Lords Sitting of 11 June 1998

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Ripon.

Athens Olympic Games: Counter-terrorism Measures
Lord Bethell Lord Bethell asked Her Majesty's Government:
Whether, in view of the decision to hold the Olympic Games in Athens in 2004, they will ask the European Union to urge the Greek Government to take effective action against the "November 17th" group.
Lord Whitty: My Lords, Her Majesty's Government condemn terrorism wherever it occurs, including the activities of the "November 17th" group and other terrorist groups active in Greece. We discuss such matters regularly with the Greek authorities. We have made clear our willingness to assist them in promoting effective counter-terrorism measures. To that end, the Greek Minister of Public Order visited London in December last year.
Lord Bethell: My Lords, I am grateful to the Minister for that reply. Is he aware though that this group has in recent years killed more than 20 people in Greece and that its targets have included not only Greek property and Greek individuals but also American, French, German and British nationals? Is the Minister worried by the thought that militant groups traditionally use and exploit the Olympic Games for spectacular attempts to gain publicity? That being the case, and as this is now an international matter, will he advise his right honourable friend to raise this question in the margins of the Cardiff Summit?
Lord Whitty: My Lords, I am aware of the targets of the "November 17th" group and certain other terrorist organisations within Greece. They have encompassed businessmen, diplomats and other foreign nationals. We are deeply concerned. We have specifically offered assistance to Greece already in establishing effective security arrangements for the 2004 Athens Olympics. My right honourable friend the Home Secretary has offered the services of his department and police expertise in helping the Greeks in this area.
Lord McNally: My Lords, as the Minister has said, terrorism always surrounds international sporting events but they are also of tremendous economic benefit. Will
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he indicate whether it is the intention of Her Majesty's Government to try to bring the Olympics to the United Kingdom at any time in the next 20 years?
Lord Whitty: My Lords, I am not immediately aware of a bid for the Olympics. I shall have to consult my colleagues in the Department for Culture, Media and Sport. We shall report to the House in due course.
Baroness Hooper: My Lords, can the Minister kindly enlighten some of us as to exactly what the "November 17th" group is about?
Lord Whitty: My Lords, its basic ideology is a little obscure. It is an anarchist organisation which appears to have close links with some of the Kurdish terrorists who operate in the area.
Lord Moynihan: My Lords, in the light of the decision to hold the Olympic Games in Athens, what offers of assistance—rather more specific than the Minister has already mentioned—and counter-terrorism assistance do the Government intend to make to the Greek Government? Furthermore, have the Government offered the Greek Government the assistance of the Directorate of Counter-Terrorist Expertise set up by the G7 countries under a British initiative of the previous government which enables expert help to be made available immediately to countries which need it?
Lord Whitty: My Lords, the UK and Greece work closely together to combat terrorism. The UK has provided technical assistance and advice to the Greek police on a number of occasions, most recently in February this year. As I indicated, the Greek Minister of Public Order visited us at the end of last year. In the European Union and elsewhere—for example in Interpol—the UK and Greece have, in common with other countries, established good police liaison for sharing intelligence in order to fight crime and terrorism. In relation to the G7 initiative, clearly that is available to Greece, as it is to other countries faced with terrorist problems.

Pensions: Administrative Costs
3.10 p.m.
Lord Peston: My Lords, in the unavoidable absence of my noble friend Lady Castle of Blackburn owing to illness, at her request and with the permission of your Lordships, I ask the Question standing in her name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what percentage of the contributions paid for national insurance, pensions, occupational pension schemes and personal pensions goes on administrative costs.
Lord Haskel: My Lords, the administration costs charged to the National Insurance Fund for awarding and paying state retirement pension and collecting and maintaining records of national insurance contributions

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were some £622 million in the financial year 1996–97. This represents about 1.5 per cent. of the fund's income in that year.
Little information is currently available about the costs of running occupational pension schemes. The Government Actuary's Department has carried out a study and will shortly publish a report of findings in this area. The Government do not collect information on the cost of administering personal pensions.
Lord Peston: My Lords, I thank my noble friend for that Answer. As I understand the matter, there may be a policy move towards encouraging personal pension schemes in the private sector. Will the Government at least pay some attention to the costs of such schemes in comparing them with the possible alternative of extending public sector schemes?
Lord Haskel: My Lords, personal pensions are a private contract between the pension provider and individuals. As we know, some charges attached to personal pensions are too high and inflexible. Individuals must therefore consider very carefully the charges that attach to personal pensions before entering into such contracts. The purpose of the stakeholder pension is to attempt to reduce some of those costs for people who cannot afford them.
Lord Monkswell: My Lords, does the Minister agree that it is absolutely scandalous that the previous administration, in promoting personal pension schemes, did not set up a mechanism to monitor the administrative costs associated with their provision, which would have been available to the Government now?
Lord Haskel: My Lords, I entirely agree with my noble friend.
Lord Meston: My Lords, have the Government yet received any reliable estimates from the pensions industry or elsewhere as to the additional administrative costs which may be incurred when pensions come to be split on divorce?
Lord Haskel: My Lords, that will form part of a study that was announced last week by my right honourable friend into the whole matter of pensions splitting. Other matters enter into it. There may be single-sum payments, which would reduce administrative charges. The whole question of whether one or other spouse can afford their share of the split pension also has to be examined. It is quite an involved matter.
Lord Higgins: My Lords, the noble Baroness, Lady Castle of Blackburn, has put a remarkable series of questions over the past few days. Perhaps I may express a personal hope in that I trust she is well.
So far as concerns comparative administrative costs, presumably the ratio would be better, as regards the Government's proposals for a stakeholder pension or a
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second pension, if that is made compulsory rather than if it is not. Despite the delay in publishing the Government's Green Paper on pensions, presumably estimates have already been made as to the comparative figures. Will the noble Lord give them to the House?
Lord Haskel: My Lords, no estimates have been made. The study is still continuing. The whole purpose of the stakeholder pension is to reduce the costs below those of personal pensions, which are considered to be rather high and unaffordable by the low-paid, those in intermittent employment and some of the self-employed.

NHS: Missed Hospital Appointments
3.15 p.m.
Lord Hardy of Wath Lord Hardy of Wath asked Her Majesty's Government:
In how many cases a patient failed to attend a hospital appointment in 1996–97, and in 1997–98; and what proportion of total hospital appointments these absences represented in each year.
The Minister of State, Department of Health (Baroness Jay of Paddington): My Lords, the figures available are for 1996–97. During that period, more than 6 million clinic appointments were missed by patients in England, Wales and Northern Ireland. That represents roughly 12 per cent. of all appointments. In Scotland, the data available are for first clinic appointments only: 148,000 first appointments were missed, representing 11 per cent. of the total.
Figures for missed procedures, which might be operations or other procedures booked on a day case and normal admission basis, are only collected in this form in England. The latest figures indicate that 156,100 people failed to turn up. That represented 4.6 per cent. of the total.
Lord Hardy of Wath: My Lords, does my noble friend agree that a problem clearly continues? Does she further agree that it is a surprising problem, given the huge expansion of NHS bureaucracy under the previous administration? Since a large wastage of NHS resources clearly applies, would it not be advisable for good practice to be encouraged across the country in order to ensure that some of the criticisms offered by noble Lords no longer apply?
Baroness Jay of Paddington: My Lords, I certainly agree with my noble friend that the figures I have mentioned represent a considerable waste of resources within the NHS. It is difficult to calculate why appointments are missed. It may be that people simply forget; or it may be for administrative reasons, as my noble friend suggests. Frankly, it is difficult to calculate precisely what loss of resources it represents. An out-patient appointment at a clinic may be for some very simple matter, or for a complicated procedure. If we take as an average £61 for each out-patient appointment,

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the NHS could be losing as much as £360 million a year on missed appointments. It is certainly a matter that needs to be actively considered.
Baroness Gardner of Parkes: My Lords, can the Minister confirm that many hospitals have taken into account the number of patients who fail to arrive? In my experience as chairman of the Royal Free, we found that 15 to 17 per cent. of out-patient appointments were not kept. Do other trusts, as we have done, factor that in, in the way in which airlines tend to over-book? Although that may represent a large saving to the National Health Service, it could present great difficulties if all the patients turned up. Is the Minister aware of that?
Baroness Jay of Paddington: My Lords, I am aware, to use the noble Baroness's analogy, that some hospital trusts are "over-booking". Perhaps it would be even better if they offered people large sums of money to get off aeroplanes or out of health service clinics if they were there when there was a surplus! I understand that some trusts, including one in Burnley, have set up a reminder system for patients. Although it was concerned that that might lead to a rather unwelcome influx of people who had been, as it were, built into the system as not attending, in fact it was able to cut the rates of "do not appear" people, as they are called, in some clinics by one-third. So it was clearly worth doing.
Lord Kennet: My Lords, may we hear more about the £360 million lost by people missing appointments? It is a common experience—certainly it is mine—that, whatever the nature of the appointment, it always runs late because the staff concerned do not have a minute off between one appointment and the next. That being so, they are always, by definition, usefully employed. Where is the £360 million going?
Baroness Jay of Paddington: My Lords, I cannot speak for the noble Lord's personal experience. It is calculated that the real wasted costs are in, for example, writing to patients who do not appear and rebooking their appointments, as well as the extremely important loss of time by highly paid and very highly skilled members of staff within the clinics who, contrary to the noble Lord's experience, are often sitting around waiting for people to appear. I spoke today to a consultant in what one would have thought was a very oversubscribed, busy London clinic who said that six of his 10 booked appointments in the previous clinic had just not turned up.
Baroness Masham of Ilton Baroness Masham of Ilton: My Lords, does the Minister agree that it is possible that some patients who are to have an investigative procedure panic at the last minute? It might be helpful if the procedure and its importance were to be explained to them, either by the GP or in writing by the hospital.
Baroness Jay of Paddington: My Lords, the noble Baroness has made an important and sympathetic point. A great deal can be done. I am looking at the issue carefully in terms of preparing people for appointments,
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as well as doing the simple, courteous, administrative things such as reminding people who may have been sent an appointment some weeks ahead and may therefore just forget it.
Lord Avebury: My Lords, does the Minister agree that, because of the length of time it takes to get appointments in some disciplines, a few of the no-shows that she mentioned may have died?
Baroness Jay of Paddington: My Lords, that is always possible. But perhaps I may quote the latest figures for out-patient appointments in England for the last quarter, which show that 81 per cent. of those waiting for appointments waited under 13 weeks and 96 per cent. waited under 26 weeks. Those waiting times conform with the Patient's Charter standard set by the previous administration.
Lord Dixon-Smith: My Lords, does the Minister have any information on what happens to the patients who fall out of the system by not attending an appointment? Do they subsequently reappear for a later appointment—in which case they perhaps ought to have a black mark against their name—or do some fall out altogether and simply do a runner?
Baroness Jay of Paddington: My Lords, I am afraid I cannot give the noble Lord a universal answer to that question, because I suspect there is not one. He talks about people having a black mark against their names. One has to remember that, as I said when replying to the noble Baroness, Lady Masham, people can genuinely forget an appointment. When we raised some concerns about this matter publicly a few months ago, I had several rather pathetic letters from people, particularly older people who had been waiting months for a cataract operation, who simply forgot on the day and then found themselves back again at the beginning of the queue. This is something that needs to be addressed, both sympathetically and administratively.
Baroness Thomas of Walliswood: My Lords, does the Minister have figures for cancellations of appointments which had been organised—or disorganised—by the hospitals themselves and for the percentage of appointments that represents?
Baroness Jay of Paddington: My Lords, the most recent figures show that there were 50,000 cancelled appointments in 1997–98, which is a lot; but that compares with the 156,100 patients who failed to turn up.
Viscount Addison: My Lords, can the Minister say whether there is any analogy in this matter with private healthcare and whether those who pay a higher premium for their healthcare turn up on a regular basis for treatment or appointments with doctors compared with those who pay through the National Health Service?
Baroness Jay of Paddington: My Lords, I am afraid that I do not have any comparative figures with the private sector, but perhaps the noble Viscount has a point.
The Earl of Lauderdale: My Lords, will the Minister look into the matter of reminders for older people? I find

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that, at the age of 87, I cannot read my diary, anyway. I have several diaries and miss my appointments simply through inadvertence. Old people do need to be reminded.
Baroness Jay of Paddington: My Lords, I am grateful to the noble Earl for reinforcing the point I made more generally in my earlier answer when I said that I had received some concerning letters from people who had had exactly that experience. It is clearly a matter which needs to be addressed. A possible solution is answering machines, which would enable people who found at the last minute that they could not attend to leave messages; but that would not address the noble Earl's problem.
The Countess of Mar: My Lords, is it possible that, where a GP knows that a patient may forget or not understand an appointment, the hospital could also notify the GP of the appointment so that his staff could ring and remind the patient of it on the day beforehand or early on the day of the appointment?
Baroness Jay of Paddington: My Lords, I am grateful to the noble Countess for that useful suggestion. With modern technology—and, after all, the telephone is not very modern—there must be systems to enable people to be reminded and prompted to take up appointments which may have been set some weeks or months in advance.
Baroness Oppenheim-Barnes: My Lords, has the Minister considered whether patients—apart from elderly, forgetful patients—who miss their appointments should have to pay some form of penalty before another appointment is granted?
Baroness Jay of Paddington: My Lords, I have seen that suggestion.

Manufacturing Industry: Interest Rate Increase
3.25 p.m.
Lord Evans of Parkside Lord Evans of Parkside asked Her Majesty's Government:
What estimate they have made of the effect on employment in the manufacturing sector of the Bank of England's decision to raise base rates to 7.5 per cent.
Lord McIntosh of Haringey: My Lords, the Monetary Policy Committee raised interest rates in order to ensure that the Government's inflation target is met. I am sure that the House, manufacturers and businesses generally will agree that we must avoid the boom and bust policies of the past, since higher inflation today results in fewer jobs, lower growth and higher interest rates tomorrow.
Lord Evans of Parkside: My Lords, in thanking my noble friend for that reply, I ask him to recall the period 1979 to 1982 when the then new Conservative Government, in pursuit of a high pound and high interest
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rate policy, destroyed huge tranches of Britain's industry and created mass unemployment, particularly in northern England. Is my noble friend aware that Labour Government supporters such as myself are becoming anxious that the present Government appear to be following a similar high pound and high interest rate policy and that manufacturing industry is again beginning to feel threatened? Can my noble friend give me an assurance that Her Majesty's Government will do their utmost to ensure that Britain's manufacturing base is protected and the jobs of workers in industry safeguarded?
Lord McIntosh of Haringey: My Lords, I am indeed old enough to recall the period to which my noble friend refers. I also recall the period between 1988 and 1993 when a million jobs in manufacturing were lost. The Government will always be very conscious of the risks involved in higher interest rates. The present evidence is that, although manufacturing industry is not expanding, it is not in recession, and the forecasts for next year are encouraging.
Lord Clark of Kempston: My Lords, does the Minister agree that one of the main factors in the strength of sterling is the high base rate? As has been said, that high rate is threatening our export markets because, as far as overseas buyers are concerned, our goods are more expensive. Does the Minister further agree that the role of the Chancellor of the Exchequer is to oversee the whole of the economy of the country and that it is quite wrong of him to shrug off responsibility for the base rate to the Bank of England?
Lord McIntosh of Haringey: My Lords, the noble Lord makes two points. On the first point, it is undeniable that there is interaction between exchange rates and export performance. On the second point, the Government maintain control over both fiscal and monetary policy in the economy. They have devolved decisions on short-term interest rates to the Bank of England.
Lord Barnett: My Lords, I thought my noble friend said in his first Answer that we were concerned about the level of inflation today. Was he suggesting that the most recent ¼ per cent. increase in interest rates would affect inflation today, or was he telling us that, in practice, for some reason the Monetary Policy Committee is able to forecast that in two years' time inflation would be lower if interest rates were increased today?
Lord McIntosh of Haringey: My Lords, I was not quite suggesting that. What I suggested in my first Answer was that the Monetary Policy Committee raised interest rates in order to ensure that the Government's target for inflation was met. We shall see whether or not I am right in five weeks' time.
Lord Boardman: My Lords, does the noble Lord agree that changes in interest rates are bound to affect many aspects of the economy which are controlled by

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the Chancellor of the Exchequer? Does he therefore regret the change which the Government made last May, or does he have no confidence in the ability of the Chancellor, if he had control of interest rates, to protect us against inflation?
Lord McIntosh of Haringey: My Lords, the noble Lord puts forward a false syllogism. Of course the Government have confidence in the Chancellor to maintain control of all aspects of fiscal and monetary policy. There is no derogation from that in the fact that there has been a devolution of decision making on short-term interest rates.
Lord Razzall: My Lords, will the Minister accept that, having listened both here and in another place to the points made on "boom and bust" when this question is asked and answered, the implication of the Government's statement is that they are simply leaving the effect of interest rates and fiscal policy on manufacturing industry to the operation of the markets? Is not that a surprising stance for new Labour to take?
Lord McIntosh of Haringey: My Lords, far from it. In many ways the Government have been directly active in helping manufacturing industry. Such policies as lowering corporation tax rates, easing regulatory burdens on businesses, extending first-year capital allowances and the creation of new venture capital funds are all directly designed to help manufacturing business.
Lord Paul: My Lords, can my noble friend confirm that the Bank of England has knowledge of the condition of the manufacturing industry in mind when fixing interest rates and is not worried about inflation alone, which is distorted by the service sector?
Lord McIntosh of Haringey: My Lords, the Bank of England Act, which came into force on 1st June, specifically requires the Court of the Bank of England to ensure that the Monetary Policy Committee has available to it information on economic trends, both regionally and by sector, therefore including manufacturing business. I can therefore give my noble friend the assurance for which he asks.
Lord Gisborough: My Lords, manufacturing business is one thing, but is the noble Lord aware that in the farming industry the pound is causing total chaos? Farming incomes are now zero and it will not be long before many farms are emptied because nobody will be able to afford to work them.
Lord McIntosh of Haringey: My Lords, the Government are aware of the difficulties caused to agriculture by a strong pound. Many of the actions I described in response to the question from the noble Lord, Lord Razzall, apply also to farming.
Lord Randall of St. Budeaux: My Lords, does my noble friend agree that, on balance, nobody wants to see high interest rates? Does he agree also that this is a
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question of making the right short-term decisions to ensure that we get long-term stability in our economy, which is vital to investment, productivity and jobs?
Lord McIntosh of Haringey: My Lords, my noble friend puts the issue concisely and accurately. For over a year the Chancellor has been seeking to persuade the people of this country of that point, with a considerable degree of success.
Lord Mackay of Ardbrecknish: My Lords, does the Minister join me in welcoming back to our midst my noble friend Lord Clark of Kempston?
Noble Lords: Hear, hear!
Lord Mackay of Ardbrecknish: My Lords, will the Minister take on board the anxiety raised by his noble friend—an anxiety shared by many of us? Big and small companies in Scotland are not facing a boom or bust; they are facing a bust. Perhaps I may highlight a tiny one. In a remote part of what used to be my constituency, a company called Mountain Technology was founded when I was a Member to manufacture ice axes. From that small company eight jobs have been lost in a new massacre of Glencoe—I have little doubt but that the noble Lord will remember Glencoe. According to the managing director on closing down the firm, apart from the mild winters—for which I cannot blame the Government—the problem has been that sales abroad have been non-existent for the past year.
Will the noble Lord take on board the concerns of manufacturing industry? Does he accept that there is a relationship between the difficulties manufacturing industry face with the high pound and high interest rates? Firms could perhaps cope with the high pound if they had low interest rates, but they cannot cope with both.
Lord McIntosh of Haringey: My Lords, I know which side my clan was on at Glencoe; I am not sure on which side was the noble Lord's clan, or indeed whether we were on the same side. Of course I have great sympathy for the eight people who lost their jobs at Glencoe. But the noble Lord is carrying his practice of arguing from the particular to the general to unprecedented extremes. It is true that the connections he suggests exist. But it is also true that the Government are aware of them and have been promulgating policies to deal with them ever since they came to office.
Lord Peston: My Lords, is my noble friend as puzzled as I am by the comments of the spokesman for the Opposition? Does he recall that there was a time when the Conservative Party was in favour of sound money? One might have expected therefore that they would be in favour of giving operational independence

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to the Bank of England in order to pursue monetary policy in order to keep inflation under control. Is my noble friend as mystified as I am by the fact that they have adopted my role of old-fashioned Keynesianism, while I adopt what I take to be their role of old-fashioned monetarism?
Lord McIntosh of Haringey: My Lords, I try to keep to a minimum my comparisons between this Government and the previous administration. But my answer to my noble friend is that I am no longer surprised by anything that the Opposition Front Bench does.
Lord Evans of Parkside: My Lords, in view of the almost universal criticism of the Bank of England's Monetary Policy Committee increasing the base rate to 7.5 per cent., will he and his ministerial colleagues consider altering the balance of the committee by having more members with knowledge of industry and fewer academics on the committee?
Lord McIntosh of Haringey: My Lords, I shall cause great difficulty in the ranks of Government Back-Bench supporters if I take sides as between manufacturing industry and academics. Both have a role to play and the Chancellor is conscious of the importance of manufacturing industry when he makes appointments to the Monetary Policy Committee, just as he is when he insists that the Monetary Policy Committee should have proper information about developments in manufacturing industry.

Business
3.36 p.m.
Lord Carter: My Lords, after consideration of the Commons Reason on the European Communities (Amendment) Bill today, my noble friend Lord McIntosh of Haringey will, with the leave of the House, repeat a Statement that is to be made in another place on economic and fiscal strategy. I should like to take this opportunity to remind the House that the Companion indicates that discussion on a Statement following the end of the Minister's initial reply to the Opposition spokesmen should be confined to brief comments and questions for clarification. Peers who speak at length do so at the expense of others.

Business of the House: Scotland Bill
Lord Strathclyde: My Lords, I hope that the Government Chief Whip will not see it as a discourtesy if I rise to ask for clarification, first, on some general points of business management and, secondly and more importantly, on the Second Reading of the Scotland Bill which is due to take place next week.
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The House will remember that my noble friend Lord Cranborne and I both gave warnings last summer of the potential consequences in terms of pressure of business in this House if the government programme were too full and there was not a proper balance between the weight of legislation introduced in this House and in another place.
We said that this House could not and would not be held to account if, as a result of the way in which the Government packed and arranged the programme, we were forced into a very prolonged Session. Since then, and in many cases for good reasons, further government legislation has been added to the programme. However, most of the Government's main programme Bills were introduced in another place and the most far-reaching and complex of all its Bills, the Scotland Bill, is yet to receive a Second Reading.
In such a crowded programme it behoves the Government to assist us in scrutinising legislation. From the first, we have not always received that to which the House is entitled. I will not go through the sorry saga of the past 12 months—that will be well known throughout the Chamber—but we are seeing signs of increasing pressure and haste on the part of the Government at a time when the legislative programme is still growing. There is a risk of this House being pushed too far when there is plenty of time in the spillover to complete the programme with full and proper scrutiny.
The Government Chief Whip and the usual channels have not been entirely unsuccessful. I wish to put on record how grateful are the Opposition for the extra half-day that we received on the Wales Bill. But it should never have been envisaged that such a major constitutional Bill could have been settled in less time.
My specific point is on the Scotland Bill. It has been announced that that Bill will have its Second Reading next week. But in the first edition of Forthcoming Business it is believed by the Government that it can be completed within a single day. Over 60 speakers have put down their names to speak at Second Reading. Since then the Government have accepted that there should be a second day. They have simply put on the Forthcoming Business,
"It is expected that debate on the Second Reading of the Scotland Bill will be continued this day, as first business".
I welcome that.
However, I wish to have clarification as to how that will work in practice. When will Peers know whether they have been selected to speak on Wednesday or Thursday? Might it not be wiser to decide now to split the subjects for debate on the Scotland Bill? Having seen the list of speakers so far, might it not be appropriate to spend the first day dealing with the political issues of devolution and on the second to look more at the legal aspects? A number of speakers have already put their names down to speak on this matter.
I want to avoid any accusation that the Government wish to confuse this House in their approach to this important Second Reading and that they would like the debate to take place in the small hours of Thursday

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morning rather than on Thursday afternoon. I hope that the noble Lord the Government Chief Whip will be able to give clarification on that point.
The last time this subject was debated was 20 years ago. On that occasion the House was given two full days. There were some 60 to 65 speakers. Moreover, next Thursday is the day on which the Government have decided to have the debate of the noble Lord, Lord Barnett, the chairman of the European Union Committee, on the European central bank. I hope that the noble Lord will not accept having his debate pushed further into the night and that he will ask the Government for the debate to be rescheduled.
I fully understand the need to expedite business, particularly at this time of the year, but I believe that there is no need to hurry. There is plenty of time for this House to give full and effective scrutiny to this legislation. I very much hope that the Chief Whip will take this opportunity to clarify the situation.
Lord Barnett: My Lords, perhaps I may say a word before my noble friend replies. I have little or no sympathy for the Opposition Chief Whip, but I have sympathy for those who wish to participate in a major debate on the European central bank, including members of my committee. I would find it quite intolerable were the Chief Whip to tell us that that debate will take place after the second day of the debate on the Scotland Bill. That would be outrageous. Many noble Lords on all sides of the House wish to participate in the important debate on the European central bank. I hope that my noble friend is able to assure me and others in this House, regardless of what the Opposition Chief Whip wants, that we shall have a full day's debate early on another day rather than have it late at night on the day suggested.
Lord Harris of Greenwich: My Lords, I understand the point made by the Opposition Chief Whip. But I recall that when the noble Lord, Lord Strathclyde, was Government Chief Whip in the last Parliament his attitude was remarkably different from the position he has set out this afternoon. I remember with great clarity the refusal of the then government to provide adequate time for a major Bill involving policy on criminal justice. But I do not propose to go down that particular avenue save to comment on the particular point made by the noble Lord, Lord Strathclyde, as regards the Scotland Bill.
Given the number of speakers, the Government have, as I understand it, agreed that part of the debate should spill over into Thursday. That is acceptable. I found it a little puzzling to hear the noble Lord, Lord Strathclyde, suggest that the Government were embarked on a policy of attempting to confuse the House. I suspect that his complaint would have been the intolerable arrogance of Ministers if the Government had not agreed to provide additional time for the Second Reading of the Scotland Bill. The noble Lord cannot have it both ways.
The position is quite clear. I do not think we can separate the debate on the Scotland Bill into two sections relating to different parts of the Bill. It would lead to a most confusing and unsatisfactory debate. That
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being so, I very much welcome what I understand the Government Chief Whip will say about the Scotland Bill. I very much hope that we have a valuable debate on this very important measure.
Lord Campbell of Croy: My Lords, I support what my noble friend Lord Strathclyde has said. In this Parliament there has been only one debate in this House on the Government's proposals in relation to Scotland and that was 10 months ago. That debate was on what had been described as a White Paper. It was published only five days before the debate. It was a very sketchy brochure containing meagre proposals and a scant outline of what they were. The debate took place on the day before the Recess, if my memory serves me correctly. It was time-limited and the speakers had only 10 minutes to speak on proposed major constitutional changes.
There is now a substantial Bill before us and the Government apparently intend to time-limit that debate. It is no surprise that so many speakers have put down their names because the constitutional effects go far wider than Scotland; they affect the whole of the United Kingdom. Therefore, I support what my noble friend has proposed.
The Earl of Perth: My Lords, I support the noble Lord, Lord Strathclyde, on this matter. At the Cross-Bench meeting this afternoon I raised the matter that only one day was to be given to the issue. General support was given to the view that that was not enough. It is a vital issue not only for Scotland but also for England. The fact that there are no fewer than 60 speakers strongly supports the view that this measure is critical for all of us. If we are to prevail on the Act of Union we should have a proper debate on it, but not at two o'clock, three o'clock or four o'clock in the morning. I very much support urging the Government to divide the debate into two days.
Lord Renton: My Lords, there is one fundamental point that I wish to raise. On the Opposition Benches in another place there are scarcely any Scottish Members. Indeed, there are no Conservative Scottish Members although there are still quite a lot of Conservatives in Scotland. In your Lordships' House we have a formidable array of Scottish Peers with wide experience. That is one of the main reasons why so many noble Lords wish to speak in the debate. Will the Government Chief Whip kindly bear that in mind?
Lord Taylor of Gryfe: My Lords, over 50 speakers have put down their names to speak in the debate and, obviously, they cannot be accommodated within the day or day-and-a-half proposed. It is a matter of vital importance constitutionally. But bearing in mind that many of the speakers will presumably travel from Scotland, with all the cost of overnight expenses, is it constitutionally possible to hold the Second Reading debate—there will be no vote anyway—in Scotland?
Lord Monro of Langholm: My Lords, I understand that this may be the last major Second Reading debate on Scotland. It is quite intolerable to think that so many Peers on both sides of the House, and former Scottish Ministers, will not have an opportunity to express their views within

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a reasonable timescale. To do so at three or four o'clock in the morning, or even late on the second day, is not acceptable. We simply must have two full days.
Lord Molyneaux of Killead: My Lords, on the question of timetabling generally, perhaps I may ask the noble Lord the Chief Whip to reconsider the apparent intention to set down on Thursday 25th June the Bill for the premature release of terrorists, which happens to be the day provided for, in legislation passed by this House, the all-important elections to the new Northern Ireland assembly.
Lord Carter: My Lords, it is a little unusual to have a usual channels discussion on the Floor of the House. The one thing that I have learnt in this job is never to be surprised by the frailty of human nature. It is a little early to start the usual discussions about the date of the Summer Recess. In the usual way, we shall discuss that a little nearer the date.
I am grateful to the noble Lord the Opposition Chief Whip for his kind remarks about the Government of Wales Bill. Perhaps he will remember that there was first an unexpectedly long debate on the report from the Select Committee on Procedure. In my usual kindly way, I managed to find some more time, so everybody was happy.
On the point about this House not starting its fair ration of Bills, I remind your Lordships that we started the Crime and Disorder Bill and the Teaching and Higher Education Bill, together with other important Bills. In fact, we receive what we are entitled to. On the point raised by the noble Lord, Lord Molyneaux, the date of the Second Reading of that Northern Ireland Bill was agreed through the usual channels.
I turn now to Scotland. I am grateful to the noble Lord the Opposition Chief Whip for his remarks and I give him full marks for a good try. It had been the clear intention that the debate on the Second Reading of the Scotland Bill would be concluded in one day. However, when we saw the length of the list of speakers, we took our decision. When the number of speakers became clear this morning, after discussion through the usual channels, it was decided that the list of speakers had grown too long to allow the debate to be confined to a single day unless the House sat extremely late into the night. Therefore, time has been provided to allow that debate to spill over into a second day. It is hoped that it will be possible to do that without deleting the other business set down for Thursday 18th June although that business would then start later in the day. I shall certainly bear the remarks made by my noble friend Lord Barnett very much in mind.
All noble Lords who have already set down their names to speak will be assumed to be available on Wednesday, as that was the day for which the business was announced and, accordingly, it is the day for which they put down their names to speak. If any noble Lord whose name is already down will also be available on the Thursday, it would be helpful if that fact could be communicated to the Government Whips' Office to assist in the construction of the Speakers' List. I should stress that the procedure will be to have a single debate spread over two days rather than
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to have two days for separate debates. As always, the final list of speakers will be produced on the Wednesday morning in the usual way. I am not sure whether the Opposition Chief Whip was entirely serious when he suggested splitting the subjects. It will be the Second Reading of an important Bill and every noble Lord should be able to speak in his place on the list to every aspect of the Bill.
Regarding the question from the noble Lord, Lord Renton, the one thing for which I am not responsible is the lack of Scottish Opposition Members of Parliament in the other place.
I hope that your Lordships will be satisfied. As always, we have tried to be accommodating. We had to see how many names were put down to speak. When we saw the list, we realised that it was too long for one day so we have allowed a spill-over into the second day.
Lord Weatherill: My Lords, before the Chief Whip sits down, may I ask him to reconsider the point made by my noble friend Lord Molyneaux about the debate on 25th June? This matter was not discussed with the Cross Benches and as two former Northern Ireland Members of Parliament sit on our Benches, it would have been courteous to discuss with us whether that was a convenient day. Northern Ireland Members will naturally wish to be in the Province at the time of the election.
Lord Carter: My Lords, all I can say is that there was the usual discussion through the usual channels. I apologise to the noble Lord, Lord Weatherill, if he was excluded, but because of the very tight timetable, of which all your Lordships are aware, regarding the enactment of that legislation and relating to the agreement in Northern Ireland, it was agreed that that was the right day for that business. We discussed this through the usual channels and the business was agreed for that day.
Lord Bruce of Donington: My Lords, before the noble Lord comes to a final decision on this matter, may I urge the importance of the arguments put by my noble friend Lord Barnett concerning a debate on the European Central Bank? The debate on the European Central Bank, and in particular the comprehensive and authoritative contents of the report from Sub-committee A, make it indispensable that this House treats the matter very seriously. The events that may happen would have a profound effect, not only on the economy of the United Kingdom, but also on its political relationships with other countries.
I am sure the noble Lord agrees that it would be intolerable if such an important document did not have a full day allotted to it. It is inconceivable that the report could properly be discussed at the fag end of business—although I agree that that business is of considerable importance. Therefore, I implore the noble Lord, in both the short-term and the long-term interests of the country, to give a full and adequate opportunity to the whole House to discuss that report on the European Central Bank. I hope that wise and more considered counsels may ultimately prevail.
Lord McConnell: My Lords, is the Chief Whip suggesting that Northern Ireland Members of this House

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should be deprived of their democratic right to vote in the assembly elections in Northern Ireland because they have to stay here to suit his convenience to consider the Northern Ireland Bill to release terrorists?
Lord Carter: My Lords, perhaps I may deal first with a point raised by my noble friend Lord Bruce. We are, of course, aware of the importance of that debate. The decision was taken only this morning that, because of the length of the list of speakers for the Second Reading of the Scotland Bill, we had to adjust the business. These are early days. I suggest that we wait until next week when we shall take a final decision on the shape of the day.
I return to the point about the Northern Ireland Bill. I repeat that the timetabling was agreed between the usual channels—between myself, the Opposition Chief Whip and the Chief Whip of the Liberal Democrat Party. The Belfast agreement states that we shall seek to enact the legislation by the end of June. If your Lordships will consider the timing of that Bill in the Commons, you will see that it is important that we now get on with the Bill. The usual channels decided not to put down the Bill for consideration before the election on 25th June, but on that day. On the point about voting in that election, I am sure that the noble Lord, Lord McConnell, will be able to vote in the morning and to take part in our debate in the afternoon.
Lord Strathclyde: My Lords, I am thankful that some aspects of this debate can return to the mystery of the usual channels. I am sure that that is where such discussions should be held. Perhaps I may clarify two points. First, there is no reason why this Session should necessarily end at the end of October. It could easily go into November. I refer to the point about there being plenty of time to complete the business when we return after the Summer Recess.
Secondly, and more specifically, I am still confused about how noble Lords who have put down their names to speak on the Scotland Bill on Wednesday will know whether they have been moved and are to speak on Thursday. I do not expect an answer to this now from the noble Lord the Chief Whip. It is important that not only my noble friends, but all Peers around the House, can adjust their diaries to deal with this. Will the Government Whips' Office telephone all those who have put down their names to speak to ask them on which day they wish to speak so that we can have a clear view of who will be speaking when?
Lord Carter: My Lords, I hope that the Opposition Chief Whip, having agreed to the wish of the House for a debate lasting two days, is not now suggesting that not all noble Lords will be present on both days. I hope that he is not suggesting that. I do not think that we can telephone all noble Lords. If noble Lords can tell us that they are available on the Thursday as well as on the Wednesday because—I must make this clear—they were expected to speak on the Wednesday, that would be helpful. As to the
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dates of the Summer Recess and the spill-over, again, I give the noble Lord full marks for a good try, but it is very early in the season to be starting that debate.
Baroness Carnegy of Lour: My Lords, on the question of the Northern Ireland day, can the Chief Whip clarify to me whether he considers that the Cross Benchers in our House are not part of the usual channels?
Lord Carter: My Lords, discussion of the Business of the House in the usual channels takes place among the three Chief Whips and always has done.
The Earl of Perth: My Lords, as I understand what has been decided, we are to have two days, which was certainly the wish of the Cross Benches.
Viscount Cranborne: My Lords, I intervene briefly. I thank the Chief Whip for his constructive attitude. We all know that he is an extremely reasonable man both as a Member of this House and in his former profession. He is very professional. I hope that the Chief Whip will be able to give the House an assurance that when the usual channels resume their discussions on this matter he will take very carefully into account the points that have been made on all sides of the House this afternoon and that when he has addressed these points in his usual helpful fashion he may be able to report back to the House as to the detailed conclusions that have been reached.
Lord Carter: My Lords, of course. The short debate that we have had illustrates what happens when the usual channels are invited to work across the Floor of the House and not outside the Chamber.

European Communities (Amendment) Bill
4 p.m.
Lord Whitty: My Lords, I beg to move that the Commons reason be now considered.
Moved, That the Commons reason be now considered.—(Lord Whitty.)
On Question, Motion agreed to.

COMMONS REASON
[The page and line refer to HL Bill 62 as first printed for the Lords]
LORDS AMENDMENT
1 After Clause 1, insert the following new clause—

QUOTA-HOPPING
(". This Act shall come into force only when each House of Parliament has come to a resolution on a motion tabled by a Minister of the Crown considering the legal protection for British fishermen afforded by the Treaty of Amsterdam on the issue of quota-hopping.")
1A The Commons disagreed to this amendment for the following reason—
Because it would not be appropriate to restrict commencement of the Act in the way proposed.
Lord Whitty: My Lords, I beg to move that the House do not insist on their Amendment No. 1 to which the Commons have disagreed for the reason numbered 1A. I remind the House that the Bill received from another place, which would allow for ratification by the United Kingdom of the Treaty of Amsterdam, was approved without amendment to its central provisions by your Lordships' House. The amendment that this House passed and which another place, by a majority of 196, has not accepted was a delaying caveat that would not alter the substance of the Bill or the Treaty of Amsterdam. Indeed, it relates to an issue not covered by the changes made to the treaties at Amsterdam. However, the important issue before the House today is that if the amendment were to be reinstated by this House it could have disastrous repercussions by delaying ratification by all 15 member states. It could potentially destabilise relations with our partners and reverse all the painstaking progress made in our European policy since the advent of this Government.
I accept that the amendment was tabled by the Opposition on the supposed basis of seeking to help Britain's fishing communities. I must make clear to noble Lords that the amendment would not remove a single quota-hopper from the British register or help our British fishermen in any way whatever. Instead, it would delay or block ratification of a treaty that offers many benefits and advantages to this country. However, in no way does this mean that we do not share the very genuine concern of the Opposition and noble Lords generally about the plight of our fishing industry. We do. The exchange of letters between the Prime Minister and the President of the Commission at Amsterdam was a real step forward. That exchange recorded the Commission's interpretation of how a member state might, within the rules of the single market, require an economic link between fishing activity and fishing communities. Since Amsterdam we have taken this forward. We issued a consultation document last July, following which the Government had extensive meetings with representatives of the UK fishing industry to discuss implementation of the "economic link" licensing conditions that we proposed.
Following that consultation, we submitted draft proposals to the European Commission which incorporated contributions from the UK fishing industry. A copy of those proposals was placed in the Library of the House on 12th May. This is a substantive package of measures which will be both effective and compatible with the treaty. We intend that all vessels shall be required to comply with one of the following criteria: having to land 50 per cent. of their catch of quota species in the UK; or requiring 50 per cent. of the crew to be resident in UK coastal areas; or requiring a certain level of operational expenditure in UK coastal areas; or other measures which will provide sufficient economic benefit to populations in the UK which are dependent on fishing and related industries.
The process of putting flesh on the bones of the exchange of letters between ourselves and the Commission at Amsterdam is an important one. We await the Commission's final opinion on the proposals.
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Only last week my right honourable friend the Minister of Agriculture, Fisheries and Food discussed progress with Commissioner Bonino.
This subject affects a number of member states as well as ourselves and it will be discussed at official level in Brussels tomorrow. We have learnt that France and Belgium are already modelling an economic link for licence conditions in their countries based on our proposals. We understand that the Commission will soon present its opinion. We expect real progress from that opinion. We have made progress. These measures will ensure that in future real economic links exist between the UK's fishing fleet and our coastal communities. That is a significant improvement on the current situation in which many vessels bring little or no benefit to the UK. Vessels that fail to maintain an economic link with the UK will be unable to fish UK quota species until such time as they are able to demonstrate that satisfactory economic links have been established.
During debates on the Bill we ranged over a number of issues, but we passed only this amendment. It is only this amendment that the Commons has rejected. While no doubt on past form certain noble Lords will wish to range slightly wider than the amendment in the course of the debate, this is the issue before the House. The elected Members of another place have overwhelmingly made clear their collective view.
Perhaps I may provide some slight comfort to the Official Opposition in regard to their amendment. I can report that its passage through this House was noted to some extent in Europe. It impressed upon the Commission and our partners that fishing is an important issue for the UK. But it also alarmed them to see that it threatens ratification. Therefore, in one sense it has achieved an impact. Unfortunately, that impact is double edged. The other edge is that our partners fear that the UK, despite the achievements of this Government, is reverting to the negative table-thumping, Europhobic behaviour of earlier years. If they go on thinking that we shall again end up on the margins of Europe. Unfortunately, that second impact is already in danger of predominating. If we persist by restoring the amendment today it will predominate and the main losers will be the very fishing communities that the amendment purports to help.
While most of the debate on the treaty was conducted in good spirit, the noble Lord, Lord Moynihan, and I exchanged a few harsh words. I am sure that the noble Lord does not wish to see a negative impact on the fishing communities any more than I and other noble Lords do. I appeal to the noble Lord and other noble Lords not to oppose the Commons rejection of our amendment. What limited positive impact our discussion of the importance of the fishing industry may have had could be jeopardised by persistence in the amendment. I hope that neither the Official Opposition nor the House in general will oppose the elected House on this issue. I call upon the noble Lord and the House to accept the position adopted by the House of Commons.
Moved, That the House do not insist on their Amendment No. 1 to which the Commons have disagreed for the reason numbered 1A.—(Lord Whitty.)
Lord Moynihan: My Lords, I am pleased to see the noble Lord, Lord Callaghan, in his place today. He was right yesterday to point out that the noble Baroness, Lady Symons, is a popular figure in your Lordships' House. However, I hope that noble Lords will understand if, in my opening remarks, I put any personal feelings of your Lordships aside and focus on the political judgment of a Foreign Office team that once again has determined that our final consideration of this Bill—the only Foreign Office legislation in this Session—apparently does not warrant the presence of the Minister.
Noble Lords will recall the importance that was attached to this matter by your Lordships' House at Second Reading. At that time my noble friend Lord Beloff begged to move that the debate be adjourned because of the absence of the Minister. Today the Minister is not with us again. I remind noble Lords of the speech of my noble friend Lord Beloff:
"It is the opinion of many noble Lords that this [Bill] is a matter of great constitutional importance and that there are precedents which show that, whenever a matter of constitutional importance is before your Lordships' House, the Bill is piloted on Second Reading and, even more importantly, in its later stages by a Minister from the department concerned".
He continued:
"The fact that this Bill is of constitutional importance hardly needs demonstrating by reference to its own clauses. In another place, it was taken through all its stages by the Prime Minister and the Foreign Secretary. Clearly, they thought that it was a matter of such constitutional importance that, in spite of their many other commitments, often airborne, they would have to devote the necessary time to dealing with it".—[Official Report, 16/2/98; cols. 25–26.]
The importance of the amendment is that it is constitutional, as was pointed out by the noble Lord, Lord Whitty, a moment ago. He said that it was of constitutional importance, and recognised as such in Europe.
On Tuesday night, when the amendment that we are considering was debated in another place, the subject was of sufficient importance to warrant the direct involvement of two Ministers in a discussion which lasted over three hours and saw no fewer than 468 Members of Parliament go through the Division Lobbies. But today, once again, we are presented with a Whip to mop up behind the absent Minister, albeit a very good Whip indeed.
Lord Whitty: My Lords, I have not often interrupted the noble Lord. I need to now. It was made clear in the exchange following my noble friend's intervention yesterday that my noble friend the Minister is carrying out important business in Canada and the US. It may have escaped the notice of some noble Lords that she is responsible in the Foreign Office for relations with Canada and the US. There was no earlier objection to her not dealing with this final stage of the Bill, which has been down in my name for at least one week and probably longer.
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The noble Lord, Lord Beloff, on that occasion, rightly directed his criticism not to my noble friend but to the business managers. His procedural Motion was defeated by the House at that stage. Having taken account of views expressed during the debate, my noble friend participated fully in the debates on the Bill. She was present throughout the Committee and Report stages. She dealt with the central issues of common foreign and security policy, defence, sovereignty, human rights and many other issues. During those stages I dealt with quota hopping. There was no objection from the Official Opposition or any other quarter of this House to my doing that. My noble friend dealt with Third Reading in this House.
As I said yesterday, in my experience of this House no Minister has shown greater diligence in fulfilling her duties to this House. However, she has other duties which are vitally important to this country and to our relations with two of our greatest allies. It is trivial for the noble Lord to raise this issue, in this way, at this time. I hope that he will not persist in it, but will let us get on with debating the substance of the amendment.
Lord Moynihan: My Lords, that is a wholly unacceptable response from the Government Front Bench. The first duty of any Minister in either House is to the House. That is a fundamental priority. Last night my noble friend Lady Young raised an important debate. The Minister was absent. Today, we have another important debate on a constitutional measure, and the Minister is absent. It is not unreasonable to point out that the Minister may, in any case, have felt compelled to return from the US to make a personal statement to the House in relation to her answers to your Lordships' House on the arms to Africa affair.
We have had three important foreign affairs issues this week. It has not been an average week in your Lordships' House for matters relating to foreign affairs. That warrants the presence of a Minister in your Lordships' House. It warrants it, as was proved on Tuesday night, when another House felt that it warranted two Ministers to appear at the Dispatch Box—two Ministers to answer in detail the points that were raised. I shall be more than happy to give way again if the noble Lord can say why it was necessary for two Ministers to be accountable to the other place where this issue had been rehearsed significantly during earlier stages of the Bill, and rightly so, whereas there is no Minister present in your Lordships' House today?
4.15 p.m.
Lord Whitty: My Lords, it may have escaped the noble Lord that this place operates differently from another place. It has long been recognised that Whips take on what, in another place, would be regarded as ministerial duties. We did not object to that when the noble Lord's party was in power. I am amazed that he does so now. If he objects to my dealing with the substance of the amendment, why did he not do so in Committee, on Report or at any other stage? If it was proper for me to deal with it then, why is it suddenly not proper for me to deal with it now? The noble Lord is making a meal of this. I hope that we can get on

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with the substance of the Bill, not just for the fishing communities of this country but for our future relations with Europe. None of this will be understood outside this House, and precious few people within the House will understand it.
Lord Moynihan: My Lords, the noble Lord cannot lightly dismiss the importance of ministerial accountability. We will return to that point time and time again. I have made my point. I hope that I have made it clearly. I echoed the comments made by the noble Lord, Lord Callaghan of Cardiff. I highlighted the fact that on Second Reading this was a subject of considerable importance which was debated in full across the Chamber. I merely restate that point. I am not for a minute questioning the ability of the noble Lord, Lord Whitty, to respond to parts of this legislation. I have praised his ability on many occasions. Indeed I have done more than that.
As noble Lords will be aware, I have argued strongly that due to his regular presence at the Dispatch Box on matters regarding foreign affairs he should be made Minister in the Foreign Office and should be given the backing he deserves for his eloquence and attention to detail. It is a pity that he has had so many opportunities because his noble friend the Minister is so frequently absent from the House on important constitutional matters as at Second Reading and today.
I thank the noble Lord for his brief response. Having read the proceedings in the other place on Tuesday night, his response was disappointing, although predictable. I regret the fact that the Government used their majority in the other place to overturn the amendment. I shall not rehearse all the key points. There were some interesting developments on Tuesday night which are worthy of further consideration in your Lordships' House.
The issue of quota hopping to which the amendment refers is a grievous example of a promise made and a promise broken. Before the election the Prime Minister told the country that the one thing he would ensure he delivered at Amsterdam—the top priority for British negotiators—was the resolution of this issue. He said that he would hold up IGC business to get the right changes to fishing policy in British interests.
The amendment clearly puts on the face of the Bill the Prime Minister's apparent intent when he made that promise. He did not say that about any other issue. He said it about fishing policy. He said it about British fishermen's interests. Yet the Government failed. They failed to achieve indisputable legal protection for British fishermen at Amsterdam. The Prime Minister returned with barely more than a confirmation of the status quo. At Second Reading, in Committee and on Report, despite our best efforts, we have been given no satisfactory explanation for that, let alone a compelling one.
Instead, we have had trotted out, time and time again, the same empty rhetoric in this House, and, two days ago, in another place while the Government attempt to hijack the high moral ground by savaging the previous
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administration's record. The logic of the argument seems to be that the provenance of any criticism is more relevant and more important than the objective validity of that criticism. In that way, attention can be neatly diverted from any governmental shortcomings.
For all the righteous sound and fury, the defence by the noble Lord, Lord Whitty, of the Government's record was flimsy to the point of threadbare. The intended effectiveness of his attack on the previous government's record throughout discussions on this issue was in inverse proportion to the weak defence of his Government's own record. As a result, we still do not know why the crucial opportunity to ensure that British fishermen were afforded legal protection—it is what they would have received—which was there to be grasped at Amsterdam, was lost.
It is with great interest that I note what the Minister responsible for quotas stated in another place. He argued surprisingly that when in government he realised that life was a little different from what it was when he was in Opposition; and because it was tough he simply did not push it, and that was that. On the one key issue on which the Prime Minister had said that they would hold up the IGC in order to get a deal, the junior Minister concerned suddenly realised the day after he was in government that life was different. And that despite the comprehensive and assiduous as ever contribution by the noble Lord, Lord Whitty, before the election which he told us on many occasions was a key mark to the work he was doing, and the effect of that work after the election.
It is fascinating to me now to question whether the whole manifesto, by virtue of being drawn up in Opposition, holds the same importance as we are regularly told it should once in government. It was a paltry excuse from the Front Bench in another House for failure to protect British fishermen's interests.
I make these comments because I see it as vital to recognise that, unless the Government go ahead, unless they push hard for changes on behalf of British fishermen, they will lose. The Government ducked this issue at the IGC because they did not have support; they saw opposition coming. We heard today about new initiatives that the Government were taking in this context. It is interesting to note what Patrick Nicholls, Member of Parliament, stated on those very proposals on Tuesday night. He asked:
"Where are we now? We have been told that some new proposals have been worked out, so where are they? Aficionados of such matters will have to find an obscure parliamentary question of 12 May saying in effect, 'These things are in the pipeline. We are waiting for Europe to tell us whether we can do what we want".—[Official Report, Commons, 2/6/98; col. 971.]
Europe has since spoken. The Spaniards have already said what they think about that. They have raised grave reservations and doubts about the revised version of the United Kingdom proposals. That is the status of those proposals for British fishermen and for the British Government in their attempt to get changes. I predict they will fail. I predict that they will not have the heart to fight for them, as was clearly displayed at the IGC and which led to the tabling of this amendment. From these Benches we have made our feelings very clear.

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The Government's approach to the whole subject has been regrettable; and I sincerely hope that it is not a harbinger of disappointments to come.
But it is not my intention to press the point today. We shall not oppose the decision of another place to remove the amendment from the Bill, but we shall leave on record our complete disappointment at the failure of the ministerial team to deliver what the Prime Minister said he would fight for; namely, the interests of British fishermen—interests which have been jettisoned, interests which were thrown away by this Government in their negotiations at the IGC.
Lord Bruce of Donington: My Lords, before the noble Lord sits down, will he explain his own government's part in this? Will he explain why they signed up to the Treaty of Corfu in 1957, and the circumstances in which the government spokesman from the Foreign and Commonwealth Office, Mr. David Davis, addressed himself to the chairman of the House of Commons Select Committee on European Legislation? He endeavoured to explain the circumstances in which the assent of the government to the Treaty of Corfu was obtained.
Will the noble Lord agree that, on reflection, the real treaty to be discussed in this connection is not the Treaty of Amsterdam, which was not about this subject, but the Treaty of Corfu which was? Can the noble Lord clarify that position? It may well be that his own government are not without blame in this for the ambiguities that have arisen in this matter.
Lord Moynihan: My Lords, I am always willing to be as helpful as I can to the noble Lord in answering his questions. I recognise that the passage has been long and difficult, not just with regard to the implications of the Treaty of Corfu which the noble Lord rightly points out, but also the 1988 Merchant Shipping Act, the responses of the European Court of Justice, and the difficulties throughout the 1980s in resolving the question. All that led to the conclusion that the most effective way forward was to write a protocol which sought to deal with a quota-hopping problem once and for all by entrenching the condition that UK quotas must provide economic benefit to UK fishing communities and not to fishing interests in other member states.
Because of the history, the difficulties and the challenges, both parties recognise that the IGC and the Treaty of Amsterdam provided an opportunity to resolve that issue once and for all. It was because of my sincere disappointment that that opportunity was not taken to address the subject once and for all that I tabled the amendment that went to another place.
Lord Shore of Stepney: My Lords, this is hardly an appropriate subject for party polemics in however mild a form they may have been embarked upon. Rather, it is an occasion where, despite our being fairly hardened politicians, we should feel and express some collective shame for the state of our fishing industry and the way in which successive governments have failed to secure their minimum interests.
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The issue does not arise just over Amsterdam, as we all well know. It arose in the beginning by the British government of the day abandoning the concept of British waters and accepting that the waters around our islands are a "Community" resource. Further to our great disadvantage was the imposition and acceptance of fishing quotas which enormously undervalued the previous British take from our waters, with the result that we have had a continuing contraction of the British fishing fleet. Indeed, when historians write about this period, one of the many subjects which they will find puzzling indeed is how a great maritime nation, with the debt it owed to its navy, its merchant navy and its fishermen, came to abandon what is a great national resource.
We now come to the present situation. What is there left for Parliament to do? It is not the best way to threaten to hold up the implementation of a treaty which has been broadly agreed and must clearly be brought into effect. But virtually every other sensible way of proceeding has been denied to us. There was the third great humiliation. Some years ago we passed the Merchant Shipping Act which would have excluded the Spaniards from quota-hopping as regards the British quota. That measure was struck down by the superior legislative and judicial powers of the European Court of Justice.
To add insult to injury, millions of pounds of compensation are now being paid to deprived Spaniards. If it comes off, the deal described by my noble friend would at least guarantee 50 per cent. of the British quota being landed in British ports and 50 per cent. of the ships which are not British, operating in our waters, would have to have some connection with the maritime interests of this country; and that is a hit of progress. But I have yet to be convinced that it will be achieved. What a miserable situation this is when we have to content ourselves with a mere 50 per cent. of what should lawfully be our own.
I cannot disagree with the course recommended by the noble Lord who speaks for the Opposition, but I do say to my noble friend that something has to be done. We are going to see a further dramatic contraction in the British fishing fleet unless we find a way of escaping from the trap into which successive European treaties have placed us.
4.30 p.m.
Lord Harris of Greenwich: My Lords, there are, I fear, very few issues of European policy on which the noble Lord, Lord Shore, and I would agree. Nevertheless, I would like to say, on behalf of us all, how delighted we are to see him back among us after his absence through illness.
The only reason for my intervening is the extraordinary speech made by the noble Lord, Lord Moynihan, at the beginning of this debate. My noble friend Lord Wallace of Saltaire will apply himself to the situation as far as the fishing industry is concerned and the text of this amendment. But I do not think that it is right to let that extraordinary speech go by without some comment from these Benches.

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I have rarely heard an exercise in synthetic indignation on quite such a scale. First of all, he was factually inaccurate, which perhaps is not altogether surprising. He seems to imagine that the Government Whips in this House are not Ministers. They are Ministers of the Crown, as the noble Lord, Lord Moynihan, will no doubt learn over a period of time in this House. If, in fact, his argument is to be taken seriously—namely, that it is some form of constitutional outrage that the noble Baroness, Lady Symons, is not with us—let me say this to him. The last Minister of State responsible for Foreign and Commonwealth Office business in this House, the noble Baroness, Lady Chalker, was often absent from the House because she was carrying out her ministerial responsibilities abroad. I cannot remember one occasion when anyone made the sort of trivial complaint which we heard from the noble Lord, Lord Moynihan. It really was dreadful stuff. I hope he is going to improve.
In a moment I shall gladly give way, but we had 14 minutes of the noble Lord, Lord Moynihan, on this narrow issue before he applied himself, in seven minutes, to the issue related to the fishing industry. That is a two-to-one ratio which, in itself, is remarkable.
I hope that ungracious attacks made on a Minister, who is carrying out public duties outside this country, will not be repeated on future occasions by the noble Lord.
Lord Moynihan: My Lords, I am grateful to the noble Lord for giving way. I should like to point out to him that I am fully aware of the status of Government Whips. I was rather surprised by the tone of his intervention on that point.
Indeed, I went further than that, because as the noble Lord may know, there was a time when we understood that the noble Lord, Lord Whitty, had been made Minister with special responsibility for the EU presidency. Specific questions were tabled in another place by Mr. Michael Howard—I would be happy to give the noble Lord copies—which disprove his point. Sadly, in my view, the noble Lord, Lord Whitty, was not made Minister with special responsibility for the EU presidency, but was a Whip with special responsibility for FCO business.
As for the other points which the noble Lord raised, they were not trivial. They were important because they emphasised, as I would do once again, the importance of ministerial accountability to this House on legislation which has a far-reaching constitutional impact. That is the point I was making. It is an extremely serious point. I am surprised that the noble Lord, from his Benches, trivialises that. It is critical that on any major legislation the Minister responsible should come before the House. That is the first priority of the Minister.
That was the point I was making. It will be a point that I shall always make and it was a point that I made regularly when I was in another place. I believe that noble Lords on all sides of this House recognise the power of that argument. It is wholly reasonable for your Lordships to expect the Minister responsible to be
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present, especially when it is the only legislation in the whole Session, and indeed likely to be the only significant legislation during this Parliament, coming from the Foreign and Commonwealth Office.
Lord Renton: My Lords, perhaps I may—
Lord Harris of Greenwich: My Lords, I apologise to the noble Lord, Lord Renton, but as I understand it, the noble Lord, Lord Moynihan, was intervening in my speech and I gave way to him. The noble Lord, Lord Moynihan, has sought to justify the point which he made earlier. In my view, the point that he made earlier was entirely unjustifiable. The noble Lord, Lord Whitty, gave him his answer. If it had been so wrong for anyone other than the Minister of State to address the House on this issue, why was that point not taken when the noble Lord, Lord Whitty, was addressing the issue during the earlier stages of this Bill?
When the noble Lord, Lord Moynihan, quoted the noble Lord, Lord Beloff, with warm approval, he omitted to point out that the amendment of the noble Lord, Lord Beloff, was rejected by this House, and by a substantial margin. He almost indicated to us that the words of the noble Lord, Lord Beloff, were rather like a judgment of the Lord Chief Justice in the Court of Criminal Appeal. I did not see that as a precise analogy, but having made the point which I have made, I propose to conclude my observations by repeating the point that I hope that we shall not have a repetition of such an ungracious statement from the Opposition Front Bench in future.
Lord Renton: My Lords, perhaps I may descend from the great heights of ministerial responsibility and the interests of our fishing industry, to make a minor grammatical point about the Motion before us. I know it is a long time since I was at school, but I was taught to agree or disagree "with" things, not "to" them. We find on the Order Paper that we are asked to disagree to this amendment.
It may be that without my knowledge the use of our great language, which is now the language of the world, has changed. I hope not and I believe not. I hope that we can get this right in future.
Lord McIntosh of Haringey: My Lords, the Chairman frequently says "The Question is that this Motion be agreed to. As many as are of that opinion will say 'Content' or 'Not-Content'". Clearly, parliamentary usage is different from that which the noble Lord was taught at school.
Lord Mishcon: My Lords, perhaps I may suggest that the Minister for Education should be called before the House.
Lord Wallace of Saltaire: My Lords, I feel that I should start by apologising for the fact that my noble friend Lady Williams is not able to be here today. She is in the United States on business.
Lord Renton: My Lords, I gave way, but not with a view to terminating my speech. It may be that I have

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such a limited knowledge of our language, after so many years practising the law and 53 years in Parliament, that I am wrong, but I do not think that the word "to" in these circumstances is as good as the word "with"
Having made that minor point, I say that we were right to ask Members of another place to think again about ways in which the interests of our great fishing industry, which has declined, could be protected. The noble Lord, Lord Shore of Stepney, referred to matters long ago which were against the interests, as he maintains, of our fishing industry. On this occasion we gave the Government and Members of another place an opportunity to improve things, and regrettably they have rejected that opportunity.
Alas, the other place has the last word, but we have asked them to think again. As my noble friend Lord Moynihan said, we must leave the matter there; it is not one on which we can reject the whole Bill and have forced upon us the Parliament Act. I believe that my noble friend and the noble Lords, Lord Shore and Lord Bruce, were right to draw attention to a missed opportunity, which is regrettable.
Lord Wallace of Saltaire: My Lords, I apologise to the noble Lord, Lord Renton, for interrupting. I had not realised that he had not finished his speech. I was merely commenting that some of us who specialise in foreign affairs from time to time find it useful to go abroad. That unavoidably interferes with the business of this House.
I yield to no one in admiring the largely solo performance of the noble Lord, Lord Moynihan. On one or two occasions I wondered whether some members of the previous government who were experts on foreign affairs had gone abroad permanently and left him to handle so much.
I wish to make two further comments. We all agree that as regards fisheries, the issue is not only the British case but the conservation of fisheries in the North Sea and elsewhere. That is an extremely important issue on which the European Union as a whole needs to take further measures. We were not helped in particular by the Spanish, but the previous government cannot escape some of the blame. It was one of two cases when the Conservatives, driven by Treasury considerations, failed to provide full compensation for those who were asked to take vessels out of service. That encouraged British fishery owners to sell their boats to Spanish owners rather than accept full government compensation. The other case on which the previous government, on Treasury advice, thought it cheaper not to provide full compensation was in the early stages of BSE. That also had deleterious effects. I hope that the current Government, driven by a remarkably parsimonious Chancellor of the Exchequer, will not repeat that mistake in other matters.
My second point is the importance of the completion of the Bill. I and many others were ashamed that the previous government delayed ratification of the Maastricht Treaty for so long and waited until everyone else had done so. Today, we have a chance to complete ratification of the Amsterdam Treaty a good deal earlier
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than our partners and are demonstrating that it is not always the intention of the British Government to drag their feet on European issues. That is much the most important issue and I am glad that the Conservatives will not be insisting on the amendment and dividing the House.
Lord Stoddart of Swindon: My Lords, I was most surprised that there was no Motion on the Marshalled List that this House insists upon its amendment. That is what I really would like to have seen. If we want to put pressure on the European Commission and the other countries of Europe, we must show them that we are tough.
There was another way in which we could have shown that we are tough. We could have proposed another amendment and sent it back to the House of Commons for consideration. That really would have been putting pressure not only on our own Government but also on the other governments of the European Community. I believe that an opportunity has been missed.
Noble Lords might ask why on earth I did not table such a Motion. The fact is that if I had done so I would not have received support. However, if the Opposition were doing its job, if it were really on the ball, it would have played this for as long as it possibly could. I understood from yesterday's Daily Telegraph that the Conservative Opposition was to have a new lease of life and that it would oppose the Government whenever it could. Yet when the first opportunity arises it falls at the first fence.
I very much regret that, but the Conservatives have a bad history on that, as my noble friends pointed out. I wish to remind the noble Lord, Lord Moynihan, whom we all respect particularly for his operations on the Bill, which have been considerable and very effective, that it was under a Conservative Government that we had the spectacle—and I say that advisedly—of the unfortunate Mr. Jack being pelted with flour by British fishermen while they were feting the High Commissioner for Canada and flying not the Union Jack but the Canadian flag all over the south-west. If there ever were a failure over fishing policy it was a failure of the Conservative Government. I hope that my noble friends in the new Labour Government will be able to do far better.
I regret that today we are not to give more power to the Government's elbow because of the failure of this House yet again to do what it can, which is to put additional pressure on the House of Commons and on the Government. That failure is noted outside and it will do us no good. I must tell those hereditary Peers who believe that being gutless will save them that it will do nothing of the kind.
4.45 p.m.
Lord Renton: My Lords, what the noble Lord has proposed would mean that the Bill might not come into operation for another year if we had successfully pressed the amendment. It could conceivably have come back to us from the House of Commons yet again, but that would be a most unusual procedure. I remember it being

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used only once, and then we did not resist. I believe that in the unfortunate circumstances we simply must accept it.
Lord Stoddart of Swindon: My Lords, I take that as an intervention. The noble Lord will know that I often put innovative ideas to the House but it does not appear to accept them, which is a great pity. He also knows that if we were prepared to insist on our amendment and that prevented the treaty from coming into operation for a year, I should be over the moon and delighted. Indeed, the country as a whole would benefit.
Lord Bruce of Donington: My Lords, as my noble friend Lord Shore of Stepney pointed out in most forthright terms, there can be little doubt that Parliament as a whole, comprising both parties, has let down the British fishing industry. No party can escape the blame for that. As my noble friend pointed out, the origin of the existing unsatisfactory position of our fishing industry arose from the deliberate deception—the deliberate deception—of the British public on the passing of the European Communities Act 1972. Then it was not revealed to the British public as anything worthy of their consideration that we were giving up our rights within the 200 mile limit. That was never explained and the approval of the British people and the British Parliament was obtained by deception. Of that there can be no doubt whatever.
The question is: what can we now do to redress the position? I suggest to your Lordships with the utmost respect, and as one who has spent the last portion of his life studying these matters, that the argument, "we must not be kept on the fringes of Europe" is a generality that is no longer acceptable at all. Every time any Member of your Lordships' House or of another place raises a question—even a question—about the validity of our existing arrangements within the European Community there is a jeer and a sneer that we must relegate ourselves to the outer regions of Europe. We must somehow conform in order to be admitted to the inner circle of Europe, which still remains, and will remain, France and Germany, whatever their temporary dislocations may be.
Every time an argument has been raised about the validity of our arrangements with Europe, of the economic benefits and otherwise to Europe, they are covered in these blanket terms, this miserable cowardice that we must agree with our European partners or we shall be relegated to the margins. I am sick of that argument as, I think, is the country as a whole.
What we need to address ourselves to, from the existing position, is how we can make amends to our own British fishing industry within the constraints under which we now labour. First, we must use our muscle. Sometimes one would think that the Government did not have any muscle despite their insistence on how important they are in Europe. We must determine what steps should be taken in order to redress the position of the British fishing industry. That requires thinking. It does not require slogans. It also requires reading through a host of regulations, decisions and directives inflicted
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upon this industry with the connivance or even through the ignorance of the Ministry of Agriculture not all of whose legislation in the form of regulations or even Acts of Parliament is thoroughly read by people in Parliament who should read and understand them.
It has become one of the defects of our democratic system that those responsible for the legislation know so damn little about what they are passing into enactment, let alone authoritatively argue about it. This must stop. The steps we need to take are firstly to apprise ourselves of the position. I was in general sympathy with the whole purpose of the amendment until I began to dig into the documents. Believe me, even working full-time it will take at least another three weeks or a month for me—and I am very familiar with European affairs—to ascertain precisely in European law and regulations, let alone in British regulations, exactly what the position of the industry is and what legal rights it has or does not have. That will take time. All of us who support the British fishing industry should undertake that task.
Clearly, it is insufficient and would be futile, other than as a gesture, to use the amendment to the Treaty of Amsterdam, or the British enactment of that treaty, as a vehicle in the argument for British fisheries. That is not a suitable vehicle. The matter requires far greater time. Therefore I shall not be insisting on our own amendment here. I shall support the Government if it comes to a vote. But I warn the Government that they should give these matters serious attention, and not just on a sloganised basis. They should endeavour to tackle the problems at base. That, after all, is why we are here. We are not here to mouth generalisations and make debating points.
We are here as part of Parliament. This is our job. Not all of us can do it; not all of us have the time to do it. But we should at least play our part. So in agreeing that the Government Motion should go forward I issue a warning. The Government should give the matter real and detailed attention and cease to heed ridiculous cries of, "We must not stay on the margin; we have to keep in with the boys in order to be recognised." Until they can ignore those arguments and deal with the facts, they will be faced with the shame of having ruined the British fishing industry.
Lord Campbell of Alloway: Before the noble Lord sits down, may I say that I greatly respect his contribution to the House on these matters as a sort of in-house guru. Perhaps I may ask him whether he knows how we came to make the agreement ceding our shores to the Spaniards to come and fish and cause this distress? If the noble Lord knows, it may help if he can tell us. If we are to try to put things right would it not be helpful to know how it happened?
Lord Bruce of Donington: I am very pleased to answer the noble Lord. I do not yet know the steps to be taken. It will take weeks of study in order to piece the whole matter together within its correct context.
Lord Clifford of Chudleigh: One matter to be borne in mind is the term "British fisherman". I am from the

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West Country. I was delighted to hear what the noble Lords, Lord Stoddart, and Lord Shore, had to say. I feel that possibly we shall be helped in the not-too-distant future if we are worried about the English and the Welsh. The English, certainly, are the West Countrymen. The Welsh may decide, as the Scottish have said they will decide as soon as they have their own parliament, what to do with the common fisheries policy. That matter was raised by myself and other noble Lords last year. It may be that everything which has been sorted out today, as we heard, will be thrown overboard by the Scots when they have their fishing fleet under their rules within the European Union, or without—but probably within because there is money involved. The same will apply if the ever-eager Welsh follow suit. It is only right for us to consider that it looks likely that whatever may be agreed today will be thrown overboard by what were initially parts of the United Kingdom.
Lord Whitty: My Lords, if there is one thing I can welcome in the speech of the noble Lord, Lord Moynihan, it is the indication that the Official Opposition will not be insisting on this amendment. I do not wish to raise the temperature any further at this stage. I do not wish to pursue the question of ministerial appearance here. The noble Lord, Lord Harris, expressed the views of many in this House more eloquently than I can.
Incidentally, I am gratified to note the change of policy on the Liberal Democrat Benches. It was a Liberal Foreign Secretary, Lord Grey, who prided himself on going abroad and we ended up with the First World War. It is possible to be a Foreign Office Minister and fulfil your obligations to this House and your diplomatic obligations also. My noble friend Lady Symons certainly does that.
The noble Lord, Lord Moynihan, referred to savaging the past government's record. I have tried to do that on previous occasions but have not really done so today. My noble friends Lord Shore, Lord Bruce and Lord Stoddart have done it for me. As noble Lords know, we have not always seen eye to eye during the passage of this Bill, but on that issue we do.
I shall dwell briefly on the last passage of the previous government's performance in this area. The noble Lord said that there was an agreement to be gained in Amsterdam that was somehow better than that we managed to achieve. The real history is that the previous government submitted a memorandum to the Amsterdam process in July 1996. The following May, after we took over government, the Foreign Ministers of most major countries in Europe had not heard of it. Could it possibly be the case that the previous Foreign Secretary felt too diffident to approach his colleagues in the other chancelleries of Europe and tell them what a central part of the negotiating policy of the British Government this was? I really cannot believe that of Malcolm Rifkind. It is surely more likely that he realised that the domestic insistence that we should hold up the Treaty of Amsterdam if we did not achieve a legally binding deal at Amsterdam on the basis of a change in the treaty—which is what the last government
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claimed—was a piece of domestic politicking and therefore, obviously, of no concern to the Foreign Office.
I fear that that is what much of this debate has been about. But, as noble Lords have indicated, there is a serious situation behind it. To be fair to all noble Lords who have participated in the debate, I am sure we all recognise that the British fishing industry has suffered seriously since the advent of the common fisheries policy. We are all committed to trying to reverse that downward trend. I do not agree with my noble friend Lord Shore of Stepney that there is no way of doing that other than by seeking to block the treaty. It is wrong to dismiss the 50 per cent. linkages but I accept also that other steps need to be taken to improve the situation of the fisheries industry.
It would be extremely beneficial to the fishing communities of all parts of this kingdom to move on from debate on the Amsterdam Treaty to pursuing the discussions between my right honourable friend Jack Cunningham and the Commission in order to reach a positive conclusion for the fishing industry in an entirely different context. I believe that the exchange at Amsterdam gave us the basis for that and what we have done to pursue that has given us an even better basis.
Lord Moynihan: My Lords, I may even elicit support from noble Lords on the Front Bench of the Liberal Democrats on this point. I know that the noble Lord, Lord Whitty, is a great admirer of my noble friend Lady Trumpington. It is fair to place on record—and she would be the first to do it if she were here—that back in June 1996 she began intensive work with regard to notification of the IGC, the Commission and member states on the tabling of proposals to deal with the problem of quota hopping. It was high on her agenda. It is historically rather inaccurate to say that the previous government and in particular my noble friend Lady Trumpington were not active on this point well before the IGC.
Lord Whitty: My Lords, I mean absolutely no disparagement of the commitment of the noble Baroness, Lady Trumpington. I am not in the habit of disparaging the noble Lord's colleagues. I was pointing out that the person who conducted the negotiations for Britain and who was therefore focused on the key points of our negotiating portfolio was not pushing this point with our allies. That is not to say that the Ministry of Agriculture at that time was not taking the matter seriously. But the treaty negotiators and those preparing for the Amsterdam conference, had the last administration been re-elected, did not take it seriously because it was not the way forward any more than boycotting and vetoing matters in the so-called beef war was the way forward. That set us back for months. It is a situation which my right honourable friend Jack Cunningham is only now beginning to rectify. The insistence on threatening the rest of Europe does not help our fisheries industry any more than it helped our beef industry.
I hope that in this House, from now on, we can move on to more constructive support of the fisheries industry. My noble friend Lord Bruce made some good points but

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I do not agree with his view that it is miserable cowardice for us to want to be at the heart of Europe. We should be there and we should use our negotiating strength to full effect on behalf of the fisheries industry and other British interests. The Amsterdam Treaty provides us with an opportunity to do that. We should now move on, and I ask the House not to insist on their amendment with which the Commons disagreed.
On Question, Motion agreed to.

Economic and Fiscal Strategy
5.5 p.m.
Lord McIntosh of Haringey: My Lords, with the leave of the House, I shall now repeat a Statement made by my right honourable friend the Chancellor of the Exchequer on the Economic and Fiscal Strategy Report. The Statement is as follows:
"The comprehensive spending review has been the most comprehensive and in-depth examination of government spending and priorities for many years. Its results will be announced in two stages. Today I will announce an entirely new regime to apply to public spending control, a fundamental reform of the rules that govern our public finances. Later next month I will set out the results of a wholesale revision of our spending priorities and the purposes of government support in each department. The central challenge is to combine prudence and stability in public finance with investment and reform in public services.
"There are four key elements to our reforms. First, the new regime must be consistently prudent and responsible. Strong public services cannot be sustained on weak public finances. The spending plans we set must ensure sustainable finances over the whole economic cycle, rigorous financial discipline that, together with monetary stability, ends once and for all the boom and bust that for 30 years has undermined stability, hindered long-term investment in our public services and prevented the country achieving its potential. That is why we will enforce two fiscal rules—the golden rule, that over the cycle current spending is covered by revenues, and the sustainable investment rule, that there must be a prudent debt to GDP ratio.
"Secondly, in each department we are assessing radically what government do, and how and where they spend their money. The comprehensive spending review results, when published, will not only show changes in priorities within and between departments but must redefine the role of government so that it is enabling and empowering, not centralising and controlling. Where government should be acting, we will do more; where government is unnecessary or restrictive, we should not act at all. And the results of the spending review will mean reform and modernisation.
"Thirdly, in respect of publicly-owned assets the essential test should be how to best meet the public interest and we will therefore propose a radical
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change in government policy towards investment and the assets government hold. Finally, where governments spend on public services they should link spending explicitly to modernisation and reform for each government department. Where there is extra money it will be tied to specific outputs. It will be investment for reform.
"So first the new framework for the future. For 30 years British public spending has been characterised by: an annual spending round rather than long-term planning; a year-to-year bidding culture, with all the problems of hurried end-of-year corrections, instead of strategic planning of resources; incremental bids not tied to outcomes, rather than spending to achieve defined results; too much attention to current spending and muddling through, too little attention to long-term investment and reform; too much focus on the public sector acting in isolation from the private sector and not enough long-term partnership with it.
"So to break decisively with this old-fashioned and short-termist culture, first, we will abolish the annual spending round. We will now set departments firm plans and fixed budgets for three years at a time. Secondly, to ensure our fiscal rules are met and to make possible long-term investment in our infrastructure, there will now be a separate current budget and a separate capital budget for each department. Thirdly, in place of incremental budgeting we will lay down new targets for efficiency and performance for every department. Fourthly, instead of the old sterile conflict between public and private sectors, we will promote new public/private partnerships. Fifthly, for the first time this Government are legislating for a code for fiscal stability which requires more open and comprehensive reporting of the public accounts. The key assumptions have been and will continue to be examined by the independent National Audit Office.
"The Chief Secretary and I are today publishing detailed figures both for the current balance and capital spending. We will set out not only the public sector's net cash requirement, the PSBR, but also the internationally accepted accruals measure of public sector net borrowing, which will provide a better guide to the underlying state of the public finances. Copies of the Economic and Fiscal Strategy Report will be available in the Vote Office.
"And all these changes—the end of the annual spending round, a long overdue distinction between investment and current spending, a new emphasis on outputs, more effective partnership between the public and private sectors and proper public scrutiny of how we are meeting our fiscal rules—make clear the importance the Government attach to reform and modernisation as the foundation for both sound finance and good public services.
"I turn now to the public finance plans that follow from our fiscal rules. The Government inherited a national debt which doubled in the early 1990s. And in the last economic cycle, debt as a proportion of GDP rose by 18 percentage points—and is now

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around £15,000 for every family in the country. As a result we are paying more in interest payments than we spend on schools or on housing and law and order put together.
"In addition, we inherited a level of annual public borrowing that was unacceptably high: in the final year of the last government, a public sector net cash requirement of £23 billion and public sector net borrowing of £27 billion.
"In the first year of the Labour Government, with the tough decisions we took in our first Budget, public sector net borrowing fell last year from £27 billion to £6 billion. We kept within the spending ceilings that we inherited in addition to a £400 million increase in the Budget for pensioners, £2 billion more on the NHS and £2.5 billion more on education.
"Those who said that we would fail to meet our targets and would fail to show the discipline necessary have been proved wrong. Indeed, over the first two years of our Government, through setting tough departmental limits, spending is within budget. But Britain must have sustainable public finances, not just for the odd year or two, but throughout the economic cycle. And British public spending, which has for decades been denied a long period of consistency and stability must now be subject not only to a framework for the future but also to clearly defined limits.
"As a result of the plans that I am announcing today, we will lock in the fiscal tightening that I announced in the March Budget not just for this financial year but for the next financial year as well. Over the three years from the time we came into Government—that is to say, 1999–2000—the fiscal tightening amounts to 2.75 per cent. of GDP measured by the public sector net cash requirement. It is 3.5 per cent. of GDP measured by public sector net borrowing, that is over £25 billion since 1996–97. This is the fiscal tightening from 1996–97 to 1999–2000 that we promised in the Budget.
"To meet our first rule, the golden rule, the Government will plan for a balance on the current budget over the economic cycle as a whole. For 35 years, current spending has grown by an average of nearly 3 per cent. a year in real terms. But within this average, annual changes have ranged from plus 11 per cent. to minus 3 per cent. From 1989–90 to 1993–94 a surplus on the current budget of over £10 billion was transformed into a deficit on the current budget of £38 billion. So in the same way that our economy has suffered from the instability of boom and bust, public spending has suffered the instability of stop and go. The uncertainties caused by this short-termist approach have frustrated the long-term planning of decent public services. Let us be clear who suffered first and worst: the vulnerable who depended most on public services. So imprudence in public spending is of no help to those who rely on public services being there when they need them.
"In the last economic cycle Britain ran an average deficit on the current budget of 1.5 per cent. of GDP, or the equivalent of an annual deficit of £12 billion
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pounds. By contrast the figures that we publish today will ensure that, over the full economic cycle, Britain will have a current budget balance—current expenditure will be covered by revenues over the cycle, something that other governments have promised but did not achieve.
"So that we can deliver sustainable public finances and thus sustainable public services over the whole cycle, the plans for current spending that I am announcing today deliberately take a more cautious approach than in the past to meeting the fiscal rules. That is why we need to plan for a surplus on the current budget over the next three years.
"The plans that we publish today are for a surplus on the current budget next year of £7 billion, in 2000–2001 £10 billion, and in 2001–2002 £13 billion. Within this new framework I can confirm that current spending will grow in line with our cautious estimate of the trend rate of growth of the economy, that is 2.25 per cent. in real terms a year over the next three years. Current spending is now planned to be 39.25 per cent. of GDP every year for the rest of the Parliament.
"It is because we are showing prudence in public finance, and because we are prepared to modernise in choosing our priorities, that we will be able to invest in long-term improvements in our key public services, education and health, and also fulfil our commitments to those, like the elderly, who depend upon public services.
"But as everyone knows the public will be better served if we also ensure the best value for money and the most efficient possible use of resources. Inefficiency in the public sector is a cost that could be afforded by a government who had a vested interest in proving the public sector could not work and believed in a philosophy of private good, public bad. But inefficiency will not be tolerated by a government who will modernise the public sector so that this country is better equipped for the future. That is why in our spending review there will be no place for new spending unless there is reform through clear targets, standards and rigour in the use of money.
"I can confirm, first, that as a result of our review each department will be set efficiency targets. Secondly, each department will be set new quality standards. I can confirm that as part of best value, we will introduce an inspectorate for housing that will help improve the management of council housing, set new standards for performance and guarantee high quality of investment. Thirdly, before allocations are made from the comprehensive spending review, departments will have to demonstrate how they propose to root out unjustified subsidies.
"So not only will we set fixed budgets for three years, but we are building in new disciplines to ensure that investment is conditional on reform. Just as new disciplines will apply to current spending, so they will also be applied to capital investment.
"Our second fiscal rule is to ensure a prudent and stable ratio of debt to national income. This is the sustainable investment rule, which is essential if we

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are to contain interest payments on the public debt. If this Government simply left the debt/GDP ratio at the level we inherited from the last government, we would be paying interest payments of £25 billion more over the Parliament, at a cost to public services.
"In the interests of greater stability, I propose to bear down on the debt/GDP ratio. Indeed, the plans that we are publishing this afternoon show the debt ratio falling from 45 per cent. when we came into government to 40.5 per cent. next year and in the following years down again to 39.5 per cent. and 38.25 per cent. The comparable figure in the European Union as a whole is 78 per cent. Britain will now plan on the basis that our debt/GDP ratio will be 40 per cent. or lower.
"For the first time for decades we are set over the cycle to have both a current budget in balance and a prudent debt/GDP ratio. As a result of our two fiscal rules public sector net borrowing, which was over 3 per cent. of GDP in the last cycle (1995–96 to 1996–97), will average 0.2 per cent. for the Parliament, 0.2 per cent. next year, 0 per cent. for the following two years and 0.1 per cent. the year after that. And we will meet the fiscal criteria laid down in the Maastricht Treaty.
"It is only because we have this tough framework, based on strict control of current spending, a prudent debt/GDP ratio and a fiscal tightening that it is possible to take the action necessary to reverse the chronic under-investment in our country's health, education and transport and housing infrastructure, and to re-equip Britain as a modern nation.
"Total investment, public and private, in Britain has in recent years fallen as a share of national income and is far behind our competitors, and far behind the rates that we achieved in the 30 years after the war. But if Britain is to renew its infrastructure, we must be prepared to break with old dogmas. We will not succeed simply by throwing money at problems or by privatising the responsibility for them. We must, therefore, be prepared to look at new ways of managing our assets and, if necessary, be prepared to redeploy them so that they serve the future, not reflect the past.
"The British Government have property, land and other assets worth hundreds of billions of pounds. But, as we discovered in the first register of national assets, Britain has an accumulation of unused or underused properties and holdings. We can no longer afford a surplus of holdings when we have a deficit in investment and there is no benefit to us in hoarding assets that do nothing to equip us for the future when we need to build a modern 21st century infrastructure. There is no public interest served by continuing to hold surplus land and building that are not needed.
"The fiscal projections set a new target for central government to realise for investment around £1 billion a year for each of the coming three years from the sale of surplus holdings that we no longer need. In the next financial year we will go ahead with
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the sale of all remaining debt held in British energy. So we will realise the value of what we do not need to invest in what we do need.
"The Deputy Prime Minister and I will propose a new long-term framework for investment by local authorities to release resources for new investment; and to co-ordinate the use of existing assets. Local authorities are now expected to realise at least £2.75 billion a year from property sales—again a sale of what we do not need to pay for investment in what we do need. To maximise investment in the renewal of our infrastructure, public and private sectors must work together in a more modern and effective partnership.
"In the past the private finance initiative was a means of substituting private investment for public investment and thus an excuse for abdicating responsibility for public investment. So there was no net gain to investment in our country. But as we have shown with our new deal for schools, public-private partnerships work best when public investment succeeds in levering, in addition, finance from the private sector. As the Deputy Prime Minister has shown in the planned multi-billion investment in the Channel Tunnel Rail Link and London Underground, private investment can be mobilised to serve the public interest.
"So this Government will apply a public interest test—what is the best means, whether through private or public investment, of securing the highest levels of investment in Britain's future and so ensuring the best public services; not demanding private ownership as a matter of dogma when it does not serve the public interest, nor maintaining state ownership when private and public partnership is the best way of advancing the public interest.
"It is obvious to the Deputy Prime Minister and me that the levels of investment and efficiency that we need in our National Air Traffic Services can be best achieved through a partnership between the public and private sector which will give the National Air Traffic Services the flexibility to plan and finance forward investment more effectively. Safety is paramount. The Government's proposals will ensure that air safety regulation is conducted independently from the National Air Traffic Services and is open and transparent. The regulator's remit will be to enforce the toughest safety standards in the world.
"My right honourable friend the Minister for Transport is making a separate announcement today on the future of air traffic control services. Our preference is that 49 per cent. of the shares, and a golden share, are held by the Government, and 51 per cent. by private investors including employees. We will consult on the details of the implementation of the proposals. This realisation of assets will enable us to invest more in our transport infrastructure, as will our proposals for greater commercial freedom for financially sound regional airports such as Manchester, Newcastle, Leeds-Bradford and Norwich.

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"The same partnership approach is appropriate for the Commonwealth Development Corporation which needs new finance for higher investment in developing countries, and my right honourable friend the Secretary of State for International Development will bring forward proposals to sell a majority shareholding.
"We will also consider how to extend the existing public-private partnership in the Tote into a broader partnership with the private sector. I can also announce that we are agreed in principle that a new public-private partnership is the best way for the Royal Mint to take advantage of new commercial opportunities.
"These are four examples of new partnerships now being evolved that show we can make the long-term investment we need while protecting the public interest. But public investment in reform and modernisation is also a means by which the Government can help renew our country's infrastructure. Under the previous government public investment fell below 1 per cent. of national income and we now invest less than all our major European partners. This Government recognise that we must invest properly in our economic and social infrastructure; in our schools and our hospitals; our transport infrastructure; our science and technology base; and in building better housing and safer and stronger communities.
"To meet these challenges of the future we are therefore setting up a new programme, investing in Britain's future. So over this Parliament we will double the level of net public investment as a share of GDP by raising it from 0.75 per cent. up to 1.5 per cent. Through realising unused and underused assets we will plan to invest £29 billion a year by the end of the Parliament. In place of two decades of run-down in investment, Britain is investing in its own future. Our long-term aim will be to maintain the share of investment in national income, at this sustainable and prudent level. For years we have been told that prudence in public finances could only be achieved at the cost of running down public investment and neglecting public services, years that ended with neither good public services nor prudence.
"The framework I am announcing today means that with sensible and tough decisions about priorities in every department in our comprehensive spending review, which will report next month, this country will now be able to ensure that the necessary resources are available for health, education and essential public services. Because of our toughness to modernise and our discipline in reform, our prudence today provides the solid foundation to invest in better schools, hospitals and public services today and tomorrow. In place of short termism and the neglect of public services, we have a new long-term direction for the renewal of our public services and our country. Prudence and investment in reform are the way forward to create a Britain that is modern, strong and fair. I commend this Statement to the House".
My Lords, that concludes the Statement.
5.25 p.m.
Lord Mackay of Ardbrecknish: My Lords, I start by thanking the noble Lord, Lord McIntosh, for repeating the Statement, and in particular for his courtesy in letting me have a copy of the Statement well before half-past three which has given me a chance to read it. I congratulate the noble Lord on coming to the House. That is in contrast to his noble friend in the Foreign Office who does not appear to be prepared to come to the House.
I am a little sorry for the noble Lord, Lord McIntosh, in having to repeat such a long Statement. Perhaps I should apologise on behalf of my fellow Scotsman, the Chancellor, who seems always to use 10 words when one would do. Perhaps if he had not gone to France yesterday to watch a certain football match, he might have had time to slim down the Statement and not give the noble Lord such a long read.
The first part of the Statement tells us how we have conducted public affairs in the Treasury and in government departments over the past 30 years. As the past 30 years includes the tenancy of the Treasury of some noble Lords opposite—for example, the noble Lord, Lord Barnett—we are all obviously reprimanded for the way in which we dealt with spending rounds in the past. For many years—certainly during the time I have been involved with these matters—there has been a three-year rolling programme. That has been reviewed each year. It seems sensible to consider new priorities and new demands; to work out what needs to be done as regards the economy; and to plan for the following year so that the programme rolls forward one year at a time. As I said, there has been a three-year rolling programme. When I read and hear the Statement I wonder what differences are proposed. If there is to be a system of three-year blocks—it could be read like that—does that mean that the next time the Government consider the whole question of spending will be in 2001 when they will plan another three-year block? I cannot believe that that is what they intend, but perhaps it is.
That certainly contrasts with the Monetary Policy Committee which meets every month to make sure it "fine tunes" monetary policy. It appears that the Government's spending plans do not need "fine tuning" at all. That is an interesting thought. I was interested in the idea that somehow in the past no distinction has ever been made between investment and current spending. That is another fiction rather like the description of the way governments of all parties have dealt with normal annual spending rounds. It will not be long before we see annual spending rounds reintroduced, although the Government will obviously have to find some other words to define them.
I was interested to hear of the Government's plans to pay off some of the national debt. My recollection is that when we paid off some of the national debt in the mid to late 1980s we were roundly criticised by the Labour Party for doing so. I welcome this conversion, along with the many others. There is a nice paragraph about the tough decisions the Government have taken in

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their first Budget. That is rapidly followed by the sentence,
"We kept within the spending ceilings that we inherited".
However, we took the tough decisions when we were in government and the party opposite simply carried on with them. It has only managed to carry on with them by fiddling some of the figures. That is the fact of the matter.
As regards spending plans and other such matters, the only reason that the noble Lord can come to this House and throw a few nuggets to his noble friends—and the Chancellor can throw a few nuggets to his honourable friends on his Back Benches—is because of the golden economic legacy that the party opposite inherited. That legacy was well underlined at the time by the noble Lord, Lord Healey. If I remember his words correctly, he said that no government had had such a good economic inheritance as the current one. They have us to thank for much of that.
I then turn to what the Government are going to do, and the quality standards that departments are to be set. I note one of them:
"we will introduce an inspectorate for housing that will help improve the management of council housing".
Most council housing in this country is run by Labour local authorities. That has been the case for years, and I welcome the admission that it is not very well run. I suppose the Government had no option. Up and down the country, the way in which Labour authorities have run their housing estate is being exposed. Nowhere is that more evident than in Scotland, where, one after another, Labour local authorities are having to own up to direct labour organisations which are a disgrace. I hope the inspector will be paid more than the plumbers who work for North Lanarkshire's DLO department, who receive £54,000 a year. Will the noble Lord assure me that the inspectorate will be better paid than the plumbers who work for that council? I welcome the proposal. However, it is rather late. The Secretary of State has had to send in a team of investigators to try to sort all these matters out. This is the Labour Party trying to sort out their own local government problems.
I could not help but notice an interesting sentence:
"And we will meet the fiscal criteria laid down in the Maastricht Treaty".
Why does that statement have to be there? The noble Lord knows that we on this side agree with the fiscal criteria that were laid down. We have always made that perfectly clear. It was sensible economics. Why does the Chancellor have to say it? Is he merely attempting once again to jump his neighbour, the Prime Minister, into joining the single currency? I wonder whether the Prime Minister, who seems to lack the Chancellor's convictions about the single currency, approved of this sentence and its meaning.
We then turn to the most amazing part of the Statement. I welcome it—I welcome the conversion of the Labour Party absolutely and wholeheartedly. However, that does not prevent me from being amazed. Perhaps I may read to your Lordships, slowly, what the noble Lord, Lord McIntosh, said. He said:
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"There is no public interest served by continuing to hold surplus land and buildings that are not needed … £1 billion a year … from the sale of surplus holdings".
Do I hear something of an echo of the sale of the family silver coming from the Benches opposite? Do they regret, and will the noble Lord, Lord McIntosh, apologise for, the number of times from the Dispatch Box he poured derision on what we were doing, when it was exactly what he is now saying his party is going to do?
On the sale of British Energy, will the noble Lord tell the House how much he expects to raise from this interesting sale? Of course, it is marvellous, when I think of all the privatisations that had to be driven through this House and the other place in the teeth of the party opposite. I welcome this proposal. It is the Road to Damascus in spades.
Local authorities are also expected to sell property and to raise considerable amounts of money—much more than central government: £2¾ billion a year. In the other place I sat on the committee which put into place the legislation for the sale of council houses. The party opposite did not want to sell anything in those days. This is an amazing conversion. I say to noble Lords opposite: welcome to the real world.
But what are local authorities going to sell? Will it be their playing fields? That would be interesting. Some noble Lords used to get very worked up when they thought that my party was agreeing to too many sales of playing fields.
Then we come to the private finance initiative. Now it is a great thing. That is another great change. Again, welcome to the real world! It amazes me that one such initiative—I take an example in Scotland which is self-contained; namely, the private finance initiative that built the bridge over the sea to Skye—was attacked day after day and week after week by Members of the party opposite. It was campaigned against by them. The campaign was largely led by a Member who is now in the Scottish Office team. How they disapproved of using—I must not call it privatisation—a public/private partnership. What is better than that partnership? The bridge has been built; people are using it; and in 20 or 25 years' time it will revert to the Government and be free. That seems to me a good public/private partnership. Yet the party opposite attacked it. Amazing!
Then we come to national air traffic control. At the last election this was a very big issue in Scotland. Perhaps I may quote Mr. Gallie, the defeated Conservative Member of Parliament for Ayr, on the subject of NATS. My quote is taken from yesterday's Herald. He said:
"I made it clear I did not oppose privatisation, but when I gauged the feelings of my constituents who worked in the Scottish Air Traffic Control Centre at Prestwick it was clear they did not support these views. I respected their views and persuaded the Government to shelve any privatisation plans until after the General Election. I wonder after today's news from within the Cabinet"—
that was when it was just a rumour, an attempt on the part of spin doctors—
"whether the current crop of Ayrshire MPs will show the same loyalty to their constituents".

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The press did not leave it at that. They went to Sandra Osborne, who is the Member of Parliament for Ayr. She said:
"I campaigned against privatisation of air traffic control and was unhappy when it appeared to remain on the agenda, however vaguely, after the election. I remain unconvinced".
Cunninghame South MP, Brian Donohoe, said:
"I firmly believe to put air traffic control into the hands of private industry would be a major step backwards in terms of safety and efficiency. This has come as a shock and I will be spending the next few days finding out the strength of feeling within Government for such a move. In the meantime I remain opposed to the principle".
An awful lot of humble pie is going to be eaten—certainly in Scottish politics—over this one, because it was made a major issue. Frankly, the Labour Party have now done a total about turn on the issue. I welcome the about turn, but I am appalled at the brazen way in which they have done this. I hope that some of those people will have the courage of the convictions they had last year in April and May when they were touting for votes around Scotland. On a general point, have the Government managed to square the difficulties of the Royal Air Force when it comes to the privatisation of NATS?
As to the other three—the Commonwealth Development corporation, the tote and the Royal Mint—my recollection is that the noble Lord, Lord Callaghan, is very keen on the Royal Mint. I am well inside what the noble Lord had to read out. There can be one verbose Scotsman, and there can be another verbose Scotsman. I wonder whether he is happy about the privatisation of the Royal Mint.
We then turn to what the Government intend to spend the money on. For a year they have frozen all spending on roads and new road projects. Some very important schemes have been frozen. We should therefore welcome the fact that they are unfreezing them.
What we see here is a tax-and-spend government, just as we said they would be. They have taxed companies and pension funds in this country. The noble Lord, Lord McIntosh, will expect me to remind noble Lords of the £5 billion a year in tax on pension funds. The tax equivalent is 5p in the basic rate. Now we are seeing the spending. So much for the Iron Chancellor!
In the Budget, Gordon Brown set out three possible scenarios for public spending. Today, he has announced that he is to follow the least disciplined option, with spending set to grow by 2¼ per cent. in real terms.
Labour promised so much. They promised to keep taxes low, to control inflation and to bear down on public spending. They have raised taxes 17 times. They have missed their inflation target 11 times out of 12. Interest rates have gone up and up, and with them mortgage rates for young people trying to buy their own homes. Today, they have even admitted that they cannot keep a tight control on spending. It is no wonder that the Chancellor tried to bury it all in a mountain of words.
5.38 p.m.
Lord Newby: My Lords, it gives me great pleasure to respond to the Statement repeated by the Minister, because I know how much pleasure it gave him to
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deliver it. Indeed, in certain respects we welcome it. I should also welcome an assurance from him that, given the very broad nature of the Statement, we might have a rather longer opportunity to debate it than the limited time that is available this afternoon. There is a slight sense that the timing of the Statement was determined principally by the need of the Chancellor to make a Statement before he makes a speech, which he will do this evening, rather than for any other reason of timing. I should therefore welcome that assurance from the Minister.
In terms of the aspects of the Statement which we welcome, we believe that the introduction of a more transparent system of Government accounting and the concentration on outputs rather than simply cash is a welcome change. Anyone who attempts to make sense of the way in which the Government spend their money using current conventions finds it an extremely difficult task. I believe that the changes proposed in the Statement will help in that regard and also help to ensure that the Government can operate under the discipline that the noble Lord and the Chancellor wish it to operate under in the future.
Secondly, naturally, anyone will welcome the principle of planning for the longer term rather than planning simply year on year ahead, although, given the nature and scale of events, in the political process one cannot believe that it will be possible to continue for the whole of this Parliament without having some significant review of at least some aspects of these plans.
Thirdly, we welcome the Government's commitment to increasing levels of public investment. I am particularly pleased to see that housing is back on the list of desirable areas of public expenditure. "Housing" is a word that has for many years been lacking in government Statements when public investment has been mentioned. I should welcome anything further that the Minister could say about how increased expenditure on housing might be delivered in the future under these plans.
We find less acceptable the way in which the Government increasingly appear to consider a low level of current expenditure to be a virility symbol which they must worship. This seems to us to have echoes of some of the rhetoric of the early years of the previous administration, and we find it more than slightly disturbing, coming from this Government. We notice, for example, that levels of current expenditure of some of our key competitors are significantly greater than in this country—in Germany, for example, they are some 5 per cent. or more greater—without this having any deleterious effect on the efficiency of growth rate with which the economy is managed. I should welcome anything further that the Minister is able to say about the general proposition that a low and increasingly tight level of current expenditure is a good thing in itself. We find that a difficult contention to accept.
We are relieved to see that the freeze on current expenditure will be lifted from the next financial year. However, does the Minister agree that, given the freeze that we have seen in the previous and current financial

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years, and the announcement made today for future years during this Parliament, over the course of the Parliament as a whole the Government will preside over a lower level of expenditure growth than was the case over the entire period of Tory Government? If that is right, as I believe it to be, how does the Minister believe that will deliver the better public services on which the Government have placed so much store?
When the lottery was first introduced, there was tremendous enthusiasm because it was able to put capital into a range of tremendous projects which otherwise could not have been undertaken. However, with the passage of time, we have found that a significant number of projects have fallen by the wayside because there has not been adequate current expenditure to back them up and keep them going. In the policy that the Government have set out this afternoon, we see a danger that very little will be done to deal with under-funding of current expenditure and that ongoing current expenditure will not be provided for to enable the new facilities planned on the capital front to be fully utilised over the longer term.
Good schools and hospitals rely as much on first-class teachers and nurses as they do on first-class buildings. In general, while we welcome the new framework which the Government plan to introduce, we fear that the Chancellor has not delivered the cash injection necessary to create the first-class education and health services for which people thought they were voting a year ago.
5.45 p.m.
Lord McIntosh of Haringey: I am grateful to both noble Lords for their utterly different responses. The difference is that the noble Lord, Lord Newby, understood the Statement and the noble Lord. Lord Mackay, understood nothing of it. I have to apologise for the length of the Statement. I got it through in 21 minutes, whereas I believe that the Chancellor of the Exchequer took 25 minutes, so perhaps there is something in Londoners reading as opposed Scots reading which leads to some benefit to your Lordships' House.
As to the Chancellor's absence in France yesterday, I suspect that the noble Lord is just jealous. In fact, as he well knows, the Chancellor was there for business meetings with Dominique Strauss-Kahn, who just happened to invite him to the Scotland v. Brazil match at the same time. It sounds to me like an excellent use of valuable time resources, although personally I would not have given a thank-you for such an invitation—but that is my problem, not the Chancellor's.
I said that the noble Lord, Lord Mackay, understood nothing of the Statement. He is in good company. Mr Francis Maude, in another place, understood nothing of the Statement either. Both of them thought that it was fundamentally a statement about expenditure over the next two or three years—and, of course, that was an important element in the Statement—but neither of them seemed to understand the fundamental nature of the changes from cash accounting to resource accounting
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which lie behind the Statement and make it possible for the Government, over the rest of this Parliament, to make a sensible distinction between current expenditure and capital expenditure of the kind that all businesses have made since double-entry book-keeping was first invented several hundred years ago. This is the real impact of what the Chancellor announced today, and it is tragic that the Opposition do not show any understanding of it whatsoever.
There are individual aspects of which the noble Lord, Lord Mackay, has a legitimate opportunity to make fun. Let me try to deal with the particular secondary points that he raised. First, he asked about three-year blocks of expenditure and whether decisions will be taken only every three years. The important point here is that those who are responsible in spending departments should have the ability to look more than one year ahead. That is what a rolling three-year programme means. The next review of expenditure programmes will take place in the year 2000. The inestimably beneficial effect of all this will be that there will never be a period in which spending departments have less than two years in which to look ahead.
The noble Lord talked as though there was nothing new in the distinction between cash and resource accounting. This is the first Government to split the current and capital accounts and the first Government under which it has been possible to make the distinction with regard to what we call "investing in Britain", which is our capital expenditure targets over the next three years. If that happened under any previous government, I should like to hear about it.
That leads me to what the noble Lord said about the various public-private partnership proposals which the Chancellor announced and the disposal of surplus land and properties. As the noble Lord well knows, in the 18 years of the Conservative Government, privatisation produced something in the order of £65 billion. I am probably out of date and underestimating that figure. Where did that money go? It went straight into the current account. In other words, it went to reduce taxes for the less well off and to enable the Government to renege on their responsibilities for investment in our country's future.
The whole point about the disposals we are discussing, whether they are disposals of land and property from central Government or of assets from local government, is that they will not be allowed to go into the current account. They will be hypothecated into investment accounts. That is a profound difference and one which shows the complete contrast between what we are doing and the privatisation programme of the last government. If I am then teased about air traffic control and British Energy, I accept that teasing with equanimity. I know that what is being done is the right thing in order to encourage investment.
Did the noble Lord even recognise what was said in the Statement? We are proposing to double the rate of public investment from less than 0.75 per cent. up to 1.5 per cent. over the period of this Government. Did he recognise the profound significance of that for the infrastructure of our country? He said not a word in recognition.

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The noble Lord, Lord Newby, looked for an opportunity to debate this matter and that message will go to the usual channels. He may find it better for us to have a debate on both parts of the package—both the Statement that is being made today and the comprehensive spending review which will be announced in July. I can say no more than that I would love to take part in such a debate and engage with the Official Opposition to see whether they understand the next part of the package.
The noble Lord accused us of treating a low level of current expenditure as a virility symbol. A low level of current expenditure is not a good thing in itself; nor is the opposite—tax and spend—as the noble Lord, Lord Mackay seemed to believe. The important point is that of course much current public expenditure is investment in the sense that investment in training and education or investment in proper pay to recruit teachers is investment. But under any acceptable statistical definition—we rely on the independent Office of National Statistics to do this for us—we have to include those elements as being current expenditure. That is why a significant increase in current expenditure was proposed in what we said this afternoon. Of the three options put forward at the time of the Budget, the option of 2.25 per cent. increase in real terms in each of the next three years is a significant increase in current expenditure in addition to the investment expenditure plans which we announced this afternoon.
The noble Lord, Lord Newby, is quite right. I take great pleasure in presenting this Statement to the House.
5.52 p.m.
Baroness Trumpington: My Lords—
Lord Barnett: My Lords, the noble Baroness looks so well that I will give way to her later. Is my noble friend aware that I agree with much that is contained in the Statement, particularly in relation to Maastricht? I do not even want to make fun of it. I do not object to the noble Lord, Lord Mackay of Ardbrecknish, having fun; he will be there a long time and I understand that only too well. He enjoys himself and is welcome to it.
I welcome much in the Statement. However, I know that my noble friend is aware that the Bank of England and the Monetary Policy Committee are obliged only to consider the Government's economic policy after bringing down the rate of inflation to 2.25 per cent. That is the priority. In those circumstances—I mention this as a possibility—what if those eight economists got the rate of inflation wrong?
I know that economists occasionally get things wrong; they could certainly have got it wrong in suggesting an increase in interest rates, with its impact in two years' time. However, given that, what are the Government's priorities, let alone the priorities of the Monetary Policy Committee? Is the policy to bring down inflation? Is it to bring down the borrowing requirement? Or is it to obtain the levels of growth that
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the Government require in order to meet the public expenditure figures that are included in the Statement? Which of those are the Government's criteria?
Lord McIntosh of Haringey: My Lords, my noble friend knows the answer to his question because we spent many happy hours debating it earlier this year during the passage of the Bank of England Bill.
The answer is that the primary target set for the Monetary Policy Committee is to adhere to a rate of inflation set by the Chancellor of the Exchequer and, subject to that, to promote the highest possible levels of growth and employment. The Monetary Policy Committee has adhered exactly to that remit. That means, in terms of what has been announced this afternoon, that in anticipating a real rate of growth in current public expenditure of 2.25 per cent. a year for the rest of this Parliament we are planning that public expenditure should benefit, as it can from the revenues available, from the growth which we expect in the economy. That means that public expenditure, both capital and current, will make its contribution to the regeneration of this country, the creation of jobs and assistance to growth which is the fundamental objective of all economic monetary and fiscal policy.
Baroness Trumpington: My Lords, at last! The noble Lord, Lord McIntosh, briefly mentioned the Tote in the Statement. Will he elaborate a little more on what he said? Is the object of the exercise to help racing? It is in a difficult position. Or is it simply to add to the list of bookmakers who do not put enough into racing and the Tote? To eliminate the bookmakers and give all that money to the Tote would be much better.
Lord McIntosh of Haringey: My Lords, I must confess that our plans on the Tote are not well advanced. As the noble Baroness knows, the Tote is already in a public-private financial partnership with Ladbrokes. However, the discussions that have taken place with the chairman of the Tote elicited the response that he believes that further public-private partnerships would be valuable and could increase the efficiency of the operation of the Tote and produce benefits for the public purse. We do not yet know how that will operate and I certainly do not understand how it relates to the private side of the betting industry.
Lord Razzall: My Lords, will the Minister expand on one specific aspect of the Statement which we on these Benches, as indicated by my noble friend Lord Newby, very much welcome? I refer to the long-overdue distinction between revenue and capital spending which, in my view, is the most significant aspect of the Statement today.
In the Statement which the Minister repeated, the following sentence appears:
"Total investment, public and private, in Britain has in recent years fallen, … and is far behind our competitors".
Those of us who have been arguing for the distinction to be made between capital and revenue spending by government would argue that one of the reasons that public sector capital spending has been so low is

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because capital spending has been aggregated with revenue spending and there has therefore been a significant reduction in public infrastructure spending, which it is to be hoped we will now see some movement to reform.
Perhaps I can probe a little on the impact of that decision on public-private partnerships and the private finance initiative. One of the reasons why the previous government, and indeed this Government, wished to try and encourage public-private partnerships and the private finance initiative is the absence of distinction between capital and revenue spending. There was significant pressure on the Government's resources and capital spending suffered.
If we now have the situation enshrined in the Statement in which we are to distinguish between capital and revenue spending; and if—as indicated on page 43 of the larger book—the public sector net borrowing requirements from 1998–99 onwards for the next five years will be negligible; will not the Government have to consider using the fact that they will be the keenest borrower and will be able to obtain the keenest rates in financial markets for capital spending? If they wish to encourage public-private partnerships, it is silly for the private sector to go into the markets and borrow at rates higher than the rates at which the Government can borrow. Will not the Government take into account the fact that, in those public-private partnerships and PFI initiatives, they ought to be in there as the borrower, if necessary, in respect of lending to the private sector vehicle? The overall cost of borrowing and the overall cost of the investment will then be lower.
Lord McIntosh of Haringey: My Lords, I am grateful to the noble Lord for those very thoughtful comments. I tend to over-simplify these matters. The Treasury hate it when I say that its traditional way of looking at these things is that £1 of capital and £1 of revenue equals £2 for cash accounting purposes. That is the truth of the matter and what we are getting away from. That is the value of the whole exercise.
Everything that we are doing in this regard must be constrained by the two basic framework statements that we have made. First, there is the golden rule and, secondly, the stable debt ratio. Having said that, what we shall get from resource accounting and budgeting is a clear structural distinction between current and capital expenditure so that they are no longer treated as though they were equivalent economic categories.
What we shall get in terms of value for money is twofold. First, we shall be focusing on capital as it is consumed rather than as it is financed. That puts the long-term investment implications of public capital on a more transparent footing similar to that in PFI at the moment. Secondly, there will be greater emphasis on the objectives to which departments devote taxpayers' money; namely, the outputs and, over a longer
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timescale, the outcomes produced and the trade-offs made. The noble Lord went further than that, but I have forgotten the final point that he made.
Lord Razzall: My Lords, it is the fact that the Government can borrow at the cheapest and keenest rates and that that should be put to use in the initiatives.
Lord McIntosh of Haringey Lord McIntosh of Haringey: My Lords, there are a number of ways in which that can be achieved. Rather than bore the House with a long exposition, perhaps I may refer the noble Lord to the Deputy Prime Minister's Statement about the Channel Tunnel rail link. Under those proposals bonds will be raised which will be guaranteed by central government. I probably will not be thanked for this, but on that basis the effect will be that we are borrowing at below market rates because there is no risk involved. That is what we are trying to achieve.
Lord Randall of St. Budeaux: My Lords, is my noble friend aware that the PSBR system that we have been operating in this country for many, many years has undermined our public services and seriously impeded investment? Does he agree with me that today's Statement takes a brand new approach to the management of capital expenditure and to our fiscal balances which will have a significant impact on productivity in this country both in terms of the economy, public services, jobs and, therefore, families?
Lord McIntosh of Haringey: My Lords, I am tempted to agree tout court. In earlier statements we indicated that we were proposing to move to resource accounts. We shall be publishing the first of them for the year 1999–2000. We shall be producing them parallel with the cash-based supply estimates and appropriation accounts until the years 2000 and 2001. I thank my noble friend for his congratulations. We are not abandoning entirely PSBR at the moment. It represents something real, which is cash coming in to government. When I say that we are producing, as private businesses do, balance sheets as well as income and expenditure accounts, we cannot neglect what private businesses also produce, which is cash-flow accounts.
Lord Boardman: My Lords, I share my noble friend's surprise at the somersault which the Government appear to have carried out in many parts of the Statement. In the interest of time I shall confine myself to one question. The noble Lord suggested that the separation of capital from revenue was a new inspiration by the Government. There has not been a Chief Secretary over the past 40 years who has not tried with the Treasury to get the separation of capital and income. The noble Lord will probably agree that the Treasury has a list which goes back to when chief ministers questioned whether there should be capital or income, starting with the battleship and turning down all kinds of things.

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Has the noble Lord a clear definition of what is going to fall on the capital side and the income side? Does he accept that no doubt this has been gone over many times by governments in the past?
Lord McIntosh of Haringey: My Lords, the answer to the noble Lord's first question is that for 40 years Chief Secretaries have tried, but we have succeeded. The answer to the noble Lord's second question is as I acknowledged in responding to the noble Lord, Lord Newby; namely, that there are always going to be difficulties in the definition of what is capital and what is revenue. I gave the example of expenditure on human capital, which the Office of National Statistics will not allow us to count as capital. We are approximating as closely as we can to internationally recognised norms of accounting in both the public and private sector. As with employment statistics, I believe that that is the right way to go.
Baroness Maddock: My Lords, can the Minister clarify the Government's thinking as regards best value in local government? I and others understood that the Government were still consulting on best value and that pilot projects were being set up. Can he also expand a little on how the Housing Inspectorate will work?
Lord McIntosh of Haringey: My Lords, the answer to the noble Baroness's first question is that we are consulting on that subject. As regards her second question, those matters will be covered in the publication next month of the comprehensive spending review. While I am on my feet, may I correct something that I said to the noble Lord, Lord Boardman? The resource accounting and budgeting system will be introduced from the year 2001–2002 and not a year earlier, as I suggested.
Lord Desai: My Lords, I welcome the separation of capital and current accounts and the golden rule. Is the projection of 2.25 per cent. growth in real expenditure and output a pessimistic forecast of output? It is below the trend experienced by the economy over the past 40 years. The growth rate in expenditure is even lower than the quoted 3 per cent. per annum. Can my noble friend say whether it is just a cautious outcome or do the Government have genuine forecasts that the economy will grow more slowly than in the past?
Perhaps I may register one small disagreement about the debt-GDP ratio. I do not see how a low or high ratio is any indication of economic prosperity. Between the years 1970 to 1990 the debt-GDP ratio decreased from 70 per cent. to 27 per cent. They were not the happiest years for the British economy. We all complained how miserable we were. Does my noble friend agree that getting that ratio down should not be a primary objective?
Lord McIntosh of Haringey: My Lords, the projection of a 2.25 per cent. increase in current public expenditure is, as my noble friend said, a cautious figure. It is achievable within the constraints of the golden rule and the debt-GDP ratio. It is not necessarily
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the same as forecasts for output as a whole. It is designed to be not too far away from the figures for output as a whole.
My noble friend has a point about the debt-GDP ratios. They are not always associated historically and statistically with economic growth. That is true. However, when we are confronted with such wild accusations of tax and spend, it is important at the very least to be able to remind noble Lords opposite that this is not a Government who are moving rapidly towards a command economy.
Lord Higgins: My Lords, I certainly go along with the increased emphasis on output measures and on the move to accrual accounting, and particularly balance sheets, which is something that the House of Commons Select Committee on the Treasury has advocated for a long time. First, on balance sheets, is it the Government's objective that the government balance sheet should go up or down in value? Secondly, the noble Lord gave the impression that if the Government sold off assets and invested money, that would result in a net increase in investment. Perhaps the noble Lord will confirm that that is not so. It may be more efficient, but it does not change the amount of investment.
Following the point made a moment ago by the noble Lord, Lord Desai, perhaps I may express my grave concern about the way in which the Government's overall policy is developing, with an independent Bank of England which has a clear objective, largely relating to inflation, and now, apparently, with a fiscal strait-jacket with regards to public expenditure. There is an assumption that that means that the tax side will not change. Presumably, that is not the position. Therefore, at least at this stage, remarks about the PSBR or other surrogates for it are not helpful. I share the view of the noble Lord, Lord Desai. I suspect that the Government's forecasts show a low rate of economic growth compared with past history—and that is because of the way in which the Government's monetary and fiscal policies are interacting.
Lord McIntosh of Haringey: My Lords, the Government's forecasts of economic growth are publicly available. Anybody can produce projections on the Treasury model—and that frequently happens. I simply do not know the answer to the noble Lord's question about whether we expect the balance sheet to go up or down. We expect it to balance. Whether we expect it to go up or down in total depends largely on the way in which we value the fixed assets which are taken into account. Work on that is still developing.
The noble Lord is right in saying that the interaction of all those factors is extremely complex. I thought that by stating our objectives more clearly we would be increasing the transparency of government economic policy. I do not describe these as a "strait-jacket". It is much better to do what we are doing here and to make forecasts about what we hope to achieve through economic policy than to do what the previous

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government did, which was to set continuing targets for tax reductions regardless of, or without any conscious reference to, their effect on economic growth.

National Minimum Wage Bill
6.12 p.m.
The Minister of State, Department of Trade and Industry (Lord Clinton-Davis): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Clinton-Davis.)
On Question, Motion agreed to.
House in Committee accordingly.
[The DEPUTY CHAIRMAN OF COMMITTEES (Viscount Allenby of Megiddo) in the Chair.]
Clause 1 [Workers to be paid at least the national minimum wage]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 1:
Page 1, line 7, leave out ("by his employer").
The noble Baroness said: When I first read the Bill and then saw this amendment, which looks very simple and which was proposed by my colleagues in the other place, I wondered why the Government were making such a fuss, but this amendment was debated at considerable length—for almost three hours—in Committee in the other place. It was described then as a "probing" amendment, but as no answer was given to the basic question, we have to take up the time of your Lordships' Committee by raising the matter again. The basic question is: why do the Government insist on the inclusion of the words, "by his employer", when to any dispassionate reader they seem to be mere verbosity? As long as the employee gets the minimum wage, why does it matter who pays him?
The debate in the other place largely revolved around the situation of catering and hairdressing staff, whose remuneration includes tips whether given directly to the employee or shared out in the tronc system. There are stories—perhaps apocryphal—that the doormen and cloakroom attendants at major London hotels, far from being paid any wages, used to pay the hotel for the concession. There are other examples. There used to be a system whereby taxi drivers kept a proportion of the fares and all the tips. Those drivers would not have regarded themselves as the employees of the vehicle owner but merely as hirers of it. However, under this Bill, it is likely that they will cease to be treated as self-employed and would be employees.
Then there is the situation where an employee is given a commission on what he takes in. I am not talking about ordinary commercial travellers and salesmen but about people such as seaside deckchair attendants who used to keep part of the ticket money as an incentive to be more assiduous. I doubt whether the unions permit local councils to operate that system these days.
I repeat my question: why do the Government insist on these three little words which do not add a single thing to the Bill and the exclusion of which will not detract from the clause by one iota? Is it because of some hidden agenda to abolish tipping, a long-held desire of old Labour, emulating the Soviet Union where it was impossible to get a taxi once the driver had performed his daily quota of rides?
Today I read a report in the Daily Telegraph—it was repeated many times on the radio—of a leak suggesting that the Low Pay Commission agrees with us. I shall be pleased if that report is correct. The question is: do the Government agree with the Low Pay Commission?
My other question is: when are the Government going to tell us what the Low Pay Commission's entire report says—or are the Government going to continue with their practice of treating Parliament with contempt and announce their policies to favoured journalists instead of to Members of both Houses, a practice for which Madam Speaker has reproved the Government on several occasions in the past few weeks?
In the light of the leaked report, will the Government undertake to accept and implement this amendment? I beg to move.
Viscount Thurso: Perhaps I may respond to one point made by the noble Baroness when moving her amendment. I refer to her point about service charges and tipping. Before doing so, perhaps I may say how sorry I was not to be present in the House for the Second Reading of this Bill as I have spoken often in your Lordships' House in support of such provisions. I should very much have liked to be here to record my support then. My comments throughout this stage are intended to be helpful and constructive, even if a little probing.
It is important to understand that there are two kinds of service charge normally operating in hotels and restaurants. The first comprises tips which are left on the table by clients who have enjoyed a good meal and feel moved to leave something extra. Customarily, they are collected either by the waiter concerned or through something known as petit tronc. There is no involvement of the employer whatsoever. The sums are simply divided among the staff and very little, if any, record is kept of them. I hope that those payments are not swept up into any consideration of a minimum wage. That would clearly be quite wrong.
The other form of service charge is where a specific percentage is included on the bill by the establishment and where the patrons very often do not have any discretion about whether or not to pay it. That is called the tronc system and it is usually administered by the hotel or restaurant. The amount passes through the books and has PAYE and national insurance levied on it. When one is recruiting a member of staff, it is usual to say, "You will be paid such-and-such as a salary and you may expect to receive so-and-so from the service charge", of which usually a certain amount is considered guaranteed. In that instance, I believe that it is perfectly proper for that amount to be taken into consideration when looking at the minimum wage. However, I feel that that is encompassed within the words, "by his

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employer". As those amounts are dealt with by the proprietor of the restaurant or hotel and appear in the PAYE system and on the payroll, it seems to me that that situation would be covered by the words currently in the Bill.
Finally, I reassure the noble Baroness that the story about doormen is entirely apocryphal. I believe that that went out before the last war. In any hotel with which I have had anything to do doormen are gold dust and I do not believe that in London the minimum wage will affect any of them.
Lord Clinton-Davis: First, I welcome the noble Baroness to this debate, which of course will be very short. We shall finish at about half-past seven! I am sure that the noble Baroness will make a major contribution to that debate. I am not surprised that the Opposition took so long in Committee in another place. The noble Baroness said that it took three hours. If it relies on the argument that the Labour Party is emulating the Soviet Union, it is not surprising that it takes a long time. That is just verbiage, and the noble Baroness knows it.
I very much welcome the contribution of the noble Viscount, Lord Thurso. He has made a personal contribution to the principle of the national minimum wage. He has applied that in the hotels of which he has experience and in which he is involved. I congratulate him on applying the principle and not just talking about it.
There is a very good reason for opposing this amendment: it is against the whole thrust of what we seek to do. That is the simple answer to the points made by the noble Baroness. The amendment seeks to remove the requirement on employers to pay their workers at least the national minimum wage. It would make it very unclear where responsibility for payment rested. If there is no responsibility how can there be enforcement? The Bill makes it manifestly plain that the responsibility lies with the employer, and there is no alternative to that. The approach of the Bill, just as with other employment law, is based on the relationship between employer and worker. I do not see any difficulty in relation to that. The proposition is very simple. We are talking about a minimum wage, and wages are paid by employers. The amendment undermines the purpose of the Bill which requires employers to pay their workers at least the national minimum. How could a worker or enforcement officer press a claim if it was not abundantly clear who was responsible for paying the minimum wage? Our evidence is that business wants to see effective enforcement. Good companies do not want to be undercut by bad companies. Clause 54(4) of the Bill makes it very clear who is the employer.
The noble Baroness spoke about tips. I believe that the issue is rather more complex than she has credited. The Low Pay Commission will make a report on this matter. I am unable to set out the Government's detailed position on tips until they have responded to the whole issue in due course. What I can say is that customers in restaurants are not employers. Sometimes they treat employees as employers but they are not. They have no share in the responsibility to pay the staff the minimum wage. We shall deal with the whole area of performance
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bonuses, gratuities and tips when we come to make our Statement on the recommendations of the Low Pay Commission.
We shall consult very widely on the draft regulations which will take this issue into account. I do not want to go into the whole issue of tipping at this particular juncture. The noble Viscount, Lord Thurso, has drawn attention to some salient points. We shall return to that matter in due course. I believe that the Committee would be very unwise to support the amendment moved by the noble Baroness.
Lord Fraser of Carmyllie: Before my noble friend determines how she responds to the Minister's reply, if the noble Lord opposite believes that the Committee will be finished by 7.30 p.m. he should advise us in which week it will reach that conclusion. I regard his response on the issue of tips as totally inadequate. I recognise well enough the very real difficulty in which he finds himself; namely, the Low Pay Commission has a report on which the Government have not yet reached a view. Clearly, the Government are trying not to reach a view upon it until this Bill has concluded its passage through this House and has been returned to another place. That is unsatisfactory. It is not simply a matter that affects the narrow point of tips in restaurants. I believe that the noble Earl, Lord Thurso, is correct.
Viscount Thurso: I thank the noble and learned Lord for that promotion, but I remain simply a Viscount.
Lord Fraser of Carmyllie: The noble Viscount may in any event enjoy that promotion for only a brief period. I believe that the noble Viscount was correct in saying that there were two types of tips. First, there are tips that are simply left on a plate or are passed directly to staff and the employer has no part in their distribution. Secondly, there are those which are collected and then divided up according to an agreed formula.
As I understand the proposal in the not particularly confidential report from the Low Pay Commission, it is recommended that all payments by result, commissions, bonuses, tips and gratuities paid through the payroll—which fall into the second category—should be included when calculating salary levels. If that is the only type of tip that is included when the calculation of the minimum wage is made, the difficulties may not be very significant. However, if what is proposed—I have not seen the confidential report—is that a wider category of tips should also be included, then some very fundamental questions arise on the whole structure of the Bill. The assumption that lies behind many of the ancillary provisions of the Bill is that of necessity the employer knows what has been paid over to the employee. For example, we find in Clause 28 that in any civil proceedings that arise over this issue there is to be a reversal of the ordinary burden of proof.
It is not difficult to understand why the Government may consider that to be an acceptable approach when the employer has full knowledge of all that is paid over to the employee. But in the circumstances that we are considering in which a restaurateur may be broadly

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aware that most of his clientele tend to leave tips, he may not know how much they leave or how often they leave them or whether any tips are left in any particular week. I believe that in those circumstances there is a very real argument that the onus of proof should not be reversed. For that reason I believe it is important to know at the outset exactly what is to be included and what is to be excluded. I believe that it would be in the Government's interests to give the Committee as clear an indication as possible of what is to be included; otherwise, we shall have to go through the Bill line by line assuming the worst and that even those tips which are not passed in any way through the books of the employer are to be included when calculating whether or not the minimum wage has been met. I hope that the noble Lord will at the outset give the Committee a rather fuller response than he has given so far.
I appreciate the difficulty. From reports that have appeared this morning in the media—in particular, the Daily Telegraph—Mr. John Monks of the Trades Union Congress has been writing to the Government about what is in the report. The Committee must know what is in the report and what the Government propose to accept at the earliest possible date; otherwise, it is not simply a matter of determining whether it is £3.60, £3.40 or £3.80. If one was concerned simply with the figure that might be one thing. It is now becoming clearer and clearer that the report contains a number of other issues that must be addressed within the whole framework of the Bill. If the Government were prepared to take a number of straightforward decisions we could deal with the scrutiny of the Bill much more simply and without the elaboration which I otherwise fear will prove to be necessary.
6.30 p.m.
Lord Clinton-Davis: It is nice to see the noble and learned Lord back. I welcome him back. His contribution is bewildering because, at one moment, he says that he understands the difficulties—the Low Pay Commission report has not been published, and the Government have not responded to it—then he says that he wants to know where the Government stand in relation to the report on this and that issue. I am not going to deal with Low Pay Commission report in dribs and drabs. He understands that.
The noble and learned Lord may want to have a debate on tipping now. I can assure him that it is a long and complex subject. It is not easy to deal with. We have the tronc system; questions of who controls it and how it is controlled; and service charge issues with which to deal. This place will have ample opportunity to discuss the matter in a more comprehensible way in due course, because it will then have before it the recommendations of the Low Pay Commission and the Government's response to those detailed matters. I shall not go into the issue in any further detail this evening, notwithstanding the noble and learned Lord's implied threats. I was only joking about 7.30 p.m. It is more like 7.40 p.m. after that intervention.
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On the noble Baroness's own admission, there was considerable scrutiny of the Bill's principles in another place. We are going through a number of those debates again. This place is entitled to do that. I confess that when I was in opposition I did that on a number of occasions because it is appropriate for this place to go through such things again if it deems fit. We have reached certain agreements in that regard which necessarily mean that it is not always helpful to go through the fundamental points again.
I tried to make it clear in my first speech that in the amendment the Opposition are seeking to undermine the fundamental tenet of the Bill. I can add nothing more to what I said originally. I hope that the noble Baroness will withdraw the amendment.
Lord Fraser of Carmyllie: I leave it to my noble friend to make up her own mind. It will not do: the Minister said on Second Reading that this place would see the report before the end of last month. I have not seen it. We do not yet have any government decisions on it. At the risk of repeating myself, if the only issue that this place needed to have brought to its attention was the level recommended by the commission—£3.60, £3.40 or £3.80—I could see that a final decision by the Government on that matter would not necessarily affect the detailed scrutiny of the Bill.
What is troubling about today's report is the revelation that there is to be an amendment on how tips are to be treated. There is an indication also in the press reports that the trade unions are profoundly unhappy about the recommendation. The Daily Telegraph claims that it is a recommendation which seems certain to be accepted by the Government.
That is our difficulty. I am sure that the Minister understands what I am driving at. Unless we know how that matter will be handled by the Government, the only way forward for us—I should prefer to avoid taking this way forward—would be to assume in every circumstance in the Bill, where there might be some impact on the drafting, if tipping on a wider basis is to be included, close scrutiny will be needed. Let us not be flippant about 7.30 p.m. or 8.20 p.m., I am more concerned that we will not do ourselves a great deal of good, in trying to scrutinise properly, if we have to make a broad range of assumptions, because, if only the Government would make up their mind, we could set them aside so that the range of scrutiny would be markedly restricted.
I appeal to the Minister again to give us some indication, if he can, of when we might know about these matters. We were promised the report by the end of May. As we understood it at the time, that meant that we would all have it available for this Committee stage. It would be helpful were we to know, at least before we reach the next stage, whether we shall see the report by then, and, equally importantly, whether there is any prospect of having the Government's decision on the acceptance or otherwise of those recommendations by that time.
Viscount Bridgeman: I support the amendment, but I do not in any way anticipate a later amendment tabled

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by my noble friend Lady Miller. The Inland Revenue has, for many years, had to wrestle with the problem of tipping. At the later stages of the Bill, I hope that the Government will pay attention to the long-established practice which has been built up by the Inland Revenue in relation to tipping.
Lord Clinton-Davis: The noble and learned Lord has asked me to do what he used to rebuke me for suggesting, that titbits of information that he might read in the press should be the subject of considered debate here. I decline to do that. He has referred repeatedly to what he has read in the Daily Telegraph, based, of course, upon speculation.
We are dealing with the framework for the national minimum wage. It will be implemented through regulations which will be subject to the approval of both Houses of Parliament. The Bill establishes the principle of the national minimum wage and the regulations will define the detail.
When we come to debate those matters, many of the issues to which the noble and learned Lord has referred will be dealt with. I cannot continue the debate by going into further and better particulars, as the noble and learned Lord wishes. I have said that on a number of occasions, and repetition does not improve the argument. He then said that he would have to take us through the Bill step-by-step, no doubt threatening us with spending hours and hours on the Bill. That is for him to choose.
I have had detailed discussions with his Front Bench and with the Liberal Democrats. The noble Baroness will recognise that. We have tried to be as helpful as possible. I had not expected this kind of approach this evening. It is a matter for the noble and learned Lord. He is an experienced Member of this place and of the other place. It is for him to decide what he wants to do.
The commission's report and the Government's response will be before this place. I cannot say now when that will be. It is not just a question of choosing one item to discuss. The commission was asked to consider a number of complex items. It would be doing an injustice to it were we just to select, piecemeal, the matters that we were going to discuss, when the Government have not mind up their mind upon the entirety of the report. I cannot carry the matter any further.
Lord Fraser of Carmyllie: I am becoming even more disappointed by the Minister's response. It has been indicated that the noble Lord's colleagues are having a reception this evening. If that were not so, I would be minded to go back on a promise that we would not have a Division on the matter. The noble Lord must appreciate how close he is getting to infuriating us seriously. The programme, the timetable for the publication of the report, and the timetable for securing decisions of the Government are not titbits. It was said at Second Reading that we would at least see the report before we reached this stage of the Bill. That does not seem to be a matter that should be caricatured as seeking titbits of information. The Government
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clearly regard it as extremely important to have the matter resolved as objectively as possible by passing it to the Low Pay Commission for a conclusion.
I shall not press the matter further on this amendment. However, if the noble Lord regards our seeking to discover the likely response of the Government to the report as a titbit, or something of inconsequence, it will not make for a measured, calculated consideration of amendments by the Opposition. I leave it to my noble friend to determine what she wishes to do.
Lord Clinton-Davies: I had no intention of upsetting the noble and learned Lord. I have done so on a previous occasion. I know how wrathful he can be. It was not my intention.
I am saying that at this stage I cannot give the noble and learned Lord a timetable. I can undertake to inform the House at the earliest opportunity what the timetable will be, and how it will fit into consideration of the further stages of the Bill, but I cannot do so tonight. The noble and learned Lord would be the first to rebuke me—he has done so in the past—for relying on speculative information in the press. The noble and learned Lord will recall that. If he cannot do so, my memory is better than his in that respect. Be that as it may, I wish to add that footnote to this debate.
Baroness Miller of Hendon: The Minister will remember that on Second Reading I asked specifically when we were to receive the report from the Low Pay Commission. I recall the matter well because the noble Lord intervened, saying that he thought he had already addressed the matter. It is impressed upon my mind, since I thought that I must have misheard. Whether or not I misheard, it is troubling that when we seek to discuss the Bill all we have are leaks. The Daily Mail today had an article on tipping. A little while ago we heard that the proposed sum was £3.60. We heard that the Treasury was not pleased about that. Then we heard reference to the Board of Trade. We are entitled to ask when we are to receive the report from the Low Pay Commission and to be concerned that the House will not receive it first.
Having said that, I shall read carefully what the Minister said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.45 p.m.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 2:
Page 1, line 8, at end insert (", provided that such person has no other casual, part-time or permanent employment with another employer in respect of the same work.").
The noble Baroness said: The urgent need for this amendment arises from an ambiguity in the clause compounded by what was thought by one of my honourable friends to be an ill-considered throwaway remark by the Minister for Small Firms during the Committee stage in another place. It occurred not in relation to Clause 1 but on a totally different aspect of Clause 2. That is why I believe that the Minister did not realise the full implication of what she said.
The Minister began by saying:
"Under Clause 1 a worker is entitled to receive the national minimum wage from his or her employer. If the employee has two jobs, he or she is entitled to have the national minimum wage from each employer".
The honourable Member for Daventry asked:
"Is she saying that would apply if the employee was employed simultaneously?"
The Minister replied—and this is of vital significance:
"Absolutely. An employee who is working for more than one employer simultaneously would be entitled to receive the national minimum wage from each of his or her employers".
Let me stress the word "simultaneously" in that reply. The honourable Member for Buckingham then said:
"I think the Minister has just dropped a clanger, to judge by the expression on the faces of Labour Members at the back of the room. Am I correct in understanding that an employee would be entitled to claim the national minimum wage from more than one employer at one time for work in respect of the same period?"
The Minister replied:
"Yes, of course".
I stress the words, "in respect of the same period".
It seems to me that the honourable Member was being magnanimous and charitable, as is his wont, in assuming that the Minister had been guilty of a slip of the tongue. Not so; the Government really meant it. In the very next session of the Standing Committee that afternoon, the Minister of State said:
"If an individual has two employers for whom he works during the particular pay period, each employer has to pay the minimum wage irrespective of whether a worker has three, four, five or six employers".
I apologise for the lengthy quotations, but it was important for the Committee to hear exactly what the Government contend is the effect of the Bill.
As the Committee is aware, the courts may now adopt the practice of looking at what Parliament intended when interpreting the words of an Act. Perhaps I may give the Committee a couple of examples of the ludicrous results that follow from this incongruous interpretation of the Act.
Let us imagine that three brothers trade in partnership in a small factory unit manufacturing widgets. Their only employee is a secretary who answers the telephone, deals with a small amount of correspondence, issues the invoices and does other minor clerical jobs. For that she is currently paid £7 an hour or £280 a week. We understand that the Low Pay Commission has recommended a national minimum wage of £3.60. If the Minister's interpretation is correct, the result is that she would now have to be paid £432 per week because she was working for three employers, the three persons who owned the business in partnership. However, the paradox does not end there. Next door is a similar business, but it trades as a limited company, so its secretary has only one employer—the company. She therefore has the proper single market rate for the job.
In place of that hypothetical example, let me give one that would exist in real life. Let us consider a large firm of solicitors practising in the City, let us say in Gray's Inn Road. Part of the infrastructure of that firm is a
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catering staff of three or four people to supply tea, coffee and quantities of delicious sandwiches so that complicated negotiations do not have to be broken off for lunch and staff and visitors in meetings are sustained well into the night. Never mind the Minister's hypothetical three, four, five or six employers. Let us suppose that that firm had 54 partners who are the owners of the firm and the technical employers of the catering staff. It is by no means the largest of such firms; there are many larger firms with numbers of partners running into three figures.
If the Minister is right, it means that each member of the catering staff, receptionists, the four people employed in the print room (which churns out thousands of pages of documentation every day), and members of the typing pool, would be entitled to 54 times the national minimum wage. If it were 54 times £3.60, the figure would be £194 an hour, or £1,555 for an eight hour day, or £7,760 for a five-day week, or even £404,352 a year. Of course that is a perfectly preposterous proposition. I am certain that one result would be a mass exodus of your Lordships from this House to seek a job as a messenger boy or girl in such a firm.
By their injudicious remarks in another place, the Ministers have opened Pandora's box. Sure enough, someone will try it on and perhaps a judge will feel bound to adopt the two Ministers' interpretation. This simple amendment removes any possible ambiguity or doubt. Common sense tells us that if a person is working simultaneously for more than one person, then he or she gets paid for the hours he or she is working concurrently. For an eight-hour day the pay is for eight hours, not 16, 24 or 54 times eight which equals 432 hours.
Nobody can claim to be paid for a 432-hour day, but that is what the Ministers in the other place were suggesting. Even the planet Mercury only has a 59-hour day. What the Minister is suggesting is that the meaning of this Bill would introduce the mother of all Spanish practices.
I do not believe for one moment that the Government could possibly intend this utterly ridiculous interpretation to prevail. All they need to do, to put the issue beyond any doubt, is to adopt the eminently sensible amendment, which in no way detracts from the right of an employee to receive the minimum wage, whatever it turns out to be, for each actual hour worked. I beg to move.
Lord Clinton-Davis: The noble Baroness spoke of preposterous propositions and then went on to make a number of them, drawing inspiration from the planet Mercury in doing so.
Perhaps I may deal with the question of a partnership. I have been inured into this because I am a solicitor. All the noble Baroness has to do is to mention the word "solicitor" and I become ensnared. We are talking about one employer in that situation, in terms of a partnership.
One can rely on a whole set of hypothetical circumstances in order to try to undermine a principle. All these cases, if they fell to be dealt with, would have

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to be dealt with on the specific facts, on the particular contractual arrangements that existed between the parties. The responsibility for paying the minimum wage can depend on those particular circumstances, especially on whether the individual being paid is self-employed, or an employee or a worker.
Amendment No. 2 would remove the entitlement to the minimum wage from any worker who works for more than one employer in respect of the same work. That is the purpose of it. I see that the noble Baroness nods in agreement.
It is worth mentioning that when the amendment was originally tabled on 30th March the words
"in respect of the same work"
were omitted. According to that version, the amendment would catch employees with a second job. We could certainly have a debate about that, if that occurred, when there was a debate in another place.
The situation would, in any case, be clear. The minimum wage would be payable for both jobs. After all, if a person has two jobs, no one expects his first employer to pay him less simply on account of the fact that he is earning two pay packets. That would be beyond the realms of imagination. So why should anybody with two jobs not be entitled to the minimum wage in respect of each employment?
The issue of second jobs does not appear to be the point that lies behind this amendment. The original amendment was changed and replaced on 21st April by the current version, which adds the words
"in respect of the same work".
Therefore, the situation which the amendment seems to envisage is one where a single person is being paid by two employers to do the same work. For the individual in question, that appears to be a very happy situation, because the person concerned would be receiving two salaries for carrying out a single piece of work.
With great respect, I do not believe that the amendment has anything to do with practical realities. Are there really individuals in this happy situation? Can the noble Baroness point to such cases? The noble Baroness sought to allude to solicitors' partnerships, which have nothing to do with this at all. Or, are there really employers who, between them, are content to pay the same individual twice over? Perhaps the noble Baroness can allude to certain factual situations. In any event, if she is able to, I do not see these situations being something that the Bill could or should be designed to prevent.
With the best will in the world, I believe that the revised amendment is meaningless. The situation is quite simple, despite this and other attempts to make it appear complex. If a worker has more than one employer and more than one job, each of those employers is responsible for paying the worker at least the rate of the minimum wage for the time during which that worker is working for him. I do not see the problem. If a person does two jobs as a worker, then he or she should get two wages, each underpinned by the minimum. That is our case. I believe it is a very sensible proposition.
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I believe the Opposition have become somewhat confused by these hypothetical instances. I hope the noble Baroness will feel persuaded that this is not a matter which she would wish to press forward tonight.
The Viscount of Oxfuird: Perhaps I may have some clarification. A number of people in this country act on a commission-only basis. How could they be described under these circumstances? Because they are responsible for the sale of a product, in the course of their work they may be employed by four or five employers. In that case, would they fall within this particular clause?
Lord Clinton-Davis: No, because they would be self-employed persons. They would be acting on a commission-only basis.
Baroness Miller of Hendon: For the purposes of clarity and Hansard, I was not nodding at the Minister. I was smiling across the Despatch Box and I was not actually agreeing with what he was saying.
Turning to that particular point, I hesitate to argue a point of law with the Minister, who has been a member of the solicitors' branch of the legal profession for, I believe, something like 45 years. Indeed, I would not wish to argue a legal point with anyone on the Government Front Bench. As he said to me, with the greatest respect, that I was wrong, I would like to say, with the greatest respect, that I believe that the Minister is wrong.
A limited company is a legal entity. A corporation created by statute or Royal Charter, such as the BBC, is a legal entity. A partnership is not a separate legal entity, but a body made up of all its individual members. If one of them incurs a debt on behalf of the partnership, or injures someone in the course of the partnership's activities, or if someone simply falls down a defective staircase in their office, each partner is jointly and severally liable to the third party. In my opinion, it is not sufficient simply to exempt partnerships because there are other activities where a person can be working for more than one person simultaneously.
The Minister asked me to give some examples. It could be a joint venture or an unincorporated members' club. For example, I and some colleagues could get together to employ a researcher out of our meagre secretarial allowance, or 50 of us could decide to engage a trainer to conduct a keep fit class between Divisions during late sittings, and many of your Lordships might well appreciate that. The amendment that we are considering has been drafted so as to cover any eventuality that the most fertile imagination could conceive. The Minister suggested that the wording of the amendment had been changed. We have changed it in order that it will cover any example that anyone might like to think up.
The amendment is helpful and is intended to rescue the Government from the consequences of the very loose phraseology used by the draftsman, followed by the extravagant and ill-considered interpretation put on the clause by the two Ministers in the other place.

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I have no intention of withdrawing the amendments at the moment. I wish to hear what the Minister has to say and I believe that my noble and learned friend has something to say, too. The Minister suggested that the amendment was irrelevant and that I did not know what I was talking about. I tried to point out to him that it was particularly relevant and that I should like to hear what he had to say.
Lord Clinton-Davis: I should never be so discourteous as to say that the noble Baroness did not know what she was talking about. I am grateful to her for her intention to be helpful, but it has not worked out that way. The partnership she referred to was a body. That is exactly what it is.
7 p.m.
Lord Fraser of Carmyllie: Is a partnership a person?
Lord Clinton-Davis: No, a partnership is not a person.
Lord Fraser of Carmyllie: Will the Minister look at Clause 54(4), which states:
"In this Act 'employer', in relation to an employee and a worker, means the person"?
Lord Clinton-Davis: It is not, normally speaking, a person, but in the context of this Bill that is how it is defined. Normally speaking, a partnership is not a person, but it depends on the context in which one is referring to it.
Lord Fraser of Carmyllie: There will be some disagreement between my noble friend and myself because so far as I am concerned a partnership in Scotland, as even English lawyers know, enjoys a separate legal persona. Therefore, in the terms of that definition, I have no doubt that a Scottish partnership would be a person.
I am interested to know, and I should be grateful for elucidation before we reach Clause 54, whether a partnership in England is properly described as a person. If a partnership in England is described as a person, we wish to get the matter clarified before we reach Clause 54.
Lord Clinton-Davis: For the purpose of this Bill, a partnership is defined as a person. In other respects, it may not be. However, I do not wish to become involved in that debate, nor do I wish to become involved in the niceties of Scottish law, of which I know even less than English law.
The question about keep-fit classes is interesting, and I shall join. I am not suggesting that the noble Baroness is talking utter balderdash; I merely tried in a polite way to refute the argument from the Government's point of view. We do not see that she is seized of the proper point. I do not see that repetition adds anything to the argument; I clearly set out our case in this regard. We believe that the Opposition are wrong. The amendment,
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if agreed to, would do serious damage to the Bill and I do not want that to happen. I invite the noble Baroness to withdraw it.
Lord Monson: Before the noble Baroness decides what to do, perhaps I may say with all respect that I do not believe that the noble Lord, Lord Clinton-Davis, has answered her point about people banding together to hire the services of a secretary or a personal trainer. We are not talking about partnerships, which may well be a grey area; what we are talking about is not a grey area.
Lord Clinton-Davis: If two people employ someone to do a job simultaneously for them the position is clear; the person concerned should receive two wages, each underpinned by the minimum. It is inconceivable that in the circumstances described by the noble Baroness and the noble Lord, Lord Monson, a typist would have a worker's contract with all three. It does not happen that way.
We are dealing with hypothetical situations. In reality, when considering the legal liabilities of particular circumstances, one would have to examine the contractual relationship which exists. One could dream up all kinds of hypothetical situations which will not advance the interests of addressing the principle. The Bill reflects employment law, all of which assumes that a worker cannot have more than one employer in relation to one job. He or she can of course have two jobs at the same time, one in the morning and one in the afternoon, but cannot do them simultaneously.
Baroness Miller of Hendon: After that last remark, I am in a certain confusion. I would have thought—and the noble Lord, Lord Monson, made the point—that we could all join together and have a keep-fit class in the Royal Chamber. The question is whether each and every one of us would have to pay the minimum wage to the instructor for undertaking the same job at the same time. I have listened carefully to what the Minister said. Although I do not agree with him, I shall not press the matter to a Division tonight. We agreed not to do so because the Minister's colleagues were at a social gathering and it is not my intention to break such an agreement.
The Government need to look at the issue again and we wish to return to it. In no way does this simple amendment interfere with or alter any of the principles of the Bill. It clarifies the Bill and would get the Government out of certain trouble. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 3:
Page 1, line 14, at end insert (" or has reached the age of seventeen years, whichever is the later").
The noble Baroness said: In moving Amendment No. 3, I shall speak also to Amendments Nos. 4 and 5. Some parts of the Bill are defective because not all the effects of particular provisions have been fully considered. Clause 1 (2)(c) is one such provision. As

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drafted, the Bill provides for the start of an employee's entitlement to receive at least the national minimum wage to be when he or she reaches school-leaving age.
Perhaps I may say for the first time that, as the Minister knows, we on these Benches do not agree with the idea of a national minimum wage, although we certainly appreciate that it is a manifesto pledge. All we shall attempt to do is to make it a little easier and a little better for everyone to live with. I agree that if there has to be a national minimum wage there has to be a start-up date for it. However, basing it on something as flexible as the school-leaving age produces uncertainty and ambiguity.
The reason is simple. Within the United Kingdom there are three different school-leaving ages. England and Wales have a different age from Scotland, and Northern Ireland has yet a third. The differences are a matter of months, being based on how long after a child reaches his or her 16th birthday he or she is allowed to leave school. The details, even as set out in the normally helpful notes to the Bill, are extremely confusing. I have read them several times and, as the Minister will have done so, perhaps he can explain the differences. I found the matter extremely confusing, although in practically every other respect the notes on clauses were helpful.
No doubt they would be understood by an expert on education, which I certainly am not. But it is clear that children living within the four different areas will be able to leave school at ages different from others living in the same area. I agree that that problem cannot be avoided. However, as between the four areas, each using a different formula, there can be a difference of several months between the age at which a child is allowed to leave school. For example, as I understand the figures in the notes to the Bill, it means that a Scottish child may have to remain at school until he or she is about 16¾. According to this same note, in Northern Ireland a child may leave school in the same year as he or she attains the age of 16 on or before 1st July. Frankly, I am not sure what that means for Northern Irish children but it seems to me that a child born on 2nd July—which happens to be the birthday of one of my sons—would have to stay in school a whole year longer than one born on 1st July. If the proposed Scottish parliament has the power to do so, it could presumably alter the school leaving age north of the border to yet a different one, higher or lower, thus yet again introducing a different standard.
For the purpose of the present debate we do not have to concern ourselves with the precise effect of these arcane and convoluted regulations. It is sufficient to say that as between England and Wales on the one hand and Scotland on another hand and Northern Ireland on a third hand, children are treated differently. Using the term of art, "school-leaving age" means that distinctions will be made between children from different parts of the United Kingdom. That is, in effect, discrimination, not just on the grounds of age but also on the grounds of nationality. I believe that is totally unacceptable. I am amazed that the party opposite should continue to countenance it after it was drawn to their attention in the other place. But that is not the end of the anomaly.
In Committee in the other place, my honourable friend the Member for Daventry pointed out the situation of someone living on or close to the Scottish border; for example, in Berwick-on-Tweed. Would his entitlement to the national minimum wage depend on where he lived or where he took a job? Would a new school leaver from England be entitled to a different wage from a colleague working alongside him who lives in Scotland? That is not the end of the possible problems. What would happen if a young person from the EC came here from a country where, for example, the school leaving age is 18 or 15?
However, what I am addressing here is the differences in school-leaving ages between children living in different parts of the United Kingdom. The amendment we propose purely and simply provides a uniform base for all school-leavers irrespective of where they live or where they work. It is not designed to deprive them of any so-called benefit from an entitlement to a minimum wage, although I personally believe they will find themselves in severe competition with those still at school who are trying to secure the part-time and weekend jobs that so many young people are looking for.
The amendment removes the absurd geographical distinctions that I have drawn attention to. In the debate in the other place no satisfactory explanation was given by the Government for not agreeing to sort out this unnecessary problem. Now that they have time to reflect, I trust that they will agree to do so.
Before I speak to the next amendment I should like to mention a matter which comes back to our discussions much earlier on the Low Pay Commission. If rumour has it, and it is right, it may well be that young persons under 18 will not be entitled to the national minimum wage. Therefore, the whole of the argument which I have just proposed would be irrelevant. That is why I and my noble friend made the point that it is difficult for us to deal with all these matters in the dark because we do not actually know.
I turn to Amendment No. 4. This amendment does not seek to provide the facility to exploit with low wages senior citizens who have attained the age of 65 and who choose for whatever reason to remain at work full or part-time or even in some new occupation. I certainly would not wish to do that. I must declare an interest in that I will be joining that venerable group in just a few days' time, difficult as I find it to believe. Nevertheless, it is the truth.
The purpose of the amendment is to provide for the exclusion of those of pensionable age from what we believe may be the adverse effects of a national minimum wage. We believe that the effects of the Bill may be to harm many members of a particular group that the Government think it is intended to help. Elderly workers are indeed a vulnerable group. The same is true for those under the age of 26 where the Government have already taken permissive powers to make an exception. The amendment would not force pensioners to work for low wages; nor would the amendment to Clause 3, mirroring the exception for the under-26 year-olds.
The amendment recognises that they are a group who may have low productivity specifically related to their age or the lack of modern technological skills. I hasten to add that there will obviously be notable exceptions—myself included—who will continue to be able to work with undiminished vigour, as do many noble Lords in this House. Such persons should be allowed to price themselves into work if they choose to do so.
The Low Pay Commission should be empowered by the Secretary of State, after due consideration, to recommend a separate level of pay for pensioners. The Secretary of State has already given herself discretionary powers not to follow any recommendation of the commission if she chooses not to.
Pensioners are a large and growing proportion of our population. Out of 10 million pensioners in this country—almost 20 per cent. of the population—800,000 of them are economically active. Approximately 600,000 of those are employees. There was a dip in the number of employed pensioners during the economic downturn in the early 1990s. This emphatically proves the vulnerability of this group in times of economic and employment difficulty.
The Minister in the other place propounded the novel economic theory that higher wages result in higher employment. I shall not get into arguments about the reality of the so-called McCarthy curve. I am certainly not an economist but common sense makes it clear that some jobs will be lost if wages go up. Without special exemptions, jobs will be lost if wages are forced up. Those job losses will fall on the most marginal groups with the lowest productivity. At present, those liable to be low producers—those who want merely to work part-time and who may need more time off work for health, family or personal reasons—can price themselves back into the labour market by adjusting the price they charge for their labour.
Many of the over 65s are in possession of their state pension and occupational pensions. They may be happy to give a couple of hours a day for a nominal wage, possibly just to pass the time. They, as well as those who want to supplement their state pension, may make all the difference as to whether the village shop can stay open or have to close down. I well remember the example that my noble friend gave on Second Reading of such a case. They may be the means of enabling the local newsagent to continue with the delivery service and thus be able to compete with the big chains.
An unacceptable anomaly is created by the Government's refusal to exempt pensioners from the minimum wage. Pensioners do not pay employees' national insurance contributions. A pensioner will therefore be between 8 and 9 per cent. better off than a person below pensionable age doing the same work for the same wage. Is it not odd that a pensioner should have a higher take-home wage than his colleague working for the same employer? Similarly, in cases where an employer has a pension scheme, an employee over the age of 65 will not be able to join it. That will save the employer from making contributions, and also the employee, thus increasing his take-home pay still further.
The amendment will help to rescue from the margins of employment many of those who are currently unemployed solely on account of their age. The Government, albeit reluctantly, have given themselves flexibility to exempt the under-26 year-olds. I am at a complete loss to understand why they should be discriminating against older workers who are presumably old enough and wise enough to know whether it is worth their while taking a job or whether they are being exploited. The amendment seeks to end the inflexibility which has characterised the Government's approach to this Bill.
The last amendment in the group would exclude trainees on a recognised training programme from the national minimum wage. That is Amendment No. 5. There is a vast variety of training arrangements ranging from day release, instruction at the employee's place of work, study leave and so on. The Government have not only said that their priority is education, education and education, but in numerous policy statements and ministerial speeches, as well as those delivered before the election, they have stressed continually the need for a trained, skilled workforce. We entirely share that view.
What we find surprising in a party which also claims that it keeps its electoral promises is that it is placing a positive obstacle in the way of the unskilled improving their skills. It must be a disincentive, even to the most enthusiastic employer, not only to have to incur the disruption of giving a trainee time off work and/or to spend time giving him on-the-job-training but also to have to pay him a larger wage than his existing capabilities command.
The training of a new employee is not only an expense and a burden on the employer; it is a positive benefit to the employee and will later, one day, one hopes, result in enhanced earning capacity for the employee. In other words, paid training, albeit at a wage lower than the national minimum wage, is an investment being made by both sides. There must be a strong commitment to training on both sides and, indeed, by the unions as well. As my honourable friend the Member for Daventry pointed out in Committee in the other place, there are a number of cogent reasons why there should be an exemption in respect of trainees.
First, it is simply a matter of equity. There could be occasions when a skilled person and a trainee are working side by side. There is no reason why the skilled employee and the trainee should be subject to the same minimum wage. Of course, this is a matter of differentials which the party opposite fully understands.
But, secondly, there is the matter of incentives. Employers should be encouraged to provide training and the Government should be encouraged to live up to their rhetoric for training. Why should an employer take on a trainee with all the commitment that that entails when, for the same money, he may employ someone already possessing the necessary qualifications and experience? It must be economically better for an employer to take on someone who has already been trained, presumably at someone else's expense, rather than incur the commitment of training a raw recruit.
Then there is the matter of consistency. On the one hand, the Government are proposing, under their welfare to work scheme, to give employers incentives in the form of subsidies to take on new trainees. Yet here in this Bill they will impose disincentives by requiring those same employers to pay over the market rate for those same trainees.
In the other place on 28th July, the Secretary of State said:
"The national minimum wage will be introduced sensibly and will take account of the needs of young trainees and not penalise occupational training activity".
It is not only the CBI which supports the idea of different rates of pay for trainees and escalating rates of pay as an incentive as that training progresses. The GMB also says that there is a case for a lower training rate. The TUC itself stated:
"There is a case for trainees of any age to be entitled to a percentage of the full minimum wage while they attain the full level of competency required to undertake the full range of duties. However, this partial exemption must be properly regulated to prevent abuse".
We certainly agree with that.
We agree with the CBI, the GMB and the TUC on that point. We agree also with what the Secretary of State said in the other place. What is surprising is that the Government do not agree at least with the evidence of the unions and the TUC. What is even more surprising is that the Secretary of State no longer agrees with herself and what she said just 10 months ago. Why has she departed from her previous reasonable attitude and adopted the inflexible doctrine of universality?
There is then the aspect of ageism which I mentioned earlier. Why are the Government discriminating against older workers? They are giving themselves the option with no assurance at all that they will exercise it to provide exemptions for those under the age of 26. In view of the Secretary of State's apparent aversion to exemptions, I am by no means convinced that it is more than window dressing or that she will bring the provision into effect, at least in the foreseeable future. I say that because she could make it an immediate exemption, if she so wished, in the same way as share fishermen and the Armed Forces have already been exempted.
Be that as it may, older trainees need consideration as well and their potential employers need incentives. With many traditional jobs disappearing, the previous government encouraged retraining schemes. The mining and steel industries are cases in point. I do not suggest that the present Government are any less committed to the retraining of those who, for some reason or other, have become redundant—and what an ugly word "redundant" is. However, it is inconsistent and wrong for the Government to place that obstacle in their way simply for what appears to us to be nothing but the doctrinaire concept of universality. That doctrine is evidenced by the title that the Government have chosen to give the Bill; that is, the National Minimum Wage Bill.
In Committee in the other place, the Minister of State claimed that Clauses 3 and 4,
"give the Government maximum flexibility to take into account the Low Pay Commission's recommendations".
With all due respect, they most certainly do not. Clauses 3(3) and 4(2) are hedged around with the most severe limitations. It so happens that I hope to assist the Government to simplify the whole matter with the amendment that I shall propose to Clause 2 later. Therefore, I shall not take up the time of the Committee any further at this stage.
The object of the amendment is to stop the Bill moving in the wrong direction by making it more difficult for employers to take on genuine trainees of whatever age. I beg to move.
Viscount Thurso: I should like to ask the Minister one question. Before doing so and speaking generally on training, I have always believed that the minimum wage is just that—a minimum wage—and that everyone employed should be entitled to it. Once people are trained, they should move on to higher rates of remuneration. Therefore, I do not quite support what the noble Baroness said. Indeed, in all the industries where I have been employed, we have tended to take the view that you take people on at the specific rate, you train them, and thereafter you receive the value of the training. In a later amendment we seek to reduce the age from 26 to 18, very much on that principle. It is in that regard that I should like to ask my question.
Colleges place people with businesses for work experience. Those people should be, although sometimes they are not, completely supplementary to the workforce. The employer takes them on specifically because of the co-operation that exists with the college in order to give work placement experience. In the hotel and catering industry, during a three-year degree course, students will typically spend six months on a practical experience split over several departments. In that circumstance they are not required by the business. I am fearful that if provision is not made, there will be a disincentive for employers to offer places to colleges. I am not sure whether that situation is covered later in the Bill. I should be grateful for the Minister's comments.
Lord Monson: The noble Viscount, Lord Thurso, is perhaps too young to remember that there was a time not very long ago when student nurses, trainee accountants and so on, far from receiving a minimum wage, had to pay something towards their training.
The noble Baroness has made out an excellent case for all three of her amendments. I wish to comment in particular on Amendment No. 4. It was mentioned that exemption has already been made for the under-26 age group. That group already receives concessions on rail travel, both here and on the Continent. The over-65s receive many more concessions—free prescriptions, subsidised rail travel, and free bus, Underground and suburban rail travel—as well as a state pension and, in most cases, an occupational pension. Why on earth should they not be allowed to work for a lowish wage for fun, as it were, or just to keep their hand in or to give them contact with other people, if that is what they wish?
7.30 p.m.
The Earl of Balfour: I should like to speak to Amendment No. 5. I shall give the Committee a specific example of something that happened to me. When I left the sea with, I am glad to say, a master's certificate in my pocket, I wanted to get into another industry; namely, the manufacture of wire and wire ropes. It was arranged for me to go to America to learn that trade in a firm which was very friendly with a firm in Scotland. I went over there and worked in every department of the firm for about nine months, which enabled me to receive a thorough grounding in the trade. However, that was on the very clear understanding that I received no wages whatever. In fact, I was warned that if I did receive any wages it would very much upset the wire-drawers union and that I would also be in quite serious trouble with the US income tax authorities.
I have given the Committee that specific example, but a similar sort of case arose a while ago. I am now a farmer. The son of a very good friend of mine wanted to gain experience of farming on other farms and came to my farm to learn. He lived with me and my family but, again, for various tax reasons, he was paid not a single penny. In that respect, I feel that those people who want to receive a proper training could find themselves in difficulties under the provisions of this Bill.
Lord Fraser of Carmyllie: I rise to offer a few additional comments on Amendment No. 3, which relates to the age of 17, or the compulsory school-leaving age. The Minister will be aware from previous exchanges that one of the matters that I believe that this Chamber ought legitimately to be exploring at this stage is the interrelationship between those pieces of legislation, which, even after constitutional change affecting the rest of the UK, will remain within the purview of this Parliament. It is absolutely clear that the issue of employment law generally—and certainly the national minimum wage—will remain within the purview of the Westminster Parliament.
However, as Clause 55(4) makes clear:
"For the purposes of this Act, a person ceases to be of compulsory school age in Scotland when he ceases to be of school age in accordance with sections 31 and 33 of the England (Scotland) Act 1980".
As I understand such matters, following on from Royal Assent and the establishment of the Scottish parliament, it is proposed that that 1980 Act is one which it would be for the Scottish parliament to amend, if it so desired. I want to be absolutely clear about that point. The difficulty lies in the relationship between devolved matters, such as education, and matters of employment, such as the national minimum wage. If the Scottish parliament were significantly to alter the school-leaving age, that would carry with it the potential for a significant change as regards those to whom the national minimum wage would apply.
I would be grateful if the Minister could confirm whether that is the case. If the Scottish parliament were to change the provisions within the 1980 Act from, let us say, the age of 16 to the age of 18, would it mean that no one in Scotland would come within the national minimum wage until he or she reached the age of 18? Alternatively,
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is this one of those rather grey areas where the purpose of the reserved matter is effectively being defeated and where accordingly, in such circumstances, there is the potential for an override of what the Scottish parliament would do?
My understanding is that there is such a risk attached. If that is the case, then, for the purpose of clarity and indeed for the purpose of uniformity, across the United Kingdom, which my noble friend highlighted, perhaps I may suggest to the Minister that a preferable way to deal with the matter would be to do so within employment law to establish a single age. It would mean that the age limit would not suffer the risk of fluctuation in different parts of the UK and would, within employment law, be applied uniformly across the country. For that reason, at least part of Amendment No. 3 would seem to me to have a value as regards securing such uniformity.
Lord Clinton-Davis: This has been a somewhat long debate thus far. The remarkable and astonishing fact that has emerged from it is the revelation by the noble Baroness that she is approaching the age of 65. Indeed, I cannot believe it. I thought that she was about 33, but there we are. I have no doubt that the noble Baroness will continue with the undiminished vigour to which she referred.
In essence, the minimum wage will apply when a person has left school. The amendment would include on the face of the Bill a much more rigid situation—that is to say, a starting point of 17 years—from which entitlement to the national minimum wage would start. In replying to this series of amendments, it is important for me to point out the need to distinguish between the primary legislation and how it is framed and the flexibility which the Bill provides under secondary legislation, especially under Clause 3.
As far as concerns the Bill's framing, I suggest that the most logical place to draw a line for eligibility in principle for the minimum wage is as set out in the Bill; that is to say, at the age when a person no longer has to attend school and may enter full-time work. Therefore, on that basis, there is a clear dividing line between the world of education and the world of work for the purposes of the Bill.
However, there is a difference between the framing of the Bill and how it is to be implemented in detail. Here I refer to the power available to apply exemption or a different rate to those under the age of 26, and to the Government's particular request to the Low Pay Commission to consider whether, and if so how, that power might be used. It is true that there was a considerable amount of discussion in the other place about the possible consequences as regards the variation of ages in England, Wales, Scotland and Northern Ireland at which young people can leave school; and that, under the Bill as drafted, this would introduce an unfairness in entitlement to the national minimum wage.
If there were anomalies, I submit that they would arise as a result of the different education systems in the United Kingdom. They would have nothing to do with the minimum wage as such. In practice, I do not believe that such anomalies would amount to very much. However,

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even if they did, there is no need to change the primary legislation as suggested by the amendment. Instead, we could simply make use of the powers available under Clause 3 to set the entitlement according to a strict age limit rather than school-leaving status. We shall certainly be consulting when we come to frame the draft regulations in this regard. Therefore, when Parliament comes to consider those issues, noble Lords will be able to embark upon a full debate on age exemptions. I submit that the amendment is unnecessary.
I turn now to the point made by the noble Viscount, Lord Thurso. Many people on what is called work experience will not have contracts of employment or other kinds of employment contracts. Therefore they will be completely outside the scope of the Bill. Some who are engaged on work experience may be trainees or apprentices with contracts of employment. We have asked the Low Pay Commission to make recommendations on this point. We believe that Clause 4 deals with that issue. However, I am grateful to the noble Viscount for having raised that important matter.
The experiences of the noble Earl, Lord Balfour, are interesting but I am not sure that they are germane to the issues that we are considering here. In those days the situation was completely different from the position with which we are currently dealing, and will deal with when this Bill is enacted. The noble and learned Lord, Lord Fraser, raised a point which I hope I have dealt with in the remarks I have just made. I notice that he nods his head in agreement.
I turn now to Amendment No. 4 which would have the effect of removing people of pensionable age from the scope of the Bill altogether. It would take away their right to the national minimum wage. I do not know whether that was intended but in our view that is what the effect would be. Certainly I agree with the contention made by the noble Baroness that those who acquire a certain age are still able to make a contribution. I declare my interest without revealing my age, which is a very great one. As far as I can see, the amendment would remove the right to a decent minimum from workers who have retired from their main jobs but who want to supplement their pensions by working, for example, at a local shop. It would also affect those who had not retired but who continued in their original job after attaining the age of 65. Why should employers be allowed to pay less than the national minimum wage to those older workers who have gained a lifetime of skills and expertise and who can still be of great benefit to firms for whom they work? Many pensioners would be excluded by this amendment. Our calculation is about 272,000 men over 65 and 504,000 women over 60 are in work.
The amendment would not only deprive those aged 65 and over of the right to a decent wage, but it would also encourage job substitution. That point was not taken up by the noble Baroness. I refer to the replacement of younger workers by older workers. That is not the outcome that we intend to produce under the Bill. The Committee will be aware that Clause 3 provides for a single exception on grounds of age for young people below 26. There are complex issues involved here. That is why we have asked the Low Pay Commission to look at the position of young people and to make recommendations. However, the
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issues are different as regards those aged 65 and over. Many will have retired from their main job but others will still continue in their main job. Whatever the case, they still have skill and expertise to offer. They deserve the rate for the job, and the rate for the job should be at least the national minimum wage. We do not need to provide for different treatment of those aged 65 and over. I hope that the noble Baroness will withdraw her amendment.
Amendment No. 5 effectively addresses the issue of how we should deal with people who are in training, or, more particularly, workers who are working only as part of a recognised training programme. The amendment would have the effect of removing entitlement to the minimum wage from people within this classification. We want a well trained, adaptable, motivated workforce. Certainly rapid staff turnover is not something that we aim at. We do not want employers to lose the incentive to offer training. We asked the Low Pay Commission to consider particularly the position of young people, many of whom will be learning a job and will be willing to undergo training to improve their opportunities. That is to be encouraged. It is not something that we would wish to discourage.
The commission was also given the task of considering and recommending a different rate for trainees. Clauses 3 and 4 of the Bill have made provision to enable the Government to respond—if we agree—to any recommendations which are made by the commission in this area. I think it is right to frame the primary legislation in the way that we did. These situations can then he adjusted by the secondary legislation which, I repeat, Parliament will have a full opportunity to consider. The amendment would provide a great deal of unnecessary detail on the face of the Bill which would be unhelpful.
Perhaps this is a suitable moment for me to make my next point as it applies to much else in the Bill. We intend to consult by circulating draft regulations covering the regulations which the commission proposed on these issues, and no doubt on others. They will be subject to affirmative resolution.
In more technical terms it could be said that the amendment would go too far because it would take the trainees in question outside the entitlement to the national minimum wage altogether, whether that is the standard rate or, if that is decided, a modified rate. I believe that would give entirely the wrong message to employers and workers. After all, trainees are an important part of the workforce. Their training will make them more valuable to a company and will have a great effect on their future working lives. For all those reasons I hope that the noble Baroness will withdraw the amendment.
7.45 p.m.
The Earl of Balfour: Before the noble Lord sits down, I point out that in the example I gave I tried to illustrate that for various reasons I was not allowed to earn any money at that time. I think particularly of a student who comes to this country and who wants to study textiles but for technical reasons he is not allowed to earn money in this country. That is exactly what happened to me. We are

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now in the common market but during the period to which I referred a Dutch student could have got into trouble if he had earned money and then crossed borders.
Lord Clinton-Davis: If we brought that situation into the current considerations, there would need to be an examination of the contractual relationship that exists in the circumstances. I cannot respond to a hypothetical instance of that kind because all kinds of considerations would be brought into play. I see that the noble Earl agrees.
Lord Fraser of Carmyllie: Before my noble friend decides what to do with the amendment, the noble Lord correctly recorded that I nodded as he provided me with an answer. I certainly now understand the route to an answer which he has offered me in terms of regulations under Clause 3. However, I think the noble Lord will recognise that I do not readily accept that such a route to achieve an answer by way of regulation is necessarily desirable.
Baroness Miller of Hendon: I have listened carefully to what the Minister has said. As regards Amendment No. 3, there is another point I can make with regard to the Low Pay Commission. If the rumours are correct, and if people under 17 were exempted, it would not matter whether the age limit was school-leaving age or 17. However, that is another issue.
I was interested to hear the Minister's remarks in relation to Amendment No. 4. He made no mention of the position of pensioners; namely, that they would not pay national insurance and would therefore be 8 per cent. better off anyway. So a pensioner might want only a small job helping out at a corner shop and would perhaps find great difficulty.
I now turn to the question of training raised in Amendment No. 5. The Minister referred to Clause 3, which relates to the under-26s. There are many people over 26 who change careers and who need training. However, having made those comments, I shall reflect carefully on the matter. I believe that these points are fundamental and we may wish to return to them. However, at this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 4 and 5 not moved.]
Baroness Farrington of Ribbleton: I beg to move that the House do now resume. In doing so I suggest that the Committee stage begin again not before ten minutes to nine.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Royal Assent
The Deputy Speaker (Lord Elton): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

Petroleum Act,

Audit Commission Act,

Community Care (Residential Accommodation) Act,

Late Payment of Commercial Debts (Interest) Act,

European Communities (Amendment) Act.

Tamar Bridge Bill
7.52 p.m.
Baroness Fookes: My Lords, I beg to move that this Bill be now read a second time.
I hope that some noble Lords will know of the Tamar bridge, a graceful suspension bridge which links the city of Plymouth and south-west Devon with Saltash and Cornwall. Beside it runs the older, historic railway bridge built by Brunel. This bridge is the main road link in that part of the country and, as such, is of very great importance to the local population, who rely on it to get them from one side to the other. The bridge is looked after by a joint committee composed of representatives from Plymouth City Council and the Cornwall county council. It is they who are promoting this Private Bill.
I see the purpose of the Bill as threefold. First, it is necessary to strengthen the bridge. That is of the greatest practical importance. It has taken a lot of traffic, much more than could have been anticipated when it was opened in 1961. Furthermore, the regulations relating to standards have quite properly been increased. And we have the prospect, after a decision taken some eight or nine years ago, of lorries of 40 tonnes being permitted to run on the roads of this country. Therefore, it is essential to strengthen the bridge. If that does not happen, the restrictions on the bridge for traffic will be very great indeed.
The committee looked at the various engineering options. It decided that the best method was to replace the concrete deck over which the roadway itself goes with a steel deck. That is not the cheapest option, but is considered by far the most satisfactory from an engineering point of view and in terms of future maintenance. If it were to be replaced by concrete, as it is at present, we could expect in another 20 years, or possibly less, a further major repair job, with all the inconvenience that that causes, and so on every 20-odd years. With a steel deck—and I asked particularly about this—one could expect a life of 120 years plus. All it would require by way of maintenance would be painting from time to time. So that seems a very good option.
The second purpose is to widen the bridge by building two cantilevers, one on the north side and one on the south side. I should perhaps explain carefully why that was thought to be a wise move. The bridge currently carries three lanes which operate on a tidal principle, so that there are always two lanes operating when the

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traffic is flowing strongly in a particular direction. That would continue. However, the cantilever lane on the north side would take the local traffic which currently joins the bridge in a very awkward and at times quite dangerous way. There are a number of accidents. Instead, it would kept quite separate from the main flow over the bridge. As a bonus, it is intended that buses should have priority on that local lane. Bearing in mind the increased interest in public transport as opposed to private cars, I am sure noble Lords will agree that that is a wise move.
The cantilever on the south side of the bridge will be solely for pedestrians and cyclists. At present, cyclists find it quite tricky and dangerous, because they are mingling with heavy vehicular traffic. They tend to use the footways that are intended for pedestrians, which leads to undesirable disputes and difficulties. With this arrangement, they will have their own paths and cycleways, quite separate from the rest of the traffic and from each other. I am sure noble Lords will agree that that, too, is a good and wise move when we are trying to encourage people not to use their cars.
I can tell the House from my own experience that the traffic that comes in locally, and at present joins in, can be very trying indeed. Only last Friday I came back from Liskeard to Plymouth and saw the full force of the flow of local traffic blending in rather unhappily with the main through traffic. I therefore believe that this widening of the bridge will be a very good move.
There is a third purpose. It is a financial one. Currently, the tolls that are used to maintain the bridge can be used only for the purposes of the bridge itself. Under Clause 31 of the Bill, it is intended that wider powers will be taken to enable the joint committee to aid good traffic management schemes on the bridge and beyond it. One particular item that it has in mind to support is a park-and-ride scheme on the Cornwall side of the bridge. That will be of great value in trying to prevent too much road traffic going over into Plymouth. The point has been reached at which the committee has said it will allow £300,000 to be set aside to help with the construction of such a park-and-ride facility. The promoters themselves are not in a position to guarantee dates as to when that might happen because there are factors that are totally beyond their control. However, there is already a site which looks likely, and there could be others if that one falls through.
I know that both Cornwall county council and Plymouth City Council are very keen on a park-and-ride scheme. It already features in the Plymouth transportation package, which also has the support of other local authorities. That would add greatly to the traffic management that we all want to see in every part of the country. It would be particularly useful in this instance.
I should add that extensive consultations have taken place, both with the local authorities involved and with the general population. The scheme has been widely supported. I believe that the promoters have been very forward-looking in seeking not only to strengthen the bridge but to make it more useful in traffic management terms. They are seeking to promote the use of transport
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other than cars by giving priority to buses, by giving greater encouragement to pedestrians and cyclists and by their financial support, if the Bill goes through, for a park-and-ride scheme. I therefore hope that your Lordships' will feel that this Private Bill is worthy of support. I was discussing it the other night with a colleague in the other place, the Member for Salisbury. He told me that in 1961, when the bridge was opened, his father, then Bishop of Truro, blessed the bridge. I hope tonight for your Lordships' blessing upon this Bill.
Moved, That the Bill be now read a second time.—(Baroness Fookes.)
8 p.m.
Lord Berkeley: My Lords, I rise to speak about the Bill in general terms and, for the convenience of the House, to speak to the Motion standing in my name on the Order Paper, which seeks to ensure that, if a Select Committee of this House is appointed to hear the one petition, it will take into account an alternative and cheaper way of strengthening the bridge, which I shall discuss briefly.
Noble Lords may wonder why I should speak on the Bill at all. I have no known connections with the south-west. I am a civil engineer and I am keen on public transport. My interest stems from discussions I had with the petitioner, the Transport 2000 Plymouth group, which caused me to look at the provisions of the Bill and seek to relate them as a local issue to present government transport policy and, in particular, to the Road Traffic Reduction Act and the more general exhortation to reduce emissions. The noble Baroness, Lady Fookes, eloquently outlined the local issues, and I congratulate her on her very clear exposition of the objectives of the Bill.
As the noble Baroness told us, the Bill seeks powers to strengthen the bridge. I support that objective, and I commend the promoters on deciding on a steel deck as opposed to a concrete one, which I sure was an excellent decision. I have a few questions with regard to the widening of the bridge from its present three lanes to five lanes, four of which would be in use initially. It is good to hear that one would be a bus priority lane. The fifth lane would be a cycle path and footpath.
I am sure that the promoters are clear about what they want to do. However, with this design, there is nothing to stop someone saying, in a generation or two: "Let us have five lanes. All we have to do is put a different colour paint on the road and the bridge will take the heaviest lorry traffic". I have some concern about that, which I shall come to later.
I had the pleasure of meeting the promoters and the petitioner, and I am grateful to them for the information that they gave me. The first point to discuss is the traffic on this bridge. As the noble Baroness said, it is tidal-flow traffic. I understand that something like 75 per cent. or 80 per cent. is commuter traffic into Plymouth. Therefore, although this is a trunk road, not much of the traffic is long-distance traffic.
I understand that the promoters believe that the strengthening can be done only by adding lanes on the outside first and then closing the middle three lanes

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for reconstruction. A cynic would say that that was wonderful; they kept the traffic going during construction, which is very important, and increased the traffic capacity across the bridge by, say, 50 per cent. at a stroke, depending on the lane directions used.
I am sure that the intention to keep the traffic going is perfectly laudable. However, having heard the costs of what one might call the two options, I have to query it. I am informed by the promoters that, if they were able to strengthen just the middle three lanes of the bridge, the cost would be about £10 million, whereas the cost of adding the side lanes as well will be somewhere between £25 million and £31 million. My first question is therefore: can the traffic be kept moving during construction without adding lanes on the outside at an additional cost of about £20 million?
I believe there are two possible options, and maybe the promoters have looked at them. I believe that, with modern construction techniques, it would be possible to keep one lane operational in the centre of the bridge and carry out work on the other half of the bridge. That would allow reasonable safe construction space for the workforce. It would, of course, require traffic lights for one-way working, but, sadly or not, that is quite common on trunk roads today. We are not talking of traffic lights over a bridge as long as the Severn Bridge. The Tamar Bridge is quite short compared with many other bridges. I believe that that could be done safely and at a cost considerably less than the cost of what is proposed in the Bill.
An alternative would be to divert some of the traffic across the ferry. I believe that the promoters intend to buy some new ferries to increase the capacity, which would help mitigate the effects.
I am not persuaded that spending an extra £20 million pounds to keep one lane open for, say, two years is justified simply to keep commuter traffic moving. In addition, I wonder whether that complies with the Government's current transport policy. There is a similar example closer to home on the A.40 Western Avenue. It was planned by the previous government to widen that road and to build flyovers, but this Government cancelled that project soon after coming into office. I regard that as a similar problem. It is a piece of road which it might have been good to widen. The scheme involved the demolition of a large number of houses. However, the Government decided not to do it.
Does the project comply with the draft guidance to local traffic authorities on the Road Traffic Reduction Act 1997? That is not the Bill we were discussing last week, but the Act, which refers to local authorities. I refer to the draft guidance published for consultation by the Department of the Environment, Transport and the Regions, on which comments had to be in by 20th April. The guidance suggests that the first plans for all authorities must be submitted by July 1999. All local authorities have about a year to do this, if it is accepted. The guidance requires local traffic authorities to produce a report containing an assessment of existing levels of traffic and a forecast of expected growth. It should also
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contain targets for reducing the level of local road traffic; and, if the authorities cannot produce such targets, they must give reasons. The guidance continues:
"The Government will, of course, want to satisfy itself that authorities are giving proper regard to their obligations under the Act, and to this guidance".
Where the capacity of the bridge is increased by 50 per cent., I find it difficult to see how these local authorities will comply with this guidance. We shall have to wait and see.
I now come to the park-and-ride scheme, with which I believe there are two problems. It was good to hear what the noble Baroness said about the promoters' intentions and wishes and the constraints that they are under. One problem is the permissions and the other is finance. It is good to hear that Plymouth already has a successful park-and-ride scheme at the other end of the town.
Turning to finance, there cannot be any excuse that money cannot be found from local authorities in the area. When £31 million is available for widening the bridge, if that cost were reduced to £10 million, there must be some left for a park-and-ride scheme. I know that the same authority is not involved, and I know it is difficult, but I am sure a solution could be found. There are probably precedents in many other parts of the country. I know that at the moment they do not have provision to provide the money, and the agent for the promoters made that quite clear to me in a copy of a letter. Nevertheless, the two promoters are transport authorities. If they had pursued the park-and-ride scheme in the early days with the same commitment that they have now and with which they pursued the bridge, we might well have been a bit further on.
The second comment applies to the permission for the park-and-ride. That is a separate issue because I gather that the two authorities are not the planning authorities. Again, if there is a delay with a public inquiry—as seems likely—on their preferred site, I suggest that they look for a temporary site for however long the inquiry is likely to take. If they cannot get to this stage with a park-and-ride scheme, the argument against widening is extremely strong. I believe that they should bring in the park-and-ride scheme at an early stage, even if they merely strengthen the bridge without widening it.
The promoters have a year and a bit to go before they have to submit proposals for reducing traffic and emissions. I shall be interested to see—I am sure that the Minister will be equally interested—what happens and whether they are able to follow the guidance. Page 16 states:
"submit 6 copies — by 31 July,"
which will then be made public. It will be an extremely interesting document.
I conclude by again congratulating the noble Baroness on her explanation of the Bill in relation to how the promoters intend to go forward. I hope that the promoters will consider carefully the points I made and that the Select Committee, when appointed by the House, will accept the instruction in my name. I have no wish to stop the Bill proceeding, the Select Committee from going ahead or the construction going

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forward in some shape or form. The strengthening is absolutely essential. However, I hope that some of my remarks are taken into consideration in the ongoing discussion.
8.11 p.m.
Viscount Simon: My Lords, my noble friend Lord Berkeley has drawn attention to various matters so effectively that he has stolen my thunder. I shall, therefore, only rumble gently.
The petitioners against this Bill are seeking two objectives. The first is that a park-and-ride facility be established that operates within certain constraints. The second is that there should be a safe footway across the bridge at all times during construction—and I am led to understand that the promoters of the Bill have agreed to providing a minibus service in lieu of the footpath.
I cannot see anything unreasonable in either of those objectives. After all, as your Lordships know, the vast majority of traffic currently using the bridge is commuter traffic. If the bridge is comparatively empty outside rush hours, what is the reason for widening it? If the widening is being done to attract more traffic to Plymouth, then that is contrary to this, and the previous, Government's policy. It seems to me that the only effect would be for traffic jams to build up more rapidly in Plymouth during peak periods due to the funnel effect. However, if, as the petitioners seek, a park-and-ride scheme is put into operation, at reasonable cost, that will not only reduce traffic levels and congestion in the city, it will also obviate the necessity—in the eyes of the Cornwall County Council and the Plymouth City Council—to widen the bridge.
I can understand the need to strengthen the bridge to take the new lorry weight limit but, when bearing in mind government policy, I fail to see why the bridge should be widened in order to, in effect, create more traffic and traffic related chaos in Plymouth—and at a very much larger cost than that required for strengthening alone. There will, without doubt, be traffic congestion during construction or strengthening work and, to me, it makes sense for a park-and-ride scheme to operate, thereby greatly increasing vehicle occupancy during peak periods and reducing the number of vehicles crossing the bridge. And if commuter traffic was reduced by the effect of a successful park-and-ride scheme, this would allow the A.38 traffic to continue without undue hindrance.
As I mentioned, I am convinced of the need to strengthen the bridge, but I am not convinced of the need to widen it.
8.14 p.m.
Baroness Fookes: My Lords, I am doubtful that I can convince either of the two noble Lords of the rightness of the Bill as I see it. However, I shall make a short attempt to do so, so as not to plague your Lordships' patience too much.
The preoccupation with the cheap option is mistaken. Again, it would involve the use of concrete and, as I explained in my opening remarks, the maintenance would be vastly different if steel was used rather than
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concrete. Furthermore, the preoccupation with the two extra lanes is overdone. I have already explained that it is the intention to allow buses priority in the one lane and cyclists and pedestrians in the other. I feel therefore that the misgivings expressed are overstated.
What is more, if the cheaper option is taken, my understanding—I have to take guidance on this from those who are engineers when I am not—is that it would so greatly reduce the capacity of the bridge for the duration of the works that real problems of congestion would arise. In practice, I suspect that some of the traffic at least would go the long way round and therefore the roads would be used more, which I gather is what the two noble Lords opposite do not wish to see. I fear that I cannot agree with their understanding of the Bill. I believe that it is highly necessary and highly desirable. I hope that your Lordships will give it a fair wind. I commend the Bill to the House.
On Question, Bill read a second time and committed to a Select committee.
Lord Berkeley: I beg to move, That it be an instruction to the Select Committee to whom the Bill is committed that they should consider whether the transport needs of the area could be achieved at a lower cost by strengthening the existing bridge without widening it.
Moved, That it be an instruction to the Select Committee to whom the Bill is committed that they should consider whether the transport needs of the area could be achieved at a lower cost by strengthening the existing bridge without widening it.—(Lord Berkeley.)
On Question, Motion agreed to.

Criminal Justice (Children) (Northern Ireland) Order 1998
8.16 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Dubs)The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Dubs) rose to move that the draft order laid before the House on 1st June 1998 be approved.
The noble Lord said: My Lords, the draft order will replace, with some amendments, those provisions of the Children and Young Persons Act (NI) 1968 which relate to children and young people concerned in criminal proceedings. It may be helpful if, by way of background, I first explain some of the inadequacies of the present system. I shall then highlight the changes to be made by the order which will contribute towards reducing the number of children in custody and ensuring that custody is used as a last resort and then for the minimum period.
The current law is primarily contained in the Children and Young Persons Act 1968. That legislation, and in particular the provisions relating to the powers of the courts to deal with more serious offenders, are outdated and result in too many children being detained in custody, and those in custody being detained for periods which are disproportionate to the offences for which they were convicted. Under the present system the only custodial order available to the juvenile courts is the

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training school order. This is a two-year order and the courts are unable to tailor the period in custody to the seriousness or persistency of the offending behaviour. The period actually spent in custody is decided by the managers of the training schools and that will often be determined by the child's behaviour in the training school or his home background rather than the seriousness of his offending. Time spent on remand is ignored.
As a result, the average period of detention of children in training schools is around 12 months. That is clearly excessive when compared with older people. For example, over 75 per cent. of young adults given a custodial sentence in the young offenders' centre are detained for six months or less and 50 per cent. are held for three months or less.
The present situation is highly unsatisfactory and the changes brought about by the order are necessary to ensure that we comply with the UN Convention on the Rights of the Child and that custody is regarded by the courts as a measure of last resort; to be used to the least extent appropriate and for the shortest possible time.
The order will abolish the training school order and Article 39 will replace it with a new determinate custodial order, the juvenile justice order. The standard period for the new order will be six months, three months of which will be spent in custody and three months under close supervision by the Probation Service in the community. In addition, time spent on remand will reduce the period in custody. Bearing in mind what I said earlier about the current average period of detention being around 12 months, these changes should have the effect of reducing significantly the numbers in custody. However, in addition, Article 12 of the order will require the youth court to release a child on bail unless fairly strict criteria are met. This is new and should have the effect of further reducing the numbers in custody.
To put the matter in context, on average, at present, over 60 of the 113 custodial places are filled. This should be reduced to below 40. These important and necessary changes were the subject of very widespread consultation in February 1997 under the previous administration. Indeed, the content of the order was the subject of discussion with interested parties before that. While a few had reservations about some aspects, in general there was widespread support for the main proposals and objectives of the order. It is interesting to note that although the policy reflected in the order was developed separately by the Northern Ireland Office, the proposals before noble Lords today are remarkably similar to those relating to the detention and training order currently being promulgated by the Home Office for the youth court in England and Wales.
The revised explanatory document sets the legislation in the context of the wider proposals for the development of the juvenile justice system in Northern Ireland. The document also identifies the changes from the proposal for a draft order which was published in February 1997 and the reasons why those were made. I do not intend to refer to them but I draw the attention of noble Lords to the decision not to extend the upper
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age for juvenile courts to include 17 year-olds. Since consultation on the proposal took place, the Home Secretary has indicated that he intends to review the 1991 decision to bring 17 year-olds within the remit of the youth court in England and Wales. In all the circumstances we decided for the present not to extend the jurisdiction of the juvenile court to include 17 year-olds. Nevertheless, we decided to retain the proposal to adopt the nomenclature of England and Wales and rename it the youth court.
In conclusion, I believe that, taken together, these changes will lay the framework for ensuring that Northern Ireland has a juvenile justice system which will meet the demands of the 21st century while retaining the flexibility to adapt and develop.
Although the changes the order makes are modest and relate mainly to the sentencing powers of the courts, the measure will not only reduce the numbers and length of time children spend in custody. It will also act as a catalyst for a greater focus on our key aim which is to prevent children committing offences in the first place. Much work is already being done to divert children from crime and to provide alternatives to custody. As the number of children in custody is further reduced, we intend to devote more resources to that area. I commend the order to the House. I beg to move.
Moved, That the draft order laid before the House on 1st June be approved.—(Lord Dubs.)
8.23 p.m.
Lord Cooke of Islandreagh: My Lords, I thank the Minister for his clear explanation of what the order does and how it is placed in the broader strategy. The order makes many amendments to related legislation and it is difficult for anyone not closely involved with children's legal problems to understand. The order is filled with references and cross-references and, if they are all correct, I congratulate the parliamentary draftsman who put them all together.
I find the revised explanatory document extremely interesting and helpful. It makes clear that in addition to the measures being taken in the order to reduce custodial sentencing and time on remand, particularly in custody, the Government intend to bring together all agencies, both statutory and voluntary, to work on a partnership basis to divert children from crime and to work more effectively to prevent them re-offending.
Part of this strategy requires a supporting infrastructure. I hope that that develops in a way which will make the most of the important work of the voluntary bodies who already operate well together. I hope that the statutory bodies such as health, social services and the Probation Service, will not think it beneath them to work with the voluntary agencies.
This work is urgent and most important. Children's crime is not decreasing in Northern Ireland. For instance, the pressing of drug-laced sweets on children in primary schools by drug pushers is deeply disturbing and is not disconnected with paramilitary groups.

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I understand that funds are not at present available to develop inter-agency work. Is the Minister able to say what is being done to make funds available? It will be money well spent.
Child crime tends to be worse in cities where efforts are currently concentrated. But it is now clear that the Juvenile Liaison Bureau must cover the whole of the Province, the rural areas as well as the housing estates. I believe that the order is just part of a strategy which is very exciting and which holds a real prospect of reducing child crime in Northern Ireland. I wish it every success.
8.26 p.m.
Lord Holme of Cheltenham: My Lords, like the noble Lord, Lord Cooke, I welcome the order and the strategy of which it is a part. I also congratulate the Minister for the clear way he introduced the order and for his emphasis on prevention. Ultimately, the order deals with children who have to be taken to court and judged. I believe that we all recognise that the most important thing is prevention and that only part of the iceberg shows.
I have two comments and two questions to ask of the Minister. My comments are these. There is a requirement in Article 8 that a child should be brought before a magistrate as soon as practicable and at all events within 36 hours. There are certain limited exceptions. This is extremely important. There is nothing more important than a child in that situation—who, in the end, may or may not be proved guilty—being brought before a magistrate as soon as possible. I welcome the way in which that is expressed in the order. I hope that the measure will be implemented and that there will be as few as possible exceptions to it.
I welcome Article 37 which sets out clear recommendations for the amount of time a young person should serve at an attendance centre. Such guidelines are very welcome when they define exactly what latitude the court has without undermining the discretion. The article is a model for future legislation.
My questions are these. It is important that future legislation complies with the European Convention on Human Rights. I am not clear that Article 45, and perhaps Article 46, do comply. The notion that someone's sentence can be altered by the Secretary of State is a matter of lively debate. It has arisen in the tragic case of the two boys who were convicted of the murder of Jamie Bulger. I would like to hear the Minister's comments on his confidence in the compliance of Article 45.
Finally, I am concerned about Article 59, which gives the Secretary of State the power to acquire land by agreement or compulsorily for the purpose of the order. On the face of it, it is difficult to see why the Criminal Justice (Children)(Northern Ireland) Order should involve the compulsory acquisition of land by the Secretary of State. I am prepared to give the Government the benefit of the doubt. The power is extremely widely expressed and, on the face of it, appears to be unnecessary. I do not see why the Government should not acquire in the market any land
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they need for centres or other purposes. I ask the Minister to exercise minimally the powers contemplated in this very wide-ranging expression in Article 59 and to do so only where they are directly relevant to the purposes of the order.
8.29 p.m.
Baroness Anelay of St. Johns: My Lords, I thank the Minister for the clarity of his explanation of the terms of the order. It is with some surprise, but it is a pleasant surprise, that I find myself speaking from the Front Bench on Northern Ireland matters. I served for some years as a magistrate, but in England, including in the youth and family courts. Although I find the contents of this order of great interest, I am, however, only too keenly aware of the differences in the operation of the youth criminal justice system between England and Northern Ireland and I therefore sought the advice and assistance of the Northern Ireland Juvenile Courts Association before drafting my comments and questions for tonight's debate. I am most grateful to the association for the time and trouble it has taken to assist me.
In most part, the order follows the terms of the draft order published in February 1997 by the previous government. In that respect, the House will not be surprised that I give a welcome to these provisions.
There are some amendments to the 1997 version, but I do not object to them. There are, however, several questions which I will put to the Minister on issues raised by the provisions of the order. In the spirit of co-operation, I have given the Minister's office advance notice of those questions in order, I hope, to make it possible for him to address them effectively tonight.
The draft order was prepared in 1997 as part of the juvenile justice strategy which the Conservative Government were in the process of developing. Its publication followed extensive consultation with a wide range of NGOs that are concerned with children's issues and the criminal justice system. It took account of the principles underlying the Children (Northern Ireland) Order which came into effect on the 4th November 1996. The objective behind that order was to provide the statutory framework within which an appropriate range of justice services could be developed.
It is of course important that systems do not become too rigid, too bureaucratic, with too high a dependence on statutory measures. I therefore welcome paragraph 5 of the revised explanatory document which points out that there is already much excellent work taking place in Northern Ireland in preventing re-offending and that that work can be built on without the necessity of legislation.
The questions I wish to address to the Minister tonight cover the following four issues: bail; the reporting of court proceedings; the establishment of juvenile justice centres, and the role of multi-disciplinary co-operation, to which the noble Lord, Lord Cooke, has already referred.
With regard to bail, I note the general welcome given by the Northern Ireland Juvenile Courts Association to the presumption that bail should be granted and to the

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laying down of strict criteria regarding remands in custody. I welcome the fact that the original draft order has been amended so that Article 12 now includes serious persistent offending as a possible exception to release on bail.
Decisions taken by magistrates as to whether or not bail should be granted are always a serious matter and are treated thus by magistrates—all the more so when one is faced with a child defined in this order as a person under 16. Could the Minister tell the House why the Government decided to reject the Juvenile Courts Association's proposal that there should be a requirement in the order that courts consider a bail assessment before deciding on a remand in custody of a person under 16? Could the Minster also tell the House what the Government's view is of the Juvenile Courts Association's proposal that bail hostels should be established so as to avoid the necessity of remanding a child to custody solely on the grounds that he or she has nowhere to go?
The second issue to which I should like to refer is the reporting of court proceedings. Article 22 extends to Northern Ireland the provision that youth courts may allow the identity of the defendant, including a photograph, to be published. I note, in passing, that this morning's newspapers carry reports that the Government have plans to encourage courts in Great Britain to make further use of this procedure than is currently the case.
Earlier this evening, I noted on the BBC News website that the Minister in another place, Mr. Alun Michael, has gone on record as saying that alleged perpetrators of offences will be encouraged to watch the proceedings in youth courts so that they can see the impact of what has happened on the alleged victim. Does the Minister consider that there are any problems peculiar to Northern Ireland in the operation of such a procedure? For example, will the courts in Northern Ireland be required to pay particular attention to the effect that publication of name or photograph could have upon the security of the child and his or her family?
I turn now to the establishment of juvenile justice centres, which the Minister carefully explained. Northern Ireland Office statistical research indicates that children who are committed to custody tend to have experienced family breakdown and may have been subjected to neglect, and physical or sexual abuse. The National Children's Bureau research highlights that most of the children have emotional and behavioural problems necessitating the implementation of anger management and other therapeutic programmes. The same research indicates a disproportionately high number of the children in the present training school system as having disabilities, including learning difficulties.
Can the Minister assure the House that the staff looking after these very vulnerable children will receive appropriate childcare training and that regular independent research will be undertaken into the operation of the new juvenile justice centres? Will the Minister consider including requirements to this effect in the new juvenile justice centres rules?
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Despite the assurance given in a Written Answer by the Minister of State in another place, Mr. Ingram, in February this year, it is widely believed that bullying is a problem in the current training schools. Fears have been expressed that this legislation may exacerbate the problem. A number of children's rights and childcare organisations have raised concerns about the potential for sectarian bullying which could arise as a result of the routine mixing of Catholic and Protestant children in the new juvenile justice centres. Can the Minister identify what measures the Government intend to take to ensure the protection and safety of vulnerable children under the new arrangements?
In a Written Answer to Mr. Kevin McNamara on 27th February this year, the Minister of State in another place indicated that currently 34.6 per cent. of staff in the training school system identified themselves as Catholic, but that only 18.4 per cent. of staff in the statutory sector are Catholic. I am told that if the impact of the legislation results in the closure of Catholic training schools, it has been argued that that will almost halve the number of Catholic staff providing a service to a mainly Catholic group of children. According to recently published statistics from the Northern Ireland office, those children account for 55 per cent. of the total. Can the Minister reassure the House that, in the sprit of the Good Friday Agreement, that will not be allowed to happen, and that the contribution of the Catholic voluntary sector will be positively maintained?
Finally, I turn to the matter which was so carefully raised by the noble Lord, Lord Cooke. I refer to the role of multi-disciplinary co-operation within the criminal justice system as it affects young people. Paragraph 9 of the revised explanatory document refers to the role of the Probation Board and states that,
"It will be encouraged to work in partnership with other organisations".
How do the Government envisage the board being "encouraged" to work with those other organisations? How will that progress be monitored? Here I join to some extent with the noble Lord, Lord Cooke, in asking what estimate the Government make of the resource implications for the non-governmental organisations. I have some experience of costing such resource implications for NGOs and I know that it is always difficult to achieve the right level of resourcing.
I realise that I have not alluded tonight to many of the major aspects of this order. In part that is because they deal with provisions with which I wholly agree, but mainly because I am very much aware of the constraints of time that govern us. For example, I am aware that the discussion of doli incapax alone may occupy us for two, three or four hours—as indeed it did so recently during the passage through this House of the Crime and Disorder Bill. I would however be grateful if the Minister could address the questions that I have posed tonight, albeit they touch upon a fairly narrow range of issues. Like other noble Lords this evening, I welcome and support the making of the order.
8.40 p.m.
Lord Dubs: My Lords, I am grateful for the support given by noble Lords to this particular measure and for

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their approval of what the Government seek to do. This relates back to the previous government who put in hand the process of consultation that brings us to the present position. But it is useful that this particular proposal has widespread support. I believe that it will result in fewer children being in custody and that those in custody will remain in custody for shorter periods and will have a greater sense of justice. The present procedures are a blunt instrument that is not sensitive to the offences committed by the children and may on occasion punish them for having unsupportive home backgrounds by keeping them in detention for longer. Clearly, that is an unsatisfactory position and this particular order will put that right.
I shall deal with the specific questions raised this evening. Both the noble Lord, Lord Cooke, and the noble Baroness, Lady Anelay, asked about the role of voluntary organisations and resources. The Northern Ireland Office has established a working group to bring together a wide range of interested parties. This is helpful in developing the partnership concept to deal with some of the difficulties that have been described. As to resources, it is hoped that savings will be realised from a reduction in the numbers in custody and that those savings can be used to encourage further work in this area and involve voluntary organisations to a greater extent than hitherto.
I appreciate the comments on the background document made by the noble Lord, Lord Cooke. It is encouraging that he agrees with it and regards it as helpful in clarifying the issue. The noble Lord, Lord Holme, asked a number of questions. He asked about the role of the European Commission on Human Rights and its relationship with Articles 45 and 46. Articles 45 and 46 deal with the punishment for certain grave offences. It is a re-enactment of provisions in the Children and Young Persons Act (Northern Ireland) 1968 and similar provisions are in the Children and Young Persons Act 1933 which applies to England and Wales. The legal advice that we have been given is that the provisions as currently drafted do not offend against the European Convention on Human Rights. It is on that basis that we are proceeding with them.
The noble Lord also asked about the powers to acquire and dispose of land. The simple answer is that the power is needed so that the Secretary of State can acquire land to provide juvenile justice centres if the need for new ones should arise. It is only for that reason that we seek to include the power in this measure. It is the standard formulation in legislation in the Northern Ireland statute book where it is necessary for government to acquire land, and it links into the Local Government Act (Northern Ireland) 1972 so that the Secretary of State occupies land as would a local authority.
The noble Baroness, Lady Anelay, asked a number of questions. I am grateful to her for having given me advance notice of them. I shall try to deal with them in the order in which she raised them, although I may have them in a slightly different order. She asked about restrictions on reported proceedings. The provisions in the order mirror those applying in England and Wales. It is for the court to decide whether reporting restrictions
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are to be lifted. The court can do this only if it is in the interests of the public to do so. Obviously, the court would take into account the possible danger to a young person found guilty of an offence if his or her name was allowed to be published. That has particular relevance to the situation in Northern Ireland.
As to bail hostels, the provisions of the order make clear that a court shall not remand a child in custody merely because there is nowhere else for that child to go. In such a case the provisions of the Children (Northern Ireland) Order 1995 would come into play and a place would be found for the child to be looked after. Clearly, that draws a distinction between care for a child and punishment for an offence. Dealing with the general situation on bail, the provisions of the order make it clear that only in exceptional cases will a child be remanded in custody, and in making its decision a court will have to make an assessment as to the need for the child to be detained in custody. Further, a court will have to give reasons when it decides not to release a child on bail. Therefore, we do not consider that a bail assessment as advocated by the JCA is necessary. We have already achieved the same aims by the way in which we are proceeding.
I refer next to juvenile justice centres and the training of staff. Many of the staff in training schools are qualified in either social work or education. I can assure noble Lords that we place great importance on the programme of education, training and confronting offending to be offered to children in custody and that staff will be given appropriate training where necessary. With regard to research into the operation of the juvenile justice centres, a new database will monitor closely the success of the regimes in preventing reoffending, which is surely one of the key yardsticks for making such judgments. As to the quality and standards of care in those centres, the Social Services Inspectorate of the DHSS is fully committed in this area, but we shall consider including that point in the rules to be published.
The noble Baroness also asked about Catholic staff in training schools. A policy and fair treatment analysis was carried out before publication of the draft order. The principal changes to be introduced by the order should lead to a reduction in the number of children, both Catholic and Protestant, remanded in custody and shorter periods in custody for those given custodial sentences by the courts. The clear benefits to children outweigh any adverse consequences for staff in juvenile justice centres as a result of a fall in population. I can assure noble Lords that if further changes are to be made to the training school estate to reflect a reduction in population, a further policy and fair treatment analysis will be carried out. But if we seek to reduce the number of children in custody and are successful in that, it follows that there will be a need for fewer centres or fewer staff in existing centres. I am afraid that that conclusion is inescapable. I believe that if the whole aim of reducing numbers can be achieved it will be well worth while.
Next, the noble Baroness asked about child protection safeguards. The staff in training schools who currently look after children in residential accommodation will become the staff in the juvenile justice centres. They are

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already fully acquainted with child protection procedures. Inspectors of the Social Services Inspectorate of the DHSS regularly visit the schools and ensure that standards are maintained.
I turn next to the role of the Probation Board. The senior management of the Department of Education in Northern Ireland, the DHSS in Northern Ireland and the NIO have agreed to work in partnership to meet the needs of children in need, including young offenders. NIO has established a working group which comprises representatives of DHSS, DENI, social services, probation, RUC and other bodies to consider how best to deal with young offenders and those at risk of offending. In addition, a new database is being established so that all children, whether in custody or under supervision, can be closely monitored or tracked. NIO officials are in close discussion with the Probation Service as to how the standards of supervision can best be monitored. The Social Security Inspectorate of the DHSS will also be engaged in monitoring the standards of supervision by the Probation Service.
I believe that I have dealt with all of the key points that have been made. I am very grateful for all the support that has been given to this order which will surely be of great benefit to young persons in Northern Ireland and therefore to the wider community in Northern Ireland.
On Question, Motion agreed to.
Baroness Farrington of Ribbleton: My Lords, I beg to move that the House do adjourn during pleasure for three minutes. I suggest that the House reconvenes at 8.52 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 8.49 to 8.52 p.m.]

National Minimum Wage Bill
House again in Committee on Clause 1.
Baroness Seccombe Baroness Seccombe moved Amendment No. 6:
Page 1, line 15, leave out ("single").
The noble Baroness said: Before I speak to the amendment, I wish to refer to the fact that we had Second Reading before Easter. Some of the amendments were tabled, and, once again, I have to say how sad and unhelpful it has been not to have had the details of the Low Pay Unit Report.
This evening I wish to speak to Amendments Nos. 6, 7, 14, 15 and 16. The purpose of Amendments Nos. 6, 7, 15 and 16 is to explore whether there should be more than one wage rate. We on these Benches have serious reservations as to whether a single rate is appropriate in every case.
Areas of the UK differ widely. One national wage would have varying effects on large and small firms. Of course it is simpler to have only one wage rate, but, as we know, the cost of living varies in different parts of
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the country. My honourable friend the Member for Daventry in another place quoted from the evidence that the CBI gave to the Low Pay Commission when he said that in Greater London 15 per cent. of employees earn under £4 an hour, while in South Yorkshire the figure is 35 per cent. I am sure that many noble Lords appreciate the higher cost of living, especially commuting, in London.
Many other areas could be taken into account under the amendment; for example, those who work in the catering industry and who receive non-monetary benefits in kind. It is always the smaller business employer who is hit by this type of legislation. As he builds up a business an employer often takes for himself less than the minimum wage. Small businesses have been the fastest growing sector. That is a fact which, I understand, has been much welcomed by new Labour, but, sadly, in the Bill we see the hand of old Labour as it proposes to price jobs out of the market in the very areas in which we need them.
The rigidity of one national minimum wage will be detrimental to one group or another. If it is fixed at a level which will not damage the economy of, say, the south-west, it will be so low that it will be of no benefit to the south-east. If, however, it is levied at a rate that lifts low wages in the south-east, it will result in significant and probably unsustainable costs on small firms in the less prosperous regions. I hope that the Minister will accept the conundrum and have an encouraging answer.
I move now to Amendment No. 14 which is a probing amendment. It relates to the two words "what is". I cannot understand why those words are included, because they do not seem to add anything, unless there is some special significance in them which is not apparent. Perhaps the Minister will tell us, or for the purpose of any future litigation disclaim, the significance. The words add nothing to the clause which reads equally well either with or without them. "Equally well" is not correct, because the clause reads badly. It is a convoluted piece of legalese. It would be easier to read the clause if it used the same words but in a different order; for example:
"The Secretary of State may by regulations make provision for determining for the purposes of this Act the hourly rate at which a person is to be regarded as being remunerated by his employer in respect of his work in any pay reference period".
In that way, the words "regarded" and "remunerated" which are the objectives of the clause are close to each other, and not separated by unnecessary parenthesis. However, I suppose that we are not here to discuss grammar. As I have already said, we need to know the significance of the two words, if they are not mere tautology. I beg to move.
Lord Newby: We on these Benches have associated ourselves with Amendments Nos. 6 and 7. Logically, we might have associated ourselves with Amendments Nos. 15 and 16 because such amendments are required if more than a single minimum wage is to apply in all circumstances. Some noble Lords will be aware that in another place and elsewhere we have argued that the issue of regional variations in the rate should be looked

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at seriously. As it stands, the Bill appears to rule out any such variation, not as a matter of policy, but just because the legislation is in the singular rather than in the plural.
In the light of the stories which have appeared about the Low Pay Unit proposing two minimum wages—one applying to those over 21 and one applying to those aged between 18 and 21—the Government will need to make a similar amendment to allow for two minimum wages to come into force.
Lord Monson: Although I agree with all the amendments in the group, I commend, particularly, Amendment No. 14. Alas, Lord Airedale, is no longer with us to swoop like a hawk from the Liberal Democrat Benches upon bad grammar or sloppy drafting in Bills. I agree strongly with the noble Baroness that the words "what is" are inelegant and redundant. I hope that the Government will at least agree to remove those two words.
The Solicitor-General (Lord Falconer of Thoroton): This grouping brings together a set of amendments which attack the principle of the minimum wage being a single rate. As the noble Baroness and the noble Lord, Lord Monson, made clear, it draws attention to what may be a drafting point rather than anything else. I refer to the words "what is" to which I shall come in a moment.
First, perhaps I may deal with the noble Baroness's preliminary observations about the absence of the Low Pay Unit's report. As the noble Baroness, Lady Seccombe, will be aware, the effect of the Bill is to permit the Government, after receiving the report of the Low Pay Commission, to fix a national minimum wage. It also permits the Government in the future by secondary legislation to change the national minimum wage. We are dealing here therefore with a Bill which provides a framework in which the national minimum wage is to be set now and in the future.
I should have thought—I could be wrong—that if it is a framework for the future, the examination of the Bill by this House would require examination, in effect, of the framework, and that that is what the process of examination would concentrate on. Although certain advice will be given by the Low Pay Commission, it might not be the same advice that it would give on a subsequent occasion.
At present I am somewhat surprised by the number of times noble Lords opposite have made the point about the absence of the Low Pay Commission's report. I am not entirely clear at the moment about the extent to which that has affected the amount of examination that they think the Bill requires. No doubt when the noble Baroness determines what to do about the amendment she will say what effect she believes it has in relation to the examination of the Bill.
I return to the substance of the amendment. I am glad to be given the opportunity of defending the principle of a national minimum wage, and a single national minimum wage. As has been made clear in another place, and was made clear during the course of the
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Second Reading debate, a single national minimum wage is a fundamental principle of the Bill. A single rate is easier to understand, and fairer and easier to enforce. The Bill provides some limited flexibility to take account of the recommendations of the Low Pay Commission. For example, the Bill provides for the possibility of a youth rate or a rate for trainees. But the flexibility is strictly limited.
I believe that there is great virtue in simplicity. The simpler we can make the provision, the simpler and more effective the Bill will be. People will know what their rights are. There will be no difficulty in understanding their minimum wage entitlement; and there will be no over-complexity which might lessen the effect of the Bill.
I do not think that I need to refer to the detail of Amendments Nos. 6 and 7. They are intended to remove the reference to a single rate in Clause 1. The noble Baroness made absolutely clear why she wished to remove that reference. She believes that there should be the ability to have differential rates. As I have indicated, the Government do not believe that a multitude of regional, sectoral or other minimum wages is the right approach. It is neither sensible nor justifiable intellectually.
I deal with examples that the noble Baroness gave. First, on variation by region or sector we need to establish a general floor under all wages, not different floors for different types of workers in different places. If we had different regional rates, there would be advantages to being in some parts of the country rather than others. There would be disadvantages for the employees in some parts of the country. Those people would be stuck on lower pay than others in other parts of the country. The proposal gives power to set a number of different rates. There could be different rates in Wales from those in Northumberland. Regional rates, quite simply, would be unfair and would not work. They would be unfair because they would not discriminate purely by where you live or work. What would one use to determine it? Is it where a worker lives or where he works? The potential for complication and bureaucracy is enormous.
Regional rates throw up anomalies for employers as well as workers. Employers in low minimum wage areas could gain a competitive advantage over those in higher areas—in the extreme case, this could encourage clustering of low paid employment in certain areas.
The noble Baroness, Lady Seccombe, referred to the fact that the cost of living is different in different parts of the country. Of course it is. But that is a factor that the Low Pay Commission can take into account in determining the national minimum wage and the Government can take into account in determining the level at which they set the rate.
Having put forward her case in relation to regional differentials, the noble Baroness then moved to sectoral differentials. I suppose we would have to have rules for deciding which sector each worker's job was in. The labour market is developing rapidly, as we all know. One has only to look at the sectoral divisions drawn up in former years to see how quickly they can lose much of their relevance.

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Defining the sectors would not be easy and many workers and their employers would inevitably be uncertain about which sector their job is actually in. Many jobs will seem to be in more than one sector. Some may seem not to fall into any particular sector. Again—I say with respect to the noble Baroness—this is a recipe for bureaucracy, confusion and complication.
There are further difficult questions. How would a regional or sectoral rate be enforced? For businesses with employees who live or work in more than one region, there would be huge complications in knowing whether they were complying with the statutory minimum for each employee.
The same goes for those businesses—and there are an enormous number of them—whose activities and workers cover more than one sector of employment. Is that really what the noble Baroness wants—a great bureaucracy placing burdens on employers and providing uncertainty and a lack of simplicity for the employee?
The noble Baroness then turned to the variation of the size of the business. We have heard that smaller businesses should be exempt from the national minimum wage or be allowed to pay lower rates than their larger rivals. Why should large firms be vulnerable to undercutting by a small minority who by paying poverty wages may be able to keep costs artificially low?
Of course we are aware of the situation of small firms and their importance to the economy. We value that contribution and understand the importance of it to the economy. That is why we asked the Low Pay Commission to have regard to the position of small firms in coming to its recommendations on the national minimum wage. I do not, therefore, believe that there is any reason to distinguish on the grounds of size of firm in the Bill or under the regulations.
On a wider level, differentiation according to size of business could be unfair and could potentially distort the structure of competition. It might even lead to fragmentation of businesses into smaller units simply to avoid paying the national minimum wage. There would be less incentive to achieve economies of scale through growth.
I come back to the point I started with. We believe that a single national rate is the fairest, simplest and most easily enforceable approach. It keeps things clear cut and cuts out unnecessary complications.
That deals with Amendments Nos. 6 and 7. I hope we have made our position clear in relation to those. I now turn to Amendments Nos. 14 to 16 with which I can deal more shortly.
These amendments are similar in their effect to Amendments Nos. 6 and 7. They are all linked or consequential amendments to do with replacing references to a single rate with references to more than one rate. Taken singly or together, the amendments would fundamentally alter the effect of Clause 2. By removing references to a single national minimum wage,
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the amendments attack the fundamental principle behind the Bill. I have covered that in what I said in relation to Amendments Nos 6 and 7.
My main point in relation to Amendments Nos. 14, 15 and 16 is simply to make clear that their effect would be rather different from the effect of Amendments Nos. 6 and 7. While the latter are to do with the setting of the rate, Amendments Nos. 14, 15 and 16 are aimed at the calculation of pay for minimum wage purposes—that is to say, the subject of Clause 2. However, they would lead to a similarly odd result by providing in principle for different rates of pay to be calculated—for example, according to region, sector or size of firm.
I hope that I have explained sufficiently why we need a single rate of minimum wage. For the same reasons, we need to ensure that there are no variations in the calculation of pay. That is to say, if a particular benefit can count as payment towards the minimum wage in East Anglia, it should also be able to count towards payment of the minimum in Wales. Any other approach is unfair and would lead to absurdity's.
That covers every point except for the point made by both the noble Baroness and the noble Lord, Lord Monson, concerning the words "what is". The general view expressed by the two people who spoke is that this is not a very elegant form of drafting.
When I looked at it, after the point was made, I thought that the words "what is" probably did not have much effect on the meaning of the Bill. That was my impression. I am glad to say that those in the Box take the same view. It probably means nothing different without those words, but it could hardly be said to be ungrammatical. The advantage is that, taken with the words "is to be regarded" they emphasise that the calculation contemplated concerns what is to count in determining whether the single hourly rate has been paid. Obviously, it is a matter of opinion, but there is a good case that the sub-section is clearer with those words than without them.
I shall certainly undertake to consider carefully the points made about the elegance of the drafting. To be honest, I do not think that there is any point of principle on this matter.
I hope that, in the light of the rather laborious explanation which I have given, the noble Baroness will feel minded to withdraw her amendments.
Viscount Thurso: I did not realise that we would embark on a debate about regional variation this early on. We have an amendment coming up later, Amendment No. 51, which addresses this issue. It may be, for the convenience of the House, if I deal with it briefly at this point, which would enable my noble friend, therefore, not to move that amendment when we come to it.
In looking at regional variation, we have, on these Benches, long advocated that that is the way to approach the minimum wage. However, I fully accept the arguments which the Minister has put forward. It may well be that intellectually and logically it is more appropriate to have one single minimum wage for the whole country. Equally, there may come a time in the

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future when views change and it is thought desirable that some variation may be necessary between different regions. It may be between Scotland and England and it may be between greater regions than that. Therefore, it seems to me quite logical that if we put into the Bill at this stage the ability for that power to be exercised by the Secretary of State at a later stage, it does not mean that he has to exercise that power immediately, and if the Low Pay Commission chooses to recommend that it is not a good idea, then he certainly does not have to exercise that power.
In order to avoid the kind of enabling legislation, which so often comes to your Lordships' House, such as one in which I was involved recently that I call the mollusc Bill, which is in fact the Sea Fisheries (Shellfish) (Amendment) Bill, would it not be sensible at least to provide the power at this stage and then, if it is not exercised, it is not exercised; but if the Government wish to exercise it they have that power?
Lord Falconer of Thoroton: I am sorry to rise again, but I do so in order to answer the points skilfully made by the noble Viscount. As regards the principle, I made the Government's position clear. We take the view that there is, as a matter of policy, a balance of advantage strongly in favour of not having regional rates. The Low Pay Commission and the Minister setting the rates can take into account the differences throughout the regions. It is a strongly held view, and it is a view that is fundamental to the Bill, that a simple, single national rate is the appropriate way forward in relation to that. That being the principle, I submit that it is entirely right that the principle is reflected in a Bill which specifically states that there cannot be regional variations.
9.15 p.m.
Baroness Seccombe: One of our problems is that we have a different attitude to the whole issue. We believe in a minimum income and the Government believe in a minimum wage. We understand that the Bill is a manifesto commitment and that it will go onto the statute book.
The noble and learned Lord mentioned the report from the Low Pay Commission. Our difficulty is that we are working in a vacuum. It is difficult to say what our reaction would have been if we had known the facts. We agree that the proposal is easier, but the Government say that it is fairer. I wonder if people with small businesses in the south-west, who may have to close those businesses, will see it as being fairer. There will be the demise of many rural shops and the Government must take responsibility for that. We believe that the minimum wage will price many people out of work in that area.
We know that wages vary in different areas. We hope that at some stage there will be regional differences to reflect the different wages that are paid. I shall read what the Minister has said, discuss it with my colleagues and perhaps return at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 7 not moved.]
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 8:
Page 1, line 16, at end insert (", being at a rate not in excess of £3.00 per hour (at September 1997 prices) or its equivalent uprated in line with inflation").
The noble Baroness said: In moving Amendment No. 8, I shall speak also to Amendments Nos. 9 and 10. They are probing amendments and they were probing amendments in another place. We need to probe because we are working entirely in the dark as to the amount that the national minimum wage will be. It is bad enough that in the other place the Bill went through all its stages without honourable Members on either side being able to extract a figure from the Government. Here we are at what is probably the most important stage of a Bill, still being asked to consider major complex matters without having that vital piece of information. That information might well affect our attitude to some of the Bill's provisions.
We were told that there might be a Statement on the report of the Low Pay Commission early this week. What do we have? We have not had that and it could be said that we have had nothing. That is not absolutely true because we have had a heavy and, one assumes, an authoritative leak from the Department of Trade and Industry that the rate is to be £3.60 an hour, with a variation for under-21 year-olds. That is countered by leaks hinting at conflicts with the Chancellor of the Exchequer who apparently wants a lower rate. The Chancellor of the Exchequer has already hit out against wage inflation, backed by the Bank of England's Monetary Policy Committee whose increase in interest rates last week was on the grounds that it was concerned with the increasing size of wage settlements. During this bizarre Dutch auction between the Treasury and the DTI—which if rumours are correct, and they usually are, is conducted by what is often called "a full and frank exchange of views"—the Government paymasters—the trade unions—are also exerting pressure. Just like Oliver Twist, they are saying, "Please, sir, I want some more".
Rodney Bickerstaffe, the Secretary General of Unison, said in a television interview last Sunday that there was a lot of pressure on the Low Pay Commission from the Treasury to keep down the national minimum wage. Perhaps we should be told what other pressures were put on the Low Pay Commission by the DTI in respect of the other aspects of its deliberations, bearing in mind that the Low Pay Commission was supposed to be conducting an independent and impartial inquiry.
Mr. Bickerstaffe, in that same interview, predicted that the Bank of England's latest interest rise would result in yet another rise in mortgage rates and that his members would then want increased wages. In other words, the Bank of England is generating its own wages inflation spiral.
Is the reason why the Government have been so coy about releasing the report of the Low Pay Commission and announcing, in accordance with Clause 5(4), what their intentions are that they are split on the matter; or is it that they hope they can spin out the announcement until the Bill has made further progress through your Lordships' House—perhaps until the Recess?
If the Minister will not tell us what the minimum wage is to be, will he tell us when he will tell us? If he will not tell us even that, will he tell us why he will not tell us that? Will he at least tell us what is the cause of the hold up? The Bill's passage through the other place included several all-night sittings in Committee. It has had its Second Reading in your Lordships' House. Will the Minister not accept that the fundamental principles and theoretical issues have been debated almost to the point of exhaustion? I say "almost" because in the absence of satisfactory answers to some of those fundamental points, and with an obstinate refusal by the Government to pay any attention to valid and constructive arguments, we shall have to go through some of them again, plus some new ones, in this place.
The amendments and this discussion would have been totally unnecessary if the Government had treated Parliament with the minimum of courtesy and provided it with the facts on which this Committee could base its judgment. The Government are not merely expecting Parliament to rubberstamp whatever they decide to do and are not merely asking us to sign a blank cheque. They will not even let us see how much the cheque is made out for. I beg to move.
Lord Falconer of Thoroton: Those Members of the Committee who did not have the amendment in front of them would be surprised to hear that the speech that the noble Baroness has just delivered was to amendments that recommended that £3.60 should be the upper limit for the minimum wage and £3.20 the lower rate for 18 to 20 year-olds.
I appreciate that the procedures of this House are quite lax, but I imagine that there must be some talking to the amendment itself rather than to any issue of a more general nature. The noble Baroness made the point that there has been no publication of the report of the Low Pay Commission. As I am sure the noble Baroness is aware, the Bill sets out the framework within which, by means of secondary legislation, the Minister can determine what the national minimum wage shall be.
In order to establish a national minimum wage, regulations must be laid before both Houses of Parliament and affirmed. So both Houses of Parliament will have the opportunity to debate the level at which the national minimum wage is set. Noble Lords opposite and Members in another place will have a full opportunity to debate the level at which it is set and make such points as they regard appropriate in relation to that.
The whole of the speech by the noble Baroness was devoted to the issue of why we have not published the report of the Low Pay Commission rather than to her particular amendments. As I said when the noble Baroness, Lady Seccombe, moved the previous amendment, I should have thought that, when scrutinising the Bill at the Committee stage, those opposite would want to concentrate on the structure of the Bill rather than on something that would occur at a later stage.
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I feel slightly diffident in talking about the details of the amendment because that is not something that the noble Baroness has done in the course of her speech. However, perhaps I may just say that it is not appropriate at this stage to talk about what the level is. It would be wholly inappropriate in the Bill to set minimum or maximum rates for the national minimum wage. That is something much more appropriately done in the procedure laid down in the Bill. It is obviously appropriate as well that a body such as the Low Pay Commission should give advice to the Government before such a conclusion is reached. That is what the structure of the Bill lays down.
I hope that in the light of what I have said the noble Baroness will withdraw her amendment.
Baroness Miller of Hendon: In the first place, I did not speak about one amendment setting a rate of £3.60, to which the Minister referred. I spoke to three amendments which suggested different rates. The point I made to the noble and learned Lord was that had we known what might be the recommendation, we could have forestalled the whole of this conversation and discussion at this stage. We should not be probing as to which is the appropriate salary level. It was done in the same way in the other place when my honourable friends and honourable Members were discussing matters in the dark, without any guidelines as to the rate.
We made the point very early on, I believe on the first amendment that we discussed today, that we are finding it extremely difficult to discuss these matters because nobody has any idea of any of the recommendations. The Minister shakes his head, but the fact remains that it happens to be a habit of this Government not to come back to the House and make statements about matters. Instead, we read about those matters in newspapers or hear about them on the radio. These debates could be much shorter if we had more information and the Government gave the courtesy to the House which it deserves by making available that information.
If the Government are not in a position to give more detail, it is extremely unfortunate that we are having leak after leak after leak because some journalists are certainly obtaining that information. This is not the only Bill on which that has happened. I know that my noble friend Lady Blatch had similar experiences when she found it practically impossible to debate matters on an education Bill because certain information which she required was not made available to her, although it was made available widely to other people.
I know that that is nothing to do with the noble and learned Lord. But I say that with regard to the way in which I moved the amendment because that is the difficulty that we are having. I still believe that this is an important matter which we must get to the bottom of. However, at this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 9 and 10 not moved.]
Lord Newby Lord Newby moved Amendment No. 11:
Page 1, line 16, at end insert—
("( ) The single hourly rate shall, at the end of one year, be increased by—

(a) the rate of inflation; or

(b) the percentage rise in the median of full-time hourly earnings during the preceding year,

whichever is the greater.").
The noble Lord said: The purpose of this amendment is to take out of the political arena the question of operating the minimum wage. Quite clearly, even if the Government are successful to the most ambitious extent in relation to inflation targets, we shall see wages rising both as a result of the rise in prices and as real incomes grow.
In those circumstances, it would be wholly inappropriate for the level of the minimum wage to be eroded in relation to both the overall level of prices and the earnings of the rest of the population. Our amendment suggests one way in which automatic provision could be made to uprate the minimum wage. We have suggested that it should be an annual uprating and that it should be either by,
"the rate of inflation; or … the percentage rise in the median of full-time hourly earnings during the preceding year, whichever is the greater".
It is fair to say that we are not wedded to that precise formula but we believe that by having an automatic uplifting provision it will save a tremendous amount of political debate and argument later which foreign experience suggests has been to the detriment of the low paid because it has tended to delay uprating.
Therefore, in large measure this amendment is a probing amendment to seek the Government's view on how they intend to deal with uprating and whether they accept the principle that taking uprating out of the political arena is an acceptable and sensible way forward, rather than having a dog fight every time the Government are suggesting putting 10p or 20p on the minimum wage.
9.30 p.m.
Lord Clinton-Davis: The noble Lord moved the amendment in a characteristically fair way. The Liberal Democrats have been very consistent in arguing this particular point. The amendment has some superficial attraction but I do not find the noble Lord's reasoned argument very compelling. I shall explain why. We do not believe that an automatic uprating system is the right way to proceed as regards the hourly rate. The amendment would take out of the method of calculation that element of judgment and flexibility which we believe to be important. Indeed, that is linked with the reasons why we asked the Low Pay Commission to recommend a rate in the first instance. We need that flexibility in order to judge what will be a sensible rate in all the circumstances, taking into account the wider factors. That is why we asked the commission to consider the matter initially. I believe that the noble Lord is familiar with those considerations, so I shall not go into them. They are well established.
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After setting the rate for the first time, I do not believe that we can assume confidently that all we have to do is sit back and let the thing run on mechanically over future years. Unquestionably, circumstances change; indeed, they often change in a way that is fairly unpredictable. I believe that it was Mark Twain who said that he was prepared to forecast anything but future events. He put it quite rightly.
In a situation where we have never had a statutory national minimum wage in this country, surely we should wait to see how the situation works out. We need to monitor and evaluate the impact and then we need to come to a considered judgment on the action required. Our position is that automatic uprating is rigid and unnecessarily prescriptive. I do not believe that it would be right to tie the Government to an automatic and fixed annual uprating of the national minimum wage or to a particular percentage increase.
Moreover, it is not necessary because such matters can be dealt with, taking into account intervening events, through the surveillance by this Chamber of the relevant secondary legislation. We could deal with the matter in that way without imposing a straitjacket whereby the Government are required to take such matters into account. I hope that I have given the noble Lord a reasonably compelling argument.
Lord Newby: The Minister advanced a reasonable argument, but I do not find it wholly compelling. I see a danger. There are some marvellous phrases about changing circumstances and the exercise of judgment. But if circumstances changed, I suspect that everyone earning a wage would be affected in the same way. Either there would be a big increase in wages across the economy for some reason, or there would be higher or lower levels of inflation. Therefore, the Minister's argument is not wholly compelling.
However, as I made clear, we are not necessarily wedded to every last word of the amendment. I am not completely persuaded that our arguments are misguided in principle. We shall obviously consider carefully what the Minister said and may return to the matter at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 12:
Page 1, line 17, after ("such") insert ("reasonable").
The noble Baroness said: In moving the amendment, I shall speak also to Amendment No. 13. These two amendments were discussed together in Committee in another place in a debate which lasted one hour and a quarter. It was a good humoured debate, described by my honourable friend the Member for Daventry as being of a very high quality. He complimented the Minister on having responded "sensitively" to the debate. The amendments were withdrawn in the other place to give time for reflection on the arguments. That time has now come.
The difficulties caused by Clause 1(4) arise not from the principle of the provision, which we accept, but from the way it is drafted. Amendment No. 12 requires the

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Secretary of State to act reasonably in fixing what is called a "pay reference period". Frankly I cannot understand why there should be any resistance to requiring the Secretary of State to be reasonable in everything that she does. The implication of a refusal of this requirement is that she reserves the right to act unreasonably, capriciously and arbitrarily. I readily acquit her of any such intention. I hope that, having now had time to reflect on the issue, the Government will accept this harmless and—if I may put it this way—reasonable little amendment. After all, it does no more than to state that the Minister will comply with the common law and the Wednesbury Rules.
Amendment No. 13 is much more complex. Part of the problem is that we do not know what pay reference period or periods the Low Pay Commission will recommend or whether the Secretary of State will accept those recommendations. This is the difficulty I raised in the Second Reading debate. I hasten to add that I do not want to rehash old arguments—I know that the Minister will be pleased about that—or to introduce any political arguments into what is essentially an administrative provision. However, the fixing of a pay reference period is a horribly complex matter. Whatever is decided is almost bound to raise as many problems as it solves and could cause injustices to employers as well as protecting employees' rights. This is because the national minimum wage will be based on some arbitrary hourly rate. However, the pay of many employees is not calculated hourly. The selection of a week for weekly paid workers and a month for monthly paid workers is a simplistic solution which is attractive on the face of it but which of itself gives rise to difficulties. That is why we have proposed that the pay reference period should be not less than a week or month, as the case may be.
I give the Committee an example of the kind of difficulty I am talking about. Let us take the case of a highly seasonal occupation, the tourist trade. Employees are required to work extremely long hours at some times in the year but have much less to do at other times. An employer may pay his staff, especially key skilled staff such as chefs, housekeepers and head waiters, an annual salary with pay averaged out over the whole year. The system operates on the basis of swings and roundabouts. Other less skilled staff may receive a bare retainer during the off season. If the pay reference period is in every case and in every occupation fixed by reference to a week or a month, an employer may find himself penalised when the busy season arrives, despite the fact that he has kept the employee on the books during the slack season. The consequence is that there may be a great deal more defensive casualisation of seasonal occupations, with some domestic staff being laid off during the off season. That is something that I believe already happens. That is why, as there has to be some pay reference period, we have suggested that it shall be not less than a week or month, as the case may be, but should be a reasonable period to be fixed by the Secretary of State, taking into account all relevant considerations which may vary from trade to trade.
The amendments enable the Secretary of State to act in a flexible manner and not cause an injustice to one kind of business by imposing a uniform solution or standard on many different trades where different considerations may apply. Although some minimum pay reference period is required, the Minister must have the power to differentiate between those different trades. At the same time, by not taking the easy route of an arbitrary universal pay reference period, the Secretary of State will need to give consideration to representations made to her about the needs of those different trades.
These two amendments are not intended to derogate in any way from the principles of the Bill, and nor do they. They simply clarify aspects which are far from clear and impose a minimum standard where there is not one, and above all they require the Secretary of State to act reasonably. I feel sure she is only too willing to do that. I hope that the Government have made use of the time to reflect given by my honourable friend in another place and will agree that what is proposed improves the Bill and that they will accept the amendments. I beg to move.
Lord Falconer of Thoroton: The amendment was beguilingly moved by the noble Baroness. She made the amendments sound so attractive. However, we have had time to think about them and we do not, for the reasons I shall indicate, believe that they would be an improvement to the Bill. They would be a detriment to it.
Perhaps I may deal first with Amendment No. 12. That amendment, as was accurately stated by the noble Baroness, requires the Secretary of State to be reasonable in determining the pay reference period. I do not imagine for one moment that the Secretary of State would wish to be unreasonable in determining that period. Indeed, the noble Baroness accepted that that was the position. The Secretary of State will make her decision in the light of the recommendations of the Low Pay Commission: an entirely reasonable approach.
The Government are currently considering the detailed application of the commission's recommendations, including this one in relation to the pay reference period. We are keen to ensure that the nitty-gritty of the legislation gets this right. The Bill provides, of course, for the Secretary of State to prescribe what the reference period should be, by means of regulations subject to affirmative resolution. Those regulations will, of course, be debated by Parliament.
Prior to that, the Government will consult on the draft regulations particularly with a view to ensuring that we get the details right. The consultation will give those affected a further opportunity to comment on the length of the reference period. So there is the advice of the Low Pay Commission; the consideration of the Secretary of State; the consultation on the detail by the Secretary of State; and the placing before Parliament of the regulations. That gives rise to a huge range of views to be taken into account.
It is difficult to envisage a process that could be more reasonable than that. There is no need to inject a reasonable requirement explicitly into the Bill itself, as

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the amendment proposes. To do so would be counter-productive. If the amendment were accepted, speaking as a lawyer myself, I am sure that the lawyers will have a field day. I can imagine all kinds of lengthy disputes and debates on whether any particular decision was reasonable.
The effect of the amendment would be that, even if the Secretary of State chose a period which she considered reasonable, others would have the right to challenge it and substitute their view for hers. I do not think that would be right. I do not believe this is a matter for lawyers to debate. It is a matter for government to decide after proper consultation and after taking proper advice in relation to it.
It is always difficult to argue against the inclusion of the word "reasonable" in legislation—because it seems unreasonable so to argue. But surprisingly, often the word achieves nothing, as in this case, and causes difficulties—again, as in this case.
It would be unusual, and unduly and unnecessarily prescriptive, to include an explicit test of "reasonableness" in this legislation. We expect our elected representatives to act in a reasonable way. If someone considers that a decision of the Secretary of State has been made on wholly unreasonable grounds, there is already scope to challenge it.
I hope that I have assured the Committee that the way in which we are proceeding is entirely reasonable. We have the Low Pay Commission's recommendations; we are consulting further; and we shall come back to this House with the detailed regulations. I am equally confident that the outcome will also be a reasonable one. I hope that deals in detail with the attractively put but, I respectfully submit, flawed proposal that the noble Baroness made in this amendment.
I now turn to Amendment No. 13. This in effect proposes to put limitations on what the Secretary of State may prescribe as a pay reference period. I can reassure the Committee that before we bring regulations on this matter before the House—namely, setting out what the pay reference period shall be—we shall be consulting on the draft regulations, particularly with a view to ensuring that we get the details right.
The consultation will give those affected a further opportunity to comment on the length of the reference period. There is no need to prescribe the reference period on the face of the Bill. There is no need to place limitations on what the pay reference period should be. Clause 1(4), as presently drafted, provides a power to set and adjust the pay reference period. It will be a matter of judgment as to what the pay reference period should be; and there can be different pay reference periods for different kinds of workers. Surely the right course in relation to this is to give maximum flexibility in order to avoid the kinds of anomalies to which the noble Baroness referred. I do not think the proposal she makes is of value to the Bill; I think it is positively detrimental and could give rise to the kinds of anomalies that she mentioned. With the greatest of respect to her, I suggest that she withdraws both of these amendments.
Baroness Miller of Hendon: In the other place my honourable friend complimented the Minister on having
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responded sensitively; here in this Committee, the noble Lord the Minister said that I asked the question attractively; but we do not seem to have got very far. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 13 not moved.]
Clause 1 agreed to.
Clause 2 [Determination of hourly rate of remuneration]:
[Amendments Nos. 14, 15 and 16 not moved.]
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 17:
Page 2, line 8, at end insert (", including remuneration by the piece rather than the hourly rate").
The noble Baroness said: Piecework is not another name for sweated labour. It is an incentive method whereby more able and faster workers can earn more by their own efforts. It is a system where those working from home can do as little or as much as they wish and can work at whatever pace suits them. The days are long gone since the notorious speed-up of the production line inaugurated by the late Henry Ford.
It is true that there are some unacceptable cases of vulnerable home workers and some factory workers still being ruthlessly exploited by unscrupulous employers. We join in the condemnation of such conduct.
The fact is that piecework is an essential part of some industries, including, for example, farming, horticulture and packing goods for mail order. Unless the Government intend to outlaw and prohibit this method of remuneration—which they do not—piecework and piecework rates are factors which have to be taken into account when calculating the minimum wage to which an employee is entitled.
There are, however, complicating factors affecting the amount that an employee may receive. Some employees may work more slowly than the average on which the piece rate is calculated. Machinery may break down during the course of a working day, with no contingency to make up for the resulting lost pay. The problem is, once again, that trying to reduce pay calculated on some other basis into an hourly rate causes a major complication.
Our amendment to Clause 2(2)(c) does not alter or detract from the provisions of that clause. It supplements it by emphasising one of the factors to be taken into account. Maybe the clause as drafted already requires the Secretary of State to take piecework remuneration into account. Certainly paragraph 2(c) of the DTI's Notes on Clause 2, Part 31–1 Detailed Provisions, claims that the regulatory powers include:
"wages … paid on a "non-time" basis eg piece work".
The amendment underlines that point that is in the notes. It is belt and braces, if you wish.
The Secretary of State will be required to frame the regulations so as to produce a viable formula to correlate the piece-rate remuneration to the hourly rate, a formula that will not allow employers to use creative accounting or for pieceworkers to fall through the cracks in the system.
The amendment is intended to concentrate the Secretary of State's mind on the problem. I suggest that there can be no harm in this modest amendment, which simply emphasises what the Government claim the clause already does. The amendment simply removes any ambiguity. I beg to move.
Lord Falconer of Thoroton: I think we are completely at one in relation to this matter. As far as we are concerned, it is vital that the Bill covers pieceworkers. We know from having read the debates in the other place that it is in relation to piecework that some of the most appalling exploitation goes on. There are horrible examples, such as people being paid 8p for sewing a pair of trousers. There is no doubt that piecework should be covered. I genuinely pay tribute to the noble Baroness for raising this point.
The Bill was specifically drafted to cover that point. Subsection (2)(c)—the one that the noble Baroness wishes to amend—says:
"That the regulations may make provision for determining the hourly rate in cases where … the remuneration is, in whole or in part, otherwise than at a periodic rate or rates".
That is specifically drafted to deal with the piece-rate position. I sympathise entirely with the desire of the noble Baroness that it should be underlined. However, we do not believe that it is necessary; we honestly believe that that is the Bill's intention. We applaud the sentiment, but take issue with the drafting. In the light of those comments, I hope that the noble Baroness will be minded to withdraw her amendment.
Baroness Miller of Hendon: That was a satisfactory answer. I accept what the noble and learned Lord said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Thurso Viscount Thurso moved Amendment No. 18:
Page 2, line 9, at end insert—
("( ) the employee is, by the terms of the contract of employment, required to live in for the proper performance of their duties").
The noble Viscount said: This is a probing amendment. Before I probe, perhaps I should declare an interest for the sake of good order. I am an employer and have a number of live-in staff. It may therefore be construed that I have an interest in this matter although a number of employers to whom I have spoken believe me to be speaking against my interests. I leave that to one side.
This is a straightforward question. I have no intention of pressing the amendment; I simply want to know a little about the Government's thinking. The amendment relates to live-in staff. The ones of whom I have knowledge are the harbourmaster at Scrabster harbour where I am the chairman and where he is obliged to live in the harbour house, and at Champneys where a number of staff, for example, head green-keepers, are often obliged to live on the premises.
Essentially, there are two kinds of live-in staff. There are those for whom the employer provides accommodation, largely because it may be difficult to find accommodation in the area. The staff often pay a rental contribution and the accommodation arrangements are largely of an administrative nature. If there is any difference between the cost of the accommodation provided and the rate the employer charges the employee for it, the Inland Revenue considers that to be a benefit in kind and taxes it as such. I am not concerned with those employees.
The amendment seeks to find out how the Government feel about the other kind of employee; that is, those who fall into a category which satisfies two Inland Revenue tests. The first test is that they are required by their contract, for the better performance of their duty, to live in. The second test usually applied is that it is the custom and habit of that specific trade.
In circumstances where the employees may not live out, where they are absolutely required to live in, it is accepted that living in is not a benefit in kind. There is usually a differential in the rate paid. Clearly, if an employee lives in a tied house or flat, there are costs to the employer. In that circumstance, the rate for the job may be less than for a similar occupation where someone is permitted to live out. There is also clearly an exchange of values. Some value is received by the employee and some value is given by the employer.
When the old Hotel Catering Wages Council was in existence, it dealt with the matter quite simply by setting two rates; that is, a live-in rate and a live-out rate for jobs. I am concerned that employees will lose out if some sort of similar provision is not made. If the value of their live-in accommodation is not taken into account, it will become easier or perhaps make more financial sense for the employer to pay the live-out wage and then charge a deduction. The actual net pay packet that the employee receives will then be less than otherwise. It is a very straightforward point. I fully accept that the drafting of this amendment may be hopelessly bad and I have probably got it in the wrong place. As I said, I simply wanted to ask the Government their views on this question. I beg to move.
Lord Clinton-Davis: I am grateful to the noble Viscount for addressing an issue that was worth being addressed. It is, of course, a probing amendment. We have drafted Clause 2 in such a way that it enables ensuing regulations to cover a wide array of topics affecting pay and working arrangements. Clause 2(2)(d) covers the situation envisaged because it stipulates that the regulations may make provision for cases where,
"the remuneration consists, in whole or in part, of benefits in kind",
while subsection (4)(a) and (b) enable the regulations to treat accommodation as,
"forming part of a person's remuneration".
and to say what its value is. I believe that that is the point that the noble Viscount has addressed.
We shall look carefully at the recommendations that the Low Pay Commission makes in that regard and in other areas. We shall make a decision on that. These are issues that will come before the House in its consideration of regulations.

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The noble Viscount mentioned a tax regime in the same context as the minimum wage regime. There are different considerations which apply. We shall be looking at those in the next amendment.
Viscount Thurso: I am most grateful to the Minister for that reply which addresses all of the points I wished to raise. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 19:
Page 2, line 16, at beginning insert—
("Subject to subsection (4A) below,").
The noble Baroness said: In moving this amendment I shall speak also to Amendment No. 22. They are to incorporate a new subsection temporarily numbered (4A). Amendment No. 19 is purely a paving amendment. The plain and simple effect of the main amendment, Amendment No. 22, is to define "remuneration". It is defined as being anything which the Inland Revenue would treat as taxable. In other words, if it is subject to income tax then it is income. It is as simple as that.
The Inland Revenue has spent several generations defining the meaning of "income" and "benefits in kind". It has, item by item, closed one loophole after another. There is a vast body of statute, case law and Inland Revenue practice notes covering both phrases. By the same token, Acts governing income tax have defined that expenses personally incurred by an employee himself should be regarded as deductions from his gross pay; for example, for a telephone and the nominal rent of an office at the home of the employee working from there.
The PAYE system also has the advantage of anticipating one of the requirements of this Bill. Each employee receives an annual certificate called Form P60 showing the amount of his gross pay and benefits. In other words, we have a method of defining income which has stood the test of time and which would doubtless continue to be refined with successive Finance Acts.
What we do not need is a second system defining income and benefits. We do not need a second system which may possibly be in conflict or inconsistent with the existing main system. We do not need a confusing system where income for one set of purposes is different from the income for another; a system which may mean that employer and employee alike will not be absolutely and consistently clear about how and where they stand.
Who, I ask, is going to draft the regulations defining pay and benefits? Are experts to be seconded from the Inland Revenue, or is it to be done by dedicated amateurs on the subject in the DTI? However able officials undoubtedly are, they may find themselves overwhelmed by the amount that they have to learn about a highly complex and specialised subject. How often will the Secretary of State have to come back to Parliament with amending regulations to rectify errors and omissions and to close loopholes?
I cannot conceive of any valid reasons why the Secretary of State should want to take on the onerous burden of defining "income" for the purposes of this Bill and then shepherding that definition through both Houses of Parliament when the work has already been done for her very competently by the Inland Revenue. I am sure that the Secretary of State and her officials at the DTI have more than enough to do without reinventing the wheel. When I was in the mail order business, advertising agencies would come to me with suggested new adverts to replace my already successful ones. That was due to something called the "not invented here" syndrome. As the Americans say, "If it ain't broke, don't fix it".
What we need in the operation of this legislation are fewer regulations, fewer possible contradictions between the Inland Revenue and the DTI, and less expensive bureaucracy, not more. I do not accuse the Secretary of State of having empire-building ambitions. However, if it is good enough for the Inland Revenue, it ought to be good enough for the DTI. I beg to move.
10 p.m.
Viscount Bridgeman: I should very much like to support my noble friend Lady Miller on this amendment, to which I referred briefly when we were considering an earlier amendment. As my noble friend said, the Inland Revenue has vast experience of, and case law and practice on, the question of tips, to which the noble Viscount, Lord Thurso, spoke with his considerable experience. The amendment sets out clearly and concisely a summary of Revenue practices. I very much hope that the Minister will reconsider his rather inflexible attitude to the definition of the "hourly rate" in the context of this amendment.
Lord Clinton-Davis: I thought that the noble Baroness indulged in some dangerous doctrine when she said that what is good enough for the Inland Revenue must be good enough for the DTI. I am not sure that her government would have accepted that doctrine. I believe that it was Winston Churchill who once said of the Treasury that it is like an inverted Micawber, waiting for something to turn down—
Noble Lords: Oh!
Lord Clinton-Davis: No, I did not say that!
Perhaps I had better use the word "beguiling" again because it seems to persuade the noble Baroness to withdraw her amendments more readily. Although the noble Baroness moved her amendment so beguilingly, I am afraid that it encounters certain difficulties. The definition of "remuneration" for tax purposes is not the same as that for minimum wage purposes. I shall try to explain why. The natures of the tax regime and of the minimum wage regime are very different. The tax regime examines all forms of income. It is not concerned simply with remuneration as such. It examines the whole range of remuneration and income at all levels. It operates according to a general set of criteria which individuals use to assess their own tax liability. Then, a tax inspector will test the situation

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periodically. What is taxable remuneration in one person's case may turn out not to be taxable in another case or to be taxable at a different rate.
On the other hand, the minimum wage regime will focus purely on remuneration. The intent is to provide a floor; it is not to intervene at all levels of pay. The composition of what will constitute remuneration will be a standard package. I am talking here of it consisting of gross pay or of net pay. Whatever the case, the same rules will apply to all. We are considering the detailed application of the minimum wage in this and other areas in the light of the commission's report.
The amendment would be very prescriptive and require the regulations under Clause 2 to deal with the calculation of remuneration for national minimum wage purposes in a very particular and direct way. As I and my noble and learned friend have said on a number of occasions, we shall consult on draft regulations to be laid before the House in the light of the commission's report. We are dealing here with a very technical matter but a very important one that affects everyone in the low-paying sectors. Employers and employees will want to know precisely what does and does not count as payments for determining compliance with the minimum wage.
We would be very chary of defining "remuneration" in the way suggested in the amendment. We believe that it is inappropriate and that it would lead to the definition of remuneration being changed every time the income tax rules changed. Those rules change frequently. Employers and individuals are obliged to adjust to those changes—sometimes they even become reconciled to them—but it is entirely different to have adjustments of this kind that create uncertainty in the context of the minimum wage, which imposes duties and obligations on employers and creates rights for workers. That unnecessary uncertainty prevents this amendment being helpful. I ask the noble Baroness to consider withdrawing her amendment.
Lord Lyell: Before the Minister sits down, perhaps I may be very naughty. I did not detect much more than a hair's breadth between what he said about remuneration and what was said by my noble friend. He spoke about differing rates of tax and remuneration. I am just an accountant. I am not a lawyer like the noble and learned Lord opposite or my noble and learned friend who has just sat down, let alone an expert like my noble friend on the Front Bench. To me, "remuneration" is "remuneration". Everything that the Minister has said covers remuneration and is perfectly clear. He may have referred to differing rates but he has said nothing about forms of income, whatever they may be called, that do not come within "remuneration" for tax or minimum wage purposes. He spoke of differing rates of remuneration and changes in tax rates but it is still remuneration. I did not detect much between the excellent case argued by the Minister and the pretty good case argued by my noble friend.
Lord Clinton-Davis: The noble Lord is the first accountant I have ever heard to describe himself as "just
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an accountant". I do not believe that he is being naughty. He is perfectly entitled to make a bogus point. I believed that I had categorically set out the substantive differences between my argument and that of the noble Baroness. I do not complain that she makes this point. It is a point which superficially is attractive. But I hope that the noble Lord will do me the honour of reading what I have said and comparing it with the speech of the noble Baroness.
Lord Lyell: I concentrated with all the attention that I could muster. I apologise to the Committee. I rose at three o'clock this morning and I have just flown back from Cyprus. I hope that my faculties are undiminished. I concentrated very hard on what the noble Lord said. I hope that it will be as attractive in writing as his mellifluous way of putting it, even at this late hour and even for me. He put it beautifully. I hope that my point is not a bogus one. I did not detect an awful lot—perhaps it was a little wider than a hair's breadth—between the Minister's case and that put by my noble friend in relation to remuneration. As an accountant, layman or a mere Angus lad I always make a naughty dig at the lawyers, but I shall desist and read what the noble Lord has said. No doubt I shall learn. I hasten to assure the noble Lord that mine was not a bogus point. I may be an accountant but I hope that I am reasonably serious, even this evening.
Lord Clinton-Davis: The noble Lord will not have received what I have said by 3 o'clock tomorrow morning. It will have to be a little later. I am sorry if I have not persuaded him that there was a substantial difference between my approach and that of the noble Baroness. I leave it to him to detect further when he has read my contribution.
Baroness Miller of Hendon: The Minister is in extraordinarily good form this evening. He tempts fate somewhat when he says that I present my amendments in a beguiling way. The more that he says that I am beguiling, the quicker I am to withdraw the amendment. I listened carefully to what the Minister said. I do not agree, but then I am neither a lawyer nor an accountant. The best thing for me to do is to read carefully what he said. At this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 20:
Page 2, line 22, at end insert—
("except that expenditure made by an employer in respect of training that is wholly or partly attributable to a person shall not be treated as part of that person's remuneration for the purposes of this Act").
The noble Baroness said: This is a probing amendment intended to elicit an answer to a problem raised in the other place on Third Reading. No answer came on that occasion. Now that the Government have had a chance to reflect upon the problem perhaps we can have a clear response.
As is well known, we are opposed to the principle of a national minimum wage because of the burdens that it will place on industry, with consequential adverse effects on employment. It may therefore seem strange that we propose an amendment, the effect of which will be to add to the costs of employers who provide training for individuals by not permitting those training costs to be treated as part of that employee's wage, despite the fact that the training an employee receives will, it is hoped, benefit him for the rest of his working life.
We have had to ask this question because of the Government's coyness in revealing their intentions as regards the amount and the administrative details of a national minimum wage. Parliament is being forced to legislate on the national minimum wage on the basis of a largely skeleton Bill, when most of the important details will be filled in at some later date in the form of a ministerial order.
Like a stone thrown into a pond, the ripples caused by the Bill will spread into many unexpected quarters for which the Government have not provided any contingency provisions. Training costs, and the consequences of including or excluding them, are such a contingency. The problems regarding training costs are contradictory. They begin with the failure to say whether they will impose a training rate of a national minimum wage on genuine trainees. Presumably it will be a rate lower than the universal rate that the Government will impose elsewhere.
There are two sides to the problem. If the training costs are not counted as part of the national minimum wage, and if there is not a lower training rate of pay, there will be an incentive to potential employees to take up the benefits of a training place. On the other hand, if employers cannot get credit for the cost of training, or even a percentage of the cost of providing the training, against their labour costs, it will be the employers who may be discouraged from incurring the expense.
In the end, employers may find it cheaper to let someone else do the training and to poach the employee as soon as he is qualified. The Government have expended a great deal of rhetoric on the need for a well-trained workforce. Now is the time to come off the fence and to tell us what they mean.
I can speak to Amendment No. 21 briefly as it is a simple amendment. I am sorry for my hesitation but I am having a slight problem because I have had a bit of a nose bleed which has made a bit of a mess on my paper. The amendment is simple in content and in terms of reasonableness and fairness. It provides that if the employer makes a contribution for an employee into a recognised pension fund, and hence for the employee's benefit, then such contribution shall be treated as additional wages enjoyed by that employee.
It is such a logical and obvious provision that it defies any necessity to explain it. One simple fact will serve to illustrate the point. The CBI's evidence to the Low Pay Commission says that pension payments are often worth as much as 10 per cent. of pay. Encouraging private pension arrangements is an important part of the Government's avowed plans to establish a second pension to supplement the state retirement pension.
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Acceptance of the amendment would be evidence of the genuineness of the Government's well publicised utterances on this topic.
However, what is difficult to explain is why the Government have wrapped up all the potential ingredients of what is pay in the mysterious wide-ranging regulatory powers in Clause 2(4). Instead of making their thinking clear and embodying it in this primary legislation, they want power to create a major piece of law by ministerial fiat.
The Government's attitude is that, as with the actual minimum wage, we shall have to wait for the pronouncement of this currently non-statutory body when all will be revealed. At that point, we shall presumably be presented with a fait accompli by the Secretary of State unless she happens to dislike the findings and decides to alter them. In the meantime, we are supposed to discuss this important Act on the basis of abstract principles. I say that because in the debate on Second Reading in another place, my honourable friend the Member for South Cambridgeshire specifically invited Ministers to say whether they wished the Low Pay Commission to treat pension payments by employers as remuneration for the purposes of the national minimum wage. That invitation was not replied to. Therefore we are still none the wiser. I repeat the question to the Minister now. If the Minister cannot or will not answer it at this stage, perhaps he can tell us why not. I beg to move.
10.15 p.m.
Lord Clinton-Davis: I hope that the noble Baroness is now all right. Of course if she requires a short adjournment, we shall certainly accommodate that.
Baroness Miller of Hendon: I thank the Minister. However, I think that I am now all right.
Lord Clinton-Davis: Amendment No. 20 seeks to ensure on the face of the Bill that an employer's expenditure attributable to training should not count towards remuneration for the purposes of the national minimum wage. If translated into practice, the effect of the amendment would work in favour of the worker. So I am delighted that the noble Baroness is confronting us with the vivid portrayal of herself as the workers' champion. I am delighted to see it. To that end, we are on the same side.
I do not think that it is necessary to change the Bill in the way proposed by Amendment No. 20. The function of Clause 2—we have said it over and again in debates—is to provide the necessary flexibility to reflect recommendations which are made now, but also recommendations and changes which might be made in the light of future experience. The amendment would be very prescriptive.
The purpose of Amendment No. 21 is to ensure that an employer's contributions to pension funds on behalf of the employee will count towards remuneration for national minimum wage purposes. In such cases this would have the effect of reducing the cash value of the minimum wage.

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The Government aim to widen pension provision. The noble Baroness has said that she understands that to be the objective of the Government. Occupational pension schemes are an important part of this framework. I understand by the amendment that she would wish not to provide a disincentive to employers who might be considering such schemes. There is merit in that.
On the other hand, the amendment would have the undesirable effect of reducing the cash value of the minimum wage that a worker would receive. I beg the noble Baroness to appreciate that that is the side of the amendment which we find unacceptable.
The noble Baroness says that there will be a ministerial fiat to deal with all this. That is not right. We have said repeatedly during the course of the debates that we shall be consulting about the regulations. The regulations will come before the House. They will be subject to the approval of the House in implementing the minimum wage. Indeed, the affirmative procedure would apply in this particular case, so the House would have ample opportunities to look at these matters.
In the light of the amendment and the argument—I had better not use the word beguiling or anything of that kind—which the noble Baroness has attractively put forward, I am not persuaded that we should change the Bill. I hope that the noble Baroness will withdraw the amendment.
Baroness Miller of Hendon: I listened carefully again to what the Minister said. I shall certainly read his remarks with great care in Hansard tomorrow. I am not sure whether it is beguilingly or attractively put, but whichever way it is put from over there, it is rejected. I have to say that the Ministers are definitely tempting me not to be so generous. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 21 and 22 not moved.]
The Deputy Chairman of Committees (Lord Murton of Lindisfarne): Before calling Amendment No. 23, I should inform the Committee that if this amendment is agreed to, I cannot call Amendments Nos. 24 to 28 inclusive.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 23:
Page 2, line 34, leave out subsection (7).
The noble Baroness said: Amendments Nos. 23, 31 and 40 are to delete the whole of Clause 2(7), Clause 3(3) and Clause 4(2) respectively. These are the provisions which inhibit the Secretary of State from exercising any discretion over the application of the Bill.
If the proposed new clause, Amendment No. 29, to which I shall be speaking later, is accepted, then each of these subsections is inconsistent with it and would need to be removed in any case. I am afraid that the sequence in which the amendments are called is not the chronological order I would have preferred. There are
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also line by line objections which we have been told could not be moved if this amendment were to be agreed to.
I believe that it is more important to concentrate on the principle of ensuring that the Secretary of State does not build a barrier preventing herself from adapting the Act in case of need. In each of the subsections I wish to delete, the Secretary of State is seeking to prohibit herself from making any exemptions or variations in the case of any of the very important factors that might call for just that. I have in mind variations for different areas of the country, different sectors of employment or undertakings of different sizes, as happens in the United States of America, which is one of Government's role models for the minimum wage, or for persons of different ages, which could have an adverse effect on older persons getting part-time jobs for which they are suited on grounds of health or family commitments.
I do not wish to anticipate the arguments that I shall be advancing in support of the new clause that I shall shortly be proposing, which is to give the Secretary of State the widest possible discretion to make exemptions. Although those arguments do bear repeating, if only in the hope that they will eventually percolate through the barrier of deafness that I think the Government have erected against the concept of giving themselves a safety net, I am well aware of the time.
The minimum wage is a new concept in this country. The Government are not following the experience of other countries, particularly the United States of America, but also other European countries. It is possible—I repeat, it is possible—that the Government may discover, when the Bill has been in force for some time, that they have made a mistake. I agree that at the moment, with their faint omniscience, they, and they alone, believe they know what is good for the country in every possible field and subject. Suppose, even with the crystal ball which the Secretary of State possesses, there is a change in circumstances and one of the parameters of these three subsections, what then will happen?
The Secretary of State will be unable to do anything without coming back to Parliament and begging for time out of a heavy legislative programme to put the matter right and to rectify her present refusal to consider the possibility that she might be wrong. In the meantime, any damage caused by the absence of discretion may go on and on, and may possibly become irrevocable.
The reason for the Government's present adamant refusal to allow any exceptions to the national minimum wage, apart from those very special ones which were wrung out of them in the other place, seems obvious. The Labour Party pledged to the unions that there would be a universal national minimum wage and Labour claims that it always keeps its promises. That is not true, as events of the past year have proved, but we need not go into that now.
So far as the unions are concerned, the Secretary of State is determined to keep that pledge, no matter what the cost to the country, the economy or individuals which may prove to be prejudicial. The power to create exemption in case of need is a matter of common sense

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and it is a matter of justice. The attitude of the Government in tying themselves hand and foot is the height of folly. These amendments will mean that the Government will be compelled to put the interests of the country before doctrinaire considerations. I beg to move.
Lord Haskel: These amendments are exactly the reverse of Amendments Nos. 6 and 7. Those amendments concerned multiple rates by region, size of firm and so forth. In this group of amendments the noble Baroness is suggesting that the Secretary of State should have the right to make such exceptions.
My noble and learned friend Lord Falconer carefully explained that these exceptions are impractical and against the principles of the Bill. At this late hour, I do not wish to go over all the points which he made in explaining why they are impractical, but the same arguments apply in this case. The universality of the Bill is a source of its strength and we wish to maintain that. I do not see any pragmatic justification for sectoral exemptions, which is what the noble Baroness suggests. The amendments might be a recipe for confusion and uncertainty and there would not be the safety net which she suggests.
New sectors constantly emerge or combine with old sectors. Modern firms now encompass multi-sectoral activities, so how would it be possible for employers and workers to cope with a range of different sectoral rates? That is why we do not believe that it is right for the Secretary of State to have these powers.
I hope that with that explanation in mind, the noble Baroness will withdraw her amendment.
Baroness Miller of Hendon: I do not agree with the Minister, but I shall withdraw the amendments. We might well return to them at a later stage.
Amendment, by leave, withdrawn.
[Amendments Nos. 24 and 25 not moved.]
10.30 p.m.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 26:
Page 2, leave out line 38.
The noble Baroness said: In moving Amendment No. 26, I shall speak also to Amendments Nos. 34 and 44. They relate to Clause 2(7)(c), Clause 3(3)(c) and Clause 4(2)(c). The Secretary of State declines to give herself powers to make regulations distinguishing between undertakings of different sizes. This is the most inexplicable of all the proscriptions which the Secretary of State is imposing on herself. It brings me back to the question of why the Government are so adamantly trying to impose a regime of absolute invariable universality.
The Labour Party, in its argument in favour of the whole concept of a minimum wage, pointed to the United States of America which has had a minimum wage since 1938. Indeed it has. However, it has also had an exemption in favour of small businesses. A small business is currently defined as one with an annual turnover of less than 500,000 dollars. At current rates of exchange, that is
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about £309,000. Why will not the Government follow the example of their model regime, the United States of America, and grant the same exemption to our own small businesses? I refer to the corner grocery shops, the little newsagents, the bakeries, the greengrocers, the village stores and other businesses which struggle to survive against the onslaught of the giant superstores. Are all those to go the same way as the high street fishmonger? Perhaps noble Lords have not noticed that they have largely disappeared from the shopping scene. And what about the new businesses just starting up? There can be no reason, except for politics, for this obstacle being placed in the way of the most vulnerable but vital sector of the community. I beg to move.
Lord Haskel: The noble Baroness referred to the minimum wage in the United States. What she did not tell us is that exemption from the minimum wage applies only to small companies which do not engage in inter-state trade. I have been an employer in the United States for many years and I am quite familiar with that.
The noble Baroness's amendment would allow the Secretary of State to differentiate the calculation of a worker's pay according to the size of the business in which the employee works. Again, the same arguments apply about differentiation as my noble and learned friend Lord Falconer made when we were discussing some of the earlier amendments. To take a random example, in the situation where one size of hotel could be allowed to use accommodation as an offset and another size of hotel could not, those companies would be paying different wages. It would be confusing and unfair and would distort competition. The whole principle of the minimum wage is that it is a minimum wage. It is not the wage that people are being paid; it is the minimum wage that they are being paid. If firms can afford to pay more, they will pay more. So we do not see any justification for allowing such variations in the calculation of the rate.
I would ask the noble Baroness to reconsider her amendment. If she is not feeling well we can certainly have an adjournment for a few minutes.
Baroness Miller of Hendon: I thank the Minister. I am feeling well.
I do not agree with his argument. My understanding is that under the fair labour standards legislation of 1938, firms whose annual turnover is less than 500,000 dollars are exempted from the national minimum wage. I am perfectly happy to look into that again, but I believe my information is correct. That is the very point that I was making.
There are all kinds of other exemptions that happen in America for small businesses. That is the one area that we are particularly concerned about. My noble friend at Second Reading gave a good example of a small shop which would be caused enormous difficulties if the minimum wage were to come in. But that is another matter.
I shall certainly look into that, but I think that the Minister might also be advised to do the same. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Razzall Lord Razzall moved Amendment No. 27:
Page 2, line 40, at end insert—
("(f) different hours of work; or
(g) different patterns of work.").
The noble Lord said: This is a probing amendment designed to test the Government's attitude on this particular point. As various Members of the Committee and Ministers have indicated, the way that Clause 2 works, and in particular Clause 2(7), is that it reflects the Government's determination to have only one national minimum wage and to remove from the Secretary of State the power to have anything other than one single minimum wage.
As the Committee will be aware, in particular we disagree with regional variation. On the other hand, the Government are determined to press on. The structure of the clause in subsection (7) confirms that there is to be a single minimum wage and that certain areas may not be excluded. Concern has been expressed that there is a problem of potential discrimination in setting the minimum wage in relation to employees who are not simply nine-to-five employees. Therefore, it should be made clear in the Bill that the minimum cannot be either recommended or fixed by the Secretary of State to deal separately with people who, for example, are doing night work or whose job is not a continuous nine-to-five job. There is a concern that there is insufficient protection in any anti-discrimination procedures. I should like to probe the Government's attitude in that regard. I beg to move.
Lord Falconer of Thoroton: The noble Lord has made absolutely clear the purpose of the amendment. He wants us to tell the Committee our attitude to workers who work, in effect, non-standard hours of work or patterns of work. He wants us to make it clear that such people are covered by the Bill and no distinction will be made in their case. I have absolutely no hesitation in giving him the assurance that he seeks in that respect.
We share the concerns of the noble Lord and those on his Benches. Indeed, we have always emphasised that workers who are marginalised and not typical—for example, part-time workers, home workers, agency workers, workers who are forced to work unsocial hours or who choose to work hours in an abnormal pattern—are often the workers most in need of protection. That is why we have clauses later in the Bill dealing specifically with them. I draw the attention of the Committee to Clauses 34 and 35.
As I said, we are happy to give the Committee the assurance that workers will not be discriminated against because of the hours they work or because they have an unusual pattern of work. After all, Clause 1 applies the minimum wage to all—and I emphasise "all" workers.
The noble Lord's amendments apply the same protection to three different clauses—Clauses 2, 3 and 4. The effect of the amendment is slightly different in the context of Clause 2, where it would prevent the Secretary of State treating workers with different hours or patterns of work differently when making regulations concerning the calculation of the workers' hourly rates
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of pay. If one looks at Clause 2(2), one sees that the Secretary of State must have power to reflect different patterns of work in working out various ancillary aspects to the minimum wage. We believe that the effect of the noble Lord's amendment would be to make that more difficult rather than easier.
The purpose of Clause 2(2) is to give the Secretary of State the flexibility to reflect in the regulations the many and varied types of working and pay arrangements which exist. The amendments proposed would prevent that. For that reason, I urge the noble Lord to withdraw Amendment No. 27.
The amendments he proposes to Clauses 3 and 4 would not have that detrimental effect, but we say that they are simply unnecessary. The Government have absolutely no intention of applying different youth or training rates to people on the basis of the hours or patterns of work they follow. The Bill applies universally, as Clause 1 makes clear.
Therefore, while the Government are entirely in sympathy with the points made by the noble Lord, we are keen to leave Clauses 3 and 4 as drafted. They are sufficiently restrictive to ensure that the clauses cannot be misused, and sufficiently flexible to allow for any unforeseen situations in the future where the Low Pay Commission, for example, may recommend some specific use for the powers in either clause. I urge the noble Lord to accept my assurances and withdraw the amendment.
Lord Razzall: On the basis of the Minister's assurances, I beg leave to withdraw the amendment. In the circumstances, I give notice that I shall not move Amendments Nos. 35 and 47 in due course.
Amendment, by leave, withdrawn.
[Amendment No. 28 not moved.]
Clause 2 agreed to.
[Amendment No. 29 not moved.]
Clause 3 [Exclusion of and modifications for, certain classes of person]:
Lord Newby Lord Newby moved Amendment No. 30:
Page 2, leave out line 42 and insert ("18.").
The noble Lord said: This amendment deals with the question of the minimum wage payable to workers under the age of 26. In a sense, I suspect that the amendment has been, or is about to be, overtaken by events. When we looked at the Bill as it first appeared before us, it was unclear what the Government's intention was in respect of workers under the age of 26. At that stage there was at least a theoretical possibility that they would not be subject to minimum wage protection. Therefore, we wished to put down a marker to show that we thought that that was unfair.
As a general principle, we support the concept of equal pay for equal work. There is clearly a whole raft of occupations in which someone undertaking work at the age of 18 is doing so on the same basis and with the same degree of output as someone who is considerably older. For that reason, we thought it appropriate to bring the coverage of the minimum wage down to the age of 18. Of course, the question then arises as to why we did

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not propose bringing it down to 16, so that it would cover everyone who might have left school. Our reasoning in that respect is quite simple.
Our view is that the period in a young person's life between the ages of 16 and 18 should essentially be a period for education and training. A large majority of young people are, indeed, undertaking formal education and training during that period. Under our proposals for education and training, we would make that the universal position. In those circumstances, therefore, it would be inappropriate for us to go below the age of 18.
As regards this amendment and those grouped with it, given the fact that we understand that the Low Pay Commission is, in a sense, dealing with the matter along the lines that we propose—namely, that young people aged between 18 and 26 will be covered by the Bill's provisions and by the low pay minimum wage legislation—and bearing in mind that we have been slightly overtaken by events, I move the amendment simply to see whether we can flush out anything further from the Minister on the matter this evening. I move the amendment on that basis. I beg to move.
Lord Clinton-Davis: I shall attempt to answer the noble Lord's request to be flushed out. The noble Lord will appreciate that Clause 3 is an enabling provision. It will allow us the flexibility to reflect the recommendations of the Low Pay Commission; but, at the same time, it will limit the scope of the clause to be misused, as we would see it, by differentiation by region, size of business, and so on.
We chose to invite the commission to consider any exemptions or variations for young people up to the age of 26. My honourable friend the Minister of State made it very clear in the discussions which took place in Committee in another place that the Government are not seeking to steer the commission to exempt all those under the age of 26. We needed to draw a line somewhere; and we drew it at 26 because that was where the New Deal drew its line.
The noble Lord has recognised that his amendments are, to some extent, deficient; indeed, he chose to use the phrase, "overtaken by events". They would result in a full adult rate for all those over 17. That is not consistent with evidence we have received from other countries and from academic studies showing that there are particular circumstances in the youth labour market which point towards some different treatment for young people. These are matters that remain to be dealt with later when the Low Pay Commission report is before us and we have tendered our reply in relation to its recommendations. I urge the noble Lord to withdraw the amendment.
10.45 p.m.
Lord Newby: I am grateful to the Minister for his explanation. I shall obviously withdraw the amendment but before I do so I reiterate the point that we believe that the principle of equal pay for equal work is a valid principle. When the detailed provisions for the minimum wage are brought forward we shall consider the extent
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to which that principle has been accepted by the Low Pay Commission and the Government. With that caveat I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Viscount Allenby of Megiddo): Before calling Amendment No. 31, I inform the Committee that if this amendment were to be agreed I cannot call Amendments Nos. 32 to 35.
[Amendments Nos. 31 to 37 not moved.]
Clause 3 agreed to.
Clause 4 [Power to add to the persons to whom section 3 applies]:
[Amendments Nos. 38 to 47 not moved.]
Clause 4 agreed to.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 48:
After Clause 4, insert the following new clause—

POWER TO SUSPEND THE NATIONAL MINIMUM WAGE IN THE EVENT OF LOCAL OR NATIONAL ECONOMIC EMERGENCIES
(" .—(1) The Secretary of State, after such consultation with the Low Pay Commission as may be reasonably practicable, may by order suspend the operation of this Act if he is satisfied that such suspension is required in the public interest by extreme economic circumstances.
(2) An order under subsection (1) may provide for the operation of this Act to be suspended in whole or in part and, in particular, may provide for the provisions of this Act to be suspended in respect of—

(a) any area or description of area; or

(b) any individual employer.

(3) No order shall be made under subsection (2)(b) above unless the employer has given the Secretary of State not less than 30 days' notice in such form as may be prescribed that, in the opinion of the employer, such an order is necessary in order to prevent the loss of jobs.
(4) A statutory instrument containing an order under this section shall be laid before each House of Parliament after being made.
(5) Unless an order under this section is approved by resolution of each House of Parliament before the end of the period of 28 days beginning with the day on which it is made, it shall cease to have effect at the end of that period.
(6) In reckoning the period of 28 days for the purposes of subsection (3), no account shall be taken of any time during which Parliament is dissolved or prorogued or during which either House is adjourned for more than 4 days.
(7) An order under this section which does not cease to have effect before the end of the period of 3 months beginning with the day on which it is made shall cease to have effect at the end of that period.").
The noble Baroness said: There have been several amendments I have not moved, not because I do not think they are important but because I am aware of the lateness of the hour and I think it is inappropriate to detain the Committee even longer at this stage.
This amendment concerns the power to suspend the national minimum wage in the event of local or national emergencies. I shall try to cut down on my notes. I remind those on the Benches opposite that one important rule in politics and indeed in government is that you never say "never". I do not possess the crystal ball that the Government claim to own, but I think there

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is bound to be a time when the Government may repent of their folly and wish there was some way they could put this whole Bill on hold, even if only for a temporary period. I shall not take up time by trying to conjure up any theoretical scenarios. I shall just give the Committee one taken from real life which many Members of the Committee on the other side of the Chamber will recall.
Meridian Motor Cycles became insolvent and, with the encouragement of a former Labour government and with a great deal of public money, were taken over by an ill-fated workers' co-operative. I do not remember what the financial arrangement with the employees comprised, but supposing that in this or in similar circumstances the employees volunteered to forgo all or some of their wages in a bid to save their firm and their jobs. Under the Bill as drafted they could not do so for fear of running foul of the Bill and the penalties imposed by it.
The proposed new clause would give the Secretary of State power to suspend the national minimum wage both as regards an area or as regards a particular employer if the circumstances warranted it, but only after consultation with the Low Pay Commission. We have made ample provision for a suspension to be brought before Parliament within a short space of time, and also for the time limit not to be affected when Parliament is not sitting. We have also made provision for the order to come to an end in no more than three months. Therefore there is no question of an unlimited suspension.
Once again this is an option which the Secretary of State can have in reserve in case of need, even if she believes that there is no possible occasion when such a need might arise, and even if she believes there is no possible occasion when some emergency might arise when the good of the country or of some particular area or potential pocket of unemployment might override the Government's philosophical view that the Bill is to be regarded as being set in concrete. She has no obligation to exercise the discretion that this clause gives her; indeed she has no obligation to do anything. But, again, if circumstances arise where it might be imperative for her to do so, she will not find herself with her hands tied, or find herself constrained by the parliamentary timetable from introducing emergency legislation.
This is an enabling provision in what is largely an enabling Bill. It in no way detracts from the initial operation of the Act in the present circumstances. However, the present circumstances are that we are at the beginning of a new recession. There is no point in entering into any recriminatory discussion about it. The fact is that what are the present circumstances may be vastly different in perhaps 12 or 24 months' time. The last thing that the Government, or indeed any of us, will want is to find small businesses going to the wall and crowds of disaffected youths findings themselves priced out of such jobs as might actually be available.
I know that the Government do not believe that such circumstances could arise, especially under their benign rule. But they must make allowances or have contingency plans for the possibility that they might be wrong, even though they have a fervent and unshakeable
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confidence in their own infallibility. I trust that in accepting that there is no conceivable credible explanation, they will accept this entirely constructive amendment. I beg to move.
Lord Clinton-Davis: I rise to speak as a member of a Government with unshakeable confidence in our own infallibility. Now I know I am infallible. I have tried to convey that to the rest of the Committee.
The circumstances in which the noble Baroness seeks to invoke this rather extreme measure are unnamed, unidentified, and not defined; and the phrase, "extreme economic circumstances", used in the new clause has no meaning. I reject the idea that it is right to assume that poverty wages might be reinstated by suspending the national minimum wage in these undefined circumstances. I cannot accept that. Nor do I think the noble Baroness was under the impression that I ever could. It is in periods of economic difficulty that poverty pay becomes even more unacceptable. We do not wish to get into the realm of discussing the power to suspend the national minimum wage, particularly in the ill-defined circumstances suggested by the noble Baroness.
Why are we seeking to acquire these powers to deal with the minimum wage? It is because exploitation has to be tackled. I believe that noble Lords on the Liberal Democrat Benches would go along with the Government in that view. It leads to a lack of motivation and a lack of involvement on the part of people who are working. All these practices are contrary to the public interest. We need to be able to encourage firms to engage on the basis of competition, higher competitiveness and higher productivity. Quality in terms of pay and conditions is extremely important in that. I do not believe in poverty wages.
I simply cannot see how acquiring this power could be in the public interest. Who would benefit from this situation? It would be the very unscrupulous employers who have motivated the actions that we seek to take. Anyway, the new clause would not work in practice. Every time an individual employer got into difficulty he would come running along to the Secretary of State asking for an order, rather than exploring ways of avoiding the crisis.
If economic circumstances were to change, the Low Pay Commission could be called to review the rate at any time. That is the very reason for the flexibility that we seek to introduce in Clauses 5 to 8. Of course, it is possible for an unexpected crisis to develop. It happened in south-east Asia very recently. But we have, I hope, developed a mechanism to try to deal with that situation. I do not believe that what is proposed in the amendment is the route we ought to be going down.
I am aware that there is a power in the Bank of England Bill to cover action in extreme economic circumstances. But that Bill deals with the macro-economy and allows the economic levers controlled by the Bank to be returned to the Treasury in certain circumstances. This Bill is not about that. This Bill is about individual rights and covers a relatively small part of the economy.

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I believe that the line taken by the noble Baroness is not the right one. We cannot go down that route. If workers deserve protection, they deserve it all the time.
Baroness Byford: Before the Minister sits down, I should like to follow up the point made by my noble friend Lady Miller in relation to where there is, for example, a management buy-out. The Minister did not respond to that point and I seek guidance. Am I wrong that, if a group of workers decide that they wish to keep their project or business going, there is in those circumstances no way in which they can forgo their wage to keep the business going? I am uncertain as to the position and should be grateful if the Minister could elucidate a little further.
Lord Clinton-Davis: The noble Baroness raises an interesting point; but there would not be an exception in that event. However, one has to examine the totality of the circumstances affecting the company. One cannot just say that the company has gone down the drain because of a particular situation which would be affected by the national minimum wage. I do not see that I can isolate that particular circumstance—which is hypothetical anyway—and say that that is the whole cause to which the company's failure is attributable. One would have to look carefully at the situation. I do not accept the conclusion reached by the noble Baroness.
Baroness Byford: I thank the Minister for that reply; but there have been such circumstances in the past, and I suspect that there will be in the future. If this attitude is taken to its fullest extent, those who are temporarily employed at that stage will cease to be employed. They will be worse off because they are not even given the opportunity for a short period of time—as has happened in the past—to decide to forgo their wages or take lower wages to keep the company buoyant and afloat so that it can continue in business. The Minister has just told me that is precluded in the Bill, and I am anxious about that.
Lord Clinton-Davis: If one is considering a buy-out, one has to look at all the circumstances. It is not possible for me to respond to the noble Baroness on the spur of the moment. I will write to her about it. We can always return to the matter at a later stage.
Baroness Byford: I thank the Minister for that. This is an important point. I shall certainly not press him tonight but, if he could come back to me on it, I should be very grateful.
Baroness Miller of Hendon: I am grateful to my noble friend for reiterating what I said in moving my amendment. I do not think the Minister took note of it. The point I was making, and which was repeated by my noble friend, was that Meridian Motor Cycles became insolvent. With the encouragement of a former Labour Government, and a great deal of public money, it was taken over by an ill-fated workers' co-operative. I have no idea what kinds of salaries they were paid or
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what kinds of salaries they drew. The point I was making was that in such cases the employees volunteer to forgo some of their wages in a bid to save their jobs. As the Bill is presently drafted, that could not happen.
All I am saying is that I was disappointed with the Minister's answer, but I hope that he will look at this again, because we are talking about events that happen from time to time and it would be foolish if a business were not able to survive simply because of that situation. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 [The first regulations: referral to the Low Pay Commission]:
[Amendments Nos. 49 to 60 not moved.]
Clause 5 agreed to.
Clause 6 [Referral of matters to the Low Pay Commission at any time]:
11 p.m.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 61:
After Clause 4, page 4, line 45, at end insert—
(" ( ) The Secretary of State shall also, without prejudice to his other powers under this section, refer to the Low Pay Commission any proposal which would result in any increase in the actual hourly rate, whether by the application of some formula or in percentage terms or by a general amount; and the provisions of section 5 shall apply to any subsequent recommendation of the Low Pay Commission.").
The noble Baroness said: Clause 6 enables the Secretary of State to refer any matters relating to the Bill to the Low Pay Commission at any time. It is, as with so many other provisions of this Bill, entirely permissive. As the DTI's explanatory note says, it is up to the Secretary of State to decide whether, and if so when, to consult the Low Pay Commission. Again, the Secretary of State is not obliged to follow any of the recommendations of the Low Pay Commission, though she is obliged to explain to Parliament her reasons for not doing so. What would happen if Parliament disagreed with her reasons is not clear. But we would be grateful if the Minister could perhaps tell us.
In other words, these provisions are largely cosmetic. The Secretary of State can refer matters to the low pay unit if she wants to, but if it does not sanctify whatever course she favours, she can ignore it. On the other hand, she can act unilaterally if she wants to. There is no regulation or criterion as to which of the two courses she should adopt. She does not have to act consistently from one case to another and does not have to explain why she preferred one course to another.
It is unclear what the Low Pay Commission will actually do after its first burst of activity in recommending what is called in Clause 5(1) "the first regulation". After that, it is presumably to go into hibernation until the Secretary of State, like the prince in "Sleeping Beauty", rouses it from its slumber and asks it to give her some advice on something or other, which she can ignore or override if she does not like the

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advice. After that—mixing up the fairy tales—it will be sent back to sleep again, just like the dormouse at the Mad Hatter's tea party.
According to the financial statement, the Low Pay Commission will cost between £500,000 and £1 million a year to run. But to do what? Absolutely nothing, if that is what the Secretary of State so decides. It may become involved in some pointless exercise if the Secretary of State decides to ignore its findings and advice. It will have to produce an annual report and accounts, but that report might conceivably say, "We have not done anything this year". It does not have to study and report on the economic effects of its own activities and of the Secretary of State's independent actions. It does not have the power to recommend that the Secretary of State should consult it on anything connected with the Bill, whether on the current rate or the desirability of altering it, creating modifications or exemptions where they are required. No. The Secretary of State will command it to sit like a well-trained dog, and sit it will, until instructed to the contrary.
There is one important task however that it can and should be given, and that task is the subject of this amendment. It requires the Secretary of State to refer to the Low Pay Commission any proposal which will have the effect of increasing the national minimum wage. There are two important—indeed vital—reasons why that should be done, and not merely at the discretion of the Secretary of State. She still retains the discretion given to her under Clause 5(4)(d) of the Bill as to whether to follow any new recommendation.
The first of the two reasons is economic. There may be cogent reasons why there should be no increase in wages at a given time, reasons why pay restraint should be exercised. We have all seen it happen in the past, and doubtless circumstances will require it again in the future.
What has to be avoided is some automatic increase for one group of workers inserted into what is called "the annual pay round". Apart from the inflationary effect that that will have and the consequences to our international competitiveness, it will also have a disastrous effect on the pay claims of workers earning well above the national minimum wage, and that is because of the resulting demands to restore differentials.
In the debate in your Lordships' House on 23rd March, the noble Lord, Lord Clinton-Davis, said.
"I fully expect that we shall encounter the ogre of the 'restoration of pay differentials—"'.
He went on to cite a study by Income Data Services which claimed that,
"Arguments about the … effect of minimum wages and the restoration of differentials had been highly partial and prone to exaggeration".—[0fficial Report, 23/3/98; cols. 1031–2.]
I do not know how and where this think-tank conducted its research. Perhaps it should have consulted the noble Lord, Lord Healey, who said in 1994, "Don't kid yourselves": the minimum wage is something on which unions will build differentials. Therefore, the minimum wage becomes the floor on which one erects
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a new tower, but then, of course, he is only a former Chancellor of the Exchequer, so what would he know about inflationary cycles?
Has this think-tank, on whose over-optimistic predictions the Government are relying to justify their head-in-the sands forecasts, ever heard of the Amalgamated Engineering and Electrical Union, one of the largest, most powerful and influential trade unions? Perhaps not, because they would then have read its policy paper on the national minimum wage which states,
"The AEEU will seek to restore differentials in wage settlements. While the AEEU agrees with the long-term aim of increasing the earnings of the lowest paid, it should not be at the expense of those slightly better off. The AEEU will seek to restore differentials".
I do not believe that the noble Lord, Lord Healey, and the AEEU deserve the dismissive description by Income Data Services, quoted by the Minister, of being,
"highly partial and prone to exaggeration".
I have tried very hard this evening not to be political. The second reason that I mention as regards this amendment is entirely political. If there is an unfettered discretion to increase the national minimum wage without even going through the motions of seeking the advice of the Low Pay Commission, there will be the temptation arbitrarily to increase it at the time of a general election or an important by-election. After all, the incumbent of the office of Chancellor of the Exchequer of either party is frequently accused of having give-away budgets for electoral purposes. I cannot believe that the Secretary of State will not be subject to similar political pressure by the strategists in her party and by the unions which influence its policies.
Needless to say, I readily assume that the Secretary of State, whether the present one or any future incumbent, will be able to resist such crude pressures. However, elsewhere in the Bill on the question of exemptions the Secretary of State has strenuously tried to avoid any discretion. To be consistent, she should simply eschew any discretion as to whether it is time to consider a reversion to a national minimum wage only—the Committee will note, only to consider whether it is time—still without being bound to follow the commission's advice in whole or in part. Involving the Low Pay Commission will at least partially absolve the Secretary of State from having a political agenda.
Before the Secretary of State presses the button to start an inflationary wages spiral, perhaps she ought to commit herself to obtaining independent advice and to come to Parliament to explain her reasons if she declines to take it. As I have already pointed out, the Low Pay Commission will cost up to £1 million a year to run. That is about £19,000 a week or £4,000 a working day. For a party that used to complain about quangos, surely it is not about to create one in this Bill, which is also nothing but a sinecure for its members and staff.
Once again, this amendment does not affect the principles of the Bill. It merely adds a necessary safeguard in the manner of its operation. I beg to move.
Lord Falconer of Thoroton: The main effect of the amendment is that it would require the Secretary of

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State to refer any proposal which would result in a higher national minimum wage to the Low Pay Commission. In other words, it would remove the ability of the Government to change the rate without first referring the matter to the Low Pay Commission; and that is, at first sight, particularly in the hands of the noble Baroness, an entirely reasonable proposition. The Government have already made clear in another place that they do not believe that the minimum wage should be varied by some kind of automatic formula. They have also made it clear that the Low Pay Commission is the right model to ensure ownership of the policy by the social partners—a vital ingredient if the minimum wage is to be introduced effectively.
Perhaps I may remind the Committee of what the Bill says at present. It is deliberately flexible regarding future changes to the national minimum wage. It says in Clause 6:
"The Secretary of State may at any time refer to the Low Pay Commission such matters … as [she] thinks fit".
We have been asked both by the noble Baroness and in another place why that wording, with its discretion, has been chosen. The reason is this: to cater for the possibility that the regulations setting the minimum wage and establishing its operation may require amendment at some future time because they do not cover particular detailed circumstances that have been overlooked or missed for some reason.
A component of pay, for example, may not have been considered fully. Problems of a technical nature to do with the pay reference period may be discovered. Obviously, we will do our best to avoid this situation but such problems can and do arise, under any administration, especially in a new area of legislation. Ministers have in any event made a commitment to consult on these and other issues in the form of draft regulations, before implementing the rate. There will plainly be cases where it will be unnecessarily cumbersome, bureaucratic and time-wasting to refer the whole matter to the Low Pay Commission. That is why the Bill is drafted as it is. It is right that there is no requirement on the Secretary of State to refer every last detail of such matters to the Low Pay Commission before making changes.
At the same time it remains perfectly open to the Government to refer matters of a more substantial nature, including any review of the need to vary or increase the level of the minimum wage. I am not convinced by the arguments that the Secretary of State should be required to consult the commission on the face of the Bill. At the same time, as was made clear in another place, I would not wish to rule out any such future consultation. It is plain that in many cases it would be appropriate. The whole arrangement needs to be bedded down, monitored and analysed before we can begin to think about how to make changes to the rate.
The noble Baroness referred to the members of the Low Pay Commission having sinecures and to the commission lying fallow, doing nothing and not even producing annual reports, while revving up expenses. That is a slight misunderstanding of the way in which the Low Pay Commission would work. From time to time, the Secretary of State, as she thinks appropriate,
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will refer matters relating to the Bill to the commission. When it does not have matters to consider, it will not be doing anything. It will not be sitting around incurring expenditure, as it were. The picture that the noble Baroness created of the Low Pay Commission may not be the model that the Bill envisages.
Finally, if there is a reference to the Low Pay Commission on any matter and if the Secretary of State determines that he or she will not accept any particular suggestion of the Low Pay Commission, under the existing provisions of the Bill the Secretary of State is required to lay a report before Parliament, giving her reasons. I think that deals with the point made by the noble Baroness about the need to explain why advice is not being accepted.
I very much hope that in the light of the explanations that I have given—I fully understand the reasons behind the amendment—the noble Baroness will feel able to withdraw her amendment.
Baroness Miller of Hendon: I was interested and pleased to hear from the Minister that the Low Pay Commission will, from time to time, do something and that sometimes it will be busy while it may not be so busy at other times. Given the amount of money that it will cost, it would be hateful to think that it had nothing at all to do! This reminds me of an earlier amendment when I said that sometimes people are very busy and sometimes they are not; it is then difficult to work out a pay reference period.
Having listened carefully to what the Minister has said, at this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 [Referrals to, and reports of, the Low Pay Commission: supplementary]:
[Amendment No. 62 not moved.]
Clause 7 agreed to.
Clause 8 [The Low Pay Commission]:
11.15 p.m.
Lord Razzall Lord Razzall moved Amendment No. 63:
Page 7, line 3, leave out ("may at any time appoint a") and insert ("shall, not more than 12 months after this Act comes into force, appoint a permanent,").
The noble Lord said: In moving Amendment No. 63 I should like to speak also to Amendment No. 64. In our view the two amendments are linked. Reverting to the discussion that the Committee has just witnessed between the Minister and the noble Baroness, Lady Miller, we take the opposite position as to the status of the Low Pay Commission. As an aside, far from worrying about the members of the Low Pay Commission obtaining a sinecure of some kind and the annual cost of £1 million, we believe, as fervent supporters of the national minimum wage, that in the next few years it is important that proper resources are devoted to enforcing this measure and providing the necessary mechanisms to ensure that it is a success. Therefore, we fundamentally disagree with the Conservative Opposition. We should like to press the

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Government for confirmation, as happened in another place, without tying the hands of the Chancellor of the Exchequer, that adequate resources will be provided to ensure that that happens.
The fundamental point on which we wish to push the Government is that the national minimum wage will be a success only if permanent status is given to the Low Pay Commission. The Committee will be aware that as it stands Clause 8 gives the Government the right within a period to give the commission permanent status. That is a mistake. We believe that the Government should now be in position to appoint a permanent commission to provide a framework for the ongoing administration of the Bill. In moving Amendment No. 63, we hope that the Government are prepared to go the last mile and confirm that they will give permanent status to the Low Pay Commission.
Turning to Amendment No. 64, this is the crux of our belief that the commission requires permanent status. We were disappointed that the Government were not prepared earlier in the debate to accept the need for a mechanism for the annual uprating of the minimum wage. We are nervous that, as has happened in the United States and other countries with a minimum wage, there will be an annual row—which we believe is now going on in the Cabinet—about the level of the minimum wage. Obviously, Ministers will not comment on that. Those who wish the minimum wage to be a success do not want this to be a political football every year. We believe that, particularly in years when the economy is not as strong as it is currently, this will be a political football. We want to enshrine in the Bill as many powers as possible for the Low Pay Commission to be divorced from that and to have an objective structure in which it can make recommendations in the public arena on which the Government will act. One knows that in fixing the initial rate the Government have set their face against the particular point that we make; namely, that regional variation is important.
If the Government are going to fix the rate at a low figure, the regional variation may not be as important as it would be if the rate were fixed at a higher figure, as the trade union movement has been advocating. We shall wait to see what the rate is and whether the Low Pay Commission has commented upon a regional variation for the fixed rate. We shall return to that point.
It is paramount that there should be an annual review by the Low Pay Commission of that and other issues. If it agrees that there is no case at the moment for a regional variation, so be it. Clearly the Government will act on that, and we will accept that. However, one, two, three, four or five years down the track, rates of unemployment in Cornwall may be significantly different from those in London, and average wage rates in the north-west may be significantly different from those in London and the south-east. Without committing themselves in any way to accepting the principle of regional variation, perhaps the Government can move towards agreeing that the Low Pay Commission will have an obligation to look every year at that and other issues and to make a report. We shall then see whether we or the Government are correct. We should like the
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Government to commit themselves to setting up the Low Pay Commission as a permanent body. It is not in the Bill, but we should like an assurance that the Low Pay Commission will be given adequate resources to enable it to perform its work correctly.
Amendment No. 64 reflects the type of report that we should like to see the Low Pay Commission produce. I beg to move.
Lord Clinton-Davis: From what the noble Lord said in relation to this matter and others, I have identified that we have many common denominators in relation to the Bill. We both support the Government's objectives. I thank him for that. His concern is to ensure that the Bill, when enacted, works well. I choose to differ from some of the prescriptions that he offers, without closing off all the routes.
The Government see the commission as continuing to play an important role, particularly in the early stages of the operation of the minimum wage. Clearly, the Secretary of State should have the valid option of being able to consult the Low Pay Commission before she uses the powers under Clause 3. That is a likely situation. We have already set up the consultation process. That is a good indication of how things will work in the future.
As this is a novel form of legislation, we need to keep open certain options for the future. I am not sure that one of those options will necessarily be the appointment of a permanent body within one year of the Act being passed. How do we know that there will be any task for it to carry out then? The minimum wage may have been in place for a few months only by then. There may be a degree of impracticability there.
Amendment No. 64 prescribes particular issues which must be covered in the Low Pay Commission's report. It is to be made annually, but it does not limit the commission to looking at those issues only. Thus the amendment is over-prescriptive and open-ended.
The noble Lord identified some important areas which any review of the Bill would need to examine: different sizes of business, different areas, gender, race, and so on. But we do not need to spell it out in this way on the face of the Bill. The commission is already obliged to look at economic and competitiveness factors in coming to its recommendations. In addition, under Clause 6(5)(b) the Government may specify other factors for the commission to consider.
I think that that is a rather more sensible and less prescriptive approach to the answers that the noble Lord seeks. I hope that he will agree with that and will not press the amendment to a Division tonight.
Lord Razzall: I have listened to the Minister with interest. He is right that we share the Government's objectives as regards the Bill to ensure that the slave wage rates prevalent in certain parts of this country should be a thing of the past. To that extent, we are arguing about methods rather than about principle.
I have listened carefully to what he said. Once the initial wage rate is fixed, if the Low Pay Commission is not given the permanent status and functions that we

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advocate, we are concerned that problems will arise in future and we shall be revisiting each year a number of the issues that are being debated here and elsewhere.
We shall reflect on the Minister's comments. We may wish to return to the issue at a later date. But at present I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 8 agreed to.
[Amendment No. 64 not moved.]
Lord Haskel: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Teaching and Higher Education Bill [H.L.]
Returned from the Commons agreed to with amendments and with a privilege amendment; it was ordered that the Commons amendments be printed (H.L. Bill 124).
House adjourned at twenty-eight minutes past eleven o'clock.