Lords Sitting of 8 June 1999

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

Air Travel: Low Fuel Levels
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
What reports they have received concerning civil aircraft on international flights carrying less than the prescribed minimum amount of fuel at the time of their reaching British airports.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, in the past two years air traffic controllers have made 12 mandatory occurrence reports to the Civil Aviation Authority about aircraft making emergency calls because of low fuel levels. As a result of priority given to these aircraft, most landed with fuel levels above the prescribed minimum. We have also been advised, through a confidential reporting system, of an allegation that one airline has operated into Heathrow airport with low fuel on a number of occasions.
Lord Campbell of Croy: My Lords, I am grateful to the Minister for his very full reply. However, does he know what the reasons are for airlines adopting this dangerous practice? Are they trying to get priority in landing when delays or diversions are necessary? Whatever the reasons, are the Government in a position to insist on adequate reserves of fuel being carried by aircraft in order to ensure safety?
Lord Whitty: My Lords, the minimum level of fuel is a matter for the aviation authorities in the country which hosts the airline. Certainly, all aeronautical authorities do try to ensure the minimum fuel. As far as concerns the Chicago Convention, that is a pretty substantial margin. It provides enough fuel to make an approach and landing, to cover one miss, to fly to an alternative airport and to hold for 30 minutes, plus any contingency which the national aviation authority prescribes. So it is quite a big margin. Nevertheless, there is obvious concern that on a few occasions—we are talking about 12 occasions out of about 2 million inward flights—there appears to have been a problem. However, so far as we can ascertain, it is not a systematic problem.
Lord Clinton-Davis: My Lords, in the light of what my noble friend said about "one airline", can he tell the House what steps are being taken to ensure that sanctions are imposed or criminal proceedings taken against the airline concerned? Is ray noble friend prepared to mention the name of the airline in the House
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today? Further, is there a process of upgrading the number of checks carried out both in relation to the level of fuel carried by aircraft and in relation to airworthiness?
Lord Whitty: My Lords, as it has appeared in many newspaper reports, I think that I am in a position to give the name of the airline concerned—Malaysia Airlines. Its policy clearly complies with the Chicago Convention minimum and its own aeronautical authorities are insistent that it should abide by that.
Where there is a clear and systematic breach, we have on occasions suspended rights to land. As far as concerns more systematic checks, there is always effectively an automatic check through the refuelling process. I do not believe that we need more than that. As I said in response to the noble Lord, Lord Campbell of Croy, the margin is very substantial. This is not a question of aircraft landing empty, or anywhere near empty, of fuel.
Lord Skelmersdale: My Lords, perhaps I may rephrase what the Minister said. He said that the problem was de minimis. I think I am right in saying that he cited 12 incidents out of a total of 2 million flights coming into this country. Can he say whether this is an increasing or a decreasing problem? If my memory serves me right, we have had at least two Questions on this subject in the past few weeks.
Lord Whitty: My Lords, the figure of 12 relates to the past two years. There has not been a significant increase in such incidents. I did not use the term de minimis, whatever that means. Clearly one incident is too many. We must ensure that all aircraft flying into our airports have a safe margin as regards fuel. Certainly, our own aeronautical system and our own authorities are anxious to ensure that that is the case.
Lord Brabazon of Tara: My Lords, bearing in mind the recently reported incident concerning Malaysia Airlines and given the fact that there is no obligation on anyone's part, as regards a foreign registered aircraft, for reports to be made of such incidents to the aeronautical authorities or indeed to the department concerned in this country, is the Minister satisfied with the situation? Further, can the Minister tell us whether in the case of Malaysia Airlines a mandatory occurrence report was made to the Malaysian authorities? If so, was that report passed on to either the Civil Aviation Authority or the department here?
Lord Whitty: My Lords, the information was passed to the British authorities and was then passed to the Malaysian authorities who have taken appropriate action with regard to their own carrier.
Lord Berkeley: My Lords, if the allegation about Malaysia Airlines is proven, do the Government have the power, through the CAA or whatever, to stop

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Malaysia Airlines flying to this country for a period of six months or a year? Surely, that is the best sanction to impose to stop other airlines adopting the same tactics.
Lord Whitty: My Lords, we have the ability to suspend landing rights. We have used that power in relation to a Nigerian registered aircraft owned by a Ugandan carrier after we had received an AAIB report. We suspended that airline for 18 months.
Lord Campbell of Croy: My Lords, in a lighter vein, if airlines are seeking popularity through punctuality, could they not emulate British Airways and arrange wagers on early times of arrival involving charming air hostesses? I understand that a recent incident has greatly increased the popularity of British Airways.
Lord Whitty: My Lords, in answering that question I would get into trouble with someone or other. Therefore I prefer to defer to the noble Lord, Lord Campbell of Croy.

Former Yugoslavia: NATO Military Activity
2.44 p.m.
The Earl of Drogheda The Earl of Drogheda asked Her Majesty's Government:
Whether they consider it is now time to halt the war in Yugoslavia.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, the peace deal which President Milosevic and the Serbian Parliament agreed to on 3rd June is quite explicit: suspension of NATO's military activity will occur after we see a verifiable withdrawal of Serb forces. That is what the Serbs signed up to; that is what we expect to see happen.
The Earl of Drogheda: My Lords, I thank the noble Baroness for that reply. It appears evident that the war will end soon. Can the noble Baroness tell us who will assume responsibility for the devastation caused to former Yugoslavia's infrastructure and its innocent civilian population as a result of the war? Who will foot the bill for that? Will Her Majesty's Government use this crisis to achieve an international responsibility for humanitarian catastrophes throughout the world which are the result of repressive governments?
Baroness Symons of Vernham Dean: My Lords, I hope that we can be cautiously optimistic in the way that the noble Earl suggests. However, I remind him that the Balkans have been littered with broken promises and we have to see that verifiable withdrawal—I emphasise this to the noble Earl—before we can state categorically that the war is about to end. Of course this crisis has highlighted the need for concentrated action to stabilise the Balkan region and the need to accelerate our existing strategies in that region and to make them more
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inclusive. The strategy that we have adopted is intended to complement the German EU presidency's initiative for a stability pact for south-east Europe. We have wholeheartedly endorsed that initiative. The stability pact will provide for a multilateral forum involving in due course all the countries in the region. That will involve a number of countries doing what we can to increase prosperity in the region and to increase partnerships based on core democratic European values.
Lord Moynihan: My Lords, with your Lordships' indulgence I should like to take this opportunity to thank the Minister for all the hard work and effort that she has put in throughout the crisis in Kosovo to date to ensure that this House is fully informed both about events on the ground in Kosovo and also about the diplomatic process of negotiating a peace agreement. Confident of similar clarity to come, I ask the Minister whether she can confirm that the peace agreement taken to Belgrade by the EU envoy, President Martti Ahtisaari, and the Russian envoy, which is forming the basis for the drafting of a UN resolution, refers to the unified command and control for the effective international security presence to be deployed in Kosovo under UN auspices, and that this presence will have substantial NATO participation. Will the Minister therefore clarify which organisation will be in charge of the unified command structure throughout Kosovo?
Baroness Symons of Vernham Dean: My Lords, I knew that the noble Lord's generous words would have a sting in the tail. However, he was generous and I thank him for what he said. Sometimes what we have had to read in dispatches has been sickening and appalling, as I know he knows. As regards the questions that the noble Lord addresses, I am sure he will be pleased to know that before I left the Foreign Office this afternoon to come to your Lordships' House to answer this Question I heard that the G8 Foreign Ministers had been able to agree a text to go forward to the Security Council. The hard work of yesterday and today has borne fruit and we hope to see that text adopted as a Security Council resolution. I am afraid that I cannot give any details of that at the moment because they were coming through as I left.
Of course the whole question of the composition of the international force is an enormously important one. We have said right the way down the line that the composition must be such as to guarantee the safety of returning refugees; that is, a NATO corps and a NATO chain of command. We have made that clear. The Russians are taking part in the discussions. We understand entirely that there are Russian sensitivities—I am sure the whole House is aware of this—with regard to the way in which this force is set up. However, we have seen similar forces set up in not altogether dissimilar circumstances. We have been able to take

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account of those sensitivities. We believe that with good will on all sides it will be possible to take account of those sensitivities again.
Baroness Williams of Crosby: My Lords—
Baroness Turner of Camden: My Lords, what compensation may the victims of NATO mistakes expect to receive?
The Lord Privy Seal (Baroness Jay of Paddington): My Lords, I apologise to the noble Baronesses. The noble Baroness, Lady Turner, should perhaps ask her question first. There will then be time for the noble Baroness, Lady Williams, to ask hers.
Baroness Turner of Camden: My Lords, what compensation may the victims of NATO's mistakes expect to receive; or will these maimed, mutilated and destroyed people be told that they must wait to get rid of Milosevic first?
Baroness Symons of Vernham Dean: My Lords, I do not believe that any compensation claims have been made to NATO. There has been some discussion of possible compensation claims. I am sure that any claims that are made will be dealt with in an entirely open and appropriate way. I think that we can do that. We know that there have been mistakes; we all acknowledge that there have been mistakes. We also acknowledge that there has been a quite remarkable degree of openness on NATO's part in saying what has happened when those mistakes have been made. I wish we could say the same for what has happened within Kosovo itself and the appalling and deliberate atrocities that have been committed there.
Baroness Williams of Crosby: My Lords, we on these Benches also thank the Minister for her great helpfulness throughout the Kosovo crisis. We add to that our great respect for the Prime Minister and the Foreign Secretary for the extraordinary resolution and commitment they have shown throughout the crisis to the ends that they are now so close to achieving. Can the Minister say anything further about the relationship of the Russian forces to the proposed NATO command? Can she confirm that the KLA has promised that it will not attack any retreating Serb forces? Can she further confirm that that will also apply to NATO forces once they are satisfied that the retreat is genuine and complete?
Baroness Symons of Vernham Dean: My Lords, I thank the noble Baroness for her remarks. As she knows, I am a mere messenger to your Lordships' House on these matters. As she has indicated, the real thanks should go to my right honourable friends.
I hope that I have been able to assure the House that the sensitivities of the Russians in the peacekeeping force are well understood. We have dealt with those sensitivities in the past in similar peacekeeping forces; we hope to do so again. This is a matter which is under active discussion at the moment. We believe that there
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is sufficient good will on all sides to achieve the mutual objective. I can confirm that the KLA has said that it will not attack retreating Serbian forces. That of course will apply to NATO; there is no question of NATO attacking retreating forces. However, I emphasise to your Lordships' that we should not count the chickens before they are hatched. We have yet to see a single retreating piece of Serbian artillery. Although we very much hope it will happen, we must ensure that it is a verifiable withdrawal before the bombing stops.
Lord Judd: My Lords, is my noble friend aware—
Lord Pilkington of Oxenford: My Lords, may I ask the noble Baroness—
Baroness Jay of Paddington: My Lords, I think it is the turn of that side of the House. Perhaps I should point out to the House that there will be a Statement on the matter later this afternoon. There will then be other opportunities to raise questions.
Lord Pilkington of Oxenford: My Lords, it is a brief question.
Lord Judd: My Lords, does my noble friend accept that the House is greatly encouraged by the news she has reported this afternoon?
Baroness Jay of Paddington: My Lords, I think that perhaps my noble friend did not quite hear what I said I indicated that I think the noble Lord, Lord Pilkington, should ask his question.
Lord Pilkington of Oxenford: My Lords, it is a brief question. What policies have been given to the occupying forces to deal with the ethnic hatreds that they will face when they enter Kosovo? Serbia occupied the territory 80 years ago and this has been a feature of bitter hatred between the Albanians and Serbs. Can the Minister assure the House that the troops which will go in will be informed of the problems they face and that. Her Majesty's Government have prepared them for the problems?
Baroness Symons of Vernham Dean: My Lords., I can give the noble Lord the assurance he seeks. We have made clear that any post-conflict settlement must protect all the people of Kosovo, regardless of their ethnic group, including the Serb minority.

BBC: Director-General
2.54 p.m.
Lord Renton of Mount Harry Lord Renton of Mount Harry asked Her Majesty's Government:
What qualifications they consider that the new Director-General of the BBC should possess.
Lord McIntosh of Haringey: My Lords, the appointment of the Director-General of the BBC is

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entirely a matter for the corporation's Board of Governors. It would not be appropriate for me to comment.
Lord Renton of Mount Harry: My Lords, I thank the Minister for that Answer. His reply was not totally unexpected. I should point out that my Question is not about people but about qualifications. Does the Minister agree that potentially—and outside the Cabinet—the Director-General is the most influential person in Britain today? Does the Minister further agree that he or she must be politically impartial, creative and committed to the public service trinity of education, information and entertainment, as laid down in the charter, and not just chase audience figures? Finally, does the Minister agree that the Director-General must ensure that the World Service continues to prosper, bearing in mind that that is the face that Britain shows around the world, often to many beleaguered people? Would the Minister endorse or add to that list?
Lord McIntosh of Haringey: My Lords, I am satisfied that the BBC's charter gives adequate guidance to the governors of the BBC on the choices they have to make. Unlike the leader of the noble Lord's party, I have no intention of expressing a political opinion on this matter.
Lord Hussey of North Bradley: My Lords, perhaps I should first declare an interest as a previous Chairman of the Board of Governors of the BBC. Does not the Minister agree that at a moment like this it is critical that the new Director-General inspires and retains the confidence of his staff in the wisdom of his policies, whatever they may be?
Lord McIntosh of Haringey: My Lords, I understand that the job description issued by the BBC to candidates for the post makes exactly that point.
Lord Marsh: My Lords, does the Minister think that the Director-General of the BBC really is more powerful than Mr. Campbell?
Lord McIntosh of Haringey: My Lords, I did not rise to that point when it was made by the noble Lord, Lord Renton, and I shall not rise to it when it is made by the noble Lord, Lord Marsh.
Lord Pearson of Rannoch: My Lords, is the Minister really saying that it is inappropriate for the Government to express a view on the qualifications that the Director-General of the BBC should possess? Can I tempt him by suggesting that he should possess qualities which would enable the BBC to escape from its present concentration on sex, violence and materialism and the hopeless elevation of rights over duties?
Lord McIntosh of Haringey: My Lords, the Government have expressed a view about the qualifications. We have expressed our conviction that
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the charter of the BBC contains adequate guidance to the BBC's governors to enable them to carry out their responsibilities.

Airlines: Passenger Seating Standards
2.58 p.m.
Lord Borrie Lord Borrie asked Her Majesty's Government:
When they will introduce regulations to ensure minimum seat size and spacing for airline passengers.
Lord Whitty: My Lords, the Civil Aviation Authority has had mandatory minimum standards for seat spacing on UK registered aircraft since 1989. These are contained in Airworthiness Notice No. 64. However, these standards are set for reasons of safety rather than passenger comfort. There is also a limit on the number of seats allowed in each row, which determines the minimum widths of seats.
Lord Borrie: My Lords, I am grateful to my noble friend for that answer. Is he aware that after privatisation British Airways reduced the space between one seat and the seat in front by three inches? Is he further aware that both in British Airways and other airlines—it is worse with charter aircraft—the space between seats and the space available for passengers has been reducing? This causes not only discomfort but can cause serious medical problems such as deep-vein thrombosis; that is, blood clots which can extend from the leg to the heart and the lungs. It is a matter which concerns comfort and health as well as safety. Does my noble friend agree that the minimum standards could be improved?
Lord Whitty: My Lords, it is probably the case that the UK Government alone prescribe minimum requirements. There are no international standards in relation to this; therefore, what I have said does not apply to non-British carriers. As regards schedule and charter airlines, in general British carriers are above the minimum standard. I have hitherto regarded my noble friend as having one of the trimmer figures in this House. Therefore, if he experiences some discomfort there is clearly a problem. It is, however, not a problem for the safety authorities, but for the consumer.
Lord Moynihan: My Lords, a comfortable passenger is one who is five foot six and a half!
Lord Whitty: My Lords, the noble Lord speaks from experience. Would that we were all designed that way!
The individual airlines have a commercial responsibility to meet the requirements of their passengers. Those requirements relate to price as well as to comfort.
The Earl of Gowrie: My Lords, is not a comfortable passenger a safe passenger?
Lord Whitty: My Lords, it is probably more true to say that a sober passenger is a safe passenger, and there

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is no evident correlation between incidents of air rage and the number of people on board, let alone the configuration of the seats.
Lord Hoyle: My Lords, does my noble friend recall the terrible accident that occurred at Manchester airport a few years ago and the recommendations that arose from that in terms of seat materials and safety generally? Have those recommendations been implemented?
Lord Whitty: My Lords, I understand that so far as British airlines are concerned they have been implemented. I cannot give an absolute assurance in relation to other airlines.
Baroness Thomas of Walliswood: My Lords, does the Minister agree that it is rather peculiar that there are international regulations governing the transportation of live animals, but no such regulations governing transport for live human beings? If they cannot achieve international regulation, is it not time that the UK Government and other governments did something about this within the European Union? Secondly, as airlines that ship live cargo can be prosecuted, has any airline ever been prosecuted for having seats that are too small? I am not a particularly large person. I know people who are both taller and wider than myself. But even I sometimes find difficulty, particularly in long-haul aircraft. I agree with the noble Lord who suggested that an uncomfortable passenger is more likely to become enraged than a comfortable one.
Lord Whitty: My Lords, I am not aware of any prosecution. We are reasonably confident that all British airlines at least meet the minimum standards laid down in the air worthiness notice. I note the noble Baroness's point about co-ordinated European action. But all aircraft have a maximum payload in terms of total numbers of passengers laid down by the manufacturer in obtaining the original certification. Hence there is a maximum number laid down internationally in that sense. Nevertheless, I repeat the point that, although comfort is a major consideration, in terms of regulation, safety must be the priority; and in terms of passenger requirements, it is frequently price rather than comfort that matters.
Baroness Trumpington: My Lords—
Lord Ewing of Kirkford: My Lords—
Noble Lords: Trumpington!
Baroness Trumpington: My Lords, it is my turn. Perhaps I may declare a personal interest. I am a particularly large person.
Noble Lords: No!
Baroness Trumpington: My Lords, so far the Minister has avoided saying exactly what is the minimum seat size. Is he able to give the House that information? With great respect to the Minister, I do not
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suppose that he really needs much leg-room, hut I most certainly do. So will he please give the requirements for leg-room as well?
Lord Whitty: My Lords, I believe that I require at least as much leg-room as the noble Baroness, probably somewhat more. I recognise that it is an important consideration. The normal distance is 26 inches between the back of the seat and the seat in front. There is also a specific requirement that there should be a distance of seven inches between the front of a seat and the seat structure in front. So that may be said to be seven inches of leg-room, plus a minimum vertical projected distance of three inches. I hope that noble Lords now have the configuration absolutely clear in their minds.
Baroness Darcy de Knayth: My Lords, does the Minister agree that it is very important. when setting regulations, also to take into account the needs of disabled passengers, particularly those of permanent wheelchair users, who have serious problems transferring to an aircraft and moving along the aisle with the chairs being carried?
Lord Whitty: Yes, my Lords, and I believe that the major British carriers make adequate arrangements in that respect. It is important that they bear that in mind on all occasions.
Lord Ewing of Kirkford: My Lords, is my noble friend aware that I remember how my mother used to discipline me, and that that is why I gave way to the noble Baroness, Lady Trumpington? Is my noble friend also aware that, yesterday, I spent three and a half hours on a British Airways flight between Edinburgh and Heathrow? In view of all the current publicity regarding Virgin Airways and British Airways installing seat-beds on their aircraft in order that passengers on long-haul flights between Heathrow and New York can get a good night's sleep, will my noble friend advise British Airways to install seat-beds on the flights between Edinburgh and Heathrow?
Lord Whitty: My Lords, I regret that my noble friend had a long journey this morning.
Lord Ewing of Kirkford: Yesterday morning. My overnight allowance is at stake!
Lord Whitty: My Lords, I trust that, in order to receive the somewhat meagre overnight allowance, the noble Lord does not find it necessary to have a bed on the Edinburgh to London flight very frequently.
Configuration is ultimately a matter for the individual airlines. If Virgin considers that a bed-like structure is necessary on its transatlantic flights, I am sure that British Airways will consider the possibility in relation to the journey from Edinburgh to Heathrow. However, that is probably too short a time for the use of the bed in any sense.
Earl Russell: My Lords, I am not generally regarded as having the fuller figure, but I must declare an interest

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in the Question. Does the Minister agree that attempting to eat in a seat that is too narrow for comfort is bad both for the passenger's digestion and for the next-door neighbour's comfort?
Lord Whitty: My Lords, I suspect that that is so. I suspect that the quality of airline food may have an effect as well. But I repeat that the price of air travel has been reduced dramatically. That is because, by and large, aircraft carry a large number of passengers. That must be one of the considerations in the commercial interest of the airlines. While it is important that they provide comfort, price should also be taken into account.

Business
3.7 p.m.
Lord Carter: My Lords, at a convenient moment my noble friend the Leader of the House will, with the leave of the House, repeat a Statement that is to be made in another place on Kosovo and the Cologne Summit. Following that, my noble friend Lord Donoughue will, again with the leave of the House, repeat a Statement on food contamination in Belgium.

Road Traffic (Enforcement Powers) Bill [H.L.]
Earl Attlee: My Lords, I beg to introduce a Bill to make further provision about the enforcement of requirements relating to drivers' hours and about the licensing of operators of goods vehicles; and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Earl Attlee.)
On Question, Bill read a first time, and to be printed.

Tax Credits Bill
3.8 p.m.
Read a third time.
Lord Higgins Lord Higgins moved Amendment No. 1:
After Clause 1, insert the following new clause—

Tax Credits Bill

  PASSPORTED BENEFITS
  (" . Recipients of a tax credit under this Act shall be entitled to all the benefits to which, but for the passage of this Act, they would have been entitled had they been in receipt of, or had they been eligible for, family credit or disability working allowance.")
  The noble Lord said: My Lords, this amendment stands also in the name of my noble friend Lord Astor of Hever. It seeks to insert the new clause as printed. We have debated the issue at earlier stages of the Bill. It arises because in the change from family credit to the new structure proposed by the Government with regard to working families', tax credit and so on, the position on so-called passported benefits is uncertain. That is the
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  entitlement which those on family credit at present enjoy to a number of benefits: for example, prescription charges, the cost of travel to hospitals and a number of other benefits of one kind or another.
  In successive debates at Committee stage, at Report stage and now on this occasion, we have sought clarification of the Government's position. Quite clearly, it is a matter of considerable importance to those who at the moment do not know where they stand with regard to the benefits, which may be of considerable value and certainly of considerable importance to individuals. In our view, it is an issue that ought to be resolved so that people know where they stand.
  However, it is extraordinary that while, throughout the debates, the Minister has sought to be as helpful as she could she has not been able to clarify the position. So on this occasion, at this late stage in the passage of the Bill, because the position was totally unclear when it was debated in another place, we seek a degree of clarification. On former occasions, the noble Baroness said it was not central to the Bill, but it is certainly of consequence and we ought not to let the Bill pass without knowing the answer.
  I have to say and have said throughout that it shows disregard for the parliamentary process that we have got this far without a clear answer. It also seems to be an extraordinary reflection of the way in which the internal workings of the Government operate. In giving, I am inclined to say, an excuse rather than a reason as to why the position was unclear on previous occasions, the noble Baroness pointed out that the matter involved a considerable number of government departments. But the fact that she has not been able hitherto to provide an answer suggests that the co-ordination between those departments and even the ability to convene a Cabinet committee meeting to decide the matter over a period of months has turned out to be beyond the ability of the Government. In my view it is an extraordinary situation.
  The noble Baroness also sought to argue that it was not a matter for primary legislation, it is dealt with by statutory instrument. But the trouble is that if the matter is dealt with by statutory instrument, it is not possible to amend that statutory instrument. My understanding is, although I believe there are some variations of view between the Liberal or Cross-Benches and my own, that the general view is that in this House we do not vote against statutory instruments. So if this House wishes to take a view on whether what the Government propose is satisfactory, this is an appropriate moment to do so. The problem has been that we do not know whether the Government's proposals are satisfactory.
  That brings me to the text of the amendment. We need to know whether people who are at present entitled to the benefits will continue to receive them in the future. I hope that, even at this late stage, the Minister can clarify the position. Originally her position was that we would know "before the Bill leaves Parliament"—a rather strange expression. We had been assured that we would know before Third Reading. Well, we have reached Third Reading and do not yet know, but one must hope that in replying in a few moments, the noble Baroness will be able to tell us whether that is so.
  At all events, whether matters are normally dealt with by statutory instrument or by primary legislation largely depends on whether there is an opportunity with primary legislation to debate the issue, vote on it and, if necessary, amend it. We have such an opportunity here.
  I hope that, even at this late stage, we can find out what the Government's intentions are and then consider in the light of that information, albeit at short notice because one will have to respond quickly, whether what the Government propose is satisfactory. It seems clearly the case that those who receive passported benefits at present ought to continue to do so. We also need to know whether people will have the same entitlement to benefits in the future if they qualify or. more accurately, would have qualified under the present legislation. That is the position. After all the debates when we have not had a single indication of the Government's intentions on the matter, I hope that we shall at long last manage to discover them. I beg to move.
  Baroness Carnegy of Lour: My Lords, I fully support my noble friend's amendment. He has made it clear on a number of occasions why he thinks it is an important issue in relation to the Bill, probably the most important. For Parliament and, above all, for the House of Commons, the elected House, to assess just how families and individuals will be affected by the changes and what their incomes are likely to be in given circumstances if they take a low-paid job, they must know rather more than we know at the moment. By the same token, Parliament needs to know whether people will find the credits which come with the job sufficiently attractive.
  The answer to those questions will obviously depend upon the eligibility for other benefits which people receiving the new tax credits will have. Otherwise one cannot tell how people will be placed as a result of the Bill, whatever the difficulties for the Government at the moment.
  My noble friend's amendment would mean that some people who have higher incomes than those on the present credit system would become eligible for benefits to which they were not previously entitled. That is the snag with the amendment. It may or may not be necessary or right that that should be so, but at present we in this House cannot tell.
  It seems to me that only by putting this kind of amendment into the Bill can we ensure that in the House of Commons the Government are made to answer this crucial question so that honourable Members can judge whether the Bill will be workable. I do not know what the Minister will say to us, but if it is not satisfactory I hope that my noble friend will seek the opinion of the House. If the Government continue to prevaricate in the matter, Parliament should not pass the Bill. We need to know what will happen to the people whom it is intended to benefit. It has a laudable aim—to help people off benefit into work—but what is the good of that if, as a result, people will be worse off, not better off? We need to know the answers and I shall listen with great interest to what the noble Baroness says.
  Earl Russell: My Lords, I am glad the noble Lord, Lord Higgins, has raised the issue again. At Report stage
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  he asked the Government's intentions. I admit that he did so somewhat in the manner of a 'Victorian heavy father—in fact, so heavy a father that perhaps he would not have been out of place in the previous Question. Nevertheless, it is an important matter of public policy on which this House and another place, as well as the world at large, are entitled to an answer. I hope that the Minister will give us one, and that she has been supplied with one by those whose consent she needs before she is able to give one. If she does not have one, T hope we may tentatively expect that other people who have not enabled her to give one might hear a little about it.
  The noble Baroness, Lady Carnegy of Lour, is using somewhat of a nuclear deterrent to try to obtain an answer in suggesting that it be used to hold up the Bill. We do need to know, but whether we need to know to the point of holding up the whole Bill is another question. I do not believe that we on these benches would take that view.
  When the noble Lord, Lord Higgins, refers to "this Government", I hope that he might perhaps be generous enough to amend his words simply to read "government". Government, independent of party, is an animal which does have certain institutional faults. Parties come and parties go, but the institutional faults tend to go on. I believe that if we blame any one party for them, we will tend to go astray.
  Having said that, I believe that this is a bigger issue than has been suggested. The Minister said on Report:
  "It is not a matter for this Bill".—[Official Report, 18/5/99; col. 242.]
  With respect, I do not find that view persuasive. This Government have shown considerable concern, rightly in my opinion, with the issue of poverty traps. This Government are concerned that work should be made to pay. While they may occasionally be a little obsessive in that aim, the aim itself is entirely justified.
  For people who need dentures, spectacles or recurring prescriptions, passported benefits can be an important part of their income. The Minister may remember the Child Support Act 1991. Her noble friend Lord Carter, no less, put down an amendment that women who came off income support and received maintenance instead should continue to receive passported benefits. Had the previous government been wise enough to accept that amendment, the number of women willing to co-operate with the Child Support Agency might have been a great deal higher than it has in fact been. Passported benefits, if lost, may create a considerable poverty trap.
  The effect of the Bill to get people into work will depend very heavily indeed on the answer that the Minister gives to this amendment. I therefore look forward to the answer with more than usual interest.
  Lord Swinfen: My Lords, passing this amendment will not delay the Bill further. The Bill has been amended in this House already and, therefore. must go back to the other place and be discussed there. It will be an ideal opportunity for right honourable and honourable Members in the other place to discuss it. However, I hope that the Minister will be able to give us an answer this evening.

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  I support everything said by my noble friend Lord Higgins when introducing the amendment. It is important for those currently on family credit, for the very poor and for those with disabilities whose disabilities cause them additional expense.
  Lord Freeman: My Lords, I support my noble friend Lord Higgins in Amendment No. 1. I follow the noble Earl, Lord Russell, in asking the Minister to enlighten your Lordships about the policy towards passporting.
  If the Minister would allow me to widen the question slightly by raising the issue of what the ultimate aim is, on 27th May the Chancellor of the Exchequer was reported to have said to the Institute for Fiscal Studies that there is now a new mission for the Treasury which includes the further integration of tax and benefits, guaranteeing a minimum income for those in work and paid through targeted tax cuts and tax credits.
  The principle of a negative income tax will be supported by many of your Lordships. However, the whole issue of passporting and integration raises fundamental questions which at earlier stages of this Bill your Lordships have addressed and to which we will doubtless return. For example, what are the implications for housing and child benefit? Are they to be paid via the working families' tax credit, as is mooted, certainly for housing benefit? Will the burden of administration be on employers from the beginning of the new financial year, 2000–01? Will the Treasury, as the Chancellor is reported to have said, work towards minimising the workload for businesses in paying passported and other benefits? Will the Government address the complicated issue of different tapers and different thresholds for different benefits—an enormously complicated area which will cost money to resolve? Finally, there is the element of compulsion. When we talk about "no benefit without work", is that really a principle that should be applied without due care and attention?
  The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, I recognise the concerns expressed in the House this afternoon, particularly those of the noble Lord, Lord Higgins, and the noble Earl, Lord Russell, on behalf of the Opposition Benches, which have been joined by others of your Lordships.
  I very much hope that the statement which I am about to make outlining the Government's proposals will fully address your Lordships' concerns. We are at Third Reading, and I realise that the convention is that when the Minister finishes it disposes of the issue. But, if the House agrees, I shall be happy to take a more relaxed view, because we have not had an opportunity to discuss this matter. Therefore, if any noble Lords wishes to come back to me, with your Lordships' consent, I shall be happy to seek to respond. I am in the hands of the House. If that would be helpful, it would allow the House a little more flexibility than would normally be the case at Third Reading.
  First, we are not disregarding the parliamentary process. As I said at both the Committee and Report stages, the passporting issue is a consequence of the
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  Bill. However, any legislation would still come before the House. Equally, any changes carried by regulations, which is the more usual way, would come before this House and the other House and would in the normal way be debatable.
  What I was seeking to say was not that this is not an important issue, but it is not an issue handled by putting words on to the face of the Bill. In other words, it is consequential, not primary. That is the distinction that I was seeking to make.
  We are all now familiar with the fact that recipients of income support, income-based jobseekers' allowance, family credit and disability working allowance qualify for help with certain other benefits, which we call passporting. The other benefits include, as the noble Lord, Lord Swinfen, told the House at Report stage, the NHS low-income scheme; welfare foods; the home energy efficiency scheme; the social fund; maternity and funeral payments; legal assistance and advice; court fees and remissions; and travel costs to visit relatives in prison. Of course, by far the most significant of these is the low income scheme for prescription charges. The income related benefits act as a proxy indicator of low income households.
  WFTC and DPTC tax credits will replace family credit and DWA from October this year. The Tax Credits Bill will simply substitute references to family credit and DWA legislation for a reference to either WFTC or DPTC. This will have the effect that, unless amended, where other departments' legislation specifies that recipients of family credit or DWA should qualify for help with other benefits, the reference will in future specify that WFTC and DPTC recipients should qualify for help with those benefits. In other words, if one does nothing, the current status quo becomes imported into the new tax credit scheme.
  However, the introduction of WFTC is a considerable policy change which, compared to family credit, leaves families very much better off. In that respect, with all courtesy, I challenge the noble Baroness, Lady Carnegy, when she suggests that families could be worse off. In fact, by moving on to WFTC, families will on average be £24 per week (or over £1,200 per year) better off.
  Baroness Carnegy of Lour: My Lords, I say to the Minister that I did not suggest that they would be worse off if they received all the benefits that they already get. If passporting was withdrawn, the working families' tax credit might have a negative effect. That is what I meant, although I may be wrong. I was not assuming that all the other benefits would continue.
  3.30 p.m.
  Baroness Hollis of Heigham: My Lords, it would be hard to conceive of a situation in which even if someone moved on to WFTC or came on to WFTC for the first time and did not receive passported benefits, he or she would be worse off. In any one week, in exceptional circumstances, there could be someone, I suppose, but the structure is so much more generous that that seems extremely unlikely.

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  There is no direct read-across to the income levels of those on family credit and WFTC. Simply and straightforwardly passporting all tax credit recipients would have extended the help provided by passported benefits much further up the income scale. In other words, had one done nothing or had one simply replaced WFTC and DPTC for the existing family credit and DWA, one would have taken free prescriptions well up the income scale to levels which most of your Lordships would think inappropriate. That would have been unfair on other households with low incomes not receiving passported help. That would be costly and the money could be used in other and, in my view, better ways.
  The issue, which I think your Lordships have accepted from the beginning, is where to draw the line between tax credit recipients who would receive passported help and those receiving WFTC who, by virtue of a relatively high income, are not given childcare credits and are not in the same financial need, and to do so in a way that is fair, identifies the appropriate target groups, is simple to operate and does not impose extra administrative burdens on the public or government. The issue is how to strike that balance.
  Our proposal is that tax credit recipients with net incomes of less than £11,250 a year or, gross, £14,300 a year will have rights to passported benefits while those with net incomes above that point will not. I shall go on to explain why we have decided on that figure in a moment. This will ensure that tax credit recipients with less than half the average family income will be guaranteed rights to passported benefits broadly replicating the existing system under family credit. In other words. the figures that currently apply in family credit will be broadly replicated within the new tax credit scheme. We expect other departments, in terms of the other passported benefits, to take this as the same income indicator.
  The new scheme will work very simply. Households in receipt of tax credits and with a net income below a specified level will continue to receive passported benefits. Those with net incomes above the specified level will not. The net income point will not depend on family size. There will be a single cut-off point, because of course the benefits do not concern children, as all children receive free prescriptions anyway, but affect only adults. It is the provision of free prescriptions for their parents that we are concerned about. We are proposing that the cut-off point will be set at £11,250, which represents a gross income of around £14,300 and broadly replicates the financial passporting figures within family credit.
  A cut-off at this point will mean that more than 1 million people of the WFTC caseload of 1.4 million or 1.5 million will receive passported benefits. However, it is fair to add, so that the House has a full account, that just under 400,000 of the full WFTC caseload will not receive passported benefits—those comprise families with moderate incomes but also include those families with relatively higher incomes who are eligible, because of high childcare costs, for WFTC.
  Lord Higgins: My Lords, will the noble Baroness kindly read the last paragraph again? It really is quite
  1310
  difficult to catch it. In particular, can she indicate how many people at the moment receive passported benefits? That will give us some idea of where we are in relation to that I million or 1.5 million people.
  Baroness Hollis of Heigham: My Lords, at the moment everyone on family credit and disability working allowance receives passported benefits. That is about 800,000 people. We are going up to a total client load of 1.4 million. The low-income scheme would break at about 1 million. Because WFTC is much more generous, particularly with childcare help, and very many more people come into it than come into family credit, we are saying that an estimated 1 million of those will be eligible for passported benefits and that 400,000 on WFTC will not be eligible. Does that help the noble Lord? I am sorry to throw figures at your Lordships, but I hope that you will understand that because we are moving to a differently structured but very mach more generous scheme, more people will come into the scheme even though those on higher incomes will not. We believe that this will represent help to low-income families broadly analogous to family credit figures without taking up resources which would be better spent elsewhere.
  I am sure that your Lordships will want to press me on how in practice such a scheme would work. From October 2000, the tax credit award notice will include a simple paragraph notifying recipients whether they qualify for help with passported benefits. In the interim, we are proposing that tax credit recipients will be able to establish their eligibility for passported benefits on the basis of the figure on the WFTC award notice showing the amount of tax credit withdrawn. That will work as follows. The notice will, as family credit notifications do now, show the maximum tax credit to which the recipient is entitled and how much of that has been withdrawn on the basis of the family's net income. The maximum credit a family is entitled to depends on factors such as age and the number of children. However, for a given net income the same amount of credit would be withdrawn for every family regardless of their maximum entitlement. The amount withdrawn, therefore, provides a unique proxy for any given level of net income.
  So, for a cut-off point of £11,250, tax credit recipients would have lost £70 of their maximum entitlement, and their maximum entitlement could go well beyond that if, for example, they had a large number of children and heavy childcare costs. But they would lose £70 of their maximum entitlement. That is why it is being done that way round. Where the award notice specifies that they have lost less than that £70 cut-off figure, they would qualify for passported benefits; where they had lost more than £70, they would not.
  Earl Russell: My Lords, I thank the Minister for giving way. Can she give a commitment that the cut-off figure will be annually uprated for inflation?
  Baroness Hollis of Heigham: My Lords, I cannot give a commitment but I would expect that to be

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  sympathetically considered. That is all I can say at this point. It is not a matter on which I have any authority. It is for the Chancellor to determine in his Budget, in discussion with the appropriate Secretaries of State, what he will do with all such benefits. But the figure would be sympathetically considered and reviewed, as are all other figures at the time of Budget Statements. The noble Earl knows what the Government's policy on family credit has been in the past.
  On the form there will be a figure showing the loss from maximum entitlement—and £70 is the cut-off figure in practice. If you lose more than £70, you would not qualify; if you lose less than £70, you would. This kind of negative image serves to allow people to know what their entitlement is. The noble Lord, Lord Higgins, looks baffled. Does he wish to intervene?
  Lord Higgins: My Lords, it is merely the paradoxical way in which what is now proposed will operate. Does the Treasury expect to gain or lose with regard to passported benefits?
  Baroness Hollis of Heigham: My Lords, this will cost extra by virtue of the fact that another 200,000 people are coming into the scheme. We expect the cost to be anywhere between £10 million in the first year, increasing to £40 million subsequently. Noble Lords can see that the scheme is more generous and more people are brought into it. That is why we are trying to get the right balance between how far up the income scale it goes while trying to avoid creating the situation that was feared by the noble Baroness, Lady Carnegy.
  I go on to explain how the system will work in practice. A tax credit recipient who wants a prescription will go to the pharmacist with an award notice, as he or she is now obliged to do theoretically with the family credit form. The pharmacist will check to see whether the amount of tax credit withdrawn is greater or less than the specified amount. A table will be available and the figure of £70 will be known to every pharmacist in the country. The pharmacist will decide whether or not to give a free prescription on that basis.
  Where the patient has physically lost the award notice a duplicate can be obtained from the Inland Revenue. Where the patient does not have an award notice at the point of seeing the pharmacist—perhaps he or she has forgotten it, or whatever—the pharmacist will tick the box on the prescription entitled "Evidence not seen". To combat false claims to exemption the Prescription Pricing Authority will carry out post-dispensing checks in appropriate cases. Checks of this kind are nothing new; they are carried out now for recipients of social security benefits who do not have evidence of an award at the point of dispensing. Those interim arrangements will last for only one year. From October 2000 tax credit recipients will receive notification automatically on their award notice of whether or not they will get help with passported benefits.
  Lord Freeman: My Lords, the Minister has explained the position very clearly. Can she give noble Lords any indication that she will ask officials to look
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  again at bringing forward to the beginning of the tax year, when employers take on responsibility for payment of working families' tax credit, what appears on its face to be a complicated arrangement rather than wait until October 2000, which is almost a year and a half from now? I would have thought that it was possible to save the double complexity between commencement of the obligation on employers and full integration of the system.
  3.45 p.m.
  Baroness Hollis of Heigham: My Lords, I hope to be able to come back to that point. These arrangements last for one year. From October 2000 tax credit recipients will receive notification automatically on their award notice as to whether or not they will get help with passported benefits. All they have to do is show the pharmacist the relevant paragraph of their award notice. We must ensure that the arrangements are properly and clearly explained to tax credit recipients, especially in the interim period. The Revenue will be discussing with the various departments how best to provide such information.
  I respond to the point raised by the noble Lord, Lord Freeman. The matter has been explored. The best advice that I can give the noble Lord is that the practical arrangements cannot be brought forward before October 2000. Given that, I am afraid that I cannot give the commitment that he seeks. Obviously, I shall pursue this further with officials. If in the course of the next year there is any possibility of this being done obviously it will be a sensible and worthwhile point with which to deal. If we can do it we shall do so, but I am not now in a position to give such a commitment.
  The arrangements for income-limited passporting that I have announced will not, however, apply to Social Fund maternity and funeral payments administered by the DSS. At the time of the Budget the Chancellor announced that maternity payments would be doubled as part of the Government's commitment to supporting families when they need it most. These payments are made to help parents meet the essential costs of new-born children when they are at their most vulnerable. It is also the time when families are likely to experience a considerable drop in income as parents take time out of work in the months immediately following the birth. In addition, the Social Fund operates separate capital rules which restrict eligibility for these payments even among families in receipt of qualifying benefits or tax credits. Therefore, I am happy to say that the Government have decided to continue to make all tax credit recipients eligible for these Social Fund payments.
  To conclude, the Government believe that the arrangements that I have outlined will provide a simple and fair scheme to identify the appropriate target group for passported benefits targeted specifically on low income families. Their strategy will not undermine the message that work pays, impose extra administrative burdens or require more forms to be filled in by either tax credit recipients or the Government; in other words, it builds on the paper practices that currently exist for

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  family credit. It will provide transparent and fair support to those families that need it. I hope that all noble Lords will agree that the Government have struck a decent and fair balance in trying to devise a scheme that protects those on low incomes without passporting those, going all the way up WFTC, who might otherwise be eligible. In the light of that, I hope that the noble Lord, Lord Higgins, will feel able to withdraw his amendment.
  Earl Russell: My Lords, with the leave of the House, I should like to thank the Minister very warmly for the care with which she set out the detail before us. It is one of the disciplines of opposition that when asking questions one must try to think what one might have done in the Minister's position. I am not in a position to answer that finally; I do not have the kind of information that is available to the Minister. But the kinds of problems that the noble Baroness has identified and the principles on which she has solved them are ones about which, in the light of those remarks, I do not feel in any position to complain. We are therefore in any further debate arguing about detail within a fairly narrow area.
  As to how many people would be worse off if they lost passported benefits, I ask the Minister to consider expenses such as dentures and spectacles where payment may be required all at once in a lump sum. That may be difficult for some people. Especially in the light of the difficulties of NHS dentistry, new dentures may on occasion cost up to £500 a time. If they and new spectacles should be needed at the same time, somebody even on a perfectly reasonable income may be in considerable difficulty.
  I have been trying to work out in my own mind whether it would be possible to use the kind of system of instalment credit that is employed on ordinary benefits. I can see a lot of difficulties in the way of that. I am in no position to say whether or not those difficulties are insuperable. I hope that the Minister will consider that question with the range of information that is not available to me.
  As to uprating, I understand why the Minister had to say what she did. I ask a question to which I hope she can respond. Will the Minister draw our exchanges about uprating to the attention of her right honourable friend the Chancellor of the Exchequer, remind him that she has had many such exchanges in this Chamber in the past and that, if his ears are weak, she might have many more to come? I hope that she does not.
  Baroness Gardner of Parkes: My Lords, I do not know whether it is in order for me to intervene. As a dentist I cannot accept the statement just made about the cost of dentures.
  Baroness Hollis of Heigham: My Lords, I am aware that the present arrangements for dentistry under family credit will apply also under WFTC to those who qualify for passported benefits by virtue of the low income scheme.
  Lord Higgins: My Lords, we have become familiar with the way in which the noble Baroness replies to these debates. I believe that even by her high standards,
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  admittedly with a brief in front of her, the Minister has given a virtuoso performance. I cannot offhand think of any Minister who would be likely to be able to do it as well. Having said that, the noble Baroness has had an extremely difficult task over recent months in getting any decision—I was going to say "any sense—out of her colleagues in other departments. While, as the noble Earl, Lord Russell, points out, the system as between one administration and another tends to work much the same, it is quite clear that in this case the system appears to have broken down, with the result that we have had to wait to this late stage in the Bill—iterally the eleventh hour—before we have had an answer. The answer is extremely complicated.
  I am left in something of a dilemma. One is up against the buffers, which is always a difficult position in which to find oneself. I remember lain Macleod saying that he agreed with Enoch Powell on everything but always got off one station before the train hit the buffers. We are up against the buffers in terms of reacting to what the Minister has said.
  I am somewhat influenced by one point: will it cost the Treasury more or less as regards passported benefits? The answer was that it would cost the Treasury more. I am prejudiced initially to believe that it is a good rather than a bad deal. (I no longer hold my Treasury halo!) If I understood the Minister correctly. it is likely that more rather than less families will benefit. I am glad that the noble Baroness indicates that that is so.
  Baroness Hollis of Heigham: My Lords, perhaps I may give the noble Lord the figures. We expect at least another 115,000 families to benefit.
  Lord Higgins: My Lords, that persuades me not to press this matter to a Division. I am reinforced in that view by what the noble Baroness said about maternity payments and the Social Fund.
  While it is always dangerous to give an answer on a matter of this kind off the top of one's head, I believe at present that we should let the matter pass in the hope that the Government implement what they have said. As the noble Baroness rightly points out, we shall have statutory instruments. I put in a tiny caveat. I am slightly unnerved to discover that your Lordships do not vote against statutory instruments. If the instrument turned out to be wrong, I should not like to have second thoughts. By putting down the earlier amendments I sought to assist the Minister to get decisions from colleagues. In the same way, I hope that that comment may encourage them to produce satisfactory statutory instruments.
  It is a highly complex matter. As my noble friends said—my noble friend Lord Freeman raised other points—these are matters of great importance to individuals who cope in their everyday lives with illness or whatever it may be. None the less, in the light of what the Government have said, and with some slight trepidation—I hope that I am making the right decision—I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 2 [Transfer of functions relating to tax credits]:
  Lord Astor of Hever Lord Astor of Hever moved Amendment No. 2:
  Page 1, line 18, after ("(2)") insert ("and section 5(1A)")
  The noble Lord said: My Lords, in moving Amendment No. 2, I speak also to Amendment No. 9.
  The Minister told the House at Report stage that the Government regard this issue with great concern. However, the reality would seem to be somewhat different. First, I had assumed in the light of the Minister's offer at Report stage, which I accepted, that the Lord Privy Seal would write to me. Twenty-one days later, I have received nothing. This seems surprising since the noble Baroness, Lady Jay, is the Minister for Women and sits on the ministerial committee overseeing the Violence Against Women Crime Reduction Programme. Although the Government claim to be making the issue of violence against women a priority, it requires far more than words; it requires practical attention to detail.
  This pattern of empty rhetoric has a precedent with this Government. In June 1996 the Labour Party published a policy document, Governing for Equality, in which they promised on their assumption of office a Minister for Women in the Cabinet with a clear and powerful mandate, a strong monitoring role and a commitment to take women's interests seriously at the highest level. Despite all that, this Minister for Women appears, certainly to me, to regard the threat posed by hereditary Peers as a greater priority than taking women's interest seriously at the highest level.
  Secondly. I have read Hansard carefully. The Minister did not address the point of our amendment at Report stage: that it should be made clear on the application form that the Inland Revenue may accept a form without the man's signature where domestic violence is feared. Recent authoritative research has found that money paid directly to mothers is more likely to meet family needs, while men use some of their income as personal spending money. No sensible person can possibly disagree with these findings.
  So far the Government's answer to this problem is to give couples a choice as to which of them receives the payment. If one believes that this is a solution, one must assume that those men who would misspend the money will suddenly recognise their failings and agree that the money should be paid to the woman. Would the most overbearing and violent men agree to such a rational and progressive stance? Surely this is highly unlikely. I have been shown a large number of heartrending cases by the professional organisations which are advising us, working in the field of domestic violence. They witness these problems every day.
  That is why we move the amendments. They require the Government to make clear on the forms that an application can be made by the woman alone if she fears the threat of domestic violence. There is a similar recognition of the problem of domestic violence in the system of child support maintenance. If a parent with
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  care fears domestic violence she can argue that she should be exempt from the requirement to co-operate with the CSA.
  I was particularly grateful that the noble Lord, Lord Goodhart, supported at Report stage the spirit behind our amendment and agreed that there may be exceptional cases where it would be desirable to have the possibility of applying without reference to the working partner. The noble Lord was concerned that if our amendment were adopted, there could be the risk that it would merely postpone rather than avoid incidents of violence to the point where the working violent man discovers that his partner has already claimed the credit. This was a valid point. However, the clear advice that we have received is that the mother is the person to decide whether this approach will make the matter worse.
  The Labour Party manifesto stated the laudable objective to keep under continuous review all aspects of the tax and benefits systems to ensure that they are supportive of families and children. The Minister said at Report stage that the Government recognise that domestic violence occurs and do what they can to ensure that children are protected and enjoy a decent quality of family life. In the light of this, surely in families where the man is potentially violent the payment choice should be made in the interests of the children. I very much hope that the Minister will recognise that there is a problem and will accept our amendment which addresses the issue. I beg to move.
  Earl Russell: My Lords, the Minister will probably say that this is not the best way of doing this. I sometimes suspect that Ministers say that in their sleep. The trouble is that they are sometimes right. If the Minister says that this is not the best way of doing it, I shall listen carefully if the noble Baroness at the same time can show us a better way in which the objective of the amendment can be achieved.
  In general, on the subject of domestic violence this Government have shown a heart in the right place, although they have not always remembered the reverse biblical maxim: where thy heart is, there should thy treasure be also.
  The other trouble—it is a constant trouble in cases of domestic violence—s that even where among the authorities there is the best will in the world, the ordinary bureaucratic requirements of the state assume that people live in stable habitations in stable arrangements. They simply do not fit a situation in which the woman's safety is at considerable risk if she makes contact with the man with whom she has been living. That happens in many bureaucratic contexts and it happens in the requirement to produce documents before obtaining benefit. It happens in the requirement to produce a partner's national insurance number. If the Bill goes ahead in its present form, inevitably, it will happen in the requirement to obtain two signatures, one from each partner.
  It is not a satisfactory situation if, when you leave home in a state of intense physical fear, you cannot get any money for yourself or your children except by

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  making a personal approach to the object of that physical fear. Even communication through an intermediary carries risks. Women's refuges tell stories of violent partners discovering their former partners' whereabouts through the most respectable means of communication. There were people who with the best will in the world simply did not realise how important it was to keep the victim partner's whereabouts secret. That is inevitable and one understands it. But it is the duty of people in responsible positions to try to guard against it. This amendment is an attempt to meet that danger. Whether it is the best attempt that can be made, I do not know and I do not presume to say. But if it is not, I hope that the Minister can show us a better one.
  4 p.m.
  Baroness Carnegy of Lour: My Lords, I do not believe that the Government and, sadly, the noble Baroness the Lord Privy Seal, the Minister for Women, have taken on board the problems that exist. Frankly, it is dodging the issue to say that the requirement should not be on the face of the Bill. Anyone who sits on, or has sat on, the Bench knows how often the situation arises that, for whatever reason, a man insists that he should receive the tax credit and then proceeds, perhaps, to spend the money on, say, drink. That is especially the case when the wife is too frightened to stand up for herself because of the frequent domestic violence that occurs.
  I do not believe that noble Lords need to read all the briefing material they have received in order to know that the problem occurs often. They are probably familiar with it among acquaintances in the area in which they live. In fact, if the problem arises the Bill may fulfil part of its purpose; the tax credit may well induce the man to come off benefit and to take up work. However, the only benefactor will be, say, the drinks industry.
  The enormous disadvantage to a family of gaining a tax credit and it being spent on, say, drink by the man—the wife being too frightened to do anything about it—would carry huge social costs as well as costs in misery to the family.
  I believe that the provisions should be put on the face of the Bill. It is no good the Government saying that the Inland Revenue will pay attention to the danger and so forth. Citizens' advice bureaux and lawyers need to know that the provision is in the legislation. People need to know where they stand. I hope that the Government will accept the amendment because it is very important.
  Baroness Hollis of Heigham: My Lords, first, I apologise to the noble Lord, Lord Astor, because he should have received a reply to his question by now. On behalf of the Government, I express my regret, and I will follow the matter up. I understood that he was receiving a written reply about the Government's initiatives on domestic violence. His request slipped through the net and I apologise; it should not have happened.
  I am rather moved and pleased that the House shares the concerns of the Government—or the Government share the concerns of the House—on the issue of
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  domestic violence. There is no dispute or difference between us on that. I sit on the inter-ministerial committee, chaired by my noble friend Lady Jay, as a representative of the Department of Social Security. I have also undertaken work for the Government on issues of domestic violence. Therefore, I, too, am committed to ensuring that we do our best to help couples to overcome the situations in which domestic violence occurs, unfortunately now drink and drugs-related. We are also committed to ensuring that where the problem is not able to be addressed through anger management courses or the like, the women partners and the children are protected in all such cases. Wearing another hat, in connection with changes to the child support system, the Government's views have shifted in response to representations that women who are at risk, or believe themselves to be at risk, are properly protected. I give assurances to that effect; there is no dispute between us about the need to protect women in that situation.
  Perhaps some of the more difficult situations described by the noble Earl, Lord Russell, and the noble Baroness, Lady Carnegy, arise when the couple are not living together as a household but where the woman has already felt the need to leave the marital home in order to secure a place of safety. In that situation, she tends to be a lone parent family.
  Earl Russell: My Lords, it was my understanding that the amendment was intended to bite in precisely the situation which arises during the few weeks after the woman leaves home.
  Baroness Hollis of Heigham: My Lords, perhaps I may seek advice on that. Amendments Nos. 5 and 6 were grouped with this amendment. However, the noble Lord, Lord Higgins, as was entirely his right, decided to separate them. They deal with the related issue of who should receive the working families' tax credit and how we should design a system to enable those who need the help that it offers to claim it.
  The two amendments deal with a more particular issue of ensuring that people know about procedures which have already been described here and in another place. Amendment No. 9 seeks to require the Inland Revenue to take reasonable steps to ensure that potential claimants who fear domestic violence are aware that they can submit a claim without their partner's signature.
  The Inland Revenue's dispute procedures, which have already been described to the House, will have a much wider scope. If I have any criticism of the amendment it is that it is too narrowly drawn. The experience of the Inland Revenue is somewhat limited because there is seldom a dispute over family credit. Domestic violence is not at the core of the issue because the argument tends to be about family management of resources and the like. In such a case, the money goes to the woman, which will be our procedure, too. Our disputes procedure is not just for those couples where there is fear of domestic violence, but for any couple who cannot agree which one of them should receive the money.

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  It is important to emphasise that we were never seeking to narrow the gateway only to domestic violence. We are going much wider than that. We are saying that, when both agree, the money will be paid to the partner in work. Where they disagree, inquiries will be followed up and the money will be paid to the carer of the children, normally the mother. If there is a dispute, the money will certainly be paid to her. Within that category of dispute are all such situations of domestic violence.
  Therefore, we have made it clear that by default, or in dispute, the money goes to her. It goes to him, even though he is the main earner, where both are in agreement. We want it to go to him because we believe that the credit should be an incentive to work, even at modest wages, and to see a clear benefit from being in work. We have balanced that against the need in disputes or by default to protect the position of women whose children remain in their primary care. We believe that we have already done that.
  The thrust of the amendment is to ensure that the Inland Revenue is open about the disputes procedure so that it is available to the women who most need to take advantage of it. I agree that the procedure is there to be used. It is there to address the problems and to ensure that, where disputes occur, the partner caring for the children receives the tax credit. We expect the need for that to be exceptional and we expect most women to agree with what we propose. However, we must capture the exceptions and, where appropriate, the disputes procedure can be used.
  I was pressed on this subject at earlier stages, including by my noble friend Lady Turner. I was happy to give an assurance that the forms to be used after the interim period will be amended to cover the point raised by this amendment. However, in practice, there is more to this. The key is that any carer who is afraid, or simply does not agree that the other partner should receive WFTC, need not sign a form completed by the partner in work and they may submit their own, signed only by them. I believe that the point is fully met.
  The second related issue is that people need to know that that is the case. I gave an assurance on the revised forms for next year, which will come into use from October 2000. The revised notes of guidance, which came about partly as a result of discussions and pressures within your Lordships' House, will give specific reference to the disputes procedure, making the position of women clear. We shall consider whether we need to specify domestic violence as such. At the moment, women suffering domestic violence constitute a smaller group within a wider disputes and default procedure, which goes much further than these amendments.
  We shall revise the forms to make matters clear. The internal guidance will be open to the public; we shall give guidance to the CAB; we shall make specific reference to the disputes procedure in the regulations to alert such organisations; and, of course, we have the debates in the House. Given that the forms will be amended in response to discussions in your Lordships'
  1320
  House, that staff will be ready to pick up potential cases and advise people on procedure, that changes will be made to the regulations, that there will be public access to internal guidance and to considering the profile that that procedure will undoubtedly achieve, I am pretty confident that people at the point of need will be aware of their rights.
  Baroness Carnegy of Lour: My Lords, with the leave of the House, I thank the Minister for giving way. The noble Baroness has said that the Government have taken the matter of domestic violence into account. Does she, with all her experience—the Minister for Women, who also has great experience in this area, is now sitting beside her—appreciate that, where there is domestic violence, the wife will sign the form, and there will be agreement. Unless it is against the law and somebody can do something about it, it will happen. Where there is domestic violence the wife will not refuse to sign; she will agree.
  Baroness Hollis of Heigham: My Lords, I believe it will be very difficult to lever open a situation where the woman is so physically or emotionally battered that she colludes with her husband's violence, in the sense of signing forms that she would rather not sign. At present the woman has positively to sign the form for her partner to get the money. If she fails to sign the form or puts in her own form, she will receive WFTC.
  I find it difficult to conceive how you can do more to protect a woman in that situation, on the grounds that all she has to do is to take no action and there is a presumption of enquiry and a presumption, ultimately, that the money will go to her. I honestly do not see how we can help if she signs the form, without someone knocking on the door and asking, "Did you really mean to sign it?" If the noble Baroness has any suggestions for meeting that situation, I will be very happy to hear them.
  If the woman signs the form, there is no way for any agency to make a distinction between that couple and a couple living harmoniously, unless they go by gossip on the grapevine, newspaper cuttings, black eyes or police reports. I do not think that is a road we can usefully go down. If the woman does nothing, the money will ultimately go to her. In terms of protection, it seems to me that is as far as any more bureaucratic system can devise. If she is so battered in that sense, one would hope that family members would advise her, if necessary, to leave home altogether.
  Baroness Carnegy of Lour: My Lords, if it were against the law for the husband to insist that his wife signs the form, in certain circumstances, the woman, having signed the form, because she is too frightened not to, could go to the citizens' advice bureau, which could look into the matter legally. If this matter is not on the face of the Bill, that could not happen. I may be wrong, but that seems to me to be the simple solution.
  Baroness Hollis of Heigham: My Lords, we shall check on whether she can subsequently nullify a form which she has already signed on the grounds that she has had a change of mind. My belief is that under

  1321
  WFTC that is possible now, but I shall check. If I cannot give the noble Baroness an answer now, I shall write to her. I am hoping that your Lordships will agree that we all want this protection that we have put in place not just for the somewhat rarer cases of domestic violence, but for the wider issues of dispute and default, given that the guidance will be amended as from next year, in response to pressure from noble Lords. I hope that the noble Lord, Lord Astor, will feel able, in the light of that, to withdraw his amendment.
  Lord Astor of Hever: My Lords, I thank the Minister for her response. Of course, I am happy to accept her apology on behalf of her noble friend the Lord Privy Seal. Unfortunately, I feel that the response of the Minister fails, by a wide margin, to address the real concerns of women and the professional organisations advising us with regard to domestic violence in the context of this Bill. However, the Opposition, and clearly the Liberal Democrats, take this matter extremely seriously. We are not prepared to leave the matter to chance.
  Earl Russell: My Lords, the noble Lord, Lord Astor, has used the name of our party. We have listened carefully to the Government's reply. What does the noble Lord think is wrong with it?
  Lord Astor of Hever: My Lords, I shall come to that. Maybe I misunderstood the noble Lord's support for us earlier.
  We on these Benches and the organisations who work at the coal-face of domestic violence feel very strongly that this matter must be on the face of the Bill. Accordingly, I wish to test the opinion of the House on this amendment.
  4.17 p.m.
  On Question, Whether the said amendment (No. 2) shall be agreed to?
  Their Lordships divided: Contents, 113; Not-Contents, 153.

  Division No. 1

  CONTENTS

  Addison, V.

  Carnock, L.

  Ailsa, M.

  Carr of Hadley, L.

  Alton of Liverpool, L.

  Charteris of Amisfield, L.

  Archer of Weston-Super-Mare, L.

  Chesham, L.

  Ashbourne, L.

  Clanwilliam, E.

  Astor of Hever, L.

  Clark of Kempston, L.

  Attlee, E.

  Cope of Berkeley, L.

  Belhaven and Stenton, L.

  Cowdrey of Tonbridge, L.

  Berners, B.

  Cox, B.

  Birdwood, L.

  Darcy de Knayth, B.

  Blatch, B.

  Davidson, V.

  Boardman, L.

  Dean of Harptree, L.

  Brentford, V.

  Dixon-Smith, L.

  Bruntisfield, L.

  Dundee, E.

  Burnham, L. [Teller.]

  Ellenborough, L.

  Butterworth, L.

  Elles, B.

  Cadrnan, L.

  Elton, L.

  Campbell of Alloway, L.

  Ferrers, E.

  Carnegy of Lour, B.

  Freeman, L.

  1322

  Garel-Jones, L.

  Moyne, L.

  Geddes, L.

  Murton of Lindisfarne, L.

  Gisborough, L.

  Norrie, L.

  Gray, L.

  Northesk, E.

  Hanningfield, L.

  O'Cathain, B.

  Harding of Petherton, L.

  Oppenheim-Barnes, B.

  Harlech, L.

  Oxfuird, V.

  Harmar-Nicholls, L.

  Park of Monmouth, B.

  Harmsworth, L.

  Pearson of Rannoch, L.

  Harrowby, E.

  Pender, L.

  Henley, L, [Teller.]

  Peyton of Yeovil, L.

  Higgins, L.

  Rawlings, B.

  HolmPatrick, L.

  Reay, L.

  Howe, E.

  Rees, L.

  Jenkin of Roding, L.

  Renfrew of Kaimsthorn, L.

  Jopling, L.

  Renwick, L.

  Kinnoull, E.

  Roberts of Conwy, L.

  Knight of Collingtree, B.

  Rotherwick, L.

  Knollys, V.

  St. Davids, V.

  Lauderdale, E.

  Sanderson of Bowden, L.

  Long, V.

  Sandford, L.

  Lucas, L.

  Sandys, L.

  Lyell, L.

  Seccombe, B.

  Lytton, E.

  sharples, B.

  McColl of Dulwich, L.

  Shaw of Northstead, L.

  MeConnell, L.

  Skelmersdale, L.

  Mackay of Clashfern, L.

  Strathcarron, I,.

  Manton, L.

  Strathclyde, L.

  Marlesford, L.

  Sudeley, L.

  Mayhew of Twysden, L.

  Swinfen, L.

  Miller of Hendon, B.

  Thomas of Gwydir, L.

  Molyneaux of Killead, L.

  Trumpington, B.

  Vivian, L.

  Monckton of Brenchley, V.

  Waddington, L.

  Monro of Langholm, L.

  Wakeham, L.

  Montgomery of Alamein, V.

  Westbury, L.

  Mountevans, L.

  Wharton, B.

  Mowbray and Stourton, L.

  Young, B.

  NOT-CONTENTS

  Addington, L.

  Dholakia, L.

  Ahmed, L.

  Dixon, L.

  Allenby of Megiddo, V.

  Donoughue, L.

  Alli, L.

  Dormand of Easington, L.

  Amos, B.

  Dunleath, L.

  Ampthill. L.

  Evans of Parkside, L.

  Archer of Sandwell, L.

  Evans of Watford, L.

  Ashley of Stoke, L.

  Ewing of Kirkford, L.

  Barnett, L.

  Ezra, L.

  Bassam of Brighton. L.

  Falconer of Thoroton, L.

  Berkeley, L.

  Falkland, V.

  Blackstone, B.

  Farrington of Ribbleton, B.

  Blease, L.

  Geraint, L.

  Borrie, L.

  Gilbert, L.

  Bragg, L.

  Gladwin of Clee, L.

  Brooke of Alverthorpe, L.

  Glanusk, L.

  Brookman, L.

  Glenamara, L.

  Bruce of Donington, L.

  Gordon of Strathblane, L.

  Callaghan of Cardiff, L.

  Goudie, B.

  Calverley, L.

  Gould of Potternewton, B.

  Carlisle, E.

  Graham of Edmonton, L.

  Carter, L. [Teller.]

  Grenfell, L.

  Christopher, L.

  Grey, E.

  Clarke of Hampstead, L.

  Hacking, L.

  Clement-Jones, L.

  Hanworth, V.

  Clinton-Davis, L.

  Hardy of Wath, L.

  Cocks of Hartcliffe, L.

  Harris of Greenwich, L

  Colville of Culross, V.

  Harris of Haringey, L.

  Crawley, B.

  Hayman, B.

  Currie of Marylebone, L.

  Hilton of Eggardon, B.

  David, B.

  Hogg of Cumbemauld, L.

  Davies of Coity, L.

  Hollis of Heigham, B.

  Davies of Oldham, L.

  Hoyle, L.

  Dean of Thornton-le-Fylde, B.

  Hughes, L.

  Desai, L.

  Hughes of Woodside, L.

  1323

  Hunt of Kings Heath, L.

  Prys-Davies, L.

  Hylton-Foster, B.

  Puttnam, L.

  Irvine of Lairg, L. [Lord Chancellor.]

  Ramsay of Cartvale, B.

  Rea, L.

  Jay of Paddington, B. [Lord Privy Seal.]

  Redesdale, L.

  Rendell of Babergh, B.

  Jeger, B.

  Richard, L.

  Jenkins of Hillhead, L.

  Rodgers of Quarry Bank, L.

  Judd, L.

  Russell, E.

  Kennet, L.

  Sandberg, L.

  Kinloss, Ly.

  Sawyer, L.

  Kirkhill, L.

  Scotland of Asthal, B.

  Lockwood, B.

  Sewel, L.

  Lofthouse of Pontefract, L.

  Sharp of Guildford, B.

  Longford, E.

  Shepherd, L.

  Lovell-Davis, L.

  Shore of Stepney, L.

  McCarthy, L.

  Simon, V.

  Macdonald of Tradeston, L.

  Simon of Highbury, L.

  McIntosh of Haringey, L. [Teller.]

  Smith of Gilmorehill, B.

  Stoddart of Swindon, L.

  Mackie of Benshie, L.

  Strabolgi, L.

  McNair, L.

  Strafford, E.

  McNally, L.

  Symons of Vernham Dean, B.

  Maddock, B.

  Taverne, L.

  Mallalieu. B.

  Taylor of Blackburn, L.

  Marsh, L.

  Taylor of Gryfe, L.

  Mason of Barnsley, L.

  Tenby, V.

  Milner of Leeds, L.

  Thomas of Macclesfield, L.

  Mishcon, L.

  Thomas of Walliswood, B.

  Molloy, L.

  Thomson of Monifieth, L.

  Monkswell, L.

  Thornton, B.

  Montague of Oxford, L.

  Thurlow, L.

  Morris of Castle Morris, L.

  Tomlinson, L.

  Morris of Manchester, L.

  Tordoff, L.

  Murray of Epping Forest, L.

  Turner of Camden, B.

  Napier and Ettrick, L.

  Varley, L.

  Nathan, L.

  Walker of Doncaster, L.

  Newby, L.

  Wallace of Saltaire, L.

  Orme, L.

  Weatherill, L.

  Paul, L.

  Whitty, L.

  Peston, L.

  Williams of Crosby, B.

  Pitkeathley, B.

  Williams of Elvel, L.

  Ponsonby of Shulbrede, L.

  Williams of Mostyn, L.

  Resolved in the negative, and amendment disagreed to accordingly.

Kosovo and the Cologne Summit
4.27 p.m.
Baroness Jay of Paddington: My Lords, with the leave of the House, I will repeat a Statement being made in another place by my right honourable friend the Prime Minister. The Statement is on Kosovo and the European Council and is as follows:
"With your permission, Madam Speaker, I would like to make a Statement on two subjects: Kosovo and the European Council in Cologne which I attended on 3rd and 4th June, accompanied by my right honourable friends the Foreign Secretary and the Chancellor of the Exchequer. The conclusions of the Council are being placed in the Library of the House.
"A large part of the European Council was taken up with the crisis in Kosovo. President Ahtisaari came straight from his mission to Belgrade to brief the Council.
"The peace plan which he and the Russian Special Envoy presented to Milosevic was accepted by the Serb Parliament and the Federal Yugoslav
1324
Government on 3rd June. The plan incorporated all of NATO's demands. It provided for the immediate and verifiable end to violence in Kosovo; the withdrawal of all military, police and paramilitary forces according to a rapid timetable: the deployment of an effective international security presence; and a civil administration. The document specified that in any such force the substantial participation would be that of NATO and that there would be unified command and control. The force would be authorised to establish a safe environment for all the people in Kosovo and to facilitate the safe return of all displaced people and refugees.
"So the document presented by President Ahtisaari embodied all the conditions set by the international community: all Serb forces come out; an international force with NATO at its core goes in; the refugees go home in peace and safety. But we did not take Milosevic's assurances on trust. The Balkans are littered with his broken promises. That is why NATO has insisted all along that the bombing will not stop until a full and verifiable withdrawal of all Serb forces from Kosovo has begun.
"To give us the certainty we need about Serb withdrawal, the commander of NATO's forces in Macedonia, General Sir Mike Jackson, met representatives of the Federal Yugoslav military on the border of Blace on 5th and 6th June. Those talks ended early on 7th June after the Yugoslav side repeatedly failed to accept the document put forward by NATO. Instead, they tried, among other things, to insist on large numbers of Serb troops remaining. This was unacceptable. However, this morning the Foreign Secretary and his colleagues from the G8 group of countries completed their work on the text of a Security Council resolution.
"I can confirm to the House that agreement has now been reached in the G8 on a text which enshrines the peace plan and its detailed terms. The text is strong and clear and meets our requirements. It will now go forward to the Security Council. It comes under Chapter VII of the UN Charter, which means that the resolution will be legally binding on the Federal Republic of Yugoslavia and authorises, through its detailed provisions, the use of force to ensure its implementation. It requires in particular the withdrawal of all Serb forces from Kosovo and authorises the deployment of our forces as part of a substantial NATO component in the international security presence, which will have a unified chain of command. The members of the G8 who are also on the Security Council—the US, Russia, Britain, France and Canada—have agreed that they will co-sponsor the draft.
"If we need any reminder of the regime we are dealing with, let me give the House one account delivered by a refugee when the UK Government's War Crimes Co-ordinator, David Gowan, visited the Albanian and Macedonian refugee camps last week. A professional man in his late 30s/early 40s said that he was one of more than 2,000 men picked up by Serb forces in early May in villages south of Pristina. They were separated from their families, beaten and

1325
transferred to the prison at Mittrovica. The prisoners were forced into cells and made to stand, shoulder to shoulder, for 24 hours without food, water or access to a lavatory. They were beaten again systematically in the prison. Yet still he said that he was among the lucky ones. He had witnessed summary executions when he was detained at the village of Vushtria and had heard reports of a mass execution of 103 men at a nearby village of Studime. So when the refugees say they want to be sure that the Serb troops will go out and our troops will go in to guarantee their safety, it is not hard to understand why.
"The next step will be further military talks to put in place the necessary technical agreement and they are taking place today at Blace. Given the progress on a Security Council resolution, there is no excuse for the FRY authorities to drag their feet again. Provided the Serbs now, at long last, honour their undertakings and begin a verifiable withdrawal of their forces, NATO bombing can be suspended, the Security Council resolution passed and the international force can start to deploy into Kosovo before the end of this week.
"It is time Milosevic realised that the longer he tries to draw this out, the longer and harder his forces will be hit. We have only achieved this agreement by showing total resolve and determination. We shall need to be as resolved and determined now in implementing it. We are close to having all the elements in place. But until we are certain President Milosevic has embarked on the withdrawal of all his forces, NATO's military action will continue.
"We can also now start planning in earnest for the reconstruction of the Balkans to give the peoples of the region the security and prosperity needed to avoid future wars. The future of these front-line states, many of which I have visited in the past few weeks, should he one of peace and prosperity, not ethnic conflict. The people of a democratic Serbia can also benefit from reconstruction and integration into the mainstream of Europe. But let me be clear: that cannot happen while there is a nationalist dictator in power in Belgrade. Until Milosevic goes, Serbia cannot take its true place in the family of world nations.
"Events in Kosovo overshadowed other issues at the European Council. But other important work was clone too. The European Council appointed Javier Solana to the new post of Secretary-General of the Council and High Representative for Common Foreign and Security Policy. Mr. Solana is a friend of Britain and a highly capable operator, as we have seen during the Kosovo crisis. His new appointment will boost the effectiveness and the credibility of the Common Foreign and Security Policy and I warmly welcome it.
"There was a full discussion of economic policy. The European Council unanimously reaffirmed that sustainable, non-inflationary growth and increased employment required comprehensive structural reforms at EU and national levels. The message is
1326
clear in the broad economic guidelines which the European Council approved and in the new European Employment Pact.
"So far as the future development of the Union is concerned, the European Council took a number of important steps. It heard a strong statement from the president elect of the Commission about his plans for reform of that institution. The European Council pledged its full support for Mr. Prodi's approach to reform.
"The European Council welcomed the new European Anti-Fraud Office agreed upon at the ECOFIN Council on 25th May which will permit the Union to step up the fight against fraud, corruption and mismanagement. Agreement was reached on the further development of a common European security and defence policy, building on the ideas which I outlined last year and which were warmly endorsed by NATO at its Washington Summit in April.
"The European Council confirmed that an intergovernmental conference will be called early next year to resolve the issues which were left open at the Amsterdam European Council and which need to be settled before enlargement. The European Council also endorsed an initiative by Prime Minister Guterres of Portugal to convene next March, under the Portuguese presidency, a special meeting of the European Council. This will be entirely devoted to economic reform and employment. The initiative As very welcome and follows the call for such an event at the Anglo-Spanish Summit on 10th April.
"We are making real headway in promoting economic reform in Europe which, as I have repeatedly said in this House, is essential to ensure sustained growth and the unqualified success of the single currency.
"The Council rejected the notion of ending tax competition or of the harmonisation of business and income taxes. Instead, sensibly, it decided merely that harmful tax competition should be avoided and it actually advocated lower business and labour costs. Unfortunately, though we had the support of 13 out of the 14 other member states, we could riot reverse the duty-free decision taken by the previous government in 1991 since they had agreed to it being reversible only if there was unanimity.
"So at the Council as a whole substantial progress was made on economic reform, but it was, rightly and understandably, dominated by Kosovo. Let us hope that the process begun at this Council and taken forward today at the G8 will come swiftly to a secure and just conclusion, ending the obscenity of ethnic cleansing and obtaining justice at last for the people of Kosovo."
My Lords, that concludes the Statement.
4.38 p.m.
Lord Strathclyde: My Lords, I am grateful to the noble Baroness for repeating the Statement made by the Prime Minister in another place. Likewise, I shall keep my answers to the two issues in the same order: first on Kosovo and then on the European Council in Cologne.

1327
Does the noble Baroness agree with me that there is a great deal of confusion on the whole situation surrounding Kosovo as to whether there is yet peace or whether there is yet going to be peace? Will the noble Baroness, as Leader of the House, ensure that we maintain a system of regular reporting back to this House, either through Statements or debates, so that these issues can be discussed in this Chamber?
We entirely endorse the view that there should be a continuation of the bombing campaign. However, is there any truth that the kinds of target aimed at previously have been changed? Also, has the overall level of sorties by the combined air forces been reduced over the course of the past few days?
I now turn to the question of President Milosevic himself. The Statement draws attention to the fact that the Prime Minister will not deal with President Milosevic, but what is unclear is whether that is a pre-condition for the peace agreement itself or a pre-condition that there will be no money for reconstruction until Milosevic has been removed. I should be very glad to hear what the Government's policy is on that.
Next, on the question of the unified command, is there going to be a role for Russian troops and, if so, how will they fit into a NATO/UN command structure? Has that already been agreed with them? As to the United Nations Security Council, what messages have been received from the Chinese Government as to how they see this developing over the course of the next few weeks?
One of the tests that should be set as to the success of this policy is whether or not the refugees are returned home and whether or not the humanitarian disaster already existing can be brought to a speedy halt so that the refugees will leave not only other countries of the European Union but also other countries in the Balkans, so that they can return home. Has the noble Baroness any estimate she can offer as to how long it will take from an agreement being reached to returning the refugees to their homes?
Turning now to the Cologne Summit, the Statement said that,
"The European Council unanimously reaffirmed that sustainable non-inflationary growth and increased employment required comprehensive structural reforms at EU and national levels".
I am glad that the Government at last are accepting what the Conservative Party has been saying for a very long time indeed. However, what have the Government done over the course of the past two years to further those aims? Practically everything that has been done has been designed to create more difficulties and more regulations for our businesses, rather than fewer. We have seen the Government give in over the Social Charter. We have seen the valuable veto being weakened and we have seen a further surrender on tax harmonisation. In this regard the Statement says that, sensibly, the Council decided merely that harmful tax competition should be avoided. I would be very grateful
1328
if the noble Baroness could produce some examples of the difference between harmful tax competition and normal tax competition.
Finally, on the detailed points raised in the Statement, why is it that the European anti-fraud office—which we welcome—is not independent of the Commission?
The Statement did not mention the single currency, but perhaps I may ask the noble Baroness, in conclusion, about the euro. Since the euro is increasingly becoming an issue of public concern, as a matter of policy are the Government pleased with the progress of the euro over the course of the past five or six months? Do the Government think that the level at which the euro finds itself against the pound is about right, or are they happy to see it fall further?
4.45 p.m.
Lord Rodgers of Quarry Bank: My Lords, I join the noble Lord, Lord Strathclyde, in thanking the Leader of the House for repeating the Statement made elsewhere by the Prime Minister. As the Statement says, the Cologne discussions were dominated by Kosovo. I hope it will not confuse everybody if I reverse the order of my comments by saying very briefly that the other steps beyond Kosovo taken at Cologne seem to be sensible as far as they went—which was not very far, but the Kosovo business was pressing. I include in that the outcome of the discussion on tax competition. The Government were bound to lose on the question of duty-free; there was never much point in pursuing this further, whatever their somewhat doubtful merits.
I also welcome the appointment of Mr. Solana to his new post. I am sure that he will serve all of us very well. As the Statement makes clear, and as the House will know since the discussion of Kosovo at Cologne, there has been, first, the failure of the border talks on Saturday and Sunday, which justified the caution which was very widely expressed following the Belgrade agreement. Then there has been the G8 meeting to which the Statement refers, yesterday and this morning. I do not know whether the noble Baroness has seen a statement which appeared this afternoon. When asked who would lead the international presence in Kosovo, Madeleine Albright said that NATO was both the core of the force and its military leader. However, Russia's Foreign Minister, Igor Ivanov, said that was still the subject of negotiation. I hope it is not still the subject of negotiation, because if we have learned anything from the events of the last week it is that we should settle the detail as well as the main principles; otherwise it will most certainly go wrong. If the noble Baroness would care to comment on the situation I shall be very glad to hear what she has to say.
Even if the plan that was accepted by Belgrade last week is indeed fully incorporated in a Security Council resolution with the necessary detail and is then implemented, we must nevertheless recognise, if we are not to be desperately disappointed, that there will be misunderstandings and a total absence of good will on everybody's part. Lives will be lost and from time to time the whole agreement will be threatened with collapse. I say that only because it is best to be wise

1329
before the possible event and to be resolute and determined in the meanwhile, whatever problems then arise. The essential key to the success of the plan is the remarkable unity of NATO, which has been demonstrated through very difficult times, together with its continued leadership. That will be essential to any successful plan.
The noble Lord, Lord Strathclyde, asked how China's attitude might develop over the next few weeks. The most important and immediate question is this: do we have any reason to believe that China will exercise a veto, or do we believe that it is on board? That is the crux of the matter, because unless China is on board, there will be no resolution.
I have two questions about what may happen thereafter. It is not clear from the Statement or from any published document who will be ultimately responsible day to day for ensuring the success of the total operation. I mean by that the re-occupation of Kosovo by its people. Where will the buck stop? If that is unclear, then again I think we shall find far more difficulties ahead than we would like.
Secondly—this is a related question—who will provide the administrative structure and who will be responsible for making sure that there will be machinery to keep the peace, to make judicial decisions and to prepare for fiscal reconstruction? There must also be a structure to make sure that schools and hospitals re-open. These routine tasks are part of reconstruction, and I would have thought that all the evidence is that the Kosovars, of themselves, will not be capable of dealing with that.
Beyond that there are a further two questions I would like to ask concerning the future of Kosovo. The Statement says that military talks are caking place again today under General Sir Mike Jackson. I appreciate that it may be too soon to say anything, but as they have been taking place today I wonder whether there is any evidence yet as to whether they will be any more fruitful than last week.
I have a further two points, rather than questions regarding the future. I believe that it is right for us in due course to be told what the total cost of the operations has been to this country. I say that as somebody who, on behalf of these Benches, has supported the action from the beginning. I believed that we would all have been deeply shamed had not NATO, with our support, taken the action that it did. I think it is necessary to know what the operation has cost and also to know what the continuing costs are likely to be on the assumptions that we are currently making about the implementation of the agreement.
Despite the optimistic conclusion of the Prime Minister's Statement and the hopes that we all, without qualification, share, I am sure that it will be necessary to be cautious and for NATO not to de-escalate its operations and its readiness too fast or too far.
4.49 p.m.
Baroness Jay of Paddington: My Lords, I am grateful to both noble Lords who have responded to the Statement for the support that they have expressed for
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the conclusions, especially the part relating to Kosovo. Perhaps I may echo what the noble Lord, Lord Rodgers, said about the need for caution. I know that the Government, and especially my noble friends, who were both congratulated during Question Time today—namely, my noble friends Lady Symons and Lord Gilbert—have been grateful for the consistent support that they have received from all parts of the House during the military operation in Kosovo. That has been very valuable. Indeed, as has been said on several previous occasions in this House, it is important that these messages have gone to British troops so that they know that there is general and genuine support for their valiant efforts. Those British troops will be continuing to play a substantial role in the next stage of these events. I am sure that the whole House will join with me and the Government in wishing them well. In some ways, it may be the most dangerous and perilous part of their duty that they will be undertaking in the future.
The noble Lord, Lord Strathclyde, suggested that there might be confusion about the next stages of these events. Clearly, at a time when the proposed UN resolution was only agreed a few hours ago and has yet to be put to the Security Council, that is at least de facto true. On the other hand, the intent of the Security Council resolution embraces the points which have been made consistently about the G8 position and indeed about NATO's position, which can he summarised simply by the fact that we must have Mr Milosevic's troops out of Kosovo. We have to have NATO troops in there and we have to ensure that the refugees can return safely and securely. Given that those points are now embraced in the UN resolution which has been agreed and, as I said in repeating the Statement, will be sponsored by all the members of the G8, including Russia, that is an important step forward.
As I said when reaffirming what the noble Lord, Lord Rodgers, said, we need to be extremely cautious and wary in dealing with someone with the trick record of Mr Milosevic in moving away at every opportunity from any commitment which has been given. I believe that the path towards a new and more hopeful position on the military, technical side is now more optimistic than it was when the talks broke down yesterday. The fact that this is now moving to New York and the UN Security Council is a hopeful sign.
The noble Lords, Lord Rodgers and Lord Strathclyde, raised the question of the attitude of the Chinese Government, which is clearly extremely important when considering the matter. Despite what the Chinese Government said in their immediate response to the unfortunate bombing of their embassy in Belgrade, we have no reason to suppose, given what they said later—namely, that they supported the general approval of a new peaceful situation in Kosovo—that they will necessarily take anything other than a positive stand about this proposed resolution. It may be of use to the House to know that President Ahtisaari is today in Beijing involved in talks with the Chinese Government. One has to hope that those talks will produce a positive outcome in terms of their support for the resolution when it reaches the Security Council in New York.

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The difficult situation about the Russian troops was mentioned; namely, what their presence will be and under whose command they will serve. Noble Lords will be aware that this is one of the continuing questions which has arisen in the discussions with the Russian Government. Because they have agreed to co-sponsor the UN resolution, which mentions the very central point that suggests that NATO will be at the core of the force that will be in Kosovo—of KFOR—and that it will be led by NATO, it is now recognised that there has been a change in their position. As far as concerns the practicalities, people are drawing on the positive experience of what has happened in Bosnia, where the Russian troops have served in a NATO force though not directly under a NATO commander. Those points of difficulty may well be ironed out in much the same way when the practical problems are addressed.
The question about the continuing presence of an authority which is not a civil authority was also raised. Indeed, this was a point which the noble Lord, Lord Rodgers, was most concerned about in relation to the organisation and administration of life within Kosovo outside the purely defence and military situation. The draft resolution, as agreed by G8, makes provision for the appointment from the UN of someone who will, as it were, take responsibility for the civil authority in relationship to the secretary general and, through him, to the Security Council of the UN. That task will be extremely difficult and there will need to be close collaboration and co-operation with the military forces. However, that issue has been specifically addressed within the draft resolution and is something which will need to be worked out—again perhaps drawing on the experience of Bosnia and other arrangements where a civil administration of that kind has been established.
I move on to the broader questions of the Council's discussions and debates on the future of employment in Europe; and, indeed, the questions which the noble Lord, Lord Strathclyde, raised about the euro and activity on the general economic and administrative front. The noble Lord mentioned the implementation of some of the policies which the Government have undertaken during the past two years—for example, he mentioned the social chapter. However, I would also mention matters relating to the minimum wage resolutions, the parental leave regulations, and so on, which have been welcomed by many people. This Government are proud to have implemented those measures and we do not feel that there is anything there that we should retreat from at this stage.
The noble Lord mentioned the employment pact, which has three pillars. First, it involves macro-economic dialogue between the member states aimed at preserving non-inflationary growth. Secondly, it intends to promote employability and entrepreneurship through a co-ordinated employment strategy which we hope will improve the efficiency of the labour markets; and, thirdly, it includes, as the Statement said, comprehensive structural reform and modernisation to improve the innovative capacity and efficiency of the labour markets and markets in goods, services and
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capital. The details of these are to be found in the conclusions of the Council which, as I said when repeating the Statement, have been placed in the Library of the House.
On the question of the anti-fraud measures and whether the Government believe that this is appropriately placed within the Commission, the Government are happy that they are within the Commission because this is being run on an independent basis. Clearly, anyone who is going to tackle fraud within the Community, the Commission or wherever it may lie needs to have the detailed information about the organisation of that body and an understanding of the detail of the official arrangements which may or may not have been called into question. It seems to the Government and, indeed, to the Council to be appropriate that it should be placed within the organisation rather than attempting to investigate from without.
The noble Lord, Lord Strathclyde, raised a further point about the euro. As the House will know, the Government's position on this is basically unchanged. We have always said that if the economic conditions on the euro were right and stability maintained, it would clearly be in this country's interest at some stage to hold a referendum to see whether moving into the euro in the long term would be something which the country supported. I can only suggest to the noble Lord that I believe there is a difference between some of these matters. As he will know, I entirely respect his position; but there is a difference in many of these matters between taking what could be perceived as a short-term political practical position and a long-term strategic view which we hope will benefit the country in much the same way as we hope the benefits to the people of Kosovo will be achieved in the long-term peaceful resolution of the discord and terrible tragedy that we have seen there recently.
Lord Strathclyde: My Lords, on a point of clarification, I asked about harmful tax competition and whether a definition of that existed. Perhaps the noble Baroness will write to me on the point. As regards the euro, I did not seek a justification for the Government's desire to join the euro; I asked whether they were happy with the level of the pound vis-à-vis the euro.
Baroness Jay of Paddington: My Lords, as I understand the position, the pound is at roughly the same level vis-à-vis the euro as it was this time last year. Noble Lords may feel that that was because of an inflationary situation in the earlier period. However, the balance has probably worked both ways. Whether one is in favour of the pound being in a position of strength vis-à-vis the euro depends on one's situation. I refer particularly to those involved in the manufacturing industry.
As regards tax competitiveness, I am perfectly happy to write to the noble Lord about the details of the Council's resolutions on that. As regards the need to preserve the important mainstream tax sovereignty—if one wants to put it that way—the Government have always taken the view that we would protect and

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preserve that position. Tax harmonisation could perhaps be relevant in some areas where it could offer an advantage. However, as regards mainstream tax issues, the United Kingdom maintains—unfortunately this worked to our disadvantage on the question of duty free goods—that unanimity is required in the Council before any changes can be made.
5.2 p.m.
I.ord Shore of Stepney: My Lords, I too thank my noble friend for repeating this Statement. I shall not pursue the question of Kosovo on this occasion, partly because of the rapid changes that seem to be taking place almost hour by hour in the negotiations there and also because, frankly, we need a debate on the matter. I shall content myself with simply urging my noble friend to arrange an early occasion when we can give our full attention to this serious and still unfolding tragedy.
I turn to other points in the no fewer than 39 pages of the presidency conclusions. In particular, I wish to ask my noble friend some questions relating to this obvious drive now to create a European security and defence capacity. The words are used, "An autonomous European defence capacity". I wish to ask the following questions. First, in defining the purposes of that capacity—I refer to the mention of the Petersberg tasks—am I right in believing that the business of actually waging war (that is, engaging enemy forces in a hostile rather than a permissive environment) is not covered by the Petersberg tasks definition? If it is covered by it, can my noble friend tell me what is the advantage, as it were, of creating and duplicating such facilities as to make the waging of war possible on a European Union basis? Why should it be better, and more likely to lead to success, than using NATO, which brings North America, with all its resolve and its power, to the assistance of its European friends and allies?
Finally, whatever arrangements are made with the European Union, will my noble friend assure me and others that the UK will maintain sufficient capacity under its own direct control to carry out tasks involving security and the use of force outside Europe (that is, in places such as Iraq and elsewhere) and that we shall not he, as it were, corralled into purely European Union and European continental actions in the future?
Baroness Jay of Paddington: My Lords, I thank my noble friend for his comments. As he will know, any discussion about whether we should have a full-scale debate on these matters would have to be agreed through the usual channels. It is appropriate that we discuss these matters in detail. I think my noble friend will agree—I hope that the House will agree—that there have been opportunities during the past few weeks to do this on a regular basis. If this matter becomes continuously relevant—as the noble Lord, Lord Strathclyde, suggested—I am sure that the usual channels will make arrangements to hold those discussions.
As I understand the position, the Petersberg tasks are essentially directed towards the peace-keeping arrangements rather than war-making, to use the rather
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graphic expression of my noble friend. NATO will of course retain the primary role in any kind of involvement that our forces are engaged in.
As regards the matters which have been discussed under the common and foreign security policy arrangements, the emphasis is on a more effective use of European forces rather than engaging in sonic new, pro-active initiatives which might stretch our forces, as my noble friend suggests. There is nothing to suggest that we are going against any of the broader and more widespread recommendations which were agreed under the Strategic Defence Review which would naturally enable this country to maintain its own independent forces.
Viscount Cranborne: My Lords, in view of the comments of the noble Baroness about tax harmonisation, can she tell us whether that means that the City of London no longer has to fear a European imposed withholding tax? As regards Kosovo, does the noble Baroness agree that what we now face is a long-term protectorate, not only in Bosnia but also in Kosovo, backed by military force? As that is the case, and in view of the fact that the Armed Forces—and the Army in particular—are already scrabbling around to find reserves to fulfil their existing commitments, where will the Army find the soldiers not only for the first six months' tour but also for subsequent tours in the Balkans, particularly if we face increasing demands on our troops to fulfil a role in Northern Ireland?
Baroness Jay of Paddington: My Lords, I am happy to tell the noble Viscount that the progress report on tax arrangements which was agreed and endorsed in Cologne—the reinforced tax policy co-operation—referred specifically to,
"the need to preserve the competitiveness of European financial markets".
I imagine that the City will feel reasonably reassured on that point.
As regards the noble Viscount's concern about the long-term situation in Kosovo, my right honourable friends the Prime Minister and the Foreign Secretary, and everyone else who has spoken on this subject, have made it clear that there is undoubtedly a long-term commitment in Kosovo, as it is obvious from everything that has happened and from everything that has been reported in the past few days that there is no question of refugees feeling confident of returning if all they are provided with is a short-term escort which did not subsequently maintain a presence.
As regards our ability to fulfil our obligations, there will of course be many other nations involved in the force. As I said in my initial response to the noble Lords, Lord Strathclyde and Lord Rodgers, we can be proud of the leadership role which the British forces have played and will play in this situation. However, there will be many others involved, including people outside NATO. Noble Lords can feel confident that we would not accept an undertaking which we did not feel we could fulfil and in many instances lead.
Lord Clinton-Davis: My Lords, does my noble friend agree that the real possibility of peace in Kosovo

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arises very substantially from the strong resolve shown by the Prime Minister and others—but notably by the Prime Minister—in the face of some equivocation, particularly on the part of the Opposition in another place? Does my noble friend further agree that without that resolve the possibility of building up an enduring state of peace and some prosperity for the people of Kosovo would have been quite impossible?
Is my noble friend prepared to say something about the preparations that are being undertaken to bring stability to the people of Kosovo and the other areas affected through a massive programme of reconstruction following a peace situation?
Baroness Jay of Paddington: My Lords, I endorse what my noble friend said about the role and the resolution of the Prime Minister. One must also reconfirm and restate the enormous importance attached to the fact that NATO and the 19 countries which have been involved in the military action in the Balkans have stayed together in a positive alliance. That has enabled the kind of progress to be made which I hope we are able to say is reaching some sort of peaceful conclusion today.
My noble friend is concerned about some of the remarks which have been made in another place in a more "political atmosphere", if I can put it that way. But I repeat what I said in my earlier remarks—which both of my noble friends sitting beside me on the Front Bench will reconfirm—that the support for the action taken has been very important in this House. I know that my noble friends have been grateful for that, as indeed have I and other Ministers.
As to the question of long-term reconstruction, that is the major issue which will concern everyone once the military organisation is in place. It will be an enormously important and probably very expensive task. Not only in terms of money but in terms of technological assistance. it will require international co-operation on a scale that is being talked of in the context of the Marshall Plan in Western Europe after the Second World War. Some preliminary discussions are under way through the international organisations, both those concerned with the monetary side, for example, the IBRD, and the organisational side through certain of the UN agencies. They are beginning to look at the matter. It is at a preliminary stage but I can assure my noble friend that urgent international discussions are going on. As I have said, this is the long-term problem which we all now have to confront.
Baroness Williams of Crosby: My Lords, with regard to the Cologne Summit, can the Leader of the House confirm that the holding of an IGC next year will not delay the process of enlargement, which of course requires institutional reform?
As to Kosovo, perhaps I may ask the noble Baroness two questions. First, newspaper reports suggest that the build-up of the force in Macedonia is being somewhat slowed down because contributions from some other countries are coming through only slowly. Can she confirm or deny those newspaper reports? Related to
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that matter, can she also comment on Mr. De Melo's statement that we will be lucky to get the refugees back before winter and that steps will have to be taken to "winterise" their quarters?
Finally, I express concern about the noble Baroness's references to Bosnia. I think she will agree that Bosnia has not been a wholly successful operation. It has been ethnically very divided; in some cases local authorities will not accept back refugees from an ethnic group other than their own. Can she at least promise that the Government will look carefully at the arrangements on the civil side for Kosovo to ensure that we do not repeat the mistakes of Bosnia, which included offering only a helping hand to local bodies and not using Bosnian refugees as a major element in the reconstruction of their country?
Baroness Jay of Paddington: My Lords, perhaps I may first pick up the point made by the noble Baroness about the IGC. The proposed agenda—albeit in a skeletal form; the IGC is not due to be held until the spring of next year—will deal, as the Statement said, with some of the issues left unresolved from Amsterdam; for example, the size and composition of the Commission, the weighting of votes in the Council and possibly the extension of qualified majority voting in the Council. I understand that there is not to be, as it were, a parallel track between the resolution of those problems and discussions upon enlargement. Of course. if enlargement is to take place along the lines that have been discussed, it is necessary that some of those issues are resolved in order to improve the effective workings of the Commission and the other bodies involved.
As to the questions relating to Kosovo, I understand that the problems of getting forces into Kosovo are caused not by a lack of political will but by some bottlenecks at the Greek ports. They have had a partly political dimension in Greece; but this has not been the fault of the suppliers of the forces concerned. There is no concern that the build-up will progress along the lines that it is.
Perhaps I may now turn to Bosnia. We can learn from both the positive and negative lessons of Bosnia. I referred to the positive lesson in my initial reply to the noble Lords, Lord Strathclyde and Lord Rodgers. That concerned the way in which the Russians had agreed to serve in Bosnia under a command which they understood was in some sense a NATO command but had no sensitivities about being NATO led. That was my main point. I agree with the noble Baroness that there are lessons which need to be learned in the negative as well as the positive sense.
The issues concerning the returning refugees are essentially a question of timing. We can only be grateful that we have come to the situation that we are now at, where at least there seems to be a possibility of movement on the return of the refugees. I have reiterated several times that the refugees will not go back unless they feel confident that a NATO force and a substantial military presence is in Kosovo. There is a time-line between achieving that result and the onset of the Balkan winter. That is why the NATO Council and all of those involved have been particularly glad that some

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resolution of the conflict seems to be taking place at a time when at least it is possible to contemplate that a substantial movement back into Kosovo will happen before the weather gets too bad.
Lord Hardy of Wath: My Lords, I have a short question.
The Earl of Lauderdale: My Lords—
Baroness Amos: My Lords, there are five minutes left. May I suggest that we first take a question from that side of the House and then a question from this side.
The Earl of Lauderdale: My Lords, I wish to ask two questions. First, how is it that the Statement completely ignores the existence, the uprising and the invasion of the Kosovo Liberation Army? Its activities provoked the atrocities that everyone complains about.
My second question is altogether different. How is it that it has taken seven weeks of illegal attack by NATO before there is any endeavour to get a proper United Nations' authorisation for what has been going on? That is a very serious question. We are accustomed in this country to observing international law and international peace. Those operations, albeit by NATO, have violated that tradition and have been unauthorised by the United Nations.
How is it that the position of the Kosovo Liberation Army is completely ignored in the Statement? Its invasion and uprising sparked off the original atrocities.
Baroness Jay of Paddington: My Lords, I am surprised that the noble Earl says that the KLA was not mentioned. It was not actually mentioned in my right honourable friend's Statement but it has certainly been part of the understandings of the G8. As I understand it, it is part of the draft resolution to the Security Council that the KLA should be demilitarised. That has been said now for some time. I am surprised that the noble Earl said that it was not mentioned.
On the question of illegality, my noble friends and I have repeated on several occasions in this House that, although there was no specific authorisation—a matter that we have discussed—this action was taken as an exceptional measure to halt an overwhelming humanitarian catastrophe. When Security Council debates took place on 24th and 26th March, strong support was given for NATO action, and the Russian draft resolution criticising NATO action was defeated by 12 votes to three.
Of course we all feel that it is now appropriate to try to achieve the Security Council resolution to take forward the peacemaking efforts that I have described and which were referred to in the Statement. But to say that the KLA has not been mentioned is not right. It has been mentioned; and it has been asked to demilitarise.
Lord Hardy of Wath: My Lords, perhaps I may put a short question—
Lord Jenkins of Putney: My Lords—
Lord Clark of Kempston: My Lords—
Baroness Amos: My Lords, I think that a question from this side would be appropriate.
Lord Hardy of Wath: My Lords, does my noble friend accept—
Lord Jenkins of Putney: My Lords, I think—
Lord Clark of Kempston: My Lords, in view of the fact—
Baroness Amos: My Lords, we are taking up valuable time. I did say that the noble Lord would put his question next.
Lord Hardy of Wath: My Lords, the Serbs have planted large numbers of mines in Kosovo. Does my noble friend accept that the Government should insist that those mines are cleared before the bombing ceases, and on an absolute guarantee that they will be?
Baroness Jay of Paddington: My Lord as to a guarantee that the mines should be cleared before the bombing ceases, militarily and in terms of the technical arrangements and all the difficult issues that must be kept in play that would be very difficult.
The question of the mines has been fully appreciated in the military technical talks that are taking place today. There may be a limited allowance for a very small number of Serbian forces to remain in Kosovo simply to identify where the mines are in order to help the NATO forces when they attempt to make the passage back into Kosovo safe. It will be very important to have accurate information. But I do not think that we can achieve that before the bombing stops.
Lord Jenkins of Putney: My Lords—
Lord Clark of Kempston: My Lords, in view of the fact that implementation of a withholding tax will cost many thousands of jobs in this country, was there a specific mention of that, rather than the matter being included in the generalisation about so-called tax harmonisation?
Baroness Jay of Paddington: My Lords, I am sorry, I may have slightly misheard the noble Lord. There is no agreement on a withholding tax being imposed on Britain by Brussels, and there will certainly be no agreement to anything that damages the eurobond market. As I said in reply to the noble Viscount, there was specific mention in the Council's resolutions that it

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was happy that the agreements that were made would take into account the need to remain competitive in those bond markets.
Lord Jenkins of Putney: My Lords, I think that there are—
The Minister of State, Home Office (Lord Williams of Mostyn): My Lords, the 20 minutes' mandatory time, as stated in the Companion, has now elapsed. There is other business and we ought to stick to the convention.

Food Contamination in Belgium
5.22 p.m.
The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Lord Donoughue): My Lords, with permission, I should like to repeat a Statement made in the other place by my right honourable friend Nick Brown. The Statement is as follows:
"With permission, Madam Speaker, I wish to make a Statement on the discovery of the presence of dioxins in certain Belgian animal feedingstuffs and food products, and on the action which the Government have taken in response to safeguard human health.
"The Belgian Ministry of Agriculture first received information in mid-March that severe health effects were being detected in laying chickens. The problem was traced to fat manufactured in January by the firm Verkest in Belgium and supplied for the production of animal feedingstuffs. Approximately one month later, the Belgian Ministry of Agriculture was informed that high levels of dioxins had been found in feed for breeding chickens, and in chicken fat analysed by the company producing the feed. After further tests for dioxins, the Belgian Government initiated on 25th May discussions on preventive measures with the Belgian industry. The United Kingdom Government believe firmly that the Belgian Government should have acted earlier to inform trading partners of the problem.
"Dioxins are a group of closely related chemicals produced during combustion and as unwanted by-products of some industrial chemical processes. Dioxins are not acutely toxic to humans at very low doses. Thus the likely intake of dioxins from short-term and sporadic consumption of contaminated food is expected to be insufficient to cause harm. Nevertheless, sustained human exposure over a long period to dioxins is potentially damaging to humans: studies relating to industrial processes show that exposure to high levels of dioxins over a period of 20 years increases the risk of cancer.
"Our public health advice on the Belgian incident is that, whilst it is clearly undesirable to consume contaminated products, there is no reason to anticipate harmful effects from consumption of those
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contaminated Belgian products which may have entered the United Kingdom market. Feed contamination is believed to have occurred over a period of less than six months, and Belgian food in the affected categories represents a very small proportion of total UK consumption.
"The Government have nonetheless acted swiftly, in close and effective co-operation with all the sectors of the food industry, to take all the steps necessary to protect United Kingdom consumers. We first received information on Friday 28th May suggesting possible contamination of some eggs and poultry produced in Belgium. We established immediate contact with the European Commission, who were holding urgent and detailed discussion with the Belgian authorities about the extent and nature of the problem. Although at that stage the Belgian authorities suggested that exports of potentially affected products to the United Kingdom were minimal, we immediately advised the food industry to check with their suppliers that such products did not originate from the affected Belgian farms.
"On Sunday 30th May, I personally discussed the issue with Commissioner Fischler in the margins of an informal meeting of European Union Agriculture Ministers.
"There were further extensive discussions between the Commission and the Belgian authorities and with the member states on 31st May to 2nd June. We maintained close contact throughout with the food industry, and specifically with a small number of companies which had sourced products in Belgium. The food industry acted quickly to withdraw potentially affected products.
"On 2nd June, in anticipation of a decision by the European Commission to prohibit the export from Belgium and the sale in all member states of poultry and eggs from the affected farms, unless they could be shown to be free from contamination, the Government issued a food hazard warning on the action to be carried out by local authorities to trace all imports of eggs and poultry from Belgium.
"The European Commission decision was given formal effect on 3rd June. On 4th June, in anticipation of a further Commission decision extending the prohibition on export or sale to a further range of products—pork, beef, and milk and milk products—I made two emergency orders under the Food Safety Act 1990 and Section 2(2) of the European Communities Act to give formal legal effect to the Commission's decisions for the full range of affected products. The European Commission formally adopted its decision on pork, beef and milk and milk products on 7th June. The powers under the emergency orders made in the United Kingdom had been in effect since midnight on 4th to 5th June.
"The emergency orders make full legal provision for the seizure and destruction of any products which violate these requirements. Local authority enforcement officers have been fully briefed on these powers, and on the need to ensure that food businesses are in compliance. These measures

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complement and complete the speedy and proportionate action already taken by Government and the food industry to protect the public.
"I believe these actions to have been proportionate arid in line with the need to protect public health arid guarantee consumer confidence. Honourable Members will be aware that some non-EU countries—including the United States of America, Canada and Singapore—have taken steps to impose restrictions on imports of products from the European Union. While it is understandable that third countries should wish to introduce restrictions on the import of Belgian products until the situation is resolved, it is disproportionate for other countries to seek to restrict imports from all the affected categories from all European Union countries. There can be no basis on food safety grounds for such action, and it is deeply unfair to our domestic producers that they should, at least temporarily, lose their markets.
"The Government are determined to continue to act with the food industry and local authorities to protect British consumers. Swift proportionate action has been this Government's guiding principle since taking office, and will continue to be so".
5.31 p.m.
Lord Luke: My Lords, I thank the Minister for repeating the Statement made in another place by his right honourable friend the Minister of Agriculture. Of course, the first priority in the matter must be the protection of British consumers. But the issue also affects British farmers whose products are now banned from the United States, Canada and other countries.
With regard to the consumer point, we support the Government in the action they have taken so far. Will the Minister confirm when the Ministry of Agriculture first knew about the problem? Was it on 28th May? If that is the case, does he not agree that it is disgraceful that., if the Belgian Ministry of Agriculture was informed in mid-March, no inkling of it seems to have reached Britain until 28th May? Was it never discussed in the corridors of EU power in Brussels? Furthermore, is it true that other European Union countries, including Holland, were told days, if not weeks, before Britain?
Does the Minister agree that to be kept in the dark over such an important matter is a poor reward for all the concessions made by this Government in the recent farm policy reform talks? Further, is it possible that British consumers were needlessly placed at risk by this unexplained delay by Belgium and other European authorities in informing Britain?
Does the Minister agree that this whole mess highlights the imperative and urgent need to improve food labelling in Britain? It would, of course, help if food labelling were accurate on the continent. I wonder whether the Minister has read an article which appeared in the Independent which states:
"In France. meanwhile, a huge consignment of chicken legs—up to 20 tonnes—marketed by a Brittany firm and labelled as French were withdrawn after a national hunt for risky food products uncovered that they were in fact Belgian".
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Is there any chance that such a worrying event could happen in Britain? Why are not British consumers told where food is actually grown and not where it is processed? Also, why are they not told rather more about how it is produced? British consumers must be more and more confused by this failure to inform them adequately about their food.
In order to label effectively it is, of course. essential to have effective traceability of products, British farmers are doing a great deal and investing a great deal in traceability. Why does it appear that others are not doing anything like enough? Will the Minister state today what he proposes to do to end this outrageous discrimination against British farmers? Does he agree that this scare will strengthen the reasonable demands of British fanners to block all imports of food produced by methods which are illegal in this country?
British farmers are prevented from exporting to the United States and other countries. In fact, the Minister of Agriculture says that this is deeply unfair, and we all agree very much with that. But what does he intend to do about it? I return to what I said earlier. Food safety is the absolute priority and the general public are rightly worried by this situation. Let us hope that they are at least partially reassured by the Statement. But a great deal more needs to be done to rectify the imprecision of the way in which we approach food safety, in particular with regard to food imports.
5.36 p.m.
Lord Mackie of Benshie: My Lords, I too wish to thank the Minister for repeating the Statement, which is important. It is right and proper that it should concentrate on the protection of the consumer. However, I fully support the noble Lord, Lord Luke, who spoke from the Tory Front Bench, in saying that the farmers are suffering from the illegal methods used and the lack of information. It bears an unfortunate resemblance to the development of BSE, in that apparently it all started with some method of manufacture with fat which produced a lot of dioxins, over and above the normal process, which got into the food chain. That is exactly what happened in Britain in that the method of manufacture of blood meal and so on was changed from the batch method which killed the bacteria to a much cheaper, more efficient method with a continuous chain which was not at a high enough temperature.
Can the Minister tell us a little more about what is happening with the firm concerned? Are all the possible places being followed up where the fats could have been used? Obviously the firm sells outside Belgium, probably in Holland, Germany and certainly France. It appears that the lessons we learnt were that contaminated animal foods stayed in the chain much longer than they should have. Really energetic methods need to be pursued before the problem can be stamped out and we can get rid of the excuse by the United States, for example, not to take British produce.
Perhaps we could now have another look at this infinitely less serious and dangerous matter of steak beef on the bone in this country. I am sorry to raise it again but it has gone on for too long.

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The Government must push the Commission to put pressure on the Belgian Government because their record appears to be appalling. For them to have cognisance of this in March and to find very high levels while we only learnt of it in late May is a scandalous piece of European non-co-operation. Could he at the same time tell us whether we have an official level of dioxins in food which we test? We know about the other levels. Can we test for dioxins? Is there a permissible level? In addition, what can be done in manufacture to reduce the possibility of contamination? We know that heat is used in the case of BSE. If dioxins are produced by heat, it must be more difficult to use heat.
I believe that a great deal of effort should be made by our Government to ensure that the Commission does its job, that the Belgian Government are persuaded to do their job, and that our farmers have the present disadvantages of the system removed and are able again to export their very safe beef.
5.40 p.m.
Lord Donoughue: My Lords, I thank both noble Lords for supporting the actions that we have taken to defend the consumer. That is always our first priority. When noble Lords have leisure to read the Statement and the chronology, they will see that the British Government acted with considerable speed and introduced our emergency orders before the Commission's decisions were finally enacted, so that to some extent we pre-empted them.
I agree with what the noble Lord said about the delay on the Belgian side, which is very regrettable. My advice is that the first time we heard about the problem was on 28th May and that the information came from industry sources in this country. That is regrettable. There does not seem to have been very speedy communication from Belgium to this country.
We believe that it is indeed true that two member countries were informed in advance of information being given to other member countries. Holland and France were alerted before we, or perhaps even the Commission, were informed. That is presumably because Holland and France are the main recipients of the contaminated feed. That is indeed a fact. I agree that it would have been preferable to have known earlier, but I believe that the Government acted as swiftly as humanly possible in the circumstances, and we regret that some of our European partners did not act as swiftly.
We agree with what the noble Lord said about labelling. We wish to introduce the maximum amount of labelling information to the consumer. We have made progress in that area. It is correct that it is not complete progress in terms of country of origin. We are pursuing better labelling in Brussels.
In terms of the United States and other third countries—Malaysia, Hong Kong and Canada—it is very regrettable that our producers are suffering as a result of this problem in certain of their big overseas markets. The noble Lord asked what could be done about that. We shall do everything possible to produce
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evidence that our products have had no contact with the sources of contamination. The United States have stated that their ban is in place until evidence of non-contamination is produced. We must do everything possible to produce evidence of that and press for the lifting of these bans.
The noble Lord, Lord Mackie, referred to the fat process. I am not an expert and I know very little about the nature of that process. What I heard about it left me with the feeling that I would not be examining it too closely. He draws a parallel with BSE. There are parallels. However, the scale of the threat to human or animal health is very different. It is the case that this once again raises questions about modern food production processes and mass food production. Everything possible is being done in this country and in Europe to trace the sources of contamination. According to reports, I believe that the Belgians themselves are in a state of near siege, many of the relevant food shops having been closed.
The noble Lord raised the question of beef on the bone. I repeat what has been announced. That situation is to be reviewed by the Chief Medical Officer in a couple of months and the decision will be based on scientific evidence.
The noble Lord referred to the Belgian record. I have said that we regret it and deplore the delay. Within Europe, it is incumbent upon all member states to make information of this kind available to their partners and to the Commission as rapidly as possible.
With regard to dioxins, tests are available. However, the tests are quite long. That is why, at this stage, we still do not know the level of dioxins in certain other foods. Nevertheless, we are able to trace the sourcing from Belgium. Our information—and the Belgians insist that this is true, and we have no evidence to the contrary—is that this year we have imported no feed from any of the contaminated sources. We imported only 728 tonnes of feed, which is less than one per cent of our imports. The evidence, and my advice, is that none of that comes from a contaminated source.
The noble Lord asked about levels. We have levels of acceptability. In the contaminated Belgian products, the levels of dioxin were up to 100 times the level that we consider to be acceptable.
5.47 p.m.
Lord Jopling: My Lords, the noble Lord the Minister has described the action of the—
Lord Kennet: My Lords, perhaps I may—
Lord Hunt of Kings Heath: My Lords, we do have 20 minutes. Perhaps the noble Lord, Lord Jopling, would like to continue.
Lord Jopling: My Lords, the noble Lord the Minister has described the action of the Belgian Government and the manufacturer concerned as regrettable. Will he not speak a little more plainly? Would it not be more accurate to say that their behaviour has been outrageous, devious and probably

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criminal? Would he also say what the Government are doing to seek from the Belgian Government and the manufacturer full compensation for the damage that they have caused to the food industry throughout Europe?
Returning to the question which the noble Lord, Lord Mackie, asked about the levels of dioxin, can the Minister tell the House exactly what testing is being carried out in relation to suspect food in shops, warehouses and catering establishments? Can he also tell us how many of those tests have shown unacceptable levels of dioxins? More important, over the weeks and months ahead, as the tests which he described as taking some time are conducted, will he ensure that, as in previous cases, the results of the tests and the source of the material tested are made fully public? That will ensure that we all know precisely what levels of dioxin have been found in food imported into this country which was originally sourced in Belgium.
Lord Donoughue: My Lords, I was happy to accept the noble Lord's description of the Belgian situation, but I felt that it was more appropriate that I did not say it myself. The noble Lord asked about compensation. It is very early days. This has hit us only recently but I can assure the noble Lord that we will do everything we can to protect and compensate the British interest. It would presumably be more appropriate to do that through the European channels. I spent last week in France and I can assure the noble Lord that the French were extremely agitated about this matter. We will not be alone in that.
'['he noble Lord asked about the tests. I am not aware of us as yet having sufficient tests that would give an indication of unacceptable levels. But I will write to the noble Lord about the test situation and then tell him what the position is on publishing the results. In terms of risk, our advice is that there is very little danger to humans, although there is to animals such as guinea pigs. There is little danger to humans from low-level exposure over a short period. Our evidence is that the danger is from high-level exposure over a long period. Our advice is that it is unlikely that there will be human damage from this incident, given the efforts that have been made and are being made to identify all products sourced from Belgium and to remove them and have them eliminated.
Lord Kennet: My Lords, I should like to ask my noble friend two questions. First, what proof, if any, is there in the allegations that we have seen in our own press that the dioxin got into the chicken feed because some manufacturer or salesman of chicken food was putting used machine oil in the mixture? My second question concerns the issue of scientific evidence in these decisions in general. Is this not rather a good example of what happens when a government take the absence of evidence of harm to be the proof of absence of harm? I gather that two Belgian Ministers were involved. The two months of delay seem to have been spent worrying about whether there was sufficient evidence to worry. Does my noble friend not agree that
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in these cases the first lesson is worry at once if you are worried at all and act, even if only provisionally, at once?
Lord Donoughue: My Lords, my noble friend asked about the use of machine oil. I have not seen, and l do not know whether there exists at the moment, definitive proof of what was the cause. But we are aware that that is a report of what was the cause. On my noble friend's second point, I agree with him that the absence of evidence of harm does not prove the absence of harm. I think that we do worry at once and that is why we act on the precautionary principle in general. That must be correct. We have of course acted on the precautionary principle in relation to beef on the bone.
Lord Alton of Liverpool: My Lords, the Minister has told the House this afternoon that two emergency food hazard orders have been issued and that dioxin levels may be up to 100 times greater than that which he would find acceptable. Yet he has also told the House that there is no public health risk. Does he not agree that this will lead to confusion in the minds of many consumers? Would it not be helpful to the House and to the public, learning from experiences with BSE, if all the scientific information which was made available to the department in coming to that conclusion was made public and laid in the Library of your Lordships' House? Does he not further agree that the resignation of the Belgian food Minister, after trying to suppress the details of this scandal for so long, demonstrates yet again the need to separate consumer interests from those of the agricultural industry? Far too often—this is a lesson not just for the Belgian government but for all European governments—the watchdog is too closely identified with the burglar.
Lord Donoughue: My Lords, perhaps I may say in response to the noble Lord that I did not categorically state that there was no public health risk. I said that our advice was that it was unlikely that humans would suffer damage from this incident. But because we act on the precautionary principle, because we cannot be absolutely sure, because public health comes first, we have taken the steps that we have taken just in case it could be worse or more serious. The noble Lord asked about the publication of evidence. I have no reason to believe that that would not be published. If it is not published, no doubt the noble Lord will ask again and I shall do my best to get him the information. Whether the Belgian Minister resigned because, as the noble Lord said, he tried to suppress the evidence, I am not sure. I do not know that that has been proven. He resigned because in the event the delay was clearly unacceptable. But there are times when the evidence is not entirely convincing and the advice and opinions move in different ways. So I do not know that one can say that he resigned because he tried to suppress the evidence.
The noble Lord's final point was about burglars arid whether governments are too close to producers and not close enough to the health of consumers. I believe that to have been the case in the past. One of the main endeavours of the new government has been to try to

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alter that balance. I am not saying that the previous administration did not have as a prime concern the health of the public too. But we have definitely tried to alter that balance and to put the consumer and public health first.
Lord Swinfen: My Lords, if contaminants from this Belgian animal feed stuff can be passed through to eggs, milk and milk products, could not genetically modified ingredients in animal feed also find their way into eggs, milk and milk products? Might not sustained exposure be potentially damaging to humans over a long period?
Lord Donoughue: My Lords, I am not aware that there is a meaningful comparison between genetically modified ingredients and these ingredients. There is a difference. Dioxins are proven to damage health. This level in consumed chicken, although I have stated that our advice is that it is not believed to be a serious threat, can be damaging over the long term. It is carcinogenic and may affect other aspects of health. There is as yet no evidence that GM ingredients have any such effect.
Lord Hardy of Wath: My Lords, the Government have clearly acted with commendable dispatch and will maintain concern for British interests. However, my noble friend will be aware that many British citizens work in Brussels—in the EU, NATO and the WEU. Have the Government taken action on their behalf and have the Belgian administration offered any promises or indemnities in the event of any of those individuals suffering disadvantage or a serious condition?
Lord Donoughue: My Lords, my noble friend is quite right to express concern for British citizens in Belgium as the Belgian Government now show concern for their own citizens. As to what can be done by way of indemnities and so forth, it is very early days, but I assure my noble friend that we shall do whatever is necessary—as we already have—to protect the interests of British subjects here and in Belgium.
Lord Skelmersdale: My Lords, for myself I am satisfied that the Government have acted both rapidly and correctly to safeguard human health in this country. However, there is a wider dimension to this. The Government have repeatedly told us that the European Union is not a federated state, nor do they intend that it should become so. Quite clearly, the Governments of the United States and Canada have taken action in respect of these products on the basis that the European Union is a federated state and in their eyes we are all tarred with the Belgian brush (if I may put it that way). Therefore, what is the Ministry of Agriculture and, more importantly, the Foreign Office, which has a great part to play in this particular matter, seeking to do to correct this mistaken impression on the part of our allies?
Lord Donoughue: My Lords, first I thank the noble Lord for his generous words about the action taken by the Government. As to others viewing the EU as a federated state, I am not sure that that is precisely so.
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They see Europe as a free market within which products move freely. If a product is defective in one it is liable to be defective elsewhere, but they will also see the very vigorous actions that have been taken both nationally and on a Europe-wide basis. We believe that they should be very rapidly convinced that the actions taken in Britain, by individual member states and the Commission should make them view the markets of particular member states as not suffering contamination. As to the Foreign Office, fortunately I do not have to answer for it, and never intend to do so.

Tax Credits Bill
6.1 p.m.
Proceedings after Third Reading resumed on Clause 2.
Earl Russell Earl Russell moved Amendment No. 3:
Page 2, line 2, at end insert—
("( ) The Social Security Advisory Committee constituted under section 170 of the Social Security Administration Act 1992 shall he renamed the Social Security and Tax Credits Advisory Committee.
( ) Part XIII of the Social Security Administration Act 1992 shall have effect, in relation to working families' tax credit or disabled person's tax credit, as if references to the Secretary of State were references to the Treasury or the Board, as may be appropriate.")
The noble Earl said: My Lords, in the absence of my noble friend I rise to move Amendment No. 3. I hope that I shall not detain the House too long on this matter since my noble friend has already done a great deal of the spade work. This amendment concerns the Social Security Advisory Committee and ensuring that its advice is available for proposals brought in under the Bill. The amendment comprises three points. The first—on which I shall not detain the House for long since it was the subject of very wide agreement in Committee—is that the advice of that committee is extremely valuable to both the Government and Parliament. Since the matter is similar to the situation in family credit the case for that advice being available is strong.
The second question that arises is: what is the actual effect of this Bill in making sure that the advice of the committee is available on tax credit proposals? The third question is: how should an amendment be drafted to ensure that the advice of the committee is available? I believe that my noble friend has got all three questions right and, hoping to hear the reply of the Minister, I beg to move.
Baroness Hollis of Heigham: My Lords, I hope that I can give the noble Earl the answers and reassurances that he seeks. The amendments that we have tabled are essentially technical—the amendment moved by the noble Earl is put more broadly—to put the position of the Social Security Advisory Committee beyond doubt. They have been grouped because they relate to the same matter.
We discussed the role of the Social Security Advisory Committee at Report stage when I explained the policy of the Government in relation to SSAC and tax credits and our intention to develop a sound and constructive informal relationship between SSAC and the Inland

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Revenue. It may be helpful if I clarify the position again. We did not intend that SSAC should have a formal role in relation to tax credits, and that is why the amendments that we have tabled put that beyond doubt.
However, the noble Lord, Lord Goodhart, raised a technical point at Report questioning whether inadvertently some part of the requirement to consult with SSAC would transfer to the Board of Inland Revenue. We have looked carefully at the noble Lord's point and want the statutory position to be absolutely clear. As the argument of the noble Lord, Lord Goodhart, suggested, unfortunately the Bill was not drafted as clearly as we would wish; in other words, the noble Lord, Lord Goodhart, was correct. I pay tribute to him. In this, as in several other matters, his expertise has been well brought to bear on a. Bill before your Lordships' House.
Hence, following the noble Lord's questions, echoed today by the noble Earl, Lord Russell, the Government have tabled two amendments which will ensure that SSAC's statutory role to advise the Secretary of State and consider proposals relating to social security remain unchanged. But we do not propose to extend its statutory role to tax credits. However, as I also said at Report and the noble Earl has said this evening—it is a sentiment with which I entirely agree—we very much recognise the valuable experience and expertise of SSAC in the field of social policy. The Inland Revenue has an excellent record for consultation with both business groups and others such as lone parents and disabled people. The Inland Revenue is currently actively discussing with SSAC's secretariat the basis of appropriate informal arrangements to draw on SSAC's special experience which will be mutually acceptable. It wants to ensure that the consultation is as wide and constructive as possible. Obviously, SSAC, with its extensive experience in the field, will potentially be a valuable source of information and views; in other words, the situation is analogous to national insurance contributions after the merger of the Contributions Agency with the Inland Revenue. Discussions here are well advanced and we hope to conclude them shortly.
Discussions on tax credits are at a very early stage but we hope that similar acceptable informal arrangements will be made to allow the Revenue to continue to tap into SSAC's expertise. SSAC has noted the transfer and it is pleased that it will have the opportunity to be consulted.
repeat what I said at Report. When the discussions are concluded—they may take some time given the timetables of both SSAC and the departments concerned—I shall be happy to write to noble Lords to explain the arrangements. Having said that, I hope that these arrangements are acceptable to the House. Having paid right and proper tribute to the noble Lord, Lord Goodhart, for ensuring that we clarify our intentions, I hope that the noble Earl feels able to withdraw the amendment.
Earl Russell: My Lords, I warmly thank the Minister for her very kind words about my noble friend Lord Goodhart, who has done a great deal of valuable work. I also thank her for her remarks on the subject of
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the amendment. Obviously, as to what the noble Baroness described, these are very early days as yet. It sounds a little like a negotiation for a peace settlement before it has been concluded. I appreciate that the Treasury has great dignity and that this matter must be treated with wariness. I understand why the Government have done this. An informal arrangement may be entirely satisfactory if it works freely and with good will on the part of all parties. This matter deserves a very cautious welcome and we look forward with a great deal of interest to hearing how it develops. We shall continue to monitor it, as I am sure will the Minister. Meanwhile, I thank the Minister warmly for her reply and welcome it on an interim basis. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Higgins Lord Higgins moved Amendment No. 4:
Page 2, line 2, at end insert—
("( ) The Treasury, in making regulations under any functions transferred to it under subsection (1) above, shall ensure that payments of the tax credit are not made to individuals who have an income, or to couples who have a joint income, in excess of £9,542.")
The noble Lord said: My Lords, even at this late stage of proceedings on the Bill, this is a probing amendment. I may have been a little over-precise on the figure of £9,542.
I thought that it was worth raising the point because I am increasingly concerned at the curtailment of benefits as a result of the individual having an income or capital at a specific level. The amendment has been provoked by the way in which the working families' tax credit moves up the income scale—we have discussed that on previous occasions—to a quite significant income of £25,000, and in one or two extreme cases up to £35,000. It is a cause for concern because that increases dependency. The way in 'which the taper works has caused some concern. Although it reduces the high marginal rate, it seems also to increase the number of people with pay rates which may reasonably be described as high.
On 5th June in an article in The Times, Mr. Graham Searjeant points out the effect of the working families' tax credit, which will mean a marginal rate of about 70 per cent. He draws various conclusions from that with regard to whether people will seek promotion, to work overtime, and so on. We are concerned at the effect of the working families' tax credit at those levels of income.
Individuals or families are likely to have benefits paid to them at considerably higher levels of income than the levels of income at which other benefits are significantly reduced or withdrawn. At a previous stage, I made a comparison with income support levels. Above the £3,000 to £6,000 level of capital, income support is reduced. There have been many arguments over the years about that limitation, in particular when individuals hang on to their last few savings believing that they give them a degree of security. Annuity and interest rates have plummeted. In general that is to be welcomed. But individuals with capital of £3,000 to £6,000, which may be taxable, will receive little real

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income from it. If one relates the capital to the income which it is likely to produce, they find their income support levels curtailed at a low level of income whereas the Government will give benefit to people on incomes vastly in excess of that amount.
It is difficult to make precise comparisons between one benefit and another. Undoubtedly they vary a great deal. The income support level is at one end of the spectrum. The working families' tax credit is at the other end and we believe that the Government have gone too far.
We understand that the figure in the amendment is the sum at which disability benefit tends to be reduced if people have a pensions income above a certain level. My noble friend Lord Astor of Hever sought to probe the point in a Parliamentary Question on 26th May at col. 922 of the Official Report. He asked:
"Is it not the case that, under the Welfare Reform and Pensions Bill, those with incomes of over £10,000 per annum will lose their incapacity benefit, while the Tax Credits Bill will make payments to those with incomes of over £25,000 per annum?"
The Minister suggested that in the Welfare Reform and Pensions Bill—no doubt we shall come joyously to it next Thursday—the figure was nearer £16,000 than £9,000 for someone with dependent children, a dependent partner, and so on. Even so, people who are drawing disability benefit will find that at £16,000 they have their benefit withdrawn, despite the fact that they are disabled, whereas those receiving the working families' tax credit will receive benefit at incomes vastly in excess of that amount. In devising the working families' tax credit, the Government have not taken an overall view in relation to a range of benefits and the way in which the tapers operate.
In her answer, the noble Baroness refers to people having an income of nearly £16,000 a year. I understand that this refers to a pension of £16,000. The Minister indicates assent. I am not clear about the situation if someone has a pension of less than £16,000 and therefore does not get caught, but might have an income very much greater than that. No doubt we shall discuss that at Committee stage of the Welfare Reform and Pensions Bill.
In introducing the working families' tax credit at the levels and with the tapers proposed, the Government have not taken into account this factor. Many people who are a great deal poorer than those receiving working families' tax credit or, unlike those receiving working families' tax credit, who may be disabled, find that the system penalises them at a level which does not apply to the working families' tax credit. I accept that one should perhaps go into detail about the precise figure. However, the principle I raise, I hope, is reasonably clear.
Various outside bodies provide the figures. However, so far as concerns the relevant clauses of the Welfare Reform and Pensions Bill, the matter is to be determined by statutory instrument. In answering the Parliamentary Question to which I referred, the noble Baroness gave a figure which does not appear on the face of the other Bill.
It is a general point of principle. The introduction of the working families' tax credit makes the time right to consider the overall situation to ensure that those who are poorer or more disabled than those receiving the working families' tax credit are not penalised.
6.15 p.m.
Earl Russell: My Lords, the subject of tapers is appallingly complicated. It leaves us with a choice between Scylla and Charybdis. Either one creates poverty traps or one lets the benefit go remarkably high up the social scale. Neither Scylla nor Charybdis is desirable. Odysseus had a rather simpler problem than the Minister. He calculated that if he sailed under Scylla he would lose only two sailors; if he sailed under Charybdis he would lose the lot. I do not think that the Minister's choice is nearly that easy. It is not self-evident to me that one of those options is necessarily, as a general rule, better than the other.
I was a little struck by the noble Lord, Lord Higgins, invoking the concept of dependency. If one receives, as people do from time to time, a substantial income tax rebate, and one enjoys that and spends it on something one would not otherwise have afforded, one does not consider that one is suffering from dependency. We are using two very different planning systems here, which is perhaps part of the Government's thinking behind the Bill. I have never seen that more clearly illustrated than I did today.
That said, I can understand why there might be arguments for a cap. I can understand them, but I do not say that I am convinced by them. If there is to be a cap, I believe that the noble Lord's amendment sets it a good deal too low. It is liable to create knock-on problems further down the scale.
Furthermore, I am concerned that the amendment contains no statutory provision for uprating for inflation. We have seen with income support saving limits, for example, what happens when there is no statutory provision. Therefore, I believe that if the amendment were passed considerable problems would be created five years down the line. For that reason, if for no other, I hope that the noble Lord will not press the amendment to a Division.
Baroness Hollis of Heigham: My Lords, the amendment seeks to ensure that neither WFTC nor DPTC can be paid to households with incomes in excess of £9,542. Before we knew the reason behind that figure, we circulated a bottle of wine around the department for anyone who could determine it. We worked through half average incomes, European standards of poverty and many other permutations, including "typos", to see where the figure came from. We are grateful to the noble Lord for explaining it.
However, he explained it by saying that it was the figure at which the 50 per cent taper in IB would kick in. I do not accept any such read-across. But even if that were used, he accepts that he has taken the figure of a single person when with WFTC one is comparing a family credit. There might be a read-across to the lower rate of DPTC, but that would be the only point at which his analogy would be valid.

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A family on IB, with a wife and dependent children, and with the appropriate dependency increases, would need an occupational pension of £320 a week, or more than £16,000 a year, to lose all its IB. Roughly speaking—I will reconfirm it—the point at which WFTC would taper out for a family of similar size, but without childcare costs which were being reimbursed, would not be wildly different. Therefore, the point being made by the noble Lord has been taken, because his figure has been based on a singly disabled person and not on the appropriate family household rate. Were he to take a family household rate and exclude the childcare element from WFTC the figures would not be wildly divergent. I shall give him the figures at a later stage.
Lord Higgins: My Lords, perhaps the Minister will allow me to intervene. Some of the figures came from outside groups which have considered the matter in considerable depth. I am not clear where the Minister gets her figures for incapacity benefit.
Baroness Hollis of Heigham: My Lords, they are in the impact assessment of the Bill. A person who has been entitled to the long-term rate of IB of £135 a week would have an addition which would include an adult dependency increase of £39.95—that is for a wife looking after a child—dependency increases of £21.25 and an age addition of £7.05. That person would need an occupational pension of £320 a week, or more than £16,000 a year, to lose all his IB. In other words, the IB case has been made reasonably on the case of a single adult, whereas with WFTC we are dealing with families. Therefore, if one is going to make such an analogy, one must compare it with an IB family in similar circumstances. At that point, the income analogy is with the £16,000 and IB. What I was trying to suggest is that if we were not including any childcare element the figures would not be wildly divergent for WFTC.
I have a second objection to the noble Lord's amendment. It was identified by the noble Earl, Lord Russell. It does not make clear whether the £9,542 refers to gross or net income. If it is net income, which equates to about £11,600 gross for a single earner family, the WFTC caseload would come down from 1.4 million families to 800,000 and the DPTC caseload would come down from 31,000 to 22,000. But it gets worse! If the figure of £9,542 reflects gross income, the drop in caseload would be even greater; down to 7001,000 families who would qualify for WFTC and 19,000 families who would qualify for DPTC.
The noble Earl, Lord Russell, was indicating the point that the amendment would not only deprive between 600,000 and 700,000 people of the support of tax credits, but, worse, it would mean that between 10 and 20 per cent of current family credit and DWA recipients would fail to qualify for WFTC and DPTC. In fact, not only would it not become the more generous work incentive, but it would make it more severe, more punitive, and therefore put more families into hardship than existing family credit and DWA procedures.
The purpose of tax credits is twofold. First, it is to produce work incentives to make work pay so that people see that the entry wage is worth taking.
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Secondly, it is designed to support families. We know that the best way of supporting families, particularly small children, is to ensure that one parent is in work. The amendment would increase the number of children in poverty because it would cap the figure for WFTC, if it were gross, below the current figures of family credit. I cannot believe that the noble Lord intended that and I cannot believe that if he were minded to pursue it the House could support him. It would he unreasonable.
I could have advanced many other arguments of a technical nature. However, given the double explanation that, first, the noble Lord has underestimated the IB figure for a similar family and, secondly, the implication that it would not only take money away from moderate earners but from very low income families, too, I hope that the noble Lord will not press his amendment.
Lord Higgins: My Lords, that was one of the more convincing arguments put forward by the Minister. Incidentally, I noticed that she did not refer to some of the other benefits—for example, income support—where the capital allowance figure must be re-examined against the background of WFTC. The amount of income generated by such capital is a pittance and causes serious problems. I know that well from years of constituency experience. However, I understand the arguments made. No doubt we shall return to incapacity benefit in the near future during debates on the other Bill. The figures she has given us today are interesting in a number of respects and, subject to 'what I have said, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Astor of Hever Lord Astor of Hever moved Amendment No. 5:
After Clause 2, insert the following new clause—

Tax Credits Bill

  RECIPIENT OF TAX CREDIT
  (" . Regulations made by the Board under section 2(1)(c) shall provide that where a couple is entitled to a tax credit, in the case of a dispute between the parties, the credit shall be paid to the mother.")
  The noble Lord said: My Lords, 1 beg to move Amendment No. 5. We shall not move Amendment No. 6, although the House has chosen not to place a duty on the Government to write on to the face of the Bill that the mother alone, if she fears domestic violence, should received the tax credits. However, it i s important that there is protection for the mother when there is a dispute between the couple. There should he an assumption that the tax credit is paid to the mother. Academic research has found that money paid directly to the mother is more likely to meet family needs, while men tend to use some of that income as spending money.
  We recognise that that was what the Minister intended when she spoke to Amendment No. 6 on Report. However, in the case of a dispute between the parties, we would like to see special protection on the face of the Bill for this vulnerable group. I beg to move.
  6.30 p.m.
  Earl Russell: My Lords, I understand that there are seriously good intentions behind this amendment. However, I have some problems with the drafting. We have been arguing, and I understand that it is the

  1355
  Government's position, that where there is a dispute between two parents, the working families' tax credit should be paid to the carer. That is a rather different way of distinguishing between two parents from the way used in the amendment. I am perfectly happy with distinguishing between two parents in terms of what they do, but distinguishing between them in terms of their gender causes me problems.
  We are subject to the European Convention on Human Rights in our domestic law as well as in our more general legal relations. To distinguish simply in terms of gender will cause us problems. Inevitably, we shall see more cases where the care of the child does not rest with the woman. Already 9 per cent of single parents are male and they are too easily forgotten, but they are entitled to exactly the same rights.
  A situation that insists that the woman should receive the tax credit, even if she does not have the care of the child, is unfortunate in practice and unequal in its effect. Will the Minister take advice on whether that will be convention compatible? I would be interested to know the result of that advice.
  Lord Swinfen: My Lords, I rise to support the amendment. However, I understand the points raised by the noble Earl. Lord Russell. As there is no time to redraft anything in this House, perhaps the Minister should accept the amendment today, allow her officials to look at it and leave it for the other place to improve it or to throw it out. I suggest that they improve it.
  Baroness Hollis of Heigham: My Lords, the speech of the noble Lord, Lord Swinfen, surprised me. I return to the point raised by the noble Earl, Lord Russell. There is clearly a problem in defining someone not by what they do but by their gender role. Time and again, we have said that, with three-quarters of married women now working, we should not automatically assume that the father is the primary earner and the mother is the primary carer. That may be the case, but increasingly there are all sorts of other arrangements. Fragmented families may reform themselves so that the mother in the family, who is the primary carer, is not necessarily the biological mother of the children. That produces complications for such amendments.
  I accept, as I believe the House will—I think the noble Lord, Lord Swinfen, also accepted this—that the points made by the noble Earl are entirely valid. There is another reason. I am happy to reiterate the commitment that the forms will be amended to reflect the disputes procedure. Following the queries from the noble Lord, Lord Goodhart, the disputes will be explicitly covered on the face of the regulations.
  The Government entirely accept the substance of what the noble Lord is asking for, as amended by the framework of the noble Lord, Lord Goodhart. The amendment has all sorts of flaws, as indicated by the
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  noble Earl, Lord Russell, and others. The Government have already given a commitment as to the substance of what the amendment is trying to achieve.
  Earl Russell: My Lords. I thank the Minister warmly, on behalf of my noble friend, for what she has said.
  Lord Astor of Hever: My Lords, I am grateful to the Minister for that reply. We have debated this point at great length during the passage of the Bill. I have no regrets about that, as I feel it is an important issue. It is a matter that concerns many professional organisations. I take the point made by the noble Earl, Lord Russell. Our concern was to protect the mother, and we used that word carefully, as opposed to the word "carer".
  On Amendment No. 3, the noble Earl, Lord Russell, used the words "cautious welcome". I give what the Minister has just said a cautious welcome. Although her points do not meet all our concerns and those of the professional organisations advising us, I accept that she has gone some way to doing so. I understand the arguments that the noble Baroness has made. We do not want to push this matter to a Division. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 6 not moved.]
  Lord Swinfen Lord Swinfen moved Amendment No. 7.
  After Clause 2, insert the following new clause—

  CALCULATION OF WORKING FAMILIES' TAX CREDIT: MAINTENANCE PAYMENTS
  (" . No scheme for working families' tax credit shall be prescribed under functions transferred under section 2(1)(a) unless provision is made in every case for an amount of income to be disregarded equal to the average assessed level of maintenance payments in the 12 months preceding the date on which the regulations giving effect to the scheme are made except where the maintenance received was greater. in which case the maintenance payments actually received shall be disregarded.")
  The noble Lord said: My Lords, the purpose of this new clause is to ensure, as far as is possible, that the same amount of credit is given to all families with the same income; for example, the same amount coming in each week. It does that by requiring that every family, whether a married couple, a lone parent not in receipt of maintenance payments, or a lone parent in receipt of below average maintenance payments, should be entitled to an income disregard of an amount equal to the average assessed level of maintenance. Lone parents who receive above average maintenance would be entitled to have the whole of the maintenance disregarded, as the Government have proposed.
  When the working families' tax credit was announced, it was unclear how income in the form of maintenance payments would be treated. In Committee in another place the Paymaster General, in an intervention, said that the Government would be proposing that income in the form of maintenance payments would be disregarded. The noble Baroness, Lady Hollis, gave the House an insight into the Government's thinking in Committee and on Report.
  I have sought to raise a number of points about the decision to disregard maintenance payments. However, there was one overriding point. If maintenance payments are to be disregarded, will the result be fair to families in similar circumstances who have the same amount of cash coming into the household each week, none of which is in the form of maintenance payments? The noble Baroness invited me to return to that point, as she thought that there may be some misunderstanding on her part or mine.
  Prior to the Report stage, I sent the noble Baroness some examples which compared the position of similar families, part of whose income consisted of maintenance payments, with families with the same amount coming in each week but none of that through maintenance payments. From the debate on Report it was not clear whether the noble Baroness had seen that letter or the examples. I assume by now that she will have done so.
  For your Lordships' benefit let me explain that one of the examples compared the position of a family of four (two adults and two young children) with earnings of £150 a week with a family of three (a lone parent and two young children) with earnings of £110 a week and a maintenance payment of £40 a week. In other words, both families start off with the same gross income each week of £150 but, because of the income disregard for maintenance payments, the family of three is much better off in cash terms than the family of four. The family of three will receive a weekly tax credit of £94.47. The family of four will receive only £78.96. Allowing for tax and national insurance contributions, the family of four end up with a disposable income—money available to pay the family bills—of £27.31 less than the family of three which receives maintenance payments.
  As I understand the Government's proposals, a lone parent who does not receive any maintenance, perhaps because the payer has disappeared, and who also earns £150 a week will, likewise, receive credit of only £78.96 a week.
  On Report, the noble Baroness made the point that a lone parent getting no maintenance and a lone parent getting £28 a week in maintenance would receive the same working families' tax credit. That means that the family who receives maintenance will be better off than the family who does not. That was confirmed by the Paymaster General in a Written Answer in another place on 26th April. His figure showed that families with earnings of £150 a week, who do not receive maintenance payments, end up with a disposable income of £236.77 per week, whereas a similar family who, in addition to its earnings, also receives maintenance of £40 a week, will end up with a disposable income of £276.77 per week. The difference between these figures and the figures that I sent to the noble Baroness, and which I have just quoted, is that in one case payments in receipt of maintenance are totally ignored and, in the other, they are included in the family's income. But on whichever basis the examples are drawn, the underlying message is the same: families who do not receive maintenance payments will be treated less well than those who do.
  The Government have rightly laid great stress on the need for fairness in taxation. If the system is to be fair, all families and taxpayers with the same income should broadly pay the same tax. The working families' tax credit is in reality a means-tested benefit. Families with the same means should get the same benefit. That will not be the case if some families are assessed for working families' tax credit purposes on the whole of their income—that is to say, all the means are taken into account, whereas other families are allowed to disregard one type of income. If the credit is to be fair, all income and all means must be taken into account or all families should be allowed to disregard income used for maintenance.
  The Government have decided, for reasons which seem to them to be compelling, to ignore income in the form of maintenance payments. If that decision is set in stone, then your Lordships need to consider how to rebalance the position so that, in the example I have given, families with the same means—that is, with the same cash coming into the household each week—as the lone parent family in receipt of maintenance payments get the same credit. Alternatively, to make the same point using the assumptions in the Government's examples, how do we rebalance the position so that all families have a sum set aside for their costs of living?
  This new clause proposes to do that by giving all families the right to have an amount of their income disregarded which is equal to the average assessed maintenance. That would still leave lone parents who get above-average maintenance in a better position, but the result would be a lot fairer than the position which will apply if nothing is done for families who do not get any part of their income in the form of maintenance payments.
  The Government may say that to disregard income in every case to an amount equal to the average maintenance will be very costly. But it seems to be the only option if families and children are going to be treated fairly. I beg to move.
  6.45 p.m.
  Baroness Hollis of Heigham: My Lords, the noble Lord, Lord Swinfen, is returning to issues that he raised previously as regards the treatment of maintenance payments and the WFTC. As my right honourable friend the Paymaster General made clear in, I believe, December or February, all maintenance payments received will be fully disregarded in the calculation of income for the purposes of WFTC. The argument being advanced by the noble Lord, Lord Swinfen, was that that meant that such parents, by receiving their maintenance as a 100 per cent. disregard, would be effectively better off than intact families, and therefore in some sense that was unfair. That was the basic argument that the noble Lord was addressing.
  Perhaps I may just clarify what will happen. As noble Lords are aware, the amount of WFTC received is affected by the level of income of the claimant and, if appropriate, his or her partner. So, in calculating the amount of WFTC due, the tax credit office will assess the maximum award according to the family

  1359
  circumstances based on hours worked, the number and age of the children and any qualifying childcare costs. It will also assess the net weekly income. If it is below the £90 threshold the full award is payable. If it is above, then the maximum award is reduced by 55 pence for every extra pound above the threshold.
  Under family credit, if a claimant is receiving maintenance payments, these were included in the assessment of weekly income except for the first £15. There is effectively a £15 disregard because it is a benefit. The maintenance payments could be kept separate and untouched and therefore used for the support of the child. However, as regards WFTC, there will be a 100 per cent. disregard of maintenance and not merely the first £15.
  Under this proposal, lone parents will be better off than they would have been under family credit. That is what we want to achieve because we want to provide a clear contribution to tackling child poverty, particularly given that we know that the face of poverty in this country is that of the child and the poorest children are disproportionately in lone parent families. About 1.8 million children in this country are living with lone parents and not receiving the maintenance to which they are entitled. The fact that they have a parent who is not in work and not receiving maintenance are the two biggest determinants of child poverty in this country today. That is why the Government are determined, on the one hand, through the New Deal and the WFTC, to make it attractive to the lone parent to go to work when she feels able to do so and, on the other hand, to propose reforms of the Child Support Agency to ensure that maintenance more reliably goes to the children in the family. Those two things together will in time, I hope, transform the situation of children who would otherwise linger in poverty bumping along on income support. Therefore, it is a recognition of the continuing responsibility to the children.
  The second point which the noble Lord made is that it means that a lone parent can be better off than an intact family because the former partner and continuing parent is paying maintenance to the lone parent. That assumes that the situation of the lone parent is comfortable and will be better than that of a couple in work. But we know that a lone parent, even with the same level of WFTC, will remain on family credit, and presumably WFTC, for much longer. There will be less opportunity of climbing up the income rungs to get a decent income independent of the benefit. We know that intact families who may be receiving WFTC will be receiving that credit only temporarily. They dip down to it when their hours have been reduced or someone has lost their job. They spring out of it quite quickly. Therefore, in that respect the situation is not analogous. In other words, the lone parent is likely to be dependent on the support of that tax credit in order to have a worthwhile wage for very much longer than the couple.
  If one follows the logic of the noble Lord's argument and only part of the £15 of maintenance is disregarded and the rest does not produce apparent greater fairness between them and an intact family, which seems to be the thrust of the noble Lord's argument, given that tax
  1360
  credit is not a benefit, the noble Lord's position would ensure that, although the first £15 can be kept, the rest would be tapered. But there will be no leverage to require the father to pay it.
  As a result, the implication of the noble Lord's amendment would be that the ex-partner's payment of maintenance would become an option and not a responsibility because it would be a tax credit and not a benefit and therefore there would be no obligation to come within the remit of the Child Support Agency, keeping only the first £15. If the lone parent made the choice to go after the rest she would keep only a small fraction of it or she would come to a black economy deal. As a result the ex-partner would not pay the maintenance due.
  Does the noble Lord really want to send out a signal to former partners—usually fathers but not invariably so—not to pay the maintenance that they should because there is no way of enforcing it because it is no longer a benefit but a tax credit? I cannot believe that, in trying to ensure that the position of a lone parent is similar to that of a couple, the noble Lord would wish to send out a signal to men that if one has a child there is no need to pay maintenance for that child, and that, if one has a partner who is lucky enough to go to work, even if the pay is low, that should also send out a signal to the male children of the family that the way to be a father is to have a child and then to walk away from the responsibilities.
  That is the import of the noble Lord's amendment and I cannot believe that that is what he would wish to happen. I understand where he is coming from, but that is where his amendment takes us. In the light of that explanation I hope that he will withdraw his amendment.
  Lord Swinfen: My Lords, it is certainly not my intention to press this amendment, and it never was.
  I can see the noble Baroness's point that a father should be responsible for his children; that is something I would never deny. At the same time we should be doing what we can to support the parents in a full family struggling to look after their children. It is the children, as well as the parents, in that family who will be on a reduced income.
  I can see the logic of the noble Baroness's explanation, but there seems to be a piece of the jigsaw missing. I realise that it is difficult to cut a piece exactly to fit that hole. It is probably Utopian, but we all strive for Utopia; so far no one has found it. As I said, I do not intend to press this matter, and beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Swinfen Lord Swinfen moved Amendment No. 8:
  After Clause 2, insert the following new clause—

  ADDITIONAL PAYMENT OF WORKING FAMILIES' TAX CREDIT TO COUPLES
  (" . Under any schemes for working families' tax credit prescribed under functions transferred under section 2(1)(a), families headed by a couple shall receive a basic tax credit, to take into account the second adult, between 55 per cent and 60 per cent greater than that received by families headed by a lone parent.")
  The noble Lord said: My Lords, during the debate on the broadly similar new clause at Report stage, the noble Baroness rebuked me for misunderstanding the rules which the Government are proposing to introduce for the basic tax credit in the disabled person's tax credit. I fear that I have to plead guilty. But I plead in mitigation that I was basing what I said about the basic tax credit for the DPTC on the booklet describing the two credits issued by the Inland Revenue last December. Otherwise, it was an excellent booklet. But the noble Baroness may wish to ensure that the Inland Revenue now understands, as I do, that under the Government's disabled person's tax credit proposals as they stand, for DPTC a lone parent will receive the same basic credit as a couple and will not be treated as a single person. I suspect that what I have to say now on this new clause will in fact apply to DPTC in the same way as to the working families' tax credit. But in order not to risk further confusion I have confined the clause to the working families' tax credit.
  The substance of the matter, which was originally raised by Professor Steven Webb on the Third Reading of the Bill in another place and which I and other noble Lords have since raised on Second Reading, in Committee and on Report without obtaining a reply, is this. In determining the amount of the basic tax credit to which a couple are entitled. the first step will be to add together the incomes of both partners and also their savings. In other words. at this stage the tax affairs of both partners are taken into account.
  The noble Baroness stressed throughout our debates on this Bill that, by contrast with family credit, the WFTC is to be part of the tax system. Presumably therefore we should expect the normal tax rules to apply. However, quite clearly this treatment is in breach of the principle of independent taxation. The partners will not have privacy in their tax affairs and the tax liability of the partner drawing the credit will be affected by changes in the income of the other. No explanation of this breach of the principle of independent taxation has yet been forthcoming.
  But at this point in the calculation of the credit due, having disadvantaged the couple by aggregating their incomes and savings, the Government are proposing to disadvantage them again by ignoring the second adult and giving a couple the same basic tax credit as a lone parent, despite the fact that the second adult has to eat, be clothed and incur the other necessary expenses of life. Yet income support, the jobseeker's allowance and housing and council tax benefit all recognise those needs by giving a couple a higher benefit than a lone parent. It is true that family credit is the exception. But if the introduction of the WFTC is to be, as the Government maintain, a major part of their welfare-to-work programme, it should not be necessary to follow the family credit in every respect, especially where it is the odd one out.
  The Government made much of the fairness of their tax proposals, including the WFTC. But I question what is fair in this double disadvantage inflicted on couples. A major aim of WFTC is to encourage people out of welfare into work. But clearly, if there is an additional benefit for couples in income support and jobseeker's
  1362
  allowance but not in the WFTC, the incentive for couples to get paid work will be less than that for lone parents. Another aim of the WFTC is to get children out of poverty, as the noble Baroness said. But clearly, if perhaps surprisingly, at any given level of income the children in a family headed by a couple will he more likely to be kept in poverty than the children in a family headed by a lone parent.
  In Committee the noble Baroness said that my new clause would cost £1.25 billion. With respect, that is not so; it need not cost a penny. It is asking that the credits should be fairly awarded. It says nothing about the level of the credits. But if what the noble Baroness is assuming in making that estimate is that it would cost £1.25 billion to increase the basic tax credit for couples in addition to the credits which the Government are otherwise proposing, then she is saying that under the Government's proposals each of the couples within the WFTC will be unfairly treated to the extent of £35 a week; that couples will receive £35 a week less incentive to get off benefits and into work; and that the children in a family headed by a couple will be in poverty to the extent of £35 a week more than other children.
  Particularly given that in their consultative document, Supporting Families, the Government showed themselves to be fully aware of the advantages to children of being brought up in a family headed by a couple, I find this proposed discrimination against families headed by couples astonishing. What is less astonishing perhaps is that I and others have raised this point so many times previously without receiving a reply. I beg to move.
  Lord Higgins: My Lords, perhaps I might intervene for a moment. My noble friend, who is very expert in these matters, made a number of important points. Will the Minister particularly clarify the point he made with regard to the question of independent taxation and the treatment of savings?
  7 p.m.
  Baroness Hollis of Heigham: My Lords, a version of this amendment was raised by the noble Lord in Committee, on Report and again today. He made the point that WFTC, like family credit before it, has but a single rate of support for the family, which may have one or alternatively two adults within it. The noble Lord points out, though this amendment is confined to working families tax credit, that DPTC' has two rates: one for families regardless of whether they are headed by one or two adults, and a lower rate where it is a single person without responsibility for children but for which he or she qualifies by virtue of their disability.
  The noble Lord, Lord Swinfen, first prayed in aid the structure of income-related benefits such as income support and JSA, which have separate rates for single, people, lone parents and couples. He says therefore that the structure of tax credits is illogical, even though the basic structure follows that used by the benefits that they replace, and he suggested on Report that there were two ways of dealing with this: one was to stop basing the help on family income and base it on the family's

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  individual circumstances; alternatively, to give couples an additional credit to acknowledge that there is another mouth to feed, which is the approach taken by the noble Lord's amendment.
  Several issues have become entangled in this argument and I should like to unravel them. First, the noble Lord is saying that it is unreasonable that there should be only one rate for WFTC, whereas essentially there are two rates for DPTC, like the DWA before it. I tried to say in a previous debate why that should be the case. There is no inconsistency. WFTC will not, does not and cannot go to a single person. DPTC can because to qualify for DPTC the first requirement is the disability. There is then an additional set of premia if, as a disabled person, you are also a partner in a family, which is the point at which it is analogous to a working families' tax credit. Following the noble Lord's logic, the DPTC would not be available to single people who are disabled but only to families. I am sure that, as somebody who has ardently espoused the cause of disabled people, that is not a line he would wish to pursue.
  His second point is that the new tax credit does not follow the general structure of income related benefits. Precisely. We are making a clean break with income-related benefits. He points out that it is benefits such as income support and JSA that have more than just a single rate in WFTC. There is a group of rates for single people, another for lone parents and another for couples. I should point out that income support has 16 basic rates and JSA has 17 basic rates. Those credits and personal allowances are added to premia for families and the like.
  That shows that the structure of tax credits is not the same because it was not intended to be the same as the structure of the basic income related benefits such as income support and JSA. It is simply not good enough to say that because you have these different premia for income-related benefits you should transfer them to a tax credit, when the only thing the Government have been trying to say is that the tax credit is not an income-related benefit.
  The one exception made by the noble Lord concerned family credits, but he said in a throwaway remark "that's the odd one out". Of course. Family credit is not a straight income-related means-tested safety net benefit for out-of-work people. It is a means of support for people who are in work but on low incomes, with families to support. That is the one that has only the basic rate, and that is the benefit on which WFTC builds and which it will, of course, replace. So far from this being the odd one out, family credit, for the purposes of this Bill, is the basic benefit which is being superseded by WFTC. It is built on the same assumptions that we are dealing with a family and with individuals and you add up all the premia, as in the past with other income-related benefits. I hope I have addressed that particular argument.
  The noble Lord's third point is that we need to consider how many adults there are in the family and should seek to base the benefit, as the family credit, on that, but with the tax credit we should simply act as
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  though it were a benefit. We want to do something different with this measure. This is an incentive to work. This is a tax credit to make the wage at the point of entry worth having by virtue of the fact that the entry wage, with the benefit of the tax credit, will now make it worthwhile working.
  The question is then: will the incentive be effective? Time will tell, but we know quite a bit about our target groups. We know, for instance, that 36 per cent of lone parents but only 14 per cent of couples claiming family credit work less than 20 hours a week. The vast majority of these lone parents are women and we know that the part-time pay of women is only 59 per cent of male full-time wages. Lone parents therefore are a particular target group for this Bill. The structure of the credits provides them with appropriate incentives.
  The noble Lord said that this could be cost neutral, but it could be cost neutral only if you either depress the value of the credit or in some way introduce swings and roundabouts between the two groups. That means that one group gains or the other group loses. If you were to make it cost neutral by taking money away from lone parents to give to couples, that ignores all the arguments I have tried to advance, such as the fact that lone parents work fewer hours and are in longer-term poverty, compared to couples. They are the ones who would lose. That, of course, is not intended, but if the noble Lord wants to improve the situation of couples without damaging the situation of lone parents, then I am afraid he will be faced with a bill of £1.25 million of public expenditure, which we think could be better used.
  As currently structured, tax credits already make couples much better off than they would be on benefit and they provide the incentive that we want. We do not think that extra money would make that much difference, in terms of incentive; nor do we accept the noble Lord's notion of fairness, because we think that long-term persistent poverty is a problem, particularly for lone parents. They are the ones who remain either on family credit, as in the past, or would probably be on working families' tax credit for longer than couples. Their poverty is persistent and their children's poverty is persistent. We want to help them out of that.
  I have tried to explain that there needs to be a difference between WFTC and DPTC and, secondly, we should not draw a parallel between the structure of tax credits and the traditional income-related benefits, like income support and JSA. We are making a break with those and instead we are building on family credit, which the noble Lord recognises as the odd one out. Thirdly, far from accepting the noble Lord's argument about unfairness to couples, we want lone parents who are the poorest of the poor to be a target group for help in this Bill. I do not think it is appropriate that we should be asking for additional expenditure of the type that would be required to raise the tax credits by individualising them according to the situation of those lone parents by having one for him and one for her, representing additional public expenditure of £1.25 million.

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  Finally, before I sit down I shall return to the point made by the noble Lord. Lord Swinfen, and reaffirmed by the noble Lord, Lord Higgins. There is no question of there being any breach of independent taxation, as the Chancellor has made clear on a number of occasions. WFTC, like family credits, is intended to give targeted support to families in work. It must therefore be based on household circumstances, but the Chancellor gave the assurance in his recent speech to the IMF that the principle of independent taxation will continue to be honoured. Perhaps I might just quote this extract from the Chancellor's speech:
  "In all our reforms we will honour the important principles of independent taxation; but we will never allow the wife or partner to he regarded as the chattel, as was the case until the late 1980s. Everyone should he treated equally in the tax system and everybody should have the right to their own personal allowance, whatever the household status."
  Having given that assurance and tried to address the concerns of the noble Lord, I hope that he will see fit to withdraw his amendment.
  Lord Swinfen: My Lords, the purpose of the amendment was to seek clarification, and after the noble Baroness's long exposition I probably have that. It is with pleasure that I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 5 [General functions of Board]:
  [Amendment No. 9 not moved.]
  Clause 14 [Persons qualifying for disabled person's tax credit]:
  Lord Higgins Lord Higgins moved Amendment No. 10:
  Page 8, line 29. leave Out from ("certifies") to end of line 31
  The noble Lord said: My Lords, this is probably the most simple amendment we have had in the course of our long debates on this Bill. It refers to Clause 14, which affects persons qualifying for disabled person's tax credit. The purpose of the clause, in some respects, is to be welcomed. I was simply puzzled as to why it is that in Clause 14(4)(2C)(b), when the disabled person's tax credit is going to run for a considerable number of days or, as I understand it, indefinitely, one of the conditions should be that a medical practitioner, within the meaning of the Administration Act. certifies certain conditions not more than 14 days before the date when the claim for the disabled person's tax credit is made. The amendment simply knocks out the expression
  "not more than 14 days before the date when the claim for disabled person's tax credit is made."
  I just do not understand why, if the benefit is going to run for a considerable time, or perhaps indefinitely, this restriction needs to be imposed, given that the person is disabled. The claimant may be away, for whatever reason. I do not understand why it is necessary to say that this particular certificate must be produced not more than 14 days before the date when the claim is to be made
  Baroness Hollis of Heigham: My Lords, the effect of this amendment will be to remove the requirement for people applying for the DPTC by the fast-track
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  gateway to provide a recent certificate from a medical practitioner. As the noble Lord, Lord Higgins, will know, the fast-track gateway will bring far more generous help than hitherto to those people who have become ill or disabled while working, and the proposal is obviously an intervention while they are still on statutory sick pay. That has been warmly welcomed because it means that a person does not have to drop out of work in order to be able to re-enter it. I believe that it will make a big difference to disabled people as regards their being able to return to their previous employer with the help of DPTC, knowing that that will pick up some of the strain of possibly reduced earnings as a result of a disability.
  However, we require the medical certificate to be no more than two weeks away. I believe that to be the concern behind Amendment No. 10. The certificate requires the medical practitioner to take a forward look at the applicant's condition and certify that it will last for six months—that is to say, for broadly the whole of the DPTC award period. So there needs to be a time limit; otherwise the certificate could be almost out of date by the time the applicants submit an application; for example, it could be submitted five months before, with the award running for only six months.
  Clause 14 sets that time limit at 14 days. We believe that to be reasonable because it will ensure that at the time of the application for DPTC—say, week 20 or 26, or whatever, of statutory sick pay—a doctor has recently taken the view that the applicant's illness or disability is likely to last at least as long as the initial DPTC award. GPs will be able to complete the certificate for DPTC without reassessing the question of capacity for work. Therefore, we are minimising the extra work for GPs and, indeed, for the applicants because they will not have to make a separate appointment to see their medical practitioner in order to obtain this medical certificate.
  Judging from what the noble Lord said, it seems to me that there may be some confusion about the timetable for a person applying for DPTC. The intention is that obtaining the certificate from the doctor stating that the disability will last for at least six months will be the last thing that a person does before returning to work. The doctor's certificate will come at the end of the process of negotiating a return to work with a former employer. The person will not obtain the medical certificate and then go and negotiate with his employer.
  Perhaps I may give your Lordships an example of, say, a bus driver. He suffers an injury, perhaps a whiplash injury or something like that, which leaves him on statutory sick pay for many weeks. After around 13 weeks on SSP, we envisage that he could discuss with his employer the possibility of returning to work at a later date, albeit to a different job or even to the same job with shorter working hours. That would start negotiations between the employee and the employer to explore such possibilities. The employer will have a chance in this time to ascertain what obligations he has under the Disability Discrimination Act to make physical adjustments to the workplace in order to re-employ that person.

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  Those negotiations between the employee and the employer could lead to a job offer or a change of job by, say, the sixteenth week of SSP. At that stage, agreement ought to be possible as to a date upon which the employee can return to work. The employee would then go to his doctor and get the six-month "forward look" certificate, by which stage he would virtually be ready to return to work. Certainly all the discussions with the employer would have been held and precise times of the new employment settled. After the 20th week of SSP and once the person is back at work, he would then apply for DPTC via the fast-track gateway. Given that all the return arrangements would have been made before the doctor signed the six-month forward look certificate, we think that 14 days is a reasonable time within which the DPTC arrangements must be finalised. In particular, the certificate must be a recent one.
  There needs to be a close relationship between the doctor's statement and the forward look, which is what that doctor's statement would do. That will be taken just before the person returns to work. Otherwise, it could be a forward look taken three months before he goes back to work, whereupon it would be invalid. That is the reason for the 14-day period, which we believe to be reasonable.
  I do not know whether the noble Lord has any further problems in that respect, but more time than that would simply eat into the six-month forward look period and may well be to the disadvantage of the person concerned. In the light of that explanation, I hope that the noble Lord will feel able to withdraw his amendment. I appreciate that it is probably a probing amendment and that is why I have taken time to explain how the procedure should work.
  Lord Higgins: My Lords, I am grateful to the Minister for that reply. If the certificate is a long one well in advance of the date of claim, I realise that it will obviously extend the length of a period. It still seems to me that two weeks is very tight, although in that sense it will make the certificate recent. However, in the light of what the Minister spelt out in her response, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Schedule 2 [Transfer of functions]:
  Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendments Nos. 11 and 12:
  Page 16, line 7, at end insert (", except Part XIII (advisory bodies and consultation)")
  Page 16, line 10, at end insert (", except Part XII (advisory bodies and the duty to consult)")
  On Question. amendments agreed to.
  Baroness Hollis of Heigham: My Lords, I beg to move that the Bill do now pass.
  Moved, that the Bill do now pass.—(Baroness Hollis of Heigham.)
  On Question. Bill passed, and returned to the Commons with amendments.

Water Industry Bill
7.15 p.m.
Report received.
Clause 5 [Regulations concerning charges schemes]:
Baroness Hamwee Baroness Hamwee moved Amendment No. 1:
Page 3, line 19, at end insert—
("( ) make provision as to the matters by reference to which effect is to be given to a measured charges notice; and")
The noble Baroness said: My Lords, in moving this amendment I shall speak also to Amendment No. both of which stand in my name and that of my noble friend Lord Addington. This amendment relates to Clause 5, which deals with regulations concerning charges schemes.
In Committee, I moved an amendment which would have allowed the water undertakers to take into account certain matters when setting the period within which a measured charges notice would be put into effect. The amendment referred particularly to the environmental impact and to the cost to the water undertaker. With that amendment I was concerned to ensure that the legislation did not require an immediate response; indeed, I believe that I described it then as a "scatter-gun" response. I felt that the undertaker should not have to apply the new metering arrangements on the one-by-one basis in response to each request from a customer. My concern there, though it might appear to have been a particular concern for the water companies, was a rather wider concern for consumers, given the fact that sensibly undertaken adjustment programmes undertaken by the water companies are to the long-term benefit of consumers.
In Committee on 22nd April (at col. 1263 of Hansard), the Minister assured us that the Government did not wish to be unduly restrictive on the time-scales within which companies must install meters. She talked about cost-effectiveness and the fact that there may be environmental benefits to be gained from giving priority to metering customers in particular areas. The noble Baroness was concerned that the amendment would give the water companies too much scope to delay responding to a request for a meter. However, she also said that this did not mean that the Government did not take seriously concerns about cost-effectiveness and environmental benefits. She added that the Government had no intention of enforcing a "blanket requirement" on water companies to fit meters within exactly the same time-scale.
The Minister went on in Committee to say (at col. 1264 of Hansard) that there is scope for guidance on time-scales for meter fitting to be included in the Secretary of State's guidance to the director-general on his function of approving charges schemes. She added that the Government did not envisage such guidance to be overly prescriptive and that it would leave scope for local flexibility.
I should like to see regulations prescribed by the Secretary of State covering the issues which I have mentioned—environmental impact and cost. I should also like priority to be given to less well-off customers.
That was a point to which the Minister, quite rightly, referred as being important. Therefore, in this amendment I have not sought to list the issues involved; I have merely sought to give a nudge, if I may put it that way, for them to be included by the Secretary of State. Assuming that there will be consultation on the regulations, I seek to ensure that there will be an opportunity for all those concerned with these matters, including the water undertakers, to contribute to the draft regulations and make points at that stage.
Amendment No. 2 follows on from an amendment that we moved at the Committee stage. It deals with our concern that undertakers should consider the regulations to be practicable. If undertakers find such measures economical, consumers' bills will be reduced or at any rate not increased. Amendment No. 2 enables the Secretary of State to give undertakers particulars of people who are entitled to assistance under the regulations.
At the previous stage of the Bill the Minister was concerned about shifting the burden of administration of the scheme—he said that both the Government and the water companies have a role in this respect—and expressed concern about meeting the costs of protecting vulnerable customers (which is an essential part of the new system, as I, of course, accept) and said that the costs of the scheme should be met by the water undertakers. I have omitted reference to bearing the costs of providing information in the hope that that makes the amendment more acceptable to the Government. There is simply a reference to an obligation to provide information and no reference to who bears the cost of the exercise. I seek to ensure that where the Government, or government departments—particularly the DSS in this case—have relevant information. that is passed on. That seems common sense.
At the previous stage of the Bill the Minister was rightly concerned not to increase bureaucracy. I suggest that this amendment is directed at that concern. The DSS will have information about people who receive benefits. However, I accept that unless the regulations are drafted in a form which we may not have anticipated, information will not be made available about those who are vulnerable in other senses; for example, those receiving certain medical treatment. However, the DSS will have information about many of the people who are to be protected under the scheme. It is not sensible to require the water companies to duplicate that work.
I have a question which is closely connected to the concern I have just mentioned. What research, if any, do the Government have in mind to monitor water poverty? Monitoring the effectiveness of the assistance that is given through the regulations—in other words, a research programme on the extent of water poverty—is an important step. A research programme in this area would chime with the proposal to place social obligations on the utility providers and would complement the Government's present attack on fuel poverty. If that were done, all those involved in this area
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could determine the effectiveness of the regulations. I hope that the Minister can assist the House on that more general query. I beg to move.
Lord Graham of Edmonton: My Lords, I hope that the Minister will allow me to say a few words. The mere fact that we have this Bill indicates that the Government recognise that problems exist which can best be tackled through legislation. I do not know the mind of the Government on this issue but I know their intentions. I believe that the Government do not wish. to make regulations too onerous. However, I sympathise with the comments of the noble Baroness, Lady Hamwee, in this regard.
As I said at an earlier stage of the Bill, there are not just vulnerable individuals in this area hut also vulnerable groups. I refer to park home residents. I declare an interest—if that is the right phrase—as the secretary of an all-party group. Many of the problems of the people in this group stem from the interpretation or the application by park home site owners of what they believe they are entitled to charge for the various utility services of water, electricity and gas. The Minister in the other place, Hilary Armstrong, established a ministerial working party to consider a range of problems which park home owners and park home site owners have raised. That working party is considering the punitive nature of some charges and the issue of fairness as between park home owners and park home site owners. It is fitting for Parliament in a busy legislative programme to be seen to spare time to try to act fairly with regard to all sides in this area although I accept that there are villains in every community.
I pay tribute to my noble friend Lady Farrington, who has responded to my query about how we deal with the person who has had rules and regulations imposed upon him but does not comply with them. My noble friend said that until the legislation begins to bite one cannot possibly anticipate what is likely to go wrong. Having been involved in local government for 40 years and having been in this place for 25 years, I believe that one can visualise the problems that will arise. However, I am grateful for the full reply that my noble friend gave to me. I hope that if the Minister is unable to accept the amendments in this group, he will recognise that there are vulnerable groups of people in this regard. These people may not be feckless or clueless and they need someone to protect their interests. Local councillors or local MPs should protect those people, and in many instances that is the case. However, wrongdoers need to know that the Government are prepared not merely to bring forward legislation in this regard but also to enforce it.
Lord Whitty: My Lords, I thank the noble Baroness for tabling these amendments which raise interesting issues. I had hoped that I had dealt with the principles involved at the previous stage of the Bill, but the noble Baroness has redrafted the amendments in a rather more sophisticated manner. Therefore I believe that we need to discuss some of the central arguments again. We are discussing a provision to extend the Secretary of State's powers. Most of the comments on this Bill have been aimed at reducing the Secretary of State's powers.

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The amendment follows on from the amendment that we debated at Committee stage. It would enable the Secretary of State to set out in regulations factors which should be taken into account in responding to customers' requests to move to a measured charge, although these factors are not specified. I believe the noble Baroness said that it was difficult to specify them fully. The Government do not believe that this extension of the Secretary of State's powers is necessary. I refer to what my noble friend Lady Farrington said in Committee. Requiring companies to respond almost immediately to each measured charges notice would not necessarily be in the wider interests of consumers, and such an onerous obligation may not be appropriate. We must recognise that companies will need to plan their programme for meter installation. In principle this planning may take account of factors such as addressing the needs of the less well off, for whom savings through moving to a meter may be particularly significant; or installing meters first in areas where they bring the greatest environmental benefit.
Under Clause 4 of the Bill as drafted, the Secretary of State would be able to give guidance to the Director General of Water Services and the director general would be able to consider companies' proposals for responding to measured charges notices as part of his new responsibility to approve charges schemes. Surely the director general would be better placed than the department, in pursuance of a direct power, to consider what level of performance companies can reasonably be expected to deliver, what local considerations apply and so forth, and then to agree proposals for meter installations which represent the interests of customers as a whole.
As we said in Committee, there is a balance to strike. It is best that the director general establishes that balance within the broad guidance. We have no intention of enforcing a blanket requirement on all companies to fit meters within a very short period or to exactly the same timescale. That would have a negative effect. On the other hand, customers should not be expected to have to wait for very long before the meters are fitted.
I can assure the noble Baroness that on the guidance and other matters the normal consultation requirements will apply. I hope that the noble Baroness recognises that the arrangements which are already set out provide an appropriate basis on which we can take forward the preparation and approval of charges schemes. In particular, these arrangements will facilitate some of the flexibility she seeks on the timing of meter installation. Therefore the first amendment is not necessary and could be counter-productive.
We debated a similar amendment to Amendment No. 2 in Committee. I am pleased to see that the noble Baroness has deleted the reference to all costs being borne by the Government. She has clearly taken that point. Even so, the amendment still shifts dramatically the burden of responsibility onto the Government. Obviously the Government are concerned that all vulnerable groups are protected—indeed, in many cases, that is the whole rationale of this part of the Bill—but
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the companies have responsibilities as well. While there is a role for the Government, shifting the whole responsibility onto the Government in terms of identifying individuals is not appropriate. There is no question that water companies will be required to devise their own schemes for identifying those entitled to protection and making separate and perhaps different decisions on whether receipt of a particular benefit will trigger protection. We must have some degree of uniformity across the country. We need to make that clear in regulations which will specify the criteria against which entitlement to protection will be determined.
On the other hand, we are keen to keep to an absolute minimum the bureaucracy involved in the proposals—for example, by identifying pre-existing documentation which will make eligibility easy to establish. In many cases a bill is based on average measured use and the proposed protection would be relatively easy to administer. All these factors should ensure that companies do not face disproportionate costs in managing the scheme to protect vulnerable groups. At the same time, it would not shift the total burden onto the Government to identify which are those vulnerable groups.
My noble friend Lord Graham referred specifically to park home residents as a vulnerable group. Clearly there are particular problems involved there. The context of the discussions with my colleague Hilary Armstrong may lead to an outcome which could be reflected in the regulations and the guidance we will give in this regard.
There is a limit to what can be done by the Government. We do not have a central record of all those suffering from the medical conditions to be covered by our regulations. Contrary to the objective of the noble Baroness's amendment, the amendment would lead to unnecessary duplication of administration between the Government and the water industry. Clearly water companies can seek from the Government information that is readily available, but it should be their responsibility to make the identification and to make sure that vulnerable groups are not adversely affected. The Government will play their full role but the water companies have an important part to play. For them and the Government protection of vulnerable groups is not an optional extra in the water charging system. Indeed, the whole point of the Bill is to make the protection of vulnerable groups an objective.
The noble Baroness asked what research is planned on water property. The national water metering trials include some research into the effect of meters on demand for different groups, which we have taken into account. We have made clear our intention to ensure that those who could suffer severe handicap as a result of the changes are protected. We therefore need to monitor the effect of our new proposals to ensure that there is protection for vulnerable groups in practice and to keep under review the need for wider measures in the light of that experience.
Without repeating myself too much, the point is that water companies are much closer to their customers than the Government. Broad guidance to the director general

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will enable him or her to give clearer guidance to the water companies. But it is their responsibility. They send out the charges; they know their customers; and they know the basis on which customers pay their bills. Our proposals for developing protection for vulnerable groups represent the right balance between the Government and the industry. The noble Baroness's amendment would shift that responsibility back onto the Government to an undue degree. I hope that she will therefore withdraw the amendment.
Baroness Hamwee: My Lords, in order to avoid bringing forward a further amendment at the next stage, can the Minister say whether it is proposed that the DSS will hand over directly information about those customers who are eligible through their entitlement to benefit?
The Minister referred to possible differences across the country. I am concerned that the water companies will be forced to reinvent a wheel—which would be a complete nonsense—in connection with those whose entitlement to benefit is relevant. I understand the distinction between those who may be on a list or on a data base because of that entitlement and those who are not on any sort of data base because their entitlement arises specifically from the provisions of the Bill. In order to avoid bringing forward at the next stage an amendment which is limited to those who would be passported through entitlement to benefit, can the Minister say any more about how the practical arrangements might work?
Lord Whitty: My Lords, if the noble Baroness means will the DSS hand over its lists of benefit recipients to the water companies, the answer is no. It would not be reasonable that that information should be provided to a private company, with all the data protection problems that it would raise. In most cases, if one is a benefit receiver, one will have documentation which is relatively straightforward to show to the water company. As we are defining the most vulnerable groups by size of family and so on, a simple list of people receiving a particular benefit will not be appropriate. In addition to data protection problems, it could be misleading to provide a full list.
To some extent there is a clear onus on the company to try and find out; there is a clear onus on the company to respond to claims from their customers that they are protected in this way; and there is a clear obligation on the public authorities, if consulted, to give the information. But there is not an automatic provision of lists irrespective of the wishes of the customers.
Baroness Hamwee: My Lords, I am grateful for that reply. Noble Lords will understand that I am not seeking to breach confidences but merely seeking the most practical approach. As to the first amendment and the point made about the extension of the powers of the Secretary of State, I shall say only touché!
I hope that the director general, in undertaking what the Minister described as normal consultation arrangements, will make sure that those arrangements
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are effective. I shall consider what has been said in response to these two amendments. I beg leave to withdraw Amendment No. 1.
Amendment, by leave, withdrawn.
[Amendment No. 2 not moved.]
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 3:
Page 3, line 44, at end insert—
("( ) The power to make regulations under this section shall only be exercised after consultation with all such bodies and persons as the Secretary of State considers it appropriate to consult in relation to the proposed regulations.
( ) No regulations shall he made under this section unless a draft of the regulations has been laid before, and approved by a resolution of, each House of Parliament."").
The noble Baroness said: My Lords, this amendment would add two subsections to Clause 5. Clause 3 gives the Secretary of State far-reaching powers to make regulations controlling the contents of the water companies' charging schemes which the director general is required to approve or disapprove, as the case may be.
In Committee, I pointed out that the director general is specifically required under subsection (7) of Clause 4 to have regard to the so-called guidance that he receives from the Secretary of State as to the manner in which he performs his duties.
Although the provisions of this clause actually diminish the discretion of the director general and diminish the independence from political interference that he has enjoyed since the industry was privatised in 1989, I shall certainly not quarrel with them at this late stage. However, it is absolutely right that the Secretary of State should, in the interests of open government, which the party opposite claims to espouse, be required to consult about any regulations that he proposes to make. Apart from anything else, that will relieve him from charges of playing politics with the industry.
The requirement to consult in the terms of the amendment is not unduly onerous. The amendment calls for the director general to consult only with such persons as he himself deems appropriate.
But there are vulnerable groups whose interests need to be considered at any stage of approving charging schemes: persons with a low income or those with a need to use exceptionally large quantities of water for medical reasons. The noble Lord, Lord Ahmed, reminded the Government at Second Reading that the Moslem community also had special needs.
In the debate on this clause in the other place, the Minister for the Environment specifically gave a pledge that,
"We shall, of course, consult on the regulations in the draft".—[Official Report, Commons, Standing Committee A: 12/1/99; col. 68.]
Consulting about regulations after the Secretary of State has committed himself to a draft will leave the interested parties pushing a very large rock up a very steep hill. Ideally, the Secretary of State should consult before his own ideas are committed to paper.
In turning down my amendment in Committee, the noble Lord, Lord Whitty, said that he did not believe that it would add to the commitment given in the other

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place by his colleague the Minister for the Environment if the obligation to consult were to be included on the face of the Bill.
I do not doubt the word of either the Minister in the other place or the Minister in this House. But Ministers change, and "new brooms" often have different ideas. A firm and binding obligation which can be changed only by subsequent primary legislation is required to ensure that the interests of vulnerable groups are fully taken into account before the Government commit themselves to a course of action.
The party opposite insists that it keeps its promises. I believe that it does. Ministers in both Houses insist that their word is their bond. On a personal basis I unreservedly accept that. However, as I have said, Ministers come and go. In this case, there can be no reason why Parliament should not have its bond in the form of a statutory obligation.
The noble Lord, Lord Whitty, suggested in his reply to me that the Secretary of State's power to make regulations is constrained by Clause 5(4). That constraint only prevents the Secretary of State from limiting water undertakers' total income. It does not prevent him from interfering in how the total charges are to be split up among different categories of consumers or about whether specially disadvantaged groups are to receive special consideration.
This amendment does not impose any obligation on the Secretary of State in that regard. All it does is oblige him to consult. As the Ministers in both Houses pledged that they would consult, I cannot see why they are reluctant to put that commitment into writing in the Bill.
The second part of the amendment follows on from the one to which I have just spoken. Apart from the consultations about the regulations that the Secretary of State will make directing the director general as to how he is to perform his duties, it is right that those regulations should be scrutinised by Parliament. He would then have to answer for his decisions if he failed to take into account the representations that he received during those consultations. The right and proper way to scrutinise those regulations is by the affirmative resolution process.
The Minister told me that the Delegated Powers and Deregulation Committee had not made any recommendations regarding the regulation-making powers under this clause. That is a very powerful argument. But there is nothing to prevent the government going for the entirely transparent process of allowing the Secretary of State's decisions to be subjected to positive vetting, rather than risk their being allowed to slip through almost unnoticed by the alternative method.
There will be no risk to the Government's timetable. If there are no problems with the regulations, they will go through on the nod. I urge the Government to demonstrate their sensitivity to the opinions of special interest groups by assuring them that their views have been positively considered, even if not acted upon by Parliament. I beg to move.
7.45 p.m.
Lord Whitty: My Lords, the noble Baroness's amendment deals with two separate issues, consultation and parliamentary procedure. I note the confidence that she has in myself and my current colleagues but that she has a fear for the future.
It would be unreasonable to expect that any future government would issue regulations without a reasonable degree of consultation. It is in everyone's interest, particularly the Government's, that the regulations are fair and practical and take into account everyone's view. This Government have given their commitment clearly in a consultation document and the consultation based on that document, and we are continuing to refine proposals in consultation now on which there will be further consultation when we produce the draft regulations. So the process is full of consultation.
I believe that it is unnecessarily suspicious of the noble Baroness to say, in relation to future Secretaries of State of whatever party, that the implication of providing draft regulations does not imply that substantial consultation would be needed. Therefore. I do not believe that the first part of the noble Baroness's amendment is necessary.
However, I feel more strongly in regard to the second part of the amendment. A key reason for adopting the approach set out in the Bill is the openness of our policy to date. In Committee, the noble Baroness herself said that it was important for a statutory instrument to be subject to proper scrutiny. But we have already set out our intentions clearly. We have invited comments on how to ensure that targeted protection is available to those who need it. It is not therefore the case that the tabling of the regulations will be the first indication of the Government's proposals in this area.
In Committee, I pointed out that the use of negative resolution procedures in this sector is entirely in line with other equivalent regulation-making powers under the Water Industry Act 1991. It would, therefore, be bizarre to moved to a changed basis from one which was accepted when the current structure of the water industry was first introduced. At the time, the noble Baroness noted that but suggested that other regulations under the Act referred to highly technical matters and were not of the same order of concern as the regulations referred to under Clause 5. I cannot agree. To take an example, Section 67 of the Water Industry Act 1991 allows the Secretary of State to make regulations governing the standards of wholesomeness of water supplied to customers. Such regulations have wide-ranging public health and welfare consequences and implications. They can have a significant effect on the costs of water, the way in which the companies operate and the income they receive from customers.
For example, if additional treatment or replacement of infrastructure is needed to meet particular standards, the director general would need to take into account such matters in setting price limits for water companies. That is the constraint which we have built into the Bill under Clause 5(4) to which the noble Baroness referred. That subsection also ensures that the Secretary of State's

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regulation powers do not tread on the toes of the director general's function as economic regulator. We have given a clear indication of the scope of the regulations' intended use, consistent with the Government's legitimate social and environmental concerns, for example, for vulnerable groups, and consistent with the way in which previous water legislation has dealt with these issues.
After the initial use of these regulations it is very likely that at least some of the subsequent uses would be minor and mainly technical updatings of the scope and nature of the protections offered, for which use of the affirmative resolution procedure would be quite disproportionate. As for initial use, the House already knows our intentions. Like the noble Baroness, I also said that the Delegated Powers and Deregulation Committee has seen nothing in the clause that requires it to be drawn to the attention of the House. In other words, by implication, the committee is happy with the negative procedure.
Therefore, I do not think that the amendment is necessary and hope that the commitments we have given on consultation deal with the first part of the amendment. Procedurally, I do not believe that the second part of the amendment is appropriate and I ask the noble Baroness to withdraw it.
Baroness Miller of Hendon: My Lords, I thank the Minister for the full answer he gave me to the two separate parts of the amendment. I also thank both him and the noble Baroness, Lady Farrington, for their courtesy in inviting me to write to them, which I did. I thank them for their clear and concise answers. Of course, I did not agree with them, which is why I brought the amendment back today. I am disappointed that the noble Lord did not think my powers of persuasion were sufficient to make him change his mind, but that has to be my fault and not his.
The only point I wish to make concerns the first part of my amendment. I am not casting aspersions on future Members who might hold the position held by the noble Lord today, but since it has been suggested that there will be consultation, I cannot see why that could not be written into the Bill. However, I accept that that is his view and I shall not push the amendment further. I have made my point and the Minister has made his.
It is true that we discussed the positive resolution earlier, and I described these as technical matters. Perhaps I did not explain myself well, because when one talks about the quality of water, it is a fact; it is good, bad or indifferent and it can be measured in a sensible way. Here we are discussing different groups of people wanting to be qualified as vulnerable, and that would be a matter of opinion not of fact. That is why it would be more important to have it done by positive resolution rather than negative resolution. However, I accept what the Minister said and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 [Right of consumer to elect for charging by reference to volume]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 4:
Page 4, line 25, at end insert—
("(3A) Whenever it is not reasonably practicable to fix charges in respect of any premises by reference to the volume of water supplied, or to do so would involve the incurring by the undertaker of unreasonable expense, then the undertaker may instead fix charges in respect of those premises on the basis of the average consumption of water in premises of comparable size.").
The noble Baroness said: My Lords, I would like to speak to Amendments Nos. 4, 5 and 14. Clause 6(3) allows an undertaker to decline to charge on the basis of a metered charge where a meter is requested, but it is not reasonably practical for the undertaker to do so or it cannot do so except at an unreasonable cost. For example, there might be a block of flats where not all tenants want meters or where the physical construction of the building makes insuperable difficulties. The Bill is silent on how water is to be charged for in those circumstances.
The secondary amendment is purely consequential on the main one. The main amendment is to clear up that deficiency by allowing water companies to charge on the basis of average consumption in similar premises. The noble Lord, Lord Whitty, when he responded to my noble friend Lady Seccombe who spoke to this amendment in Committee, said that the amendment,
"does not allow the water companies any flexibility in those circumstances".—[Official Report, 22/4/99; col. 1266.]
I should have thought it gave them a great deal of flexibility, but what I think or do not think does not matter. It is what the water companies themselves think, they are the promoters of this method of resolving the problem. So unless the Minister will now argue that there is some objection to it, it is difficult to see why the Government should continue to refuse to consider it.
I do not agree with the Minister's suggestion that this is a matter that should be left to the director general to approve or otherwise in accordance with his powers under Clause 4, which relates to charging schemes. I believe that this is a matter where the Government, in their own Bill, should close a gap which they have themselves created, not, I hasten to say, through any wrongful intention, but simply because they took a proper decision to allow the water companies art exemption and failed to cover the resulting gap. I believe that it is in your Lordships' House that the gap should be closed, not at the desk of a newly created official.
I now wish to speak to Amendment No. 14, which is also in the group. The Minister will recall that at the Committee stage I had tabled the same lengthy amendment as a probing amendment, but I withdrew it before moving it because it was suggested to me that Clause 11 covered the concerns which are the subject of the amendment. However, I am now advised that this is not the case, which is why I have re-tabled it and present it here this evening.
The object is to resolve a particular difficulty, or perhaps an anomaly, which affects blocks of flats. In most cases, with older blocks of flats, it has proved to

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be impossible to install a meter for a whole block unless all the tenants agree. Also, as I pointed out in my remarks on the earlier amendment, in some cases the configuration of the pipework in a block means that either all the flats are metered or none can be.
This amendment deals with the problem in two alternative ways. First, the owner of the building requests the installation of a meter measuring the entire supply coming into the building. The owner pays the whole water charge to the supplier. The metering in this case can be done without the mechanical problems I have just described. The owner then debits each tenant with a share of the cost of the water supplied to the building.
Your Lordships may wish to know that the director of Ofwat has recently produced a set of draft regulations on the re-sale of water which will protect tenants from unscrupulous landlords, to avoid the problems that have existed in the past in relation to electricity and gas supplies.
Noble Lords will also be aware that it is a common practice in blocks of flats that have been sold on long leases or as freeholds to the tenants for all the expenses of the building to be apportioned among the occupiers on the basis of some agreed formula contained in the identical leases. Floor area or rateable value are common criteria.
Subsection (4) defines "owner" as the immediate lessor of the occupiers or any management company or organisation. These are also commonly used devices in the case of such blocks of flats. I concede that it may be very generous, or possibly rash, for a landlord who decides to pay the water bill for the entire block and then to undertake the responsibility of acting as a debt collector for the water company by collecting it back piecemeal from the individual lessees. There will be some cases where it will be commercially worthwhile for a landlord to undertake this onerous task.
The proposed Ofwat regulations may allow him to make a small percentage profit, or the water company may allow him a discount, or the leases may allow him to make an administration charge on all amounts disbursed for the block. The landlord will make up his mind whether or not he wants to get involved. The truth is, I suspect, that not many landlords will.
That is where the second arm of the amendment—plan B, if you like—comes in. This will enable the water company to assess and charge for water on the basis of the average consumption in dwelling-houses of comparable size. I have discussed the implications and advantages of this system in my Amendment No. 4 to Clause 6 and I shall not take up the House's time by repeating the points. Once again, I have provided for potential disputes to be referred to the director by either party under the procedure laid down in Section 30A.
Whichever method is used, it will enable the occupiers to escape from the increasingly obsolete method of calculating water charges based on an out-of-date rateable value. The amendment is long but the principle and the objectives are short. Once more,
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I ask the Minister to accept it. If she does not wish to do so, perhaps she will offer some other solution to the problem. I beg to move.
8 p.m.
Baroness Farrington of Ribbleton: My Lords, as an overall principle, we want to see a water charging system which gives customers increased choice. For some people, this may mean opting to have a meter installed because they would prefer to pay on the basis of a measured charge. However, there will be some circumstances where it will be impractical to fit a meter or one could be fitted only at great expense. The noble Baroness, Lady Miller of Hendon, cited the example of a block of flats with shared supply pipes. While I do not believe that it makes sound economic sense to force water companies to spend a disproportionate sum of money on fitting a meter in these circumstances, I agree with the noble Baroness that it would be desirable for customers to have access to an alternative basis of charging.
In our consultation document, Water Charging in England and Wales, A New Approach, we recognised that some customers could face problems of not being able to have a meter fitted for reasons of practicality or expense and proposed that in such cases householders should be able to pay an assessed charge. We therefore strongly support the principle of protecting customers' interests in such circumstances. I made clear during Committee stage our intention to avoid the inequity which has been identified where customers serve a measured charges notice but find that it is unreasonably expensive or impractical to fit a meter.
Protection to such customers can be delivered effectively through the mechanism that we propose to introduce, via Clause 4 of the Bill, for the director general to approve companies' charges schemes. Furthermore, in contrast to the arrangements put forward in this amendment, the use of Clause 4 would give water companies flexibility to consider arrangements for assessing charges which meet their customers' concerns. Possible options include charges based on average consumption, an assessed consumption based on the number of occupants, or an assessed consumption based on the size of the property, as suggested in the noble Baroness's Amendment No. 4.
Amendment No. 14 seeks to assess particular issues which may arise where it is not possible to install meters in blocks of flats. The noble Baroness's amendment introduces the idea that there are two ways of dealing with this problem when an occupier wants a measured basis of charging. One option would be an assessed charge, more nearly related to the bill that might have been payable, given average consumption, in a property of similar characteristics. This is the same provision as that in Amendment No. 4, which seeks to apply this in any case where a requested meter cannot be installed.
The amendment also provides for consideration of an alternative arrangement whereby the whole block is metered, the undertaker charges a measured bill to the owner, lessor or management company, and that owner re-charges the individual occupiers. As drafted, the

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amendment is permissive and not triggered unless the owner asks to take on responsibility for paying water charges for the block and is subject to the terms of any lease.
However, like Amendment No. 4, there does not appear to be anything in Amendment No. 14 which cannot be implemented under the existing provisions of the Bill. As I hope I have explained, the development of an assessed charge to protect the interests of these customers can be delivered effectively through the mechanism that we propose to introduce, via Clause 4 of the Bill, for the director general to approve companies' charges schemes. In respect of the proposal for the landlord to take on the responsibility for charges, such an option already exists, subject to the terms of the leases.
We believe that this rather complex amendment shows the difficulties and potential inflexibility of attempting to set down in primary legislation the level of detail of all that should happen in such cases. I believe that it would be unnecessarily prescriptive to set out the procedures for calculating assessed charges on the face of the Bill. I hope that the noble Baroness will recognise the clear support that I have given to the principle of assessed charges where meter fitment is impracticable or unreasonably expensive, and will agree that in those circumstances these amendments are not necessary.
The noble Baroness also raised during the earlier stage of the Bill the issue of subsection (5) of Amendment No. 14, requiring any dispute under this section to be referred to the Director General of Water Services for determination under Section 30A of the Water Industry Act 1991. We believe that such disputes could take many forms between the owners and occupiers of buildings and between landlords and their tenants. It seems highly unlikely that the director general or his staff will be qualified or equipped to deal with the whole variety and potentially considerable number of disputes that this amendment could result in their receiving. For this reason alone, there must be some doubt that the amendment as drafted is workable. However, I hope the reply that I have given is as helpful as it possibly can be and will enable the noble Baroness to feel that she can withdraw the amendment.
Baroness Miller of Hendon: My Lords, I thank the Minister for her very helpful response. I suppose the difference between us lies in the fact that maybe I am seeing this glass half empty and the Minister is seeing it half full. She is very optimistic that this method of assessment will work and come into play. I am asking for something a little more specific, but I accept absolutely what the noble Baroness says and I wish her optimism well. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 5 not moved.]
Baroness Hamwee Baroness Hamwee moved Amendment No. 6:
Page 4, line 39, leave out ("twelve") and insert ("twenty-four")
The noble Baroness said: My Lords, Amendment No. 6 seeks to give a consumer a rather longer period to opt back from metering; in other words, it seeks to
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revoke the measured charges notice. The amendment is to some extent about the adequacy of the right to opt back and also how far it represents, as drafted, a significant increase in consumer choice.
Clause 6(5) allows for the revocation of a measured charges notice and a reversion to an unmeasured basis if a consumer thinks that that suits his needs rather better. The Minister in another place described this as being a consumer protection measure comparable to the protection given under consumer protection legislation, under which consumers can change their minds in a specified cooling off period. I am not sure, however, that I can recall another product or service which, if riot rejected by the consumer within a specific period, is then regarded as a commitment on the part of the consumer for ever—not only the consumer in this case, but the consumer's successors.
The Minister also said that a balance had to be struck between providing choice for consumers and ensuring stability in charging. She said that about a year was probably the right balance. The implication seemed to be that a slightly longer period might be considered. At the Committee stage in this House, I argued that a period of 12 months was simply inadequate for a consumer to assess whether a measured charge best suited a particular household's needs. Needs will vary from year to year and period to period as a household changes its nature. If consumers are to have real protection, there would be no limit on the period for reversion. Looking at the 12 months, I also argued that: it was quite simply too short because there would not be a full year's bills on which a consumer could base a judgment. I was therefore concerned that this was not in any real sense increasing consumer choice, because the choice would not be an informed choice.
The amendment I proposed in Committee sought to take out time limits entirely. The Minister then resisted that open-ended provision. I responded briefly to that by wondering aloud whether a fixed period longer than 12 months would meet everyone's concerns. That is the purpose of Amendment No. 6. The amendment seeks to achieve the balance that the Government have said they are seeking. It proposes a 24-month rather than a 12-month period. It does not propose that a consumer can switch backwards and forwards more than once. It seeks simply to extend the period within which one reversion can take place. I hope that that will meet all concerns.
If there were a realistic possibility of our moving to some consistent basis—for instance, council tax bands rather than the move towards metering—I might he less concerned. But I have been informed since the Committee stage that the word on the street, to the extent that the street talks about these things, is that the use of council tax bands is entirely off the agenda. It would be helpful if the Minister could say something about that. I beg to move.
Lord Whitty: My Lords, the noble Baroness has somewhat restricted the ambitions of her previous amendment. We are now arguing about whether the period should be one year or two years. Perhaps I may say at the outset that we should see this in proportion.

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It is an important objective of the Bill to give consumers some rights to revert if they find that charging is not working out. At present there is no such right. We have to establish a balance with regard to the period of time the scope for reversion should apply.
Water companies are concerned that granting widespread powers to revert will increase uncertainty, impose extra costs on them, which eventually would be passed on to the rest of their consumers, and reduce stability in their planning. On the other hand, as the noble Baroness said, we need to ensure that customers have an essential protection to guard against cases where customers opt for a meter and find that they lose out or suffer in some other way as a result. We are looking to strike a balance. It is important to give people adequate time to assess what the change of charging has brought to them. On the other hand, the water companies need some protection.
In my view, it should be fairly quickly clear to consumers how the different charging system has affected them. In most cases they will be able to tell from their first six-monthly bill. It is true, as the noble Baroness implies, that the longer they have, the more information they will have. But we have to draw a line somewhere. They will have a fairly clear indication from their first six-monthly bill. If the second bill would normally appear after the 12-month period and they are concerned, they can insist on earlier billing in order to meet the deadline. Therefore, I am not convinced that, even in principle, extending the deadline would bring significant additional benefits or significant additional information to consumers.
There are, however, some technical points about the amendment as drafted which I wish to draw to the noble Baroness's attention. I assume that one effect of the amendment is unintended. Under our proposals, customers who opt for a meter but find virtually at once that it does not suit their needs would have the reassurance that they would not have to face more than 12 months on a measured charge. However, the amendment, if accepted, would enable water companies to refuse to allow customers to revert to an unmeasured charge until two years after the meter was installed. Customers who opt for a meter and realise quickly that they have made a mistake—for example, after six months—would not regard this amendment as being in their interest. The amendment has an additional defect in that it would require a corresponding amendment to Clause 6 to make it workable. Therefore, as it stands, it is a technically defective amendment. In the light of those arguments, both the technical and the substantive, I hope that the noble Baroness will feel able to withdraw her amendment.
The noble Baroness asked me about the current position on shifting charging to council tax bands. This is a complex issue. If water companies wish to proceed to develop council tax-based charges, the next step for them is to draw up detailed proposals. My colleague Michael Meacher has met water companies on a number of occasions and we certainly have not ruled out for all time a move to council tax charging. As there is a complex effect in terms of winners and losers, it seems
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a difficult move to make. Companies which were going to make that move would have to make some substantial preparations. If companies require any information to help them develop their proposals, they can approach the department for that information. But at present we do not see an early move to council tax-based charging. We have not received a request to release the council tax information on which such a system could be based. But that is different from saying, as the noble Baroness said, that we have ruled it out entirely.
8.15 p.m.
Lord Skelmersdale: My Lords, before the noble Lord sits down, he said that he believed that after the first six months a customer would be able to make a realistic assessment; and then after the six months he would have another five months to make up his mind what to do about the situation. However, it depends where in the year the six-month period comes up. Has the Minister any information on the average pattern of water use? One would have thought that people take more baths or showers in the summer. Therefore, the noble Baroness might well have a point in saying that 12 months is not long enough. Whether two years is right, I have no idea. Perhaps the Minister could respond to that comment.
Lord Whitty: My Lords, the level of water consumption changes over the year, but not quite as dramatically as the noble Lord indicated. If people are worried about their first six-monthly bill, they can request from the company a second bill before the next six months is up. In other words, they could meet the 12-month deadline to see what the total, or something close to the total, 12-month pattern would look like. However, in general, I would say that the first six-monthly bill either comes as a shock or a pleasant surprise once one changes one's metering arrangement. To some extent, most people, having been convinced that they need to change their system, would have an expectation of which way it would go. If it went in the opposite direction, that would be clear from the first bill in almost all circumstances.
Baroness Hamwee: My Lords, I am grateful to the noble Lord, Lord Skelmersdale, who precisely picked up the point which concerned me. I take the two criticisms of the amendment. The first was that I have not dealt with the consequential amendments later in the clause in a way which would make the amendment properly workable. The most important piece of information that I have received concerns the ability of a customer to insist on earlier billing than normal. I had not been aware of that, but I am sure it is my own fault that I had not taken that on hoard. That being so, it is particularly important that water companies are encouraged, if not directed, by the director general to highlight that provision when information is being given about the ability to opt for metering and then to switch back. Customers need to know what mechanisms are available to them to take decisions. I am sure that I am not the only Member of this House—certainly not the only person in the wider community—who bins all the

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bits of small print that tend to accompany bills from utilities. I hope that very plainly presented information about this matter will be an absolute requirement when these provisions come into effect.
As to council tax, the point about winners and losers is one that has also been made to me. I am told that the water companies are still concerned that perhaps for reasons of data protection—nevertheless, it is a real problem for them—council tax banding information is available only in conventional or (if I may so put it) primitive documentary rather than electronic form. It is a pity that a way has not been found to provide information that is quickly and easily accessible—no different from information that can be accessed by asking a whole series of questions of a local authority and receiving pieces of paper—in a way that they can handle more easily. I express that little whinge. However, to return to the question of the 12 and 24 months I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 7:
Page 5, line 12, at end insert—
("(7A) In any case where—

(a) the premises had been let for residential purposes for a term not exceeding 21 years, whether commencing before or after the commencement of this Act, and

(b) the lessee for the time being had given a measured charges notice to the undertaker without the express written consent of the lessor for the time being, and

(c) the premises have reverted to the original lessor or his successor in title, whether upon the expiry of the term, or upon forfeiture or abandonment or disclaimer or surrender of the lease or by any other means,

the consumer (here meaning the original lessor or his successor in title or, if the premises have been re-let, any new lessee of the premises) may within 12 months of the premises reverting to the original lessor or his successor in title, give a notice to the water undertaker revoking the measured charges notice.")
The noble Baroness said: My Lords, I must begin by declaring the same minor interest as I declared at the earlier stages of this Bill. I am both personally and via family companies in which I am a shareholder the landlord of some rented residential properties. I am not involved in their day-to-day management, and I am advised that it is a matter of indifference to me whether any present or future tenants do or do not elect to have meters.
This amendment is to deal with an anomaly to which I drew attention at both Second Reading and Committee stage. I believe that it is more than an anomaly: it is an injustice that Parliament should not create because the victims are far less powerful and weaker economically than the water companies. The amendment covers the situation in which a person lets out his home for a short period. His tenant then opts to have a metered supply, as is his right. Under Clause 11 the landlord is positively prevented from objecting or even being consulted by having to give his consent; in other words, the landlord has absolutely no say or control over the matter. I do not argue with that. Clearly, the tenant who pays the water bills should be entitled to be charged for the water that he consumes in the way that suits him best.
However, what happens when the tenancy comes to an end? I am talking about short tenancies, not very long ones. If the premises revert to the lessor after the 12-month cooling off period granted by Clause 6(5), the lessor is permanently stuck with a meter that may not suit his own domestic arrangements. One can imagine, for example, the common situation of a person who lets his house for a couple of years while he works overseas. As the Bill stands, the lessor is not only prevented from objecting to the metering of his own property but he also cannot restore the position when he comes back into possession of it.
It is axiomatic of English property law—indeed. I imagine, any sensible commercial system of law—that a tenant or lessee cannot grant rights over a property or impose liabilities on it which extend past the date of the expiry of the lease. To give a very obvious example, a tenant cannot grant a sub-tenancy which extends past the length of his own term. He cannot grant a perpetual right of way, a right of light, a right of drainage and so on. Clearly, he should not be able to impose on the landlord a burden to which the landlord has no right to object and cannot have removed after the tenancy has expired and the tenant has long since moved on; and that is a burden which will last for ever.
The noble Lord, Lord Whitty, in responding to me at Committee stage, suggested that there would be administrative costs on the water companies for what he called "unconstrained switching" and "uncertainty in pricing by the industry". I believe that that makes a major mountain out of a very minor molehill. The number of cases throughout the entire country in which the combination of all the necessary ingredients may arise must be very small. For example, the premises must be let for more than a year and the tenant must have opted for a meter. When the tenant moves out and the property reverts to the landlord he or his new tenant must decide that he does not want a meter. I can confidently predict that there will be very few such cases a year and an immeasurable and insignificant cost to the industry and its other customers.
In the past few days we have seen the furore in the press about Rebecca Mark who is reported to be about to make £33 million from her share options in Wessex Water. That company is about to be floated—no pun is intended—on the New York Stock Exchange. I do not comment on the rights or wrongs of her position, but with sums like this being involved in the industry why do the Government worry about whether the water companies might incur a negligible amount of administrative costs and lose what to them would be a minor amount of income as a result of a home owner reverting to his previous personal arrangements with them? At least the noble Lord the Minister accepted my point that there would be no need for the supplier to remove the meter or re-install it at a later date.
Just a little over two years ago the party opposite when in opposition reviled water companies as greedy profiteers who reduced large parts of the country—I recall that it had Yorkshire particularly in mind—to the state of an arid desert due to a combination of inefficiency and the spending of their allegedly excessive profits on dividends rather than on their

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infrastructure. At the same time, their directors were reviled as fat cats. We now find the Government coming down on their side with the excuse that their profits might suffer a minor scratch, not even as much as a dent, if lessors were allowed to protect their own property rights.
The question is whether it is the Government's policy that every property shall in the short term be metered so that once a property is in, it can get out only in the exceptional case provided for in Clause 6. This amendment provides simple justice to a very small group of property owners so that their rights and assets are not diminished by the act of someone who, by definition, has a short and transient interest in the property. If there is a financial detriment, it should fall on the giant water companies which will be the ultimate winners in the metering process rather than individual small property owners. Amendment No. 8 is consequential on Amendment No. 7.
I urge the Government to accept these small provisions which do not detract from the Bill in any way, but which prevent a property owner from having a right taken away from him unilaterally. I beg to move.
Lord Skelmersdale: My Lords, in response to the previous amendment, the Minister (to paraphrase and précis his comments at the same time) told the noble Baroness, Lady Hamwee, that she had gone over the top. I am quite sure that he will say exactly the same to my noble friend. In answer to the point made by my noble friend in Committee, the noble Lord commented that the power was in the hands of whoever paid for the water. In other words, if the landlord paid for the water he was covered by the Bill; if the tenant paid for the water he was covered by the Bill. That is fair enough. But my noble friend makes a valid point. In those cases where the tenant is in the property for a short period and elects to pay for the water through the water bill, surely the landlord should have some powers as regards his property.
In this country we used to have the system of shorthold tenancies. They lasted for a maximum of six months and had to be renewed. That is no longer the case. The former government extended the period to a year, or perhaps two: I cannot remember. I suggest that the period of the true shorthold tenancy would be an appropriate period for the involvement of the landlord in the decision on water metering.
8.30 p.m.
Baroness Hamwee: My Lords, I support the noble Baroness's amendment. She is right to come back to this point. We have talked about the need for balance. She identifies a point where the Bill is unbalanced. I support her attempts to rectify that balance.
Baroness Farrington of Ribbleton: My Lords, Amendments Nos. 7 and 8 would mean that water companies would have to accept a notice of revocation from subsequent tenants or from property owners into whose property a meter had been installed at the
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instigation of the tenant without the express permission of the landlord, even where that may have occurred 20 years before.
We have made clear our desire to increase customer choice in water charging, and our proposals do that. However, we have previously explained that this needs to be tempered by ensuring that customers have some stability and predictability in their bills. Giving this very extended right to opt in and out of measured and unmeasured charging could cause uncertainty for the industry and the regulator in predicting companies' revenues and could lead to increased administrative costs. To be drawn into discussions about potential fat cats and levels of drought in Yorkshire—a county which is slowly falling into the sea, I understand, on the other side of the Pennines—and a debate on profits I believe would spoil the positive relationship that we have had during the passage of the Bill.
Anything which reduces the stability in bills we agree is the concern of customers. That is why we thought carefully about the provisions in the Bill which relate to consumers switching between measured and unmeasured charging. We believe that provisions in the Bill regarding reversion provide the right balance between greater choice for customers and ensuring stability in water charging. We are working from the position that those who pay water charges should be neither more nor less advantaged because they live in rented or owner-occupied dwellings. It would not be consistent with this approach to give tenants or landlords rights which are not available to other consumers. That is what underlies our thinking, not a wish to make life more difficult for landlords.
New tenants moving into a property have as much chance as house purchasers to establish beforehand the basis of calculation of rent and other charges; and if they feel strongly about water metering they will weigh that alongside other factors in taking on the tenancy. The regulations to protect vulnerable groups under Clause 5 will apply just as much to tenants as to owner-occupiers, and will offer protection to those with a high essential water use who could face hardship if moving into a property with a meter. The noble Baroness gave the example of a landlord who moved back into the property as an owner-occupier. He would be in exactly the same position as any other owner-occupier moving in.
On the question about shorthold tenancy, under Clause 11, new Section 209A((3) does not apply where the tenancy is a fixed term tenancy for a term of less than six months. I hope that that answers the question.
The regulations protect vulnerable groups. If landlords feel strongly about the basis for water charging in their properties, it is open to them to arrange to be responsible themselves for paying the water and sewerage charges to the undertaker and charging tenants a rent that includes water services. In such circumstances, the tenant would not be expected to have an interest in seeking to change the basis on which the undertaker set the charges. This is an important reassurance for landlords unwilling to have a meter in their premises. We have listened carefully to the points made by the noble Baroness, Lady Miller of Hendon, about potential problems for landlords.

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I wish to state again that there is nothing inherent in metering that makes anyone's bills higher or lower. On average, they should be about the same. So although metering may be more or less attractive to different consumers, it should not affect average costs or the value of the property.
We do not believe that there is a persuasive case for treating rented properties differently from others. Where the landlord takes on the role of consumer and tenants do not have direct responsibility for the water bill, it will be the landlord who decides whether to have a meter. Where the tenant has liability for the water charges, the method of payment is predominantly a matter between him and the water undertaker, and we consider that the same regime should apply as to owner-occupied premises.
I appreciate that the noble Baroness, Lady Miller of Hendon, may feel that some of the points have been repeated. But I hope that the totality of the answer will demonstrate that we have given careful consideration to the points she raised. I hope that she will feel able not to press the amendment.
Lord Skelmersdale: My Lords, before the Minister sits down, perhaps I may say that both she and the noble Lord, Lord Whitty, have spoken about balance. Does the noble Baroness agree that if one sector of customers has one year in which to operate the scheme and another sector has six months, something is out of kilter?
Baroness Farrington of Ribbleton: My Lords, the circumstances are different in those cases. During a period of tenancy the consumer is bound to be a different person. The example cited by the noble Baroness, Lady Miller of Hendon, was of a tenant moving in and moving out. The comparison during a 12-month period would not be for the same occupants using the same amounts of water.
Baroness Miller of Hendon: My Lords, I thank my noble friend and the noble Baroness, Lady Hamwee, for their support on what I consider an important matter.
I thank the Minister for her lengthy answer but I do not accept it for several reasons. Before giving the reasons, I wish to meet her point about the fat cats, Yorkshire and the arid desert. I did not mention those factors when I argued a similar amendment in Committee. In Committee, I tried to be factual about the position. That got me absolutely nowhere, so I thought that I would change my tactic. There is no harm in trying! I tried and the Minister rose a little to what I said. But that was the purpose of my comment.
I wish to make a couple of points. First, I do not believe that the Minister has addressed herself to one of the most important areas I was discussing. It was the tenant having the ability to extend rights over a property beyond the length of his lease. I mentioned a tenant being unable to give a right of way beyond the time he lived in the property.
The provisions are new to English property law and need examination. I have no intention of dividing the House tonight, but I hope that the officials in the Box in particular will listen carefully to my comments. I do not believe that the issue should be pushed under the carpet.
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The Minister said that when an owner returns to his property it is just like a new owner moving in. A new owner buys a property as it exists. Let us suppose that an owner, possibly a man with children at boarding school, is posted overseas. The tenant moving into his property may be a single person who decides to have a water meter. So be it. However, when the owner returns, the tenant having moved out, he might feel that that is not an economical move. The property was his, but it was altered against his will because he had no right. That is atrocious.
This is a particularly difficult issue. I have no interest one way or another—because I happen to have an interest in a property, it will make no odds to me one way or another—but I have declared an interest. For that reason, I would loath to have to push the amendment. If it were someone else's, I would have loved to support it. However, it was appropriate for me to draw it to the attention of the House. I shall withdraw it, but I hope that the Government will give it serious consideration.
Baroness Farrington of Ribbleton: My Lords, before the noble Baroness formally seeks to withdraw the amendment, perhaps I may draw her attention yet again to the fact that, if landlords feel strongly about the basis of water charging on their property, particularly in the circumstance of someone posted abroad for a short time, it is open to them to arrange to pay the charges themselves and charging the tenants for that. In such circumstances, the tenants would not be expected to have an interest in seeking to change the basis—
Baroness Miller of Hendon: My Lords, I heard the noble Baroness say that previously. I also noted carefully what was said by the noble Baroness, Lady Hamwee, about people throwing away Bills and bits of information. It may well be that someone posted abroad would not know about the change. I am saying to the Minister that I do not believe that that is an excuse for the Government to interfere with the property rights of a landlord beyond the extension of the lease he has granted. That might be a way out, but it is not right. The situation is embarrassing for me and I certainly shall not divide the House. I am looking around at my colleagues and at Members on the other Benches and I believe that it would be totally inappropriate to divide the House. I should not wish to, but I ask the Government urgently to reconsider the matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 8 not moved.]
8.45 p.m.
Clause 7 [Restriction on change in basis of charging]:
Baroness Hamwee Baroness Hamwee moved Amendment No 9:
Page 5, line 45, at end insert (", and
(d) such conditions as may be prescribed are satisfied in relation to the water resources available to the area in which the premises are sited").
The noble Baroness said: My Lords, following the comment of the noble Baroness, Lady Miller, perhaps I may make it clear that I was not saying that I throw

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away bills. I tend to pay bills, but it is the bits which come with them that I throw away—or rather put into a bag for recycling.
Baroness Miller of Hendon: My Lords, to suggest that the noble Baroness throws her bills away would be quite appalling!
Baroness Hamwee: My Lords, Amendment No. 9 is the environmental amendment. Its purpose is to allow water companies to require customers in areas of water stress to be metered. During earlier stages, particularly at Second Reading, we spoke about the variation in rainfall and water demand in different regions. The latter is closely related to density of population. In areas such as the south east of England, it is difficult to meet the rising demands for water while at the same time protecting the environment. Your Lordships will be aware of examples of environmental damage. Many have been reported in the press, particularly when rivers run very low. I understand that environmental damage has been caused to 50 nationally important rivers and wetlands.
The amendment seeks to allow demand management measures in order to ameliorate the environmental impact and to ensure that sufficient water is available for customers in future. Water metering can be regarded as an important component in demand management. In tabling the amendment, I suggest that water companies should be able to target water metering to areas of water stress.
Some companies already operate a policy of compulsory metering in such circumstances. I understand that in 1994 Folkestone and Dover water, as part of a scheme for demand management, included the compulsory metering of customers on a zone by zone basis. That reduced demands, or at any rate use, to levels experienced in the early 1980s. Your Lordships will immediately appreciate the environmental benefits of that. Incidentally, it helped the company to raise service standards. The concern is that the Bill prevents water companies from applying such an arrangement.
The Director General of Water Services, responding to the recent government consultation on charging, stated that where appropriate he is in favour of companies retaining a general right to meter customers where water resources are scarce. The Environment Agency, responding to the same consultation, has supported compulsory metering for sprinkler users and swimming pool owners and for areas of water resource stress.
The amendment proposes a further subsection to the clause to allow conditions to be set in regulations regarding the water resources situation in the area where the premises are located. If they are within an area of water stress, the consumer would not benefit from the right to refuse a meter. I have proposed that as an enabling power. Likewise, if water companies decided to make use of the option, they could introduce metering in a phased way.
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I appreciate that areas of water stress would be defined in regulations. In order to pre-empt the point that the Minister has made three or four times during the course of this and other legislation—picking me up whenever I suggest that the Secretary of State has an additional power—one must sometimes accept that powers will be given to the Secretary of State to achieve a greater good. If the Minister continues to make that point he will find extremely long amendments tabled from these Benches to constrain what the Secretary of State can do and to flesh out our amendments. That may be a considerable temptation in the next large piece of legislation that will face your Lordships. I accept that the Secretary of State will have additional powers that will be required to identify the areas.
I understand that there are recent government proposals for abstraction licensing that would be helpful. Those require the Environment Agency to develop abstraction management strategies for each river catchment, so that there are local strategies. The agency could define areas of water stress using the information from those strategies, which I understand have to be reviewed on a six-yearly basis.
This amendment is not designed to override the provisions in the Bill to protect vulnerable households from metering. They would still be available for the special protection measures that have been identified. However, I hope that the Government will recognise—returning to this elusive objective of balance—that that is an appropriate balancing provision. I beg to move.
Baroness Miller of Hendon: My Lords, although I was happy for my amendments to be grouped with Amendment No. 9, Amendments Nos. 10 and 11 relate to a completely different point. I tabled these two amendments in Committee, but in view of the shortage of time that evening I did not move them. At that stage, they were intended to be probing amendments, but I believe that they require substantive consideration by the Minister, who has had more than a month to think about them.
As at present drafted, subsection (2) prohibits an undertaker from installing a meter unless the consumer has requested it, or has consented to it, or unless there has been a change in the occupation of the premises and the new occupier has not yet received a bill on a non-metered basis.
Another set of circumstances where the continuation of an unmetered charge would be inappropriate, because a continuation of the use of the rateable value would be inappropriate, is in cases where the premises have been so substantially altered that the rateable value should have been increased, and would have been increased, but for the repeal of Part V of the General Rate Act 1967.
Since rateable values were last set in the late 1970s, many properties, especially houses, have been substantially modified. Extensions and garages have been built, attics have been converted into extra rooms, and so on. In most cases the ever-vigilant district surveyor will have caught up with the owner of the property and the rateable value will have been increased,

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thereby triggering an increase in the water rates. However, in cases where the rateable value has not been increased, and in future cases where there are substantial alterations to a property, the owner could be paying an unduly low water bill because the rateable value has not been increased to reflect the enhancement of the property. The addition to sub-clause (2) removes that anomaly by allowing the supplier to switch to a metered supply.
It is logical that, if a newly built property is automatically to have its supply metered under the terms of this Bill, to all intents and purposes what is a newly converted or substantially altered property should be dealt with in the same way.
That is also consistent with the Government's acknowledgement that eventually all properties will be on a metered charge basis, as was made clear by the Minister for the Environment, Transport and the Regions in Committee in the other place when subsection (2)(b) was debated at some length.
The purpose of this amendment is to ensure that persons whose properties have increased in value because of substantial alterations do not pay a disproportionately low amount of water charges because there is no longer any machinery to increase their rateable value. That casts an unfair burden on the other customers, as both Ministers have mentioned in other instances.
Amendment No. 11 provides for disputes under this clause to be referred to the director under the appeals procedure set up by new Section 30A. Of course, disputes can arise, especially when the water company claims to have discovered that a substantial alteration which would have resulted in an increase in the rateable value has been made to the property whereas the owner will doubtless want to argue that the alteration is so insignificant that there has been no increase.
How big is substantial? I do not believe that we have to trouble ourselves by trying to define how big substantial is. The director can puzzle that one out. After all, that is part of his job.
As I said, this amendment draws attention to an anomaly. If this group of amendments is not acceptable to the Government, perhaps the Minister will not only tell your Lordships why not, but also tell us what alternative solution the Government have to resolve the problem.
Lord Whitty: My Lords, one of the main purposes of the Bill is to provide a right to customers to remain on the unmetered charges. This slightly disparate group of amendments is brought together because they all attempt to restrict that right.
The first question is whether we need any change to the face of the Bill to allow the kind of circumstances to which both noble Baronesses have referred. At present, the position is that the right to remain on unmetered charges has to meet the criteria specified within the Bill. We have already indicated that, through regulations, we propose to allow water companies to
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require metering for certain purposes, for example, commercial use, garden sprinklers, swimming pools and so on.
We could use the powers on the face of the Bill to extend the provisions of the Bill to some of the areas to which both noble Baronesses have referred. Therefore, I do not believe that we need a change to the Bill. No doubt the noble Baronesses will wish to know the Government's intention in this area.
On Amendment No. 9, clearly there is a problem about demand and conserving water in cases where water resources are under stress. The proposal to allow more widespread metering in those areas is, to some extent, an extension of the principle to which I have already referred. The arguments are fairly finely balanced. It could be argued that water companies already have the power to require meters for those using significant amounts of water for discretionary purposes, and that we do not need to do anything further on that. However, we recognise that in some areas of the country, particularly in parts of the South East, the demand for water is rising above its provision and that there could be danger to the local environment.
Therefore, in principle, we are prepared to consider allowing water metering in the kind of circumstances that the noble Baroness, Lady Hamwee, described. We need to be careful how we do that. My colleague, Michael Meacher, has invited the director general to develop proposals that will give effect to the aims that lie behind the amendment of the noble Baroness. Organisations such as the RSPB are pursuing that. We can already do that under the provisions for regulations. Therefore, I do not think that it is necessary for the noble Baroness to pursue her amendment.
On Amendments Nos. 10 and 11, I understand that water companies are reluctant, in some circumstances, to continue charging at the pre-1990 rateable value when the property has been significantly amended, There is nothing in our proposals that require water companies to stick to the rateable value assessment for those properties, but that does not mean that, if they move to a different system, that overturns the right of the customer to remain on an unmetered charge.
Amendment No. 9 indicates that there is an argument that metering is justified because of the conservation and environmental benefits. That does not apply to all altered premises and we cannot provide for it on that blanket basis. The fact of adding a garage, for example, does not of itself mean that water consumption increases. There is a fair amount of correspondence from customers saying that it would be unfair for a meter to be imposed upon them because of relatively minor changes to their houses which had no real effect on water use.
While we do not want water companies to be tied to outdated rateable values for properties where that is not appropriate, the fairer system is to allow water companies to update the basis of their charges, but without taking away customer choice. Under the Bill, as it stands, water companies would be able to use licence

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fees or to assess rateable value, provided that the basis of such charges is set out in the company's own charges schemes. As I expect the noble Baroness is aware, some companies already adopt that approach. Therefore, I do not consider that the right to remain on an unmeasured charge should be overridden by reference to an alteration in property. It should relate to specifics which will be set out in regulations of the same order. We have already indicated that we are prepared to allow water companies to impose meters, as I said at the beginning of my reply. As we can already do that under regulations, I hope that that will convince both noble Baronesses that it is unnecessary to pursue these amendments.
9 p.m.
Baroness Hamwee: My Lords, I thank the Minister for his reply. I accept that, since the amendment is not prescriptive as regards the detail of dealing with water stress areas, it may not add anything to the powers which are already available. As the Minister anticipated, it is the Government's intention which is of particular interest rather than the words on the face of the Bill. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 10 and 11 not moved.]
Lord Addington Lord Addington moved Amendment No. 12:
After Clause 9, insert the following new clause—

Water Industry Bill

  RESELLING OF WATER
  (" . After subsection (5) of section 150 of the Water Industry Act 1991 (charging for services provided with the help of an undertaker), there is inserted—
  "(6) An order under this section may—

  (a) require any person who resells water supplied by a water undertaker to furnish the purchaser with such information as may be specified or described in the order; and

  (b) provide that, in the event of his failing to do so, the maximum price applicable to the resale shall he specified in the order, or shall be reduced by such amount or such percentage as may be so specified."").

  The noble Lord said: My Lords, in this amendment we return to a subject which has been touched on earlier in our discussions on other amendments. It relates to the right to know exactly what one is being charged and why. It has particular reference to groups of people who have water resold to them. We had very interesting and lively discussion on this matter on the last occasion. I believe I described it as the most forceful probe imaginable made by the noble Lord, Lord Graham of Edmonton.
  The argument is that people should know what they are being charged for the resale of water. That means that they should be given information. Opportunities are occurring for landlords: in particular, owners of
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  temporary housing sites and mobile home sites are effectively ripping off people by overcharging them for water. The sums involved may not be very large, but one is being overcharged for a public amenity.
  This Bill suggests that no longer will someone be denied basic water or at least enough of it to live in a civilised manner. A secondary individual—a person between the supplier and the user of the water—will be allowed to extract extra money by the simple process of not having to tell a person what they are being charged so that that person cannot take action.
  This amendment would solve that problem. But we are at Report stage and it would be invidious to suggest that we have not had discussions already on this matter. Indeed, I have a copy of the letter which the noble Baroness, Lady Farrington, sent to the noble Lord, Lord Graham, saying that the Government were prepared to take action under regulations that a cap would be placed on what could be charged down to the normal household rate for the area.
  That probably comes close to answering paragraph (b) of my amendment, but it does not refer to (a). Even in the spirit of moving forward, it does not answer the point of principle behind this amendment. It is a practical and possibly a short-term answer. The letter does not answer the whole of the question for the long term.
  When replying, if the Minister can give me an answer which tells me when we can have the rest of the answer and find out what is going to be done long-term to deal with the problem, I would feel much happier. If it is not for this legislation, when will it occur? I beg to move.
  Baroness Farrington of Ribbleton: My Lords, Amendment No. 12 proposes an addition to the powers of the Director General of Water Services when making a water resale order. The amendment would allow the order to force the disclosure of information by the person reselling water to the purchaser. This is a subject slightly outside the scope of the Government's water charging review and the other measures in this Bill, in which we have concentrated on the charges paid to water undertakers.
  The use of the powers in Section 150 is so far untried. The director has recently proposed to make an order to limit resale prices and this has been widely welcomed. I welcome this proposal too. But, as I explained at Committee, we do believe that it is premature to propose an extension of powers to make an order before the existing power has been used even once. The Government would prefer first of all to consider how the order works within the present available powers. These already enable the director to limit water resale prices to the fair recovery of the sums paid by the reseller to the water undertaker. Once the order was in operation, if we were confronted with evidence that it was not entirely effective, then we would consider legislation or some other measure. But I would prefer not to accept an

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  amendment that assumes that the presently proposed order will not be effective in forcing water resellers to charge only reasonable prices.
  The proposals for an order do move some of the way to meeting the concerns which have been expressed. For example, in Ofwat's consultation paper on water resale, it suggested that,
  "To provide a basic, transparent test which will address particularly high charges, it is proposed that annual charges for unmeasured resale purchasers should not exceed the average unmeasured household water and sewerage bill for the relevant supplier unless the landlord provides evidence that application of the principles below warrants a higher charge".
  This would provide a safety net of a simple price limit based on readily available information and would shift the onus of producing information to justify high charges to the reseller. If a purchaser feels that he is being overcharged but cannot obtain information from the reseller about the basis of the charge, it would be up to the reseller to demonstrate why a higher charge than the safety net charge should be paid.
  During debate in Committee, the noble Lord, Lord Addington, asked how the Government would obtain information on whether the proposed resale order proves effective or whether some strengthening of the director's powers might be needed. The proposed order will strengthen Ofwat's role in policing arrangements for water resale. I hope that this will raise awareness of water resale issues among those affected and raise the profile of Ofwat's role in this area. This should ensure that information is collected more systematically and problems identified more thoroughly.
  I hope that the noble Lord, Lord Addington, will recognise that positive steps are being taken to assist those obtaining water services via resale arrangements, and that we shall continue to consider this subject in co-operation with Ofwat and through other bodies. On top of the fact that action is already being taken to improve the position of those subject to water resale and to provide greater fairness, it is also the case that this amendment is defective in that it relates only to water and not to sewerage services, which for many customers make up the greater proportion of the bill.
  I can assure the noble Lord, Lord Addington, that this issue will be kept under close review. We will act immediately should there be evidence that such action is necessary. In the light of that reassurance, I hope the noble Lord will feel able to withdraw his amendment.
  Lord Addington: My Lords, at Report stage that is about as much of an answer as one can expect. When the Government say that they are looking at the situation and will act if necessary, we know that we are starting a process which can take a considerable amount of time. But on the principle that the first step in any journey is always the most difficult, we have started well. On those grounds I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 10 [Extension of power to carry my works in connection with metering]:
  Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 13:
  Page 7, line 28, at end insert—
  ("( ) After subsection (9) there is inserted—
  "(10) In this section, references to "premises", "building.' or "house" shall he taken as also being references to—

  (a) any private dwellinghouse forming the whole or any part of any premises, building or house, and

  (b) any premises, building or house excluding any private dwellinghouse forming part of such premises, building or house."").

  The noble Baroness said: My Lords, in moving Amendment No. 13, I shall speak also to Amendments Nos. 15 and 16. All three amendments revolve around the same point, which has not been clarified in the Bill, even though it is essential that it should be.
  The amendments relate to mixed premises; that is, premises which are used both for commercial purposes and as a residence. At Committee stage I gave as a possible example public houses where the manager lived in; the common situation of a shop or restaurant with a flat above; even possibly the caretaker's flat in commercial premises.
  Amendment No. 13 to Clause 10 has the effect of ensuring that a metered supply can be installed in the business premises even if the residential part is not metered. It also means that once the business premises are separately metered, the residential part of the premises are protected from disconnection. That protection is something that I would riot have thought the Government would want obstructed in any way or for any reason. It will ensure that if for some reason the supply of water to the commercial premises has to be disconnected, the residential premises could not be used as a shield protecting the defaulting business premises from disconnection.
  Amendments Nos. 15 and 16 deal with different aspects of the same situation where mixed-use premises are involved. Amendment No. 15 ensures that where there are mixed premises, the supply company can insist on separate supply pipes to the commercial and the residential parts of the building. Amendment No. 16 follows from that and reinforces what I said about Amendment No. 13 to Clause 10. It makes it clear that the ban on disconnections of residential premises, which we all support, does not extend to mixed-use premises where the water supply is used by the business; for example, a public house where the water supply is almost totally used by the business. But, on the contrary, where premises are treated as one unit—a shop with a flat over it—then the flat itself cannot be cut off when the shop uses no water at all.
  In responding to the amendments at Committee stage, the noble Baroness, Lady Farrington of Ribbleton, argued against extending the powers of the water companies to enter peoples' houses in order to separate supply pipes. The noble Baroness also suggested that suppliers might even charge the householder for doing

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  so. That latter is something that can be covered by the intended regulations. Lastly, she said that the work might be something,
  "that the customer neither wants, nor needs doing".—[Official Report, 22/5/99: col. 1283.]
  These amendments aim to strengthen the rights of the householder and to protect him against getting mixed up in the financial problems of the business. True, they also strengthen the hand of the water supply company by removing an obstruction to its ability to recover their debts. We have the Late Payment of Commercial Debts (Interest) Act, so I am sure that the Government agree with this.
  The noble Lord, Lord Whitty, was concerned that the water company should not be put to expense by people switching backwards and forwards between being metered and not being metered, as I reminded your Lordships when we discussed the amendments to Clause 6. Surely then the Government should be no less concerned that they should not be inhibited from recovering their debts by the presence of residential premises. The gas suppliers, the electricity suppliers and the telephone companies have no problem in distinguishing between the commercial and residential occupiers of the same building and in supplying them separately. The water companies feel that they too would have no difficulty in dealing with both parts of the same building separately if they were given the appropriate powers to do so by this Bill.
  The noble Baroness, at the conclusion of the debate, very kindly offered to consider the matter further if I wrote to her. As I have already mentioned, I did; and the noble Lord, Lord Whitty, also sent me a detailed reply, for which I have already thanked him and for which I thank him again now. He made two main points. He said in effect that the problem dealt with by Amendment No. 13 will be covered by the regulations to be published in due course. I just feel that, this matter having been raised twice before today, it should have been possible to include the requisite clause as part of the primary legislation, because it is such a matter of concern to the water companies and it is something that the Government themselves say they recognise as a problem.
  Turning to Amendments Nos. 15 and 16, connected to Amendment No. 13, there is a reason why a clear and express definition of what constitutes a dwellinghouse is vital. The reason is that, when a private dwellinghouse forms part of a mixed use property, it must be possible clearly to differentiate between the parts that are used exclusively as a dwellinghouse and the parts that are used for other purposes. Furthermore, the reason why the water companies, who have briefed me on this point, are concerned to see the definition inserted as I have proposed, into Section 219(1) of the Water Industry Act 1991, is that, in addition to the point about disconnections, (a) will also apply to Section 162 of that Act, which relates to metering, and (b) will apply to Section 64, which relates to service pipes.
  Although it is felt, with the greatest of respect, that the noble Lord's criticism of the form and effect of the amendment as previously proposed are not entirely
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  justified, I have modified the amendment slightly so it now appears in its present form. I hope this makes it more acceptable.
  The amendments simply make it clear that, when premises are occupied for mixed purposes, those parts can be separately charged for the water that they consume. The water companies do not believe that this objective can be achieved without an exact qualification of the Water Industry Act 1991, which is why this amendment puts the matter beyond doubt. I am sorry to engage in such technicalities at such a late stage of the Bill, but the point has been before the Minister right from the outset. Doubtless his officials and advisers are clearer about the issues than I was on the day that this Bill landed on my cluttered desk. I repeat that all I am asking for is that the Minister should put on the face of the Bill the clarification that is needed. I beg to move.
  9.15 p.m.
  Lord Whitty: My Lords, as the noble Baroness said, we discussed similar amendments at the Committee stage. Although slight changes have since been made, I regret that I cannot regard these amendments as necessary, and in some respects they are actually undesirable. For example, the effect of Amendment No. 16 would be to disqualify from protection any dwelling in which business activity was carried out, regardless of what sort, or how much. In practice that would disqualify, or could be said to disqualify, many homes from protection: for instance, if you take work home or if you operate from your home any degree of business activity, it would mean that all of it would then have to be counted as a business premise.
  There has been widespread support across the community for protection against disconnection and we would not want to have a loophole whereby a minor amount of private business activity in a home would remove the protection against disconnection.
  Amendments Nos. 13 and 15 would extend the power the water companies already have to carry out work on customers' supply pipes. It is still not entirely clear to me that the amendments would actually add more than a very little in practice. At the moment, companies do have the power to separate supply lines where they have given notice that they intend to install a meter in the relevant properties. In Clause 10 of the Bill we are extending those powers to enable companies to carry out the necessary work in order to fit a meter.
  Clause 7 of the Bill constrains the water companies' ability to impose charging on household customers. Under the proposed Section 144B of the Water Industry Act 1991, water companies will be able to meter properties where conditions are met. We have indicated that we are permitting companies to impose charges where customers are using water for commercial purposes or, as I said earlier, for such devices as garden sprinklers, swimming pools and so forth. We therefore expect that this provision will enable water companies to install meters where water, as such, is used in connection with a business, without the need for such a complex amendment as Amendment No. 13.

  1401
  If Amendments Nos. 13 and 16 are not accepted—and I would urge the House not to accept them—Amendment No. 15, as it stands, would serve no useful purpose and we would not support such an amendment, for the reasons that my noble friend spelt out at an earlier stage. It would allow water companies to go into anyone's home whether or not a meter had been requested, and to carry out work to separate supply pipes. Under the amendment, companies could even charge the householder for the work involved in this, although the only purpose would be to make it easier for the water companies to disconnect the supply at a later date.
  I do not believe that such a degree of intrusion is desirable or that it is the probable objective that the noble Baroness has in mind, but that would be the effect of the amendment. I cannot really accept that it is right to allow companies freedom to impose on their customers in this way and then to charge them for doing so. Similarly, I do not accept that companies need the powers proposed in the amendments for any effective carrying on of their business.
  I must state, once again, that one of the principles of this Bill is to provide a protection against disconnection. There are limited exceptions, but this would not only greatly widen the number of exceptions; it would also give powers of intrusion to water companies going well beyond what the companies themselves would, if they thought about it, really want. In the circumstances, I hope that the noble Baroness will not press her amendments.
  Baroness Miller of Hendon: My Lords, I thank the Minister for his remarks. I have to say that the water companies themselves asked me to table these amendments. Although the Minister said that he feels sure that if the water companies thought about it they would not think it such a good idea, I believe that they have thought about it time and again. They are very much concerned about the position, for example, of public houses, as I mentioned. However, I note what the Minister said. I thank him for his comments and beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendments Nos. 14 to 16 not moved.]

Northern Ireland (Emergency and Prevention of Terrorism Provisions) (Continuance) Order' 1999
9.21 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 13th May be approved [19th Report from the Joint Committee].
The noble Lord said: My Lords, I think it would be useful if I gave some background to the issue that we are debating this evening. The United Kingdom's counter-terrorism legislation is under review at present. Your Lordships will be aware that the Government published a consultation paper last December containing
1402
their proposals for new UK-wide legislation to replace both the PTA and the EPA. Around 80 responses were received and we are weighing carefully the points made with a view to introducing a Bill as soon as possible. The responsibility for this measure will rest with the Home Secretary and the Home Office.
With the implementation of the Belfast agreement, the Government's firm hope is that when the new counter-terrorism provisions are enacted we will be able to treat Northern Ireland like any other part of the United Kingdom under the proposed new Act; that is, there will be no need for any additional measures specific to Northern Ireland. Of course, the Government will need to make a final judgment about this nearer the time the legislation is introduced.
However, our approach is a clear reflection of the Government's commitment to repeal the emergency legislation in Northern Ireland as soon as it is safe to do so. Moreover, it is in line with our aim steadily to transform the security environment, as appropriate, as part of the process of achieving complete normalisation of all aspects of Northern Ireland society.
The Good Friday agreement sets out the basis for a lasting peace and political accommodation in Northern Ireland. The past year has been characterised by strenuous efforts across the spectrum to implement the agreement in full. There can be no question that political progress has been slower than we would have hoped. But the Government continue to be optimistic about the prospects for Northern Ireland's future. It is not a false or misguided optimism but is based on a hard assessment of what is actually happening on the ground. Parties linked to the main paramilitary groups support the agreement.
Our assessment is that the main groups' ceasefires remain intact, although continued activity, like the outrageous paramilitary assaults, remain a matter for concern. The past years have seen major changes in the paramilitary landscape of Northern Ireland. But, regrettably, the Good Friday agreement has not yet brought an end to the terrorist threat.
On both Republican and Loyalist sides, new groupings have emerged determined to destroy the agreement and cheat the people of Northern Ireland out of their hopes for peace. These groups remain small but sadly their capability is still considerable. The past year has seen a series of brutal terrorist attacks reminiscent of the worst days of the Troubles.
I must refer to Omagh. Just a few months after the agreement Northern Ireland suffered its worst single atrocity, with 29 people tragically cut down in a savage attack directed at a busy market town on a Saturday afternoon. There have been other attacks too, including the murder of Lurgan solicitor Rosemary Nelson by an under-car booby trap. And of course we had the tragic murder of Mrs. Elizabeth O'Neill in F'ortadown at the weekend. Our thoughts are with Mrs. O'Neill's family at this time.
Since the Good Friday agreement, 44 people have been killed by terrorism. There have been 197 shootings, including 80 paramilitary style shootings,

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178 paramilitary assaults and 144 bombing incidents, including numerous petrol bomb attacks on police and pipe and blast bomb attacks by loyalist dissidents.
The RUC will do everything in its power to bring those who carry out these vile acts to justice. But to be successful it needs the maximum co-operation of those who may have information about these events. I call again for anyone who has such information, no matter how insignificant it may seem, to notify the police immediately.
I pay tribute to the continued courage and commitment of the men and women of the RUC and to the Armed Forces acting in their support. Both the Government and the people of Northern Ireland know only too well the difficulties faced by the RUC. Unlike any other police force in the UK, the RUC has had to perform a dual role of combating terrorism and maintaining public order, while at the same time investigating every-day crime and upholding the standards of a civilised society, and it has had to pay a high price in doing so. All of us hope that the security forces never have to lose another life as a result of terrorism. Sadly, that has not been the case during the past year.
I pay tribute to the memory of Constable Frankie O'Reilly, murdered last September at Drumcree. Constable O'Reilly, a community police officer, represented all that is good about policing and the many positive aspects of the ongoing, but often unrecognised, work of the RUC. Our thoughts remain with his wife and family and with the families of the other 301 RUC officers who have so tragically lost their lives over the past 30 years.
Despite the difficult environment in which they have to operate, the RUC and the Armed Forces have carried out their duties with consummate professionalism. During 1998, 391 persons were charged with scheduled offences, and in the first quarter of 1999, 63 persons were charged with scheduled offences. The security forces also continue to recover significant amounts of weaponry and explosives—38 firearms alone in the first quarter of this year. Recent significant finds have included pipe bombs and related materials in the County Antrim area. These have resulted in three persons being charged with a range of related offences.
Even given this background, we are determined to move towards a more normal security environment as quickly as we can. Much has already been achieved, including, since the Good Friday agreement, a reduction by two thirds in the amount of Army patrolling in support of the RUC, with the lowest number of Army personnel now on operational duties since 1970. Military installations have also been closed—seven in Fermanagh—and others have been demolished, including the largest military base at Whiterock in West Belfast. But we must ensure that our security policy is always governed by the threat level. I want to make it clear that while the threat remains the Government will not leave the people of Northern Ireland without the protections which the anti-terrorism legislation provides.
I now turn to those protections and the specific legislation that we are considering today. The EPA provides the security forces with powers over and above those in the ordinary law—powers, for example, to deter and detect terrorist crime and protect the whole community. It also provides for a range of protections, including codes of practice governing the detention and treatment of persons arrested under the terrorism provisions, and silent video recording and audio recording of the interviews which the police conduct with suspects. There is also a requirement, and a safeguard, that for the provisions to remain in force they must be reviewed and renewed annually by Parliament. That is the business of your Lordships' House today.
The draft order would continue in force for 12 months from 16th June 1999 the temporary provisions of the Northern Ireland (Emergency Provisions) Act 1996; that is, most of its provisions. It would also continue in force Section 4 of the Criminal Justice (Terrorism and Conspiracy) Act 1998 as it applies to Northern Ireland; and Parts III and V of the Prevention of Terrorism (Temporary Provisions) Act 1989 in so far as they have effect in Northern Ireland and relate to organisations proscribed under the EPA.
In particular, the EPA provides for a schedule of offences deemed to be terrorist related unless certified otherwise by the Attorney-General and for the Diplock court system of non-jury trial with associated safeguards; for additional police and Army stop, question, search, seizure and arrest powers; for road closure powers; for offences against public security and public order; for the regulation of the provision of private security services; and for the regime and protections that operate in the police holding centres. The Act also provides for the independent scrutiny of Army complaints procedures.
Since the Act was last renewed, the provisions relating to membership of proscribed organisations have been amended by the Criminal Justice (Terrorism and Conspiracy) Act 1998 to provide for new police evidence and court inference provisions and forfeiture of property powers.
Finally, the temporary provisions of the PTA related to Northern Ireland concern offences associated with the raising of terrorist funds and the investigation of terrorist activities.
Informing today's debate is the recent report of Mr. John Rowe, QC, the independent reviewer, on the operation of the Act in 1998. This report was published on 13th May. This year Mr. Rowe's review has included the temporary provisions of the Criminal Justice (Terrorism and Conspiracy) Act 1998 in so far as they relate to Northern Ireland. Mr. Rowe's remit is to examine the use of the provisions and to consider whether they are still needed and whether they have been used fairly and properly. The Government are grateful to Mr. Rowe for the time and effort he has put into producing his report.
We note that he records that the measures contained in the Criminal Justice (Terrorism and Conspiracy) Act 1998 have not been used and that it is his view that the new evidence and inference provisions are likely to

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contravene the European Convention on Human Rights. However, the Government made clear during the passage of the Act that they were satisfied that the provisions are ECHR compliant. The Government have not altered their view. It is also the Government's view that it is still too early to make a considered assessment of the value of the powers.
Despite his comments on this aspect of the relevant legislation, Mr. Rowe has concluded that the temporary provisions of the EPA should be renewed in their entirety. The Government share that view. Mr. Rowe adds further—I hope that your Lordships' House will be reassured by this—that although some people have said to him that the powers have been used to harass and oppress, his research has led him to conclude that the powers have been used properly.
It is of particular value also that today's debate is further informed by other independent observers. I am happy to say that the recently published reports of the independent commissioners for the holding centres, Sir Louis Blom-Cooper and Dr. Bill Norris, and of the Independent Assessor of Military Complaints Procedures, Mr. Jim McDonald, have again provided reassurances that the security forces are using their powers properly. The Government are grateful to Sir Louis Blom-Cooper, Dr. Bill Norris and Mr. Jim McDonald for the admirable work they do, for their considered views and for the reassurances they provide.
The Government recognise and are encouraged that the threat of terrorism in Northern Ireland has diminished significantly. Following the Belfast agreement, overwhelmingly supported by the people of Ireland, north and south, we hope and expect the threat to diminish to the point where no special Northern Ireland powers will be necessary. In the meantime, we will not leave the people of Northern Ireland without the provisions that are necessary to deter and detect terrorist crime and to protect the community. That is why the Government are seeking the renewal of the temporary provisions contained within the EPA.
I commend the draft order to your Lordships' House. I beg to move.
Moved, That the draft order laid before the House on 13th May be approved [19th Report from the Joint Committee].—(Lord Dubs.)
9.34 p.m.
Viscount Brookeborough: My Lords, I welcome the fact that Northern Ireland will, in the not too far distant future, be treated like the rest of the United Kingdom and that we will all be covered by the same Act in the prevention of terrorism.
I thank the Minister for his explanation of the order. I support its continuance. We have had debates recently dealing with many aspects of terrorism in the Province. I do not intend to take time going back over them in detail. We have covered: prisoner releases; intimidation; beatings and mutilations; the decommissioning of weapons; the search for the bodies of the disappeared, and many other aspects—most of which show only too clearly that this order is required.
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Owing to the ever more horrifying news headlines from Kosovo, the continued beatings and mutilations have not been so frequently reported on this side of the Irish Sea. However, they continue at the same pace and are just as horrific as they ever were. Recently, attention was drawn to them in an excellent debate in the Commons. They featured more highly than they do at present.
There has been no decommissioning of weapons. The infrastructure of the terrorist organisations, both loyalist and republican, remain intact and in place. Yet prisoners continue to be released.
The recent Northern Ireland (Location of Victims' Remains) Act, passed in order to facilitate the recovery of the bodies of "the disappeared", has so far produced little success—only one body. Most of us objected to the Act and doubted that it would work. It looks as though we were right, except in this one case. Every newspaper in the Province reports daily on the negative results of the searches. Virtually every television news report shows the locations and the mechanical diggers at work. Worst of all, the reports show the increased agony and anguish of the families of the disappeared. This issue, and the lack of success, are casting a terrible gloom and despondency over the Province.
For the IRA to set out the terms and conditions for immunity from prosecution in these cases, and for the Government to produce an Act fulfilling the IRA's requirements without the delivery of eight out of the nine bodies is a most cruel blow to the families concerned. I cannot describe what an appalling situation this is producing in the Province and in Ireland as a whole. It affects virtually everybody.
We now come round yet again to the Drumcree-Portadown situation. I condemn what is happening there. The loyalist terrorist groupings have been murdering both Catholics and Protestants. The latest person to be killed, Mrs. Elizabeth O'Neill, was buried yesterday. Everyone will agree that we should send sympathy to the family. The loyalist terrorists continue to attempt to murder others with bombs almost nightly. I fear that worse is yet to come if their political wings have no sanction levelled against them in the near future. Will the Minister tell the House when their political wings will be expelled from the Assembly? How soon will the RUC have the evidence to do so? Fourteen pipe bombs similar to those used at Drumcree last year were found by the Security Forces today in Lurgan. How much more misery do we have to sustain in the Province before the Government take action against the political wings of terrorist organisations on both sides of the religious divide? We, the inhabitants of Northern Ireland, will pay the price for the appeasement of terrorism if nothing is done sooner rather than later.
To add insult to injury, the very people who gave such service to our nation, not only in Northern Ireland but in other theatres, are not to be given anonymity in the Saville inquiry. The noble and learned Lord, Lord Saville, believes that the soldiers do not warrant anonymity. Yet he is more used to trials involving fraud and financial affairs, and may not have much experience

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of the ways of violent criminals, even in England. Their violence and technology is nothing compared with that of the IRA. The vast majority of the people in the United Kingdom feel that these soldiers are being betrayed by their Government on this issue. I ask the Minister a question which I know we have asked before, but there are many people, including those involved in law and legal services, to whom many of us have talked, who do not quite agree with the opinion expressed previously by the Minister. Why cannot the noble and learned Lord. Lord Saville, be instructed to grant anonymity?
In conclusion, I support the continuance order. We wish the Government every success in the near future. But they will have to act on certain issues and do so quickly.
9.39 p.m.
Baroness Park of Monmouth: My Lords, I thank the Minister most warmly for his thoughtful and full introduction. He has given us some reassurance on the Government's determination to support the security services. However, I remain deeply concerned that it is still far too early to proceed to normalisation because it is only too likely to prove IRA-speak for neutralising the RUC. I beg the Government not to go too far for cosmetic political reasons.
Life in Northern Ireland is not normal and it is a long way from being so. I very much support the renewal of this order because it is both necessary and right to review the legislation. I cannot but note, however, that since the 1998 Act was rushed through both Houses after the tragedy of Omagh, when we were told how tough the Government intended to be on terrorism, no one seems yet to have been prosecuted, although, I am sure, serious inquiries are being pursued. I realise that these things cannot be done just like that. Nevertheless, there is that Act. We have not seen much in the way of results, except that I was reassured to hear the Minister tell us about the number of successful searches and other acts that the RUC has been able to carry out.
However, the major object, the capture of serious terrorists, has not happened. The only further legislation we have had to pass has been designed to ensure that the murderers of the disappeared are to be protected for their acts rather than indicted. It has been a terrorists' charter. I look forward to the report which the 1998 Act requires the Government to lay before us at least once in every 12 months.
The marching season is upon us and a loyalist faction at least as hateful as the IRA, though far less powerful, has foully murdered a woman whose only crime was to be part of a Catholic family in a Protestant enclave. It is in the interests of the IRA, and indeed of the extremists among loyalists, to foment trouble and then blame any breakdown of the executive on David Trimble, and thus to obscure the real issue: that of Sinn Fein/IRA's determination to enter government still with their guns beneath the table.
The importance of this legislation is that, I hope, it continues to empower the RUC and the security forces generally to act when the evidence is available to bring
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terrorists to justice. It is especially necessary for the RUC to be seen to be fully supported by the Government at this critical time. I noted the Minister's remarks in that connection with great pleasure, especially since Sinn Fein/IRA would dearly love the Patten Commission to report in favour of the abolition of the RUC and its replacement by a people's police.
The RUC cannot but feel threatened. It might be worth remembering that the IRA is responsible for killing, according to statistics collected by INCORE (the Initiative on Conflict Resolution and Ethnicity), in the years 1969 to 1998 no less than 610 people under 25 and 73 over 25 compared with 29 under 25 and six over 25 by the RUC. The loyalist groups killed 132. It is worth noting, too, that the IRA was responsible for the largest number of deaths among both the under-18s and the under-25s and are responsible for 58.8 per cent of all deaths. Civilians represented 45.6 per cent of those under 25 and 79 per cent of those under 18. The IRA makes war on women and children.
A substantial number of Catholics were killed by republican paramilitaries, their own people. Today the punishment beatings and shootings continue, to which the Minister rightly alluded, and which have run into thousands over the years, as does the exiling of whole families. Imagine that happening in the UK, nobody even noticing it and no one daring to complain or seek redress from the law of the land.
The recent brave revelations by the families of the disappeared are an example of what has gone on all these years but can never be said. We cannot abandon people who are already terrorised within their communities to the tender mercies of authorised paramilitary policing, thinly disguised as community policing, in the name of normalisation.
I hope that the Government can, if possible, somehow use this legislation to make more examples and to demonstrate both to the law-abiding general public and to the forces of law and order, and not least to the terrorists, that they support the security forces and believe in their value and commitment.
To give one example, at a time when we are blithely sending the Parachute Regiment to Kosovo, it seems hardly the moment to throw some of their comrades, who only did their duty, to the IRA wolves in the Bloody Sunday inquiry for the sake of that mantra "transparency", when we well know, if the judge does not, the consequences—death for them and their families. The same is true of witnesses from that admirable and courageous force, the RUC, and the RUC reservists. Some of the latter are now tetraplegic and paraplegic because they did their duty.
To sum up, I urge that we retain and renew any powers that we have to bring terrorism, if not to book, under control. I hope that the intention to bring it under a general UK law does not result in weakening it, because so many of the provisions that are needed in Northern Ireland in the present circumstances would not even be considered likely or possible in this country: otherwise, the ordinary man and woman in the streets of Northern Ireland will believe that the terrorists always win.

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The present black comedy that the IRA is conducting at the expense of poor, unfortunate members of their own community, those whom they claim to be there to protect, is, thank God, doing them little good. It does not enhance the reputation of the two governments either, since they are seen to have been cynically and successfully manipulated. We must not allow that to happen at the Bloody Sunday inquiry.
I support this legislation but I hope we shall endeavour to make sure that anything which succeeds it can be equally effective in the special circumstances of Northern Ireland, where normalisation, I fear, is a long way off.
9.47 p.m.
Lord Dunleath: My Lords, I apologise for speaking in the gap. It is due entirely to my ignorance of the fact that a Speakers' List was formed for this evening. However, I think that the Minister and the Table are aware that I am going to speak this evening.
I thank the Minister for his usual clear and careful explanation behind the reasons for this continuance of the order. He has highlighted the ongoing catalogue of terrorist outrages that are still continuing in Northern Ireland. In particular, I wish to associate myself with the generous tribute that he has paid to the courage and dedication of the officers of the Royal Ulster Constabulary.
It is with regret that I can but support the Motion that is to be adopted for yet another year. I say "with regret" because Northern Ireland is far from being at true peace. A little over two weeks ago, the Northern Ireland (Location of Victims' Remains) Bill was passed. Since then, one body has been returned by the IRA. We have seen the distressing sight of the Gardai trying to locate other victims on a beach car park in County Louth, in County Monaghan and elsewhere. We have seen distraught relatives at these locations, waiting and hoping that the remains of their loved ones will be found. Ten or more days later, nothing has yet been found, despite all the diligence of the Gardai.
One must ask whether the IRA has given deliberate misinformation to the commission or whether they really do not care or cannot remember where the bodies of eight people were dumped by them. This must be set against earlier comments from the IRA that some bodies, including that of Captain Robert Nairac, would never be found.
This callousness of the IRA and their treatment of the disappeared 25 or so years ago has finally hit home and there is a wave of revulsion throughout Ireland today. For once, even Mr. Adams may be discomfited. I hope that Sinn Fein will feel the depth of this anger at the ballot box on Thursday.
Last week, Mrs. Elizabeth O'Neill was murdered in Northern Ireland by loyalist thugs. It would appear that her only crime was to be the Protestant half of a mixed marriage. Mixed marriages are taken for granted in this country. In parts of Northern Ireland, love crosses the religious divide at extreme peril.
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Yesterday, a pipe bomb was discovered at a Roman Catholic primary school in Ballymena. My noble friend Lord Brookeborough referred to further pipe bomb discoveries today. The marching season is now almost upon us, with the Drumcree situation from last year still not resolved and no signs as yet of any compromise on contentious marches this year. Finally, and most significantly, no more has been seen from Sinn Fein/IRA on the decommissioning of weapons.
The Secretary of State yet again urges David Trimble and the Unionist Party on the one hand and Sinn Fein/IRA on the other to be flexible and to go that extra yard for peace. As my noble friend Lord Molyneaux has said before, David Trimble has gone the distance—he has been flexible, he has compromised, he has made concessions, he can go no further. Sinn Fein/IRA, on the other hand, have not moved an inch.
With this in mind, I was profoundly depressed to read Kevin Toolis's article in The Times on 3rd June where he wrote:
"The long, slow but necessary betrayal of Ulster's Protestants … has at last begun".
He went on:
"David Trimble has the unenviable task of managing political defeat as the options for Unionism draw ever tighter. By persuasion, guile and ultimatum the British Government has determined on a course to force the Unionists into a political accommodation with their fellow Irishmen. And it is now too late … for Tony Blair to draw back.
Power in Ulster is trickling from the Crown towards nationalist Ireland and the future Irish Taoiseach, Gerry Adams".
I do not agree, it may not surprise the House, with all that he says and in view of recent events, Mr. Toolis may or may not have got it quite right. But it is against this background that I support the continuance for another year of the Northern Ireland emergency and prevention of terrorism provisions.
9.51 p.m.
Lord Molyneaux of Killead: My Lords, I, too, apologise to the House for not putting down my name to speak. I was taken unawares by the timing of the order.
On the face of the order, which 1 support, there appears the word "Continuance" and in the Explanatory Note the word "continues" appears twice. Those expressions are, of course, accurate because this is an annual parliamentary exercise. We are continuing the emergency and prevention of terrorism orders for another 12 months, as we have been doing for decades. On such occasions, both Government and Opposition spokesmen have expressed the hope that continuance will not be required at the end of the period. Previously, hope could not be entirely discounted. But this year hope is very much a pipedream—for, as has already been explained by my noble friends, terrorism in all its sordid forms is on the increase. It is mostly conducted by bodies which support the agreement. There is a message of sorts there for some people. Mr. Adams asserts that the political vacuum is the cause, ignoring the fact that he alone can honour the spirit of the Good Friday agreement and start the whole mechanism.

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However, as my noble friends have said, two weeks of shame on the IRA has transformed the constitutional future of Northern Ireland. The world now sees that Sinn Fein/IRA deceived the two governments into thinking that they could and would locate the bodies of the disappeared. They lied to persuade Her Majesty's Government and Parliament to produce legislation to grant immunity to murderers and now, most unforgivably, they callously inflict untold suffering on the nationalist families of those they had tortured and murdered.
The shattering lesson of this sordid episode is that Sinn Fein/IRA can never be trusted again. The Prime Minister must remain true to his promises of a year ago and reject demands from all who would have him apply pressure on David Trimble to trigger a Northern Ireland executive on the basis, and solely on the basis, of Sinn Fein/IRA undertakings, which the world knows will be dishonoured once they have their feet under the Cabinet table.
9.55 p.m.
Lord Fitt: My Lords, in a debate such as this it is inevitable that there will be a certain amount of repetition. I was a Member of another place in 1973 when the first Act of this kind was placed on the statute book. It has been soul-destroying to live in Northern Ireland while this catalogue of tragedies has continued and to see this legislation amended, added to and subtracted from every year. To many people it seems that this measure and the Prevention of Terrorism Act has not had any real effect.
My reason for entering into this debate this evening is to try to tell the House something of the horror that has engulfed Northern Ireland since the passing of the Northern Ireland (Location of Victims' Remains) Bill by this House. I have been in Northern Ireland in the past eight days. Irrespective of our opposition to the measure, we and the Government had hoped that the IRA would designate where these bodies lay and that they would be identified at the earliest possible opportunity.
I believe that the Government first began to give consideration to this legislation on the recommendation of intermediaries from the Government of the Irish Republic. They acted through intermediaries. Evidently, the Government of the Republic had been told that the IRA was now prepared to designate where these bodies lay. I accepted the bona fides of the Minister, even though I opposed this measure. He honestly believed that by this time those bodies would be located and identified.
On the morning of the Saturday before last I was in Belfast and listened to what I regarded, and will continue to regard, as one of the most horrible, poignant, sad interviews that I had ever heard in my life. It was an interview conducted by David Dunseith five years ago with Helen McKendry whose mother Jean McConville was taken away in 1972 and murdered by the IRA. I only hope some means can be found by which that recording can be played on every radio station
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throughout the United Kingdom. That broadcast brought to mind all the horrible events that have overtaken Ireland in the past 30 years. One listened to Helen McKendry detail every minute and second of the past 27 years since her mother was taken away and brutally murdered.
Having heard the story, one began to question what had happened. All of these people were murdered in the Republic of Ireland, not in Northern Ireland. That gives credence to the unionist case that the IRA had a bolt hole to run to which was not available to the loyalist murderers. I then began to talk to people. I wondered whether when Jean McConville was taken over the border she was sitting in a car looking into the eyes of her murderer or she was already dead. The same applies to the others because they were all murdered in the Republic. That broadcast caused a convulsion of sympathy throughout Northern Ireland right across the religious and political divide.
In Northern Ireland I have lived through some of the most terrible tragedies: the La Mon killings, Bloody Sunday and Enniskillen. I can keep going. However, I have never felt such a wave of revulsion sweep over the Northern Ireland community at what has happened since the passing of this legislation, and no bodies have been forthcoming. Can the Government put pressure on the intermediaries who first gave them the information? The amendment which was very nearly carried in this House provided that if those bodies were not returned by 30th June the amnesty which was being granted to the perpetrators of these murders should be rescinded. If the Government had again to consider the legislation they might look with some sympathy on that amendment.
The noble Lord will know that every newspaper, unionist, nationalist, columnist and contributor in Northern Ireland has expressed with varying degrees of sadness what has been happening. The people of England have not had to sit night after night, as has been illustrated by the noble Viscount, Lord Brookeborough, watching diggers trying to dig up a car park with the nine sons and daughters of the murder victim present hoping that their mother's bones would be dredged up. That is still going on and will continue to go on because I do not believe that the IRA will be in a position to detail where those graves are. I believe that it knows where the graves are. The people who carried out those murders must still be living. The people who took those individuals across the border to be murdered must still be living. They have already been granted anonymity. They have already been told there will be an amnesty. The murderers of those people could go to the various sites which have been spoken about and could say, "There it is", without fear of prosecution.
If members of the IRA have any compassion or sympathy in their souls for what they have done to Northern Ireland, they should avail themselves of this opportunity to identify those bodies once and for all. The hurt that exists in Northern Ireland at present is hard to describe.
In his opening remarks, the noble Lord, Lord Dubs, mentioned that since we last discussed emergency provisions there has been Omagh, the murder of

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Mrs. O'Neill, and other tragedies. One cannot remember all the tragedies. But the noble Lord forgot to mention that one of the most awful murders that has taken place since we last discussed this legislation was of the three young Quinn boys in Ballymoney. One is inclined to forget all the horrible murders that have taken place.
The measure which was passed is now embodied in this legislation, after the Omagh tragedy. In pushing through the amnesty Bill, the noble Lord, Lord Dubs, said that there would be a partial amnesty granted to those members of the republican movement who would detail where the graves were, but that if the Government were to find out from other sources where those graves were, they would be able to prosecute the murderers. I should like the Government to tell us that this legislation, which I support, will be used to hunt down the people who carried out these atrocious murders all those years ago.
I agree with the noble 'Viscount, Lord Brookeborough, that one is terribly frightened at the number of pipe bombs which have been found in Northern Ireland over the past few days. A pipe bomb was found in a Catholic primary school in Ballymena. Had that bomb gone off it could have killed more than the number of children murdered in Dunblane some years ago. It shows the length to which extremists will go to defeat what they regard as their opponents and to attain their own political ends.
This legislation, and any other that is necessary, should be used within the next week because we are coining to the dangerous time in Northern Ireland's political history; the Drumcree march. Every effort should be made and every weapon given to the RUC to ensure that both sets of murderers, and particularly the people who are in control of pipe bombs, do not cause the carnage which they will undoubtedly cause if they are not taken off our streets.
Lord Hylton: My Lords, before the noble Lord sits down, perhaps I may say that he has made a powerful and very emotional speech. However, does he agree that some progress has been made? During the past year, nine times as many people have been charged with terrorist-type offences as have been killed by terrorists. Is that not a step forward?
10.6 p.m.
Viscount Slim: My Lords, I am grateful to the Minister for catching my eye and allowing me to say a few words. Of course I support the order. It is only right that most of us in the House do so. You can have an order, but, as the noble Lord, Lord Fitt, said, if you do not use it and its powers you have only a piece of paper. If the Government continue—their predecessors were much of the same ilk—the doctrine cif appeasement as they have done throughout the past few years, this order is of little value. As the noble Lord, Lord Fitt, said, if you have got something in your hand, use it to stop what is today a Sinn Fein/IRA mafia which demands its dues and completely dominates many sectors of the commercial world and the people of Northern Ireland.
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That is an issue which I have not heard your Lordships discuss previously in great detail. I sometimes think that the Government do not wish it to be discussed.
The point about the order is that in the hands of any government—your Lordships know that I am not concerned with Right, Left, Liberal Democrat or anything of the kind but with good, strong, positive government when it is needed—it should be used. If you have a piece of paper, use it. It is ridiculous to pass such orders and do nothing.
I believe that the noble Lord, Lord Fitt, had a point. We have the power; do we have the guts to use it? I say to the Minister, who has a most unenviable job and undertakes it with great compassion and skill, that when he is given something he should use it in a way which will bring peace and a little happiness to a very troubled part of our land.
I am becoming slightly persuaded that the whole thing is a bit of a hoax and that really the Government's intentions are eventually to give Ireland away; to have nothing more to do with it arid to make wonderful speeches about everyone being nationalistic, independent and having one Ireland. As the noble Lord, Lord Fitt, and others have said, there is a feeling of betrayal. Any government which goes in for betrayal will be very much taken to task. I say to the noble Lord, let us pass this order, but let us hope that somebody somewhere will have the guts to use it
10.10 p.m.
Lord Redesdale: My Lords, it saddens me greatly that events in Northern Ireland over the last few clays show that it is necessary to support the continuance order before the House today.
Yesterday morning, hours before the funeral of Elizabeth O'Neill—I believe that all noble Lords echo the sentiments expressed by the Minister and many noble Lords—another pipe bomb, with the potential to kill and maim was discovered at a primary school in Ballymena. It is not possible to describe the horror of that act.
Those are just two incidents out of many which have occurred in recent weeks and months. There is absolutely no justification for the terrible spate of violence we have witnessed in Northern Ireland, not just in recent days, but indeed since the signing of the Good Friday agreement last year. Recent reports have indicated that there have been some 144 bombing incidents since 10th April 1998 as well as countless paramilitary beatings and other such attacks, each one of them abhorrent in itself. That continuing sectarian violence has caused the implementation of this legislation.
This legislation, regrettably, is still necessary. My Liberal Democrat colleague in another place argued that, when considering this legislation, we must balance the rights of the public and civil liberties with the rights of people accused of terrorist crimes. If those crimes are committed, some members of the public will lose their lives or be caused serious injuries, yet as civil democrats

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we cannot support the removal of some fairly fundamental rights from an individual for less than fundamental reasons.
The considerable evidence in the Rowe report and elsewhere suggest that this legislation has saved lives, and will continue to save lives in the current circumstances. The noble Viscount, Lord Slim, suggested that this legislation is not used. That is far from the case. However, it does not offer terrorists some distorted justification to carry out their crimes by claiming that their rights have been limited. There is no justification for the paramilitaries to perpetuate the kind of violence that has been seen in Northern Ireland. This legislation is, in our view, still necessary.
Many noble Lords have mentioned the consequences of passing the Northern Ireland (Location of Victims' Remains) Act. As someone who was quoted in the press as a lone voice in support of that piece of legislation, I have not changed my position, even after the results that we have seen. I do not lay the blame for the non-retrieval of the bodies at the door of the Government. We supported the Government because we believed that this was a humanitarian Bill. I want to echo the words of the noble Lords, Lord Fitt and Lord Dunleath, and the noble Viscount, Lord Brookeborough, in saying that we also suffered the wake of revulsion about the way in which the IRA failed to live up to their promises.
I was hopeful, when the first body was discovered, that others would be found, because the purpose of the legislation was to return the bodies to the families so that they could be buried with dignity. I find it incredible that those people who were acting as intermediaries, with the legislation in place, could not come in person and point to the spot. The press need not have been looking over their shoulders, but the offer should be made. It is not too late for that to come about.
The noble Viscount, Lord Brookeborough, in a powerful speech during the passage of that Bill, used the articles in the press as an indication of what the IRA was up to. Having read the press cuttings, I am sure that the wave of revulsion expressed has affected everybody north and south of the border. I believe that it will have a detrimental effect. I believe that Sinn Fein cannot wash its hands of this. It must be accountable. It claims to be a democratic organisation. It will have to answer to the voters. I hope that Sinn Fein is punished in the forthcoming elections.
Mention has also been made of the public inquiry. I still understand the reason that the Minister gave for the Government's inability to intervene in a public inquiry—that is, because it must be independent. The Minister said that he was quite sure that the noble and learned Lord, Lord Saville, would probably take account of the feelings of the House and also the feelings expressed widely throughout the country, but I feel uneasy that he still is not looking to introduce anonymity for those who will give evidence.
I look forward to the day when it will not be necessary to renew these orders. It will then be necessary to ensure that in the process of replacing the
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temporary legislation we do not allow unnecessary powers to remain in operation and that the proper means for scrutinising the operation of such powers are in place. I am sure that the long-term aim of the people of Northern Ireland is the complete normalisation of society there and for Northern Ireland not to have exceptional powers which are not granted to the rest of the United Kingdom. The Good Friday agreement has given Northern Ireland the chance to resolve for good the exceptional circumstances that make this legislation necessary. My sincere hope is that this chance will not be wasted.
10.15 p.m.
Earl Attlee: My Lords, I too am grateful to the Minister for his explanation of the order that he has given us tonight and we, of course, support it. I join with him in his well-justified praise of the security forces for their outstanding and persistent efforts in providing as secure an environment as possible. When we return from the Summer Recess we can look forward to examining the conclusions of the Patten Commission. I hope that the unique contribution that the security forces have made will be properly recognised.
We on these Benches believe that the Belfast agreement, signed on Good Friday last year, offers the prospect of a genuine and lasting peace in Northern Ireland. There is now a real chance that the politically motivated violence and sustained terrorist campaign that have characterised the past 30 years may well be over for good if we can put in the last few pieces of the jig-saw puzzle.
However, nobody need be in any doubt of the difficulties that lie ahead. The peace that currently exists in Northern Ireland is in many respects an imperfect or partial peace because the main terrorist organisations, complete with their command and control structures, remain firmly intact. They are continuing to target potential victims and recruit and train members. The terrorist organisations have yet to make a start to the decommissioning of their illegally held arms and explosives as they are required to do under the Belfast agreement. All the main terrorist groups have been engaged in savage mutilations, beatings and bombings, the most recent being Mrs. O'Neill. That is confirmed by Mr. John Rowe in his most recent report.
However, even in the event of the agreement succeeding—we hope that it does—the terrorist threat will remain high for some time. The history of Irish republicanism in particular is littered with splits. For example, the Provisional IRA itself was born out of a split with the old Official IRA in 1970. The Omagh bomb in 1998—the single worst atrocity in the past 30 years, in which 29 people were murdered—was carried out by a republican splinter group. The prospect of an IRA split remains very real indeed. It would be folly to underestimate the ability of a breakaway IRA, in addition to other groups, to destablise Northern Ireland.
A return to violence by republicans would almost certainly lead to a breakdown in the loyalist ceasefires which have held since October 1994. In the years immediately preceding the ceasefire the UDF and the

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UDA, in addition to various groups using cover names, were responsible for more murders than their republican counterparts. Should they too return to violence, the full range of powers contained in the current emergency provisions legislation, and perhaps more, will be required.
That said, the outlook today is definitely more optimistic than at any point since the outbreak of the Troubles in 1969. I hope that the process of normalisation will continue and that we can then move to permanent UK-wide security provisions alluded to by the Minister. We on these Benches certainly look forward to the Bill that the Minister mentioned and the advent of the conditions that will make it possible.
Several noble Lords mentioned the regular ritual of extending the EPA and other legislation and the fact that nothing changes. But matters are changing, and for the better. I have been in Northern Ireland many times since my appointment, but I have yet to see the Army on patrol, let alone arresting anyone. That applies especially to Belfast. Progress is being made, but there are still challenges and I hope the Government can meet them.
The noble Viscount, Lord Brookeborough, and others raised the issue of the Bloody Sunday inquiry. When the Minister winds up he will no doubt suggest that anonymity for witnesses is a matter for the noble and learned Lord, Lord Saville of Newdigate, and his inquiry. It may well be that the Government cannot instruct the inquiry—I believe that was the position of the noble Lord, Lord Redesdale. However, the Minister and his right honourable friends have responsibility as they themselves set up the terms of reference for the inquiry. If they had added a few simple words such as, "without jeopardising the safety and security of witnesses", they would have avoided the current difficulties. More importantly, it would have increased the chances of the inquiry identifying any new evidence relating to that fateful day.
But who knows what the effect of this inquiry will have on the members of the Parachute Regiment. They are just about to engage in hazardous operations, but at the same time their predecessors' safety is being disregarded by the Government. A large proportion of today's paras were not even born at the time of the Bloody Sunday events. What comfort can the Minister offer to your Lordships and members of the Armed Forces that suitable arrangements will be made for former members of the security forces giving evidence to the inquiry?
Many noble Lords raised the issue of the Northern Ireland (Location of Victims' Remains) Bill, and nobody made a more passionate contribution than the noble Lord, Lord Fitt. We on these Benches made our feelings clear when we debated the Bill. My greatest practical concern then, never mind the moral issues, was that the relatives would be tormented due to the terrorists not releasing the relevant information. I feared that they would try to extract further concessions from the two governments. My concerns almost immediately became reality, but not for exactly the reasons I expected.
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It was always recognised that in some cases location would be extremely difficult. But we are now, facing a humanitarian challenge greater than the one that the Bill was supposed to overcome. Whether the terrorists are now facing a public relations disaster for the reasons anticipated by the noble Lord, Lord Redesdale, at the Committee stage of the Bill I know not. It is certainly hard to understand the terrorists' motivation if the information that they had available was always so hazy.
During the passage of the Bill the Minister challenged the House—or it may have been the Committee; I cannot remember—to say what was the alternative to the Bill. My noble friend Lord Cranborne had the courage to answer. He said, "Do nothing", or words to that effect. In the current situation does the Minister now regret not taking the advice of my noble friend?
10.23 p.m.
Lord Dubs: My Lords, despite reservations about some aspects of what is happening in Northern Ireland, I am grateful that every noble Lord who spoke supported the renewal of these provisions. However, perhaps I can deal with some of the specific points which arose during the debate, although they do not arise directly under this order. It is a tradition of this House that we tend to go wider than the subject under debate on occasions such as this.
The noble Viscount, Lord Brookeborough? asked about sanctions being taken against political representatives of paramilitary organisations. Some terrible things have certainly happened recently, and I described some of them in my opening speech. But we need clear evidence and the ability to link the people who perpetrated these offences to specific organisations which in turn are linked to political parties represented in the Assembly. That evidence is not easy to come by. I am certain that the RUC will leave no stone unturned in its pursuit of those who committed these dreadful acts, and of course its inquiries continue. Indeed the Secretary of State keeps under continuous review the state of the ceasefires. But there are paramilitary organisations which are not on ceasefire, and there are some which are on ceasefire but which do not have political representation in the Assembly. So it is not as easy as the noble Lord suggested, but can assure him that the RUC acts diligently.
Of course we would like people in the community who have evidence to come forward with it, that is always the wish of the police. I can assure your Lordships that the RUC has been very diligent in pursuing the many inquiries about what has happened recently.
The noble Viscount and other speakers, including the noble Earl, Lord Attlee, mentioned the Saville inquiry. I repeat that I understand the concerns and I also repeat that any decisions made by that inquiry are a matter for that inquiry alone. I do not think it would be appropriate for an independent inquiry to be, as it were, compelled by the Government to act in a particular way. I do not think it is proper for the Government to comment on the workings or the decisions of the inquiry. Of course the noble and learned Lord, Lord Saville, will be aware of

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this debate tonight and of everything that has happened recently and I am quite sure he will consider what has been said here. However, I would ask your Lordships to accept from me that an independent inquiry has to be independent. The previous government did not tell the Widgery inquiry how that inquiry should proceed, and we do not believe it is appropriate in this particular instance.
The noble Baroness, Lady Park, referred to the Criminal Justice (Terrorism and Conspiracy) Act 1998 and said that it had not been used. We have the legislation on the statute book, as does the government in the Republic. It is there to be used by the RUC and the Gardai as and when appropriate. We have given the police additional powers in that Act, and it is up to them to decide whether or not they wish to use those powers in any particular instance. In any case, the fact that they have not been used yet does not mean that they will not be used in the future. I think it is too soon to make judgments about the value of legislation which has only recently reached the statute book.
I think that every noble Lord who has contributed to this debate referred to the Northern Ireland (Location of Victims' Remains) Act. I am as aware as anyone of the horror that has swept Northern Ireland, and indeed the Republic, at what has been happening. We are all aware of the grief of the families of the victims and of their very visible distress when they see the Gardai searching in a number of locations and, with one exception, finding no bodies as yet.
I understand that and I am bound to say that I cannot help feeling that the publicity associated with it must have been damaging to the IRA and Sinn Fein. I cannot draw any other conclusion about that. I believe it was right for the Government to put forward a measure which had only one aim: we wanted to alleviate the suffering of the families of the disappeared, because those families believed, as we did, that the IRA would come forward with an indication of the location of the bodies.
It may well be—and I very much hope that it will be—that further digging and searching will reveal the bodies, but we acted in good faith and the families wanted us to act in this way. They have been in an intolerable position for far too long. To ensure that the information would be forthcoming, we accepted the principle that no one giving information should be disadvantaged by doing so. However, let me stress that does not mean there is an amnesty.
Viscount Brookeborough: My Lords, I thank the Minister for giving way. We know that the Government acted in good faith, but would he not agree that the IRA have not acted in good faith and that they have betrayed whatever agreement or trust there might have been about this Bill, to the extent that the people involved in these killings have not come forward? We have had intermediaries; we have had "Chinese whispers". Therefore nobody should be surprised that the bodies cannot be found when the people who have been given immunity by the Act should they point out the position of the bodies have not actually come forward
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themselves. The Government should be doing something about forcing them to do so, either by imposing a time limit or in some other way.
Lord Dubs: My Lords, the digging for the bodies is continuing at various locations in the Republic. I think that it is too early for me to comment on whether the whole venture will be successful, or at least will be helpful—I do not like to use the word "successful"—to the families of the victims. Let us wait for a little longer to see whether the anguish of the families will be relieved by the discovery of the bodies.
I should stress that this is not an amnesty for the terrorists. The legislation was intended simply to help the families. If other evidence comes to light—indeed, because the bodies have not been found, they are not evidence at this stage—as to who committed those murders all those years ago, criminal proceedings could be brought. The Act certainly does not prevent that. I repeat the appeal which has been made on more than one occasion: if anyone has any more information which might help to pinpoint the location of the remains. I urge that person to pass the information on quickly to the commission for the sake of the families.
The noble Viscount, Lord Slim, urged the Government or the powers that be—the security services—to use what powers they have to deal with terrorism. Perhaps I may give the House some figures in that respect for the present year: that is to say, from 1st January to the end of May. These very up-to-date figures are as follows: 112 people altogether have been charged under the various pieces of legislation dealing with terrorism. Of those, 32 republicans and 80 loyalists were charged, and that in a period of five months. So I do not believe that it is right to say that the Government, or, indeed, the RUC, are not acting diligently to bring terrorists to justice. I know that the RUC works very hard in this respect.
It is not a question of the betrayal of the people of Northern Ireland, as the noble Viscount suggested. We are simply working to implement the Belfast agreement, to which the people of Northern Ireland have demonstrated their full support. It is clear in the agreement that the future of Northern Ireland rests in the hands of the people of Northern Ireland; it does not rest in the hands of this Government.
Viscount Slim: My Lords, I am grateful to the Minister for giving way. I used the word "betrayal" on purpose because from information that I have there is discussion on this in all quarters not only in this country but also certainly in the north of Ireland in Ulster. I said it hoping that the Minister would refute my statement. I also said it because I think that the Minister and the Government should publicly refute such a statement. There is concern and mistrust from good and honest people. I used the word on purpose so that at a certain stage—not necessarily tonight—the Government would come forth and say that there is never to be any betrayal in the way that I put my statement.
Lord Dubs: My Lords, I am happy to say it now and I am sure that the Government will go on repeating

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it at intervals lest there be any doubt. There is no question of any betrayal of the people of Northern Ireland. We have achieved an agreement which gives the people of Northern Ireland the power to determine their own future. Therefore, they cannot be betrayed. It is up to the people of Northern Ireland to make decisions in the fullness of time about how they wish their future to be. Of course, we want to hand over to the devolved assembly and to local Ministers as soon as possible. That is part of the process of the agreement. But there is no question of any betrayal, and I utterly refute the suggestion there might be.
In conclusion, I should say that the vast majority of the people of Northern Ireland want to see the agreement work. They recognise that it represents the best hope for a new and peaceful future for them and for their children. There are difficulties to be overcome and the debate tonight has indicated some of them. It takes time to build the trust which is necessary for the agreement and the new institutions to succeed. It is taking a little longer than we had hoped for that trust to be established. But we as a government are determined
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to overcome these difficulties; so, too, I believe, are the political parties. No one is walking away from that process. I believe that everyone is still committed to making it work. Everyone is still talking about how to achieve the final stage of the agreement with devolution.
But progress is being made; there are ideas on the table and these envisage progress to devolution by 30th June. This is the date set by the Prime Minister and it is his view of the final date by which devolution must take place. It is vital that all the parties face up to the difficult decisions that have to be made in order to implement the agreement in full. That is the position we are in. There are difficulties ahead, but the Government are hopeful that we can overcome those difficulties, and that will be the best way of guaranteeing a peaceful future for the people of Northern Ireland. In the meantime we need anti-terrorist legislation on the statute book. I am grateful for the support that the Government have received tonight for the renewal measure.
On Question, Motion agreed to.
House adjourned at twenty-fire minutes before eleven o'clock.