer frame. He had been assessed as needing services from the Gloucestershire council. It provided him with a home carer twice a week for shopping, collecting his pension, laundry and cleaning, with meals on wheels four days a week.
He was informed by the council that the resources allocated by the Government were inadequate and services must therefore be reduced. Mr. Barry sought a judicial review in the High Court which granted a declaration that the council had acted unlawfully. The Court of Appeal agreed with the High Court and also held that the council was not entitled to take account of its resources when assessing need and providing for it.

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That was the nub of the problem. When the case was referred to the House of Lords, the Law Lords had to decide whether a local authority could take into account its own resources when assessing a disabled person's needs for those services listed in the 1970 Act which I mentioned.
The crucial word was "need". The Court of Appeal had held that "need" was an ordinary word, the meaning of which could not be affected by the level of resources. The Court of Appeal held that local authorities could not take resources into account when assessing need. Nevertheless, the Law Lords thought differently and overturned the ruling by three to two—a highly controversial decision. For me, one of the dissenting Law Lords, the noble and learned Lord, Lord Lloyd of Berwick, put it in a nutshell. He said:
"Every child needs a new pair of shoes from time to time. The need is not the less because his parents cannot afford them".
Likewise, the need of disabled people cannot be wished away by the poverty of local authorities. The requirements of the 1970 Act are clearly that such needs should be met and it is for the local authority to meet them.
Providing for disabled people in the community has been on a par with other statutory requirements of local authorities: it has to be done. I note that there is no mention of taking resources into account with other duties, so why should that be so in the case of disability? Is it the case that disabled people are now to be pushed to the back of the queue, as usual?
The 1970 Act removed the lottery of people receiving different services according to where they lived. The effect of the Law Lords' ruling is to restore that lottery and again provision will depend on where disabled people live and the relative wealth of their local authority. But, as the noble and learned Lord, Lord Berwick, said:
"Parliament cannot have intended that the standards and expectations for measuring the needs of the disabled in Bermondsey should differ from those in Belgrave Square".
In my view, there is no doubt about what Parliament intended, nor any doubt about disabled people's needs. Those needs were precisely the same the day after the Law Lords' judgment as they were the day before. There was no difference in the needs of those disabled people on 19th March and on 21st March.
The day before the judgment on 20th March those needs were met by the local authority, as they have been met for nearly 27 years. Therefore, there can be no question of extra new costs if the Bill before the House is passed. We simply revert to the position as everyone has known and understood it for all those years. That is a crucial part of the argument. We simply revert to the position on 19th March 1997. I hope that no one will suggest to the House that there are massive extra costs involved in the passage of the Bill: there are not. We merely seek to restore the law to what it was on 19th March, one day before the judgment.
From where would any extra costs stem? There are none. Anyone who wishes to argue about extra new costs should produce evidence of them as the situation
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was on 19th March. I await evidence from anyone who is opposed to, or even lukewarm about, the Bill. The argument about costs is absolutely bogus.
I commend the Bill which specifies that a local authority's resources cannot be taken into account either in making an assessment of need or in making arrangements to meet need. That is the position that has worked satisfactorily for 27 years. The passage of the Bill will ensure that local authorities observe the spirit as well as the letter of the 1970 Chronically Sick and Disabled Persons Act. The Bill will ensure that disabled people have restored to them the right to essential services on which they rely so heavily. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Lord Ashley of Stoke.)
8.16 p.m.
Lord Swinfen: My Lords, I am delighted to support the noble Lord, Lord Ashley of Stoke, in this Bill. As the House knows well, he has a long and distinguished career both here and in another place in working for people with disabilities.
I hope also that the party now in power will give him the help which it gave to me over the past 15 years when I have tried to improve the lot of disabled people. The noble Lord deserves its help more than I deserved the help which it so richly gave to me over the past 15 years. I should be very disappointed if his party is not prepared to help him now.
The complex and confused state of the law relating to community care makes it extremely difficult to give appropriate and accurate advice to disabled and elderly people. While the decision a few weeks ago in the Gloucestershire case may have clarified the position for local authorities, it has exacerbated the anxieties and uncertainties faced by people with disabilities.
The decision of your Lordships' Judicial Committee was by a majority of three to two. Even the most distinguished lawyers in the land are divided as to the correct interpretation of the law. Therefore, we should all be most grateful to the noble Lord, Lord Ashley of Stoke, for bringing forward this Bill which will clarify the position. It will make it clear that a local authority's resources have no relevance to the assessment of a disabled or elderly person's need for community care services.
One of the principal aims of community care is to meet the needs of people with disabilities rather than fitting those people into existing services. That cannot be achieved without proper individual assessment of need, without taking into account any extraneous factors. I am convinced that Parliament did not intend that the standard and expectations for measuring needs should differ in various parts of the United Kingdom. The passing of the Chronically Sick and Disabled Persons Act in 1970 was a noble aspiration. Having willed the end, Parliament must provide the means. This Bill gives us that opportunity.
Without this Bill being passed into law, the working of the Carers (Recognition and Services) Act 1995 will be under threat. Already I am advised that many carers

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are being prevented or dissuaded from having an assessment of their needs. If the eligibility criteria are tightened, fewer carers will be entitled to ask for an assessment and the situation will be exacerbated.
Carers and their disabled or ill relatives will be placed at increased risk in the community without support. Carers already save the state an estimated £34 billion per year. If, as a result of the judgment in the Gloucestershire case, support is reduced to disabled people and their carers, that will probably be very costly to the health and well-being of both people with disabilities and those who care for them; and, ultimately, very expensive to the public purse. I strongly support the Bill.
8.20 p.m.
Baroness Darcy (de Knayth): My Lords, I should like to add my enthusiastic support to this small Bill which, strictly speaking, is and should remain unnecessary. It makes clear beyond reasonable doubt the duty of the local authority under Section 2 of the Chronically Sick and Disabled Persons Act 1970. The noble Lord, Lord Ashley of Stoke, was an eloquent supporter of that legislation during its passage through the other place in 1970. In his comprehensive and masterly introduction of his amendment Bill tonight, the noble Lord showed that he was very clear as to the meaning of Section 2 of that Act.
The noble Lord quoted the eloquent yet practical dissenting speech made by the noble and learned Lord, Lord Lloyd of Berwick. The noble and learned Lord was also very clear that it could not have been Parliament's intention that a local authority could say, "Because we don't have enough resources, we are going to reduce your needs". The needs remain exactly the same. Nor could Parliament have intended, to repeat the words of the noble Lord, Lord Ashley, that these needs were gauged differently in Bermondsey or Belgrave Square.
Indeed, the architect of the Chronically Sick and Disabled Persons Act, Alf Morris, showed that he was very clear as to the intention of Section 2 when in an article in The Times of 26th May he referred to a,
"perverse … ruling by the Law Lords which allows local authorities to circumvent the statutory duty to provide home care appropriate to the individual needs of disabled people".
I made my maiden speech on the Second Reading of the Chronically Sick and Disabled Persons Bill in this House. I can assure your Lordships that, so far as I am aware, none of us at any time during the passage of the legislation intended that the duty to provide appropriate care could depend upon the availability of resources.
The Second Reading of that Bill in this House was on 9th April 1970. The noble Earl, Lord Longford, in his comprehensive explanation of the Bill, referred (at col. 241 of Hansard) to Clause 2, now Section 2, as being, "mandatory beyond dubiety". So we have the interpretation of Section 2 very clearly expressed in Hansard.
The noble Lord, Lord Ashley of Stoke, portrayed very graphically the concern felt by disabled people and disability organisations. It is bad enough that the Law
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Lords' ruling has allowed local authorities to use the argument about the lack of resources to determine a disabled person's need; it is surely intolerable to go further and remove help from the disabled person after his or her needs have been recognised and have been met and after those needs have been reassessed and found to have remained unchanged. That is what happened in the case of Mr. Barry.
There is grave concern that the duty imposed by Parliament in relation to giving disabled people the support that they need to remain living outside institutions is being degraded into a mere power to help if there are sufficient spare resources. The fact that local authorities have a general duty to act reasonably does not, I think, provide much of a safeguard. All that this seems to do is to make a hotch-potch—a witches' brew—out of needs and resources: if there were no resources, could it not be argued, as the noble Lord, Lord Ashley, indicated, that it was reasonable for a local authority not to meet any need however great?
I find this particularly worrying because, in general, neither the funds collected through the council tax nor the funds provided by central government are earmarked for particular purposes. Local authorities are thus free to place a high priority on, for example, environmental conservation and the very lowest priority on helping disabled people. I am in no way knocking environmental conservation, but, let us face it, there is nothing particularly sexy about community care. Indeed, much more excitement is created by the threat to fell a beautiful tree than by the announcement of a cut in the supply of incontinence pads. As a paraplegic of 30 years' experience, I know that you cannot become more continent simply because the local authority is strapped for cash.
I return for the last time to the submission made by the noble and learned Lord, Lord Lloyd, who acknowledged that the decision by a majority of only three to two, as has been said, had allowed Gloucestershire and other local authorities to escape from an impossible position—the position of being given a statutory duty but not the wherewithal to perform it. The noble and learned Lord said that he could not help wondering, however, whether local authorities would come to regret the decision as much as Mr. Barry did. He said that the solution lay with the Government.
As the noble Lord, Lord Swinfen, said, the passing of the Chronically Sick and Disabled Persons Act 1970 was a noble aspiration. Having willed the end, Parliament must be asked to provide the means. That is what the Bill seeks to achieve. As the noble Lord, Lord Ashley, said, it would restore the status quo to what Parliament clearly intended in 1970 and what was in effect the position until the Law Lords' judgment of 20th March of this year. I hope that the Minister will bear that very much in mind when she comes to reply. I also hope that she will be able to respond, if not with enthusiasm, at any rate in a positive and constructive manner.
8.25 p.m.
Lord Addington: My Lords, the Bill is only a one-page document, but its effects, if it were to be rejected, would be incredibly wide for one simple reason: virtually all the legislation in the field is based around the fact that there are needs and so there is a demand to be met, and not around the fact that there is a limited supply of resources to meet the demand. That is something which runs through every single type of support legislation for people with special needs and learning disabilities; indeed—you name it—it is a theme which runs through. It is something which has been apparent in every debate that we have had. Individual needs—and this is a strong point as stated originally by the noble Lord—are the most important aspect.
We are talking about people who are separate units and none of them is the same. Without the type of legislation that states that you cannot say that because you have problems balancing your budget you can cut something away, every single gain in the field is under threat. The current Government have joined with me and many others speaking in tonight's debate time and time again to state quite clearly that this was good; indeed, that has happened on numerous Bills. Moreover, the principle underlines other legislation.
The code of practice for special educational needs is specifically designed to say that certain needs shall be met; it does not mention a budget. If the Bill is rejected on grounds that resources dictate whether attention will be paid to a person's needs, what will happen when the education department ultimately says, "We haven't got enough money"? I shall understand if the Minister says that that proposition is outside her brief. Nevertheless, I give her my assurance that the question will not disappear because I shall personally return to it.
Every time you say, "We can't do this because it costs money", you actually undermine the value of someone's individual rights. If the Government are about to say that they cannot accept it because there are insufficient resources available, I should point out that the noble Lord, Lord Ashley, dealt with that response clearly in his introduction. Indeed, he stated that we are not asking for new money; we are asking for money that has been used before. That aspect is something to which I and my colleagues drew attention during the last election but, there again, we were not listened to quite well enough.
Unless you underline the fact that this type of legislation is designed for people's needs, you will actually take away most that is good about it. I say that because unless you are determined to treat individuals on an individual basis, you are removing virtually every consideration. If the Government have that intention, I ask them now at least to give notice as to when they will be announcing whether these restrictions will be included in other pieces of legislation. If that is to be the case, I can assure them that they will be hearing a lot more about the subject from these Benches. I hope that the Government are prepared to accept the Bill and state quite clearly that they are returning to the aim of meeting the individual needs of individual people with certain problems.
8.30 p.m.
Lord McColl of Dulwich: My Lords, I, too, add my congratulations to the noble Lord for introducing this Bill. This is one of many proposals with which he has been associated, all designed to improve the quality of life of disabled people.
The problem we are discussing this evening follows the withdrawal of services from many elderly and disabled people in Gloucestershire because of an overspend in its budget, not because there has been any change in the needs of the disabled people. There is also an apparent inconsistency in provision of these services throughout the country due to a lack of agreed national standards.
One of the first questions which we must surely ask is, if the money is not available in some areas but is in others, what is the money being spent on? In other words, how are local authorities deciding on their priorities? In helping them to determine priorities, what guidelines will the Government give them and how will the Government monitor their performance?
It is quite clear that the vulnerable group that we are discussing this evening need the provision for which they have been carefully assessed. However, there is another reason for providing for their needs. Quite simply—this has been mentioned already—if one provides fully for their needs in one sphere, that may make them more independent and possibly reduce their needs in other areas. On the other hand if the needs of incontinent people, for instance, are not met, in the long run the total bill may be much higher than it would otherwise have been.
We ought to discuss another aspect of the whole subject of available resources. The pessimist always describes this as a lack of resources, whereas the optimist prefers to use the phrase "finite" resources. We should not neglect the great stimulus that finite resources have in compelling people to think and to work out the best way of using those finite resources in supplying the best service they can not only for disabled people but for patients suffering acute disease or injury. A good illustration of this is seen in hospital practice.
Some years ago in some parts of the country a hospital would see only one patient a month with a stab wound of the abdomen. As your Lordships can imagine, it is difficult to assess exactly how much damage has been done inside, not knowing how far the knife has been put in or what damage it has done. Therefore these patients have to undergo a major operation to have their abdomens opened up and carefully inspected to assess the damage and correct the injury.
However, in some parts of Africa it is possible to see 100 patients with stab wounds of the abdomen in an evening, especially a Friday evening. Clearly it is impossible to carry out 100 major operations in an evening. Therefore those who look after these people are compelled by finite resources to find the best way of dealing with the situation. They work out a way of detecting which of the stabbed patients needs a major operation and they become skilled at doing so. That policy results in only a few people having a major operation and therefore one avoids doing perhaps

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90 major operations in an evening. Therefore one is doing much less damage and the overall results are better. At the end of the day one ends up with a much better deal and a much better standard of care. By having tight budgetary controls the mind is concentrated to give the best service and the best service is often a cheaper service. Perhaps that is what the Labour Government had in mind in the 1970s when they introduced cash limits into the National Health Service.
The hospital service relies heavily on ward sisters, for whom I have always had the greatest respect. They are ideal managers and they dispense the milk of human kindness. They constantly have to assess the daily or even hourly needs of their patients, for example how often their blood pressure and pulse have to be taken and how many dressings have to be applied. If, however, the sister is short of nurses on a ward on a particular day for one reason or another, perhaps because of illness or a flu epidemic, she has to adapt and reduce the amount of work that is done on some patients. Her assessment of their needs is separate from the resources but inevitably, as she is assessing the needs, that merges imperceptibly into her decision of how to deploy her resources most effectively.
On a similar theme, there is an interesting situation in the National Health Service now in that some purchasing authorities have issued a statement that they are no longer prepared to treat on the NHS patients with conditions such as varicose veins, lumps of fat—which we politely call lipomas—and various lumps and bumps. That is a significant departure. It will compel those patients to seek those operations in the private sector. It would be helpful to hear the Government's reaction to that and whether they agree with that policy, which has been determined at local rather than national level. There are many problems which we have to discuss in this difficult area. I look forward to hearing the Minister's reply.
8.36 p.m.
Baroness Gould of Potternewton: My Lords, I too pay tribute to the work of the noble Lord, Lord Ashley, in bringing forward this Bill. I have listened with great interest to his views and to those of the other noble Lords who have spoken in this short but interesting debate. I welcome the chance to set out the Government's position on the Bill.
This Government are determined to improve the position of disabled people. Our manifesto made that clear. We want to improve community care services for disabled people, for other service users, and for carers. We want to improve those services, whether they are provided by the NHS, by social services, or indeed by any other agency. With that in mind, the manifesto confirmed our intention of developing a charter on long-term care services which we see as a way of ensuring people get the basic standards they can expect to lead a dignified life. We are developing our ideas on this. Our manifesto also made clear our intention to examine provisions for long-term care for elderly people. We shall make further announcements on these matters in due course. I shall be happy to pass the views
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expressed by your Lordships to my honourable friend the Parliamentary Under-Secretary of State for Health. However, in the interim we must stress that local authorities' obligations to disabled people under Section 2 do not change.
The Government believe strongly that work is the best form of welfare. We are committed to giving opportunities to work for sick and disabled people who have some capacity to do so, in the same way as we are doing for lone mothers. Over the coming months we will be looking to see what changes are necessary to ensure that the particular needs of people who have disabilities are provided for.
The Government clearly demonstrated their commitment to promoting the principles of equality of opportunity and defending the rights of all its citizens at the Intergovernmental Conference. Despite the short time the Government have been in office, they supported a new treaty Article 6a designed to combat discrimination based on sex, racial or ethnic origin, religion and belief, disability, age or sexual orientation. Just as importantly, the UK sponsored a declaration to be appended to the treaty in respect of Article 100a, one of the articles which governs the harmonisation of the EU single market. The declaration requires the institutions of the Community to take account of the needs of disabled people when drawing up measures under Article 100a. Together, these changes represent an important advance in ensuring that the interests and needs of disabled people are taken into account across all the member states of the European Union.
The Government have considerable sympathy for the aim of strengthening social services for disabled people which so clearly underlies this Bill. However, we do not believe that the route which the Bill proposes to take to achieve that aim is the right one.
To explain why this is so, I need to rehearse some of the history behind the Bill. I hope that your Lordships will forgive me for going over ground which has been covered by previous speakers.
Section 2 of the Chronically Sick and Disabled Persons Act 1970 places social services authorities under a duty to arrange certain services for individual disabled people where they are satisfied that that is necessary to meet their needs. The services concerned include practical assistance in the home; provision of recreational facilities; assistance in arranging adaptations to the home, or the provision of additional facilities designed to secure greater safety, comfort or convenience; holidays; meals; and the provision of a telephone and any special equipment necessary to enable the disabled person to use it.
The Act has long been recognised as a milestone in legislation affecting disabled people, and I would wish to pay tribute to those—including my noble friend Lord Ashley—who were instrumental in achieving its successful passage through Parliament. I know that many of your Lordships took part in the celebrations of the Act's 25th anniversary in 1995.
I took particular note of the points made by the noble Baroness, Lady Darcy (de Knayth), and my noble friend Lord Ashley of Stoke, in respect of the interpretation

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of the Act. It has been the understanding of successive governments that local authorities are able to take their resources into account in assessing a person's need for the services listed in Section 2 of the Chronically Sick and Disabled Persons Act and deciding what services to arrange. It is important to note that the circular issued shortly before the Act came into force in August 1970 stated,
"Criteria of need are matters for the authorities to determine in the light of resources."
The thrust of this debate has been the judicial review case brought against Gloucestershire social services in 1995, fully detailed by my noble friend Lord Ashley. Last year the challenge was upheld in the Court of Appeal. However, noble and learned Lords in this House, I appreciate by three to two, overturned the Court of Appeal's interpretation of the law in a judgment given on 20th March of this year. That is to say, the legal position has been confirmed to be that which the Department of Health, since 1970, has believed to apply: that authorities may take their resources into account in assessing the needs of a disabled person and deciding what services to arrange.
However, it is important to emphasise that the judgment does not give authorities a licence to stop providing services. But resources are only one of the things that should be taken into account. They must still take into account all other relevant factors. They cannot use pressures on resources as an excuse for taking an arbitrary or unreasonable decision.
Nor does the judgment mean that local authorities are no longer under any duty towards disabled people. Once a local authority has decided that it is necessary, in order to meet the needs of a disabled person, to arrange a service listed in Section 2, then it is under a duty to arrange it. That has not changed.
The noble Lord, Lord Swinfen, expressed concern that the Gloucestershire judgment would affect carers' rights under the Carers (Recognition and Services) Act 1995, and that they will not be able to obtain assessments. That is not the case. The Carers (Recognition and Services) Act gives carers who provide regular and substantial care the right to ask for an assessment of their ability to carry on caring when the person for whom they care is being assessed. The authority must take the results of the carer's assessment into account when deciding whether or what services are provided to the user. That is not changed by the Gloucestershire judgment.
The Bill introduced by my noble friend Lord Ashley seeks to reverse the effect of the ruling of the noble and learned Lords in the Gloucestershire case. If enacted, it would prevent authorities from taking account of resource considerations in assessing needs and deciding what services to arrange. They would be able to take resources into account only when deciding how to arrange services to meet the needs they have identified. Unfortunately we do not live in a world where resources can be ignored. In recognising that fact, the Government have embarked on a far-reaching review of spending priorities. Now is not the time to
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require authorities to ignore resources. Nor, I believe, would it generally be seen as fair to single out one particular group of people for this treatment.
Lord Addington: My Lords, if the Minister will give way, perhaps I may say this. The singling out of people is exactly the point that I sought to make. Most of the legislation does not take resources into account. At least that was our understanding when the legislation went through Parliament. That is the problem. A new precedent is being created where resources are being taken into account.
Baroness Gould of Potternewton: My Lords, I must disagree with the noble Lord. I do not think that this measure states that. If one considers the evidence from the Association of Directors of Social Services, it has expressed its concerns that such action would create a protected group within the population of those with community care needs who would have the right to services without regard to resources, to the certain detriment of other users. We share that concern.
Why, for instance, should resources not be a consideration in deciding on the non-residential services to be provided under Section 2 when they are a consideration in deciding on residential services which are not provided under Section 2? I regret to say to my noble friend Lord Ashley that I cannot accept his argument, nor that of the noble Lord, Lord Addington, that the Bill will not lead to a significant increase in expenditure and that it would simply ensure that existing good practice is enshrined in legislation. Resources have always been relevant to the level of need provided for.
We know, for example, that pressures on local authority budgets in recent years have led them increasingly to concentrate social services on those with the need for the most intensive support. As a minimum, the Bill will require them to undo those changes. However desirable that might be thought in principle, it would undoubtedly have a cost.
The Bill could well do more than merely undo recent changes. It is difficult to produce a precise and accurate figure for what the total cost might be if the Bill were to come into force this year or next. However, the Department of Health estimates that it could be a substantial sum and that is not something for which existing spending plans provide. Relatively modest increases in activity could have significant cost implications for local authorities. Authorities would be able to meet this only by diverting resources from other groups—such as children at risk—or from other services, including other services to disabled people. Again, the Association of Directors of Social Services has written to the Government to express its serious concerns about the substantial costs which it considers could arise as a result of this Bill.
It is important to recognise, too, that the Bill would not produce simply a one-off increase in expenditure.

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The noble Lord, Lord McColl, referred to finite resources. However, there is no finite list of services which might be provided under Section 2. For example, ways of
"securing greater safety, comfort or convenience in the home",
will change over time, particularly as new technologies develop, with the result that the needs which disabled people might be assessed as needing will also increase. This would put a continuing pressure on authorities to find more resources.
It is for those reasons that we regret that we cannot support the Bill. Nevertheless, I stress our concern that there should be an improvement in community services. I have taken careful note of all the suggestions made in this debate as to how that might be done. We shall keep community care legislation, including that which applies to disabled people, under careful review. There may be a case for change. But the best time for decisions on that will be when we are clear about the direction of other developments, such as the actions that are likely to result from our examination of long-term care for the elderly.
Although we cannot support the Bill, we understand the concerns that are behind it. To respond to the noble Lord, Lord McColl, my honourable friend in the other place, the Parliamentary Under-Secretary of State for Health, will shortly be making an announcement as to how he intends to reinforce local authorities' understanding of their continuing responsibilities to disabled people under the CSDP Act. As I said, we shall continue to keep community care legislation under careful review.
8.50 p.m.
Lord Ashley of Stoke: My Lords, I should like to thank everyone who took part in this short but very important debate. I am especially grateful to the noble Lord, Lord Swinfen, the noble Baroness, Lady Darcy (de Knayth), and the noble Lord, Lord Addington. All three have been consistent and persistent campaigners on behalf of disabled people. I can only guess at their response to the reply that we just heard. The matter will no doubt be raised on another occasion.
I thank my noble friend Lady Gould for coming to the Dispatch Box and explaining the Government's point of view. As she is not merely my noble friend, but my friend, I want to take the unusual step of exempting her personally from what I am about to say. I mean that. She has been a spokeswoman for the Government and must not take my next comments personally. I know of her tremendous personal commitment to the cause of disabled people. She is now excluded from my remarks.
It is traditional and habitual for supporters of the Government to be restrained when criticising the Government and exaggerate when attacking one's opponents. I intend to maintain that tradition of restraint. I am shocked at the inadequacy of the Government's response to this Bill. I cannot believe that a Labour Government are actually saying that they reject the Bill and support the present situation, which leads to outright discrimination against disabled people. I am shocked,
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and I am horrified. I never expected such a blank refusal to take any action on this vital issue. I find it very hard to believe. The Government really will have to think again.
Let me deal with a few points raised by the Government. They say they are determined to improve the position of disabled people. That is fine; we accept their words. But the best way of improving the position of these disabled people is to support the Bill. The Government say that they are working on ideas in relation to disabled people. How very kind! We have already worked on the ideas. In the Bill that we propose the ideas are already worked out. There is no need to work on ideas, no need to consider the problem. The answer is in this short Bill, described by the Law Society as "succinct and comprehensive". It simply reverses the Law Lords' judgment and takes us back to the position as it was on 19th March, when disabled people were being provided for at no great expense. That is all the Bill seeks to do; but that is very important.
The Government say that in the coming months they will see what is necessary. They do not need to see what is necessary. The statement suggests that this debate might never have taken place. There have been some outstanding speeches, apart from my own. They have been succinct, clear, eloquent and powerful. The Government simply cannot say, "We are now going to see what is necessary", as if people did not speak. The words of the debate will appear in Hansard tomorrow. They have been spoken and they will be there in black and white. The facts and opinions have been brought forward in the House of Lords. The Government cannot say that they will see what is necessary as if no debate had taken place.
The Government say that they are proud of the amendment in Article 6a in the European treaty. That is fine. I was among those who asked the Government to bring in the amendment. It helps in matters of discrimination and I congratulate the Government. It represents a beginning in Europe. But if they want to tackle discrimination not merely on a European level, the best way of tackling it is by backing this Bill. The effect of the Law Lords' judgment is to discriminate against disabled people in their own homes. There could not be worse discrimination than that. The Government should think again.
The Government say that this Bill is not the best route. In that case they should suggest an alternative, realistic route. Instead of expressing vague generalities about thinking, considering and assessing the matter in the future, they should tell us what they intend to do. I know that they have been in office for only a short time. But they have had time to assess the 1970 Act and the way in which it has been working. It is not good enough to say simply that this is not the best route.
I am afraid that the Government are utterly wrong when they say that the understanding of governments is that local authorities could take resources into account all these years. If the Government believed, when they were in office 18 years ago, that the resources should be taken into account by local authorities, they should have said so during that time. There is no point in stating

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now, after 18 years out of office, that they believed resources were being taken into account. The fact is that if local authorities were taking resources into account, they were breaking the law. The law was clear and categorical. It is the Law Lords who have now changed that by their ruling. If the Labour Government were so assured when in office that local authorities were taking resources into account, they should have objected. Any Government should object to the law being broken, by local authorities or anybody else.
The Government referred to a circular. Circulars do not matter all that much. They are advisory, they offer guidance etc. But the law is the law; and local authorities should have observed the law. In fact, most did. They had been making provision for disabled people in accordance with the 1970 Act. It has been a patchwork; it has not been applied as assiduously and perfectly as it should have been. Nevertheless, local authorities have been making these provisions.
I am afraid I have spoken for rather longer than I had intended. I wanted to emphasise the fact that I exempt my noble friend, my great friend, Lady Gould from the remarks I have just made. It was a comment on the Government.
The final and crucial point is this. The Government stated tonight that this Bill will lead to significant amounts of money being made available. That is totally wrong. It does not matter what calculations civil servants in the Department of Health make. They are wrong. The Government must respond to the challenge that I put forward. On 19th March, a very short time ago, there was no massive financial commitment, no great drain on resources. So we come to 21st March, after the Law Lords' judgment. Where does that massive demand come from? All we ask is to go back a couple of months. There is no phenomenal demand.
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It is quite wrong for the Government to say that massive amounts of money will be involved with this Bill. I remind the Government that it was the Labour Party in opposition who derided the Department of Health when the Berry Bill outlawing discrimination was going through the other place. It was the Department of Health which said that it would cost a fortune—I have forgotten the actual figure; I think it was £1 billion or £1.5 billion. The figure was plucked from nowhere. It was quite unrealistic. The Labour Opposition rightly derided the department for manufacturing a grossly inflated and exaggerated figure.
The Government make the claim about large amounts of money being entailed under the Bill but they should think again. If they insist, they should produce the evidence for their claim. If the evidence is there and massive amounts of money are involved, we shall think again. But we want the evidence. Until we have that, the Government must reconsider.
This problem will not go away. I have seen enough disabled people suffering to convince me. I have received fax after fax from the RNIB and other societies about people who are suffering now. And it is only the beginning. The flood will come when more people are denied vital resources. I hope that the Government will think again. I ask the House to support the Bill.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Imperial College Bill
The Queen's consent signified and Bill reported from the Unopposed Bill Committee without amendment.
House adjourned at one minute past nine o'clock.